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October Sales Mixed In Still-Growing Video Game Industry

On the hardware side, the greater supply of Nintendo Wii paid off with the console recording its best sales month since last November and December.

Revenue for the video-game industry in October, the first month of the critical fourth quarter that includes the holiday shopping season, grew by 18%, despite a significant decline in sales of portable players, a market research firm said.

Sales increased to $2.2 billion for the month, keeping the industry on track to top $22 billion for the year, the NPD Group said. The 18% rise over October 2007, however, was less than the year-to-year increase of 26% in September.

Despite the October growth, NPD said sales were "mixed" in the month. "The console portion of the market made significant gains at 26% across hardware, software, and accessories, while the portable side of the market stalled, declining 14%," NPD analyst Anita Frazier said in a statement released late Thursday. "Year-to-date the portable segment of the market is still up 7%."

On the hardware side, the greater supply of Nintendo Wii paid off with the console recording its best sales month since last November and December. Price reductions on Microsoft's Xbox 360 resulted in a 7% increase in unit sales over September. "Keeping in mind that September was a five-week month while October had four, the sales pace increased 33%," Frazier said.

Sony saw a 57% increase in unit sales of the PlayStation 3, which compared with its rivals was the highest year-over-year monthly increase, Frazier said.

NPD breaks up the video-game industry into four categories: games, hardware, software, and accessories. The latter was the only category to record a decline, falling 8% from October 2007. "Accessory sales are down for the month, but we should expect this category to pick up again with the anticipated increase in hardware sales for the holidays," Frazier said.

The industry in September saw its first-category sales decline since March 2006. Sales of video games fell 7% to $1.27 billion from $1.35 billion in September 2007. NPD attributed the decline primarily to the lack of a blockbuster game on the scale of last year's record-setting Halo 3.

NPD tracks sales in retail stores only, and does not include online sales.

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