Video Game Sales Fall

Video game sales once again failed to live up to expectations last month as the sluggish economy kept Americans from buying a lot of video games -- with the exception of Microsoft Corp.'s "Halo: Reach."

Market researcher NPD Group said Thursday software sales fell 6 percent in September to $614 million. Analysts were expecting a slight increase.

"We expect a negative market reaction to the data as software sales were once again below the street's expectations," wrote Wedbush Morgan analyst Michael Pachter in a note to investors. "The declines can only be explained as a combination of a weak economy and console fatigue at persistently high prices."

The blockbuster shooter "Halo: Reach" sold an impressive 3.3 million units during the month, but Pachter said this was not enough to offset weak sales for Nintendo, Sony Corp.'s PlayStation 3 and music games. There were 254,000 Wii consoles sold last month, according to NPD, down from 462,800 a year earlier.

"The Wii continues to struggle due to gamer fatigue and a lack of high-profile releases," Pachter wrote. "We believe the iPod Touch is cannibalizing dedicated game handheld hardware sales, and expect weakness in handhelds to persist until the 2011 introduction of the Nintendo 3DS."

Microsoft shares climbed 16 cents to $25.39 in premarket trading Friday.