Can PlayStation Move, Natal revive video game sales?

February was a rough month for video game sales. One bright spot: demand for the Sony PS3 and the Microsoft Xbox 360 were up. Will PlayStation Move and Project Natal help?

The Microsoft Xbox360. Sales of video games slumped in February of 2010, a new report shows. Surprisingly, there was an increase in demand for the Xbox360 and Sony PlayStation3 consoles.

As designers look ahead at PlayStation Move and Project Natal at the Game Developers Conference in San Francisco this week, the industry as a whole got some bad news.

Americans spent roughly $126 billion on Xbox 360, PlayStation 3, Nintendo Wii consoles, video games, and accessories in February, a 15 percent drop from one year ago. That's the news today from NPD, a market research group that reports on trends in US consumer spending. In an interview with the Associated Press, NPD Group analyst Anita Frazier says she was surprised by the weak showing.

"I had expected the industry to perform somewhat better this month," Frazier says.

It's been a grim year or so for the video game market, which has seen scaled-back interest in so-called casual gaming titles such as "Wii Fit," "Guitar Hero," and "Rock Band." In 2008, for instance, music games generated $1.4 billion in revenue. They now generate half that amount, NPD says.

"These are volatile categories," Jesse Divnich, an analyst at Electronic Entertainment Design and Research, told the AP. "Once you own a 'Wii Fit,' you don't need another 'Wii Fit.' "

There were a few bright spots to be found in the sales figures from last month. According to NPD, Microsoft sold 422,000 Xbox 360s in February, more than long-time front runner Nintendo Wii and an 8 percent year-over-year gain. Meanwhile, Sony sold 360,000 PlayStation 3 consoles in February, up from 277,000 units the month before.

For its part, Sony is spinning the improved PlayStation 3 sales as a comeback story. For months, sales of PS3s had flatlined – in many ways, there is nowhere to go but up. As we reported yesterday, Sony recently demoed its PlayStation Move motion-control system, which the company says will attract both casual and hardcore gamers.

Thus far, Move has attracted a good deal of buzz.

"The migration path from the Wii household to the PlayStation 3 household is a pretty natural path, partly because of the experience that you can get on the PlayStation Move but also because of the content that we find on PlayStation 3," Sony exec Peter Dille said at a Game Developers Conference in San Francisco. The PlayStation Move package is expected to retail for $100; it should hit shelves this fall.

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