Hardware fell harder at 29 percent while accessories declined 8 percent. The physical retail channel "suffered its lowest month" for 5 years in the US.
"There is no getting around the fact that video game sales in the new physical retail channel suffered its lowest month since October 2006," said NPD's Anita Frazier.
"Despite the very rough month, new physical retail sales are down just 4% year-to-date and based on seasonality trends observed over the last 10 years, which have been remarkably stable year-in, year-out, industry sales in this particular channel are poised to land in the flat to -2% range once the total year is completed.” July is a brutal month.
Fortunatley the digital marketplace is filling the ever growing void.
“New physical retail sales of hardware, software and accessories accounted for 69% of the total consumer spend on the industry in Q1. We have measured some remarkable growth in other ways that consumers are acquiring content, including digital sales of full games and add-on content, mobile games, and social network gaming," continued Frazier.
"Growth in these areas, combined with a flat to modest decline in new physical sales should result in 2011 showing growth over 2010." EA Sports' NCAA Football series managed to break the rather disappointing mold however for the month of July in the US.
"NCAA 12 was the best-selling title for the month, realizing a 15% increase in unit sales versus NCAA 11 in July 2010. The increase in sales could have been fueled by ardent football fans who have to wait a little longer to get their hands on Madden this year."
The Xbox 360 console finally saw a dip in sales after months of huge gains. "This was the first month that the Xbox 360 saw a year-over-year decline since December 2009. This is more of a reflection of robust sales last July, which was the biggest month for unit sales of the 360 in 2010 outside the holiday months (November and December)," they added.
"Last year’s sales of the 360 hardware platform were driven by the introduction of the Kinect-ready slim form factor SKU." It seems the honeymoon Kinect period is over.