Revenue from U.S. video game sales dropped 31 percent to $1.17 billion in June, compared with $1.7 billion a year earlier, according to data released Thursday by market research firm NPD Group.
The ongoing economic recession and a lack of blockbuster game title releases were blamed for the drop, the fourth decline in video game sales in as many months.
"This is one of the first months where I think the impact of the economy is clearly reflected in the sales numbers," NPD's Anita Frazier said in a statement. "This level of decline is certainly going to cause some pain and reflection in the industry."
Hardware sales suffered the greatest hit, falling 38 percent to $382.6 million from $617.3 million in the year-ago month. Only the Microsoft's Xbox 360 game console managed to record a slight sales increase, while Nintendo Wii sales dropped 45 percent, and the Sony PlayStation 3 dropped 59 percent.
Game sales revenue suffered the second largest hit, falling 29 percent to $625.7 million from $875.8 million a year ago. Sales of video game accessories also declined, falling 22 percent $158.2 million from $202.8 million a year ago.
Once seemingly recession-proof, the game industry has fallen on hard times. Video game sales dipped below $1 billion last month for the first time since 2007.
NPD also suggested that part of the decline may be due to gamers moving to online gaming, but said that trend did not represent a significant threat to console makers.
"While some of the decline in retail sales could be a migration on the part of consumers to acquiring content via digital distribution, our reports on downloads and subscriptions reveal that it's not yet having enough impact on the console market to be an overly meaningful factor in the retail down-turn," Frazier said. "That said, there are increasing avenues for consumers to game, including via mobile devices, and it's clear the industry is sorting through how to manage all these opportunities while deploying resources appropriately."