Video Games Booming as Xbox 360 Returns to No. 2

Jennifer LeClaire, newsfactor.com

The sluggish economy doesn’t seem to be hurting the video-game market. U.S. sales of game hardware and software skyrocketed 57 percent in March compared to the year-ago period, according to the NPD Group.

The total for gaming hardware, software and accessories was $1.7 billion in March. Nintendo led the pack with its Wii console, according to NPD. Nintendo sold 720,000 Wiis, buoyed by the release of Super Smash Bros. Brawl, which sold 2.7 million copies.

“You’d never know that the U.S. economy was under distress by looking at the video-games industry sales figures,” NPD analyst Anita Frazier said.

Microsoft Returns to Number Two

Microsoft’s Xbox regained the number-two position, bumping Sony’s PlayStation 3 into the third spot in sales. Microsoft sold 262,000 Xbox 360s compared to Sony’s 257,000 PS3 units, giving Redmond only a slight lead. Microsoft blamed its recently slowed sales on supply constraints.

“You have to give Microsoft a lot of credit here. Microsoft is losing the sales battle to Nintendo, but Microsoft is the hero product for third-party publishers,” said Michael Goodman, a video-game analyst at Yankee Group. “Despite the strength of Nintendo’s installed base, Microsoft is increasingly becoming the platform of choice for publishers.”

Goodman pointed to Grand Theft Auto as an example. It’s the same product on the PS3 and Xbox 360, but the 360 also offers online play with lots of bells and whistles, including exclusive downloadable content. It’s a sign, he said, that publishers are recognizing the 360’s importance.

“Think back to the previous generation and EA and Sony were best buds. They were joined at the hip. This time around Microsoft is getting the preferential treatment,” Goodman said. “Think back to Madden in the fall. Microsoft got a superior version because the frame rate was better on the 360 than it was on the PS3.”

Sony’s Sluggish Sales

PS3 sales doubled over the year-ago period. Sony could see continued boosts over the next quarter with the release of games like “Metal Gear Solid 4″ and “Grand Turismo 5 Prologue.”

“Our sales momentum continues to defy what is traditionally a sluggish sales month,” Sony Computer Entertainment America Chief Executive Jack Tretton said. “It is proof that, in these economically challenging times, consumers recognize the long-term value of our platforms.”

Goodman said Sony can’t be disappointed with its recent gains, but Sony is still a far way from Microsoft’s numbers — hundreds of thousands of units behind. With Microsoft resolving supply constraints, Sony could see even more competition from the Xbox 360.

“To be successful, Microsoft doesn’t necessarily have to be number one. It just needs to be number one to the publishers. There’s a big difference there,” Goodman said. “You can expect a close race, at least in North America between Microsoft and Sony for that number two position.”

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