Video Game Industry Sales Fall in 2010

NEW YORK ( TheStreet) -- Sales of video gaming hardware, software and accessories topped $18.6 billion in 2010, a 6% drop from 2009, according to industry tracker NPD Group.

Last year was a difficult one for video game publishers, as consumers increasingly chose to shed expensive console systems in favor of cheaper alternatives on smartphones and social networks like Facebook.

Sales of new hardware for the year decreased 13% from a year ago to $6.3 billion, as the Microsoft ( MSFT) Xbox was the only hardware platform to see an increase in sales over 2009.

Software sales were down 6% to $9.4 billion, despite the success of games like Activision's ( ATVI) Call of Duty: Black Ops, which has surpassed $1 billion in sales since its November release.

Industry bright spots included PC physical games sales, which increased 3% in 2010.

Gaming accessories also enjoyed a record month in December, rising 13% year-over-year to $2.9 billion due to an increase in the average retail price of accessory items. Microsoft's Kinect device was the best-selling accessory for the second month in a row, following its release in November. Sales of the device have topped 8 million in 60 days, Microsoft has said.

--Written by Olivia Oran in New York.

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