2009 has not been a good year for video games here in the US. While console sales were up significantly compared to July, August marked the sixth consecutive month in which industry sales have declined year-over-year. According to numbers recently released by NPD Group, overall gaming sales were down 16 percent YoY despite positive sequential growth for each major console other than the Sony PlayStation 2. Accessory sales were up 2 percent but game sales were down 15 percent and console sales dropped a massive 25 percent. Of note, PS3 sales in August were up over 72 percent compared to July’s numbers (121,800) thanks to a recent price drop. Here’s how August hardware sales break down:

• Nintendo DS: 552,900
• Nintendo Wii: 277,400
• Microsoft Xbox: 215,400
• Sony PlayStation 3: 210,000
• Sony PSP: 140,300
• Sony PlayStation 2: 105,900

As far as game titles, EA’s Madden NFL 2010 for Xbox 360 was the highest-selling game in August with 928,000 copies sold, followed by Wii Sports Resort for the Wii (754,000) and then EA’s Madden NFL 2010 for PS3 (665,000). Square Enix’s Batman: Arkham Asylum took both the four and five spots, having sold 303,000 copies for the Xbox 360 and 290,000 copies for PS3.

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Many would say the worst is behind us where the recession is concerned but gaming giants Nintendo, Sony and Microsoft would probably disagree. An industry that stumped analysts and remained strong throughout the recent turbulent economic climate is finally beginning to feel the impact of the wave of reduced spending that has attacked most industries in recent history. Video game sales began declining slowly in March but NPD Group has just released June numbers that show a slightly more alarming drop than we’ve been seeing over the past few months. US sales in June dipped a substantial 29 percent YoY — a record drop — and consoles sales were down a whopping 38 percent. Long story short, an industry that held strong on the back of Nintendo’s Wii and DS/DSi is looking like it may finally be approaching relative saturation. The odds of another Wii-like breakthrough reaching market any time soon are slim to none but something better happen in the near future to woo gamers back into opening those wallets. Drops in console pricing are rumored but still not confirmed, though we have little faith that minor price adjustments would have the kind of impact the industry needs to rebound significantly.

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The first quarter of 2008 was rough on the typically hardy gaming industry but following a 17 percent decline in overall sales, there is a bright spot for one of the big three console companies as Q2 kicks off. Obviously, that company is Nintendo. Sure the Wii is still leading the pack when it comes to stationary consoles but the big news earlier this month was the arrival of the company’s latest portable gaming console, the Nintendo DSi. A substantial update from its little cousin the DS Lite, Nintendo’s DSi has been available in Japan for quite some time and finally made it to US shores last week. In its first full week of sales, Nintendo reports the handheld sold a remarkable 435,000 units. To put that in perspective, Nintendo moved just over 226,000 DS Lites in its first week of US availability. Bigger screens, dual cameras and a handful of photo manipulation tools highlighted in Nintendo’s supporting ad run apparently add up to big success. The NPD Group reports that Nintendo accounted for nearly 59 percent of all video game hardware sold in March — thanks to the DSi, expect that number to climb in April.

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