Annual video game sales fall, better 2011 in view

Visitors try out Microsoft's new videogame "Halo: Reach" at the Tokyo Game Show in Chiba, east of Tokyo September 16, 2010. REUTERS/Yuriko Nakao

SEATTLE (Reuters) - Video game sales fell for 2010 but are expected to bounce back this year as people embrace new ways of playing games online and on-the-go, according to retail research firm NPD Group.

Despite a surge in video game accessories -- spurred by Microsoft Corp’s Kinect and Sony Corp’s Move motion control systems -- total spending on video games and equipment fell 6 percent to $18.6 billion in 2010, as gamers curtailed spending in the early part of the year.

But a recovery is predicted for this year, as more people access games on Internet sites such as Facebook and play them on mobile devices.

“The increasing number of ways to acquire content has allowed the industry to maintain total consumer spend on content as compared to 2009,” said NPD analyst Anita Frazier. “We should expect 2011 to be a growth year in the games industry as the consumer demand for gaming continues to evolve.”

Microsoft notched its best ever month for the Xbox in December, selling 1.9 million of the game consoles, helped by its new Kinect hands-free system and the latest in the “Fable” and “Halo” game series.

But the world’s largest software company, which launched its latest Xbox 360 console in 2005, lost out to Nintendo Co Ltd’s Wii in the key holiday shopping month, according to NPD figures. Sony’s PlayStation was third.

Microsoft said on Thursday high demand for the Xbox and Kinect add-on unit caused shortages in stores over the holiday period and forced it to accelerate delivery of units to stores that were meant to be sold in January and February.

As a result, the company said, it expects shortages of both the Xbox console and the Kinect add-on for the next two months.

Microsoft said last week it has sold more than 8 million Kinect units over November and December, the first two months on the market, beating its target of 5 million.

Reporting by Bill Rigby; editing by Andre Grenon and Carol Bishopric