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News

  NPD: Industry Down 9% In June As Software Slumps, 360 Overtakes Wii
by Chris Remo [Console/PC]
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July 15, 2010
 
NPD: Industry Down 9% In June As Software Slumps, 360 Overtakes Wii

The U.S. game industry has had another month of year-over-year declines: according to tracking firm NPD, retail console revenues dropped 6 percent from June 2009 to $1.1 billion, following last month's 5 percent year-over-year decline.

With no major game debuts -- last month's top three games, led by Red Dead Redemption's Xbox 360 version, stayed the top three -- software was hit particularly hard, falling 15 percent from $627.0 million to $531.3 million in June.

Meanwhile, hardware revenue rose 5 percent to $410.7 million from $382.8 million, a reversal of last month's result which saw software up and hardware down.

And within that hardware result, Microsoft pulled off a victory over Nintendo in the home console front for the second time this year: Xbox 360 outsold Wii by a healthy 7 percent margin, although the Nintendo DS still took the top overall hardware sales slot for the month.

In a research note, NPD analyst Anita Frazier said that, while June's results were unfortunate, the arrival of new motion controllers could provide a boost to the industry, and NPD plans to take into account more non-traditional revenue streams.

"Given the strong slate of content still to come, and the release of the Move and Kinect controllers, which I believe will spark additional interest in gaming, I think we could see the total year new physical retail sales come in at $20 billion," said Frazier. "We'll also be reporting consumer reported sales of digitally distributed, rental and used games content to provide insight into those non-POS sources of game sales."

Software

It was a lackluster month for software, both in debuts and in total revenue. The only new releases to make it on to the chart were N-Space's Nintendo DS version of Toy Story 3, which entered at number seven, and Traveller's Tales' LEGO Harry Potter: Years 1-4 on Wii, which reached number nine.

Every other game on the list was a carryover from last month, with the impressive exception of Just Dance, which managed to reach fifth place with 174,800 units, six months after it was first released for Wii.

Red Dead Redemption's 582,900 units on Xbox 360 and 380,300 units on PlayStation 3 bring the game's total U.S. sales to date up to nearly 2.5 million, making it the country's best selling game of the year so far.

The total U.S. retail game sales for June 2010 are as follows:

1. Red Dead Redemption (Rockstar San Diego/Take-Two, Xbox 360), 582,900
2. Super Mario Galaxy 2 (Nintendo, Wii), 548,400
3. Red Dead Redemption (Rockstar San Diego/Take-Two, PS3), 380,300
4. New Super Mario Bros. Wii (Nintendo, Wii), 200,900
5. Just Dance (Ubisoft, Wii), 174,800
6. Wii Fit Plus (Nintendo, Wii)
7. Toy Story 3 (n-Space/Disney, NDS), 164,000
8. UFC 2010: Undisputed (Yuke's/THQ, Xbox 360)
9. LEGO Harry Potter: Years 1-4 (Traveller's Tales, Warner Bros., Wii), 136,000
10. UFC 2010: Undisputed (Yuke's/THQ, PS3)

(While NPD no longer publicly provides figures for games beyond the top five, Nintendo separately released sales data for Toy Story 3 and LEGO Harry Potter.)

Hardware

Hardware contrasted favorably to software this month, with a big revenue boost that reflects an even bigger increase in unit sales. While revenue was up 5 percent, unit sales were up a massive 35 percent, thanks to a combination of price cuts and improved Xbox 360 and PlayStation 3 pickup.

In particular, Xbox 360 saw the mid-month release of its first major form factor revision, which was accompanied by $50 price reductions on the older models of the console.

"Hardware sales saw a notable uptick from May on an average sales per week basis, and all three current gen console systems saw unit sales increases over last year; in particular, the Xbox 360 and the PS3," wrote Frazier. "The Xbox 360 experienced its second largest non-holiday month after September '07 when Halo 3 launched, and the PS3 has now garnered 11 consecutive months of year-over-year unit sales increases."

U.S. hardware sales for the month read as follows:

1. Nintendo DS: 510,700
2. Xbox 360: 451,700
3. Wii: 422,500
4. PlayStation 3: 304,800
5. PSP: 121,000
 
   
 
Comments

Steven Ulakovich
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I am a little shocked, and kinda upset, that Mario Galaxy 2 is selling considerably less than New Super Mario Bros Wii. All of that Wii hardware out there, and we see very little on the software side.



Such a disappointing software month all together, that drop off after the third spot is pretty steep.

Ian Uniacke
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I think it might be a simple value proposition. Are you going to spend 80 dollars on a game for the whole family or 80 dollars on a game for a single player? NSMBWii just seems like much better value when viewed as 20 dollars a person.

Leon Terry
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A good rise of 360 and PS3 HW over last month and year. The Wii is up yoy for the second month ( NPD didn't mention it last month).



Sales for SMG2 didn't drop much as all , but I have no idea why anyone would expect it to perform similar to a 2d Mario game. You must not understand the trends with Mario games. If you do some research you will see that sales for Mario games dropped a lot when it went to 3d.

T K
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Anita Frazier at NPD really makes me laugh. The industry has now been in decline for nearly two years!!! And yet she keeps trying to spin it to make it look like its going to grow again. Its pathetic. Console game sales peaked in 2008 and its been downhill since then. 2009 software sales down over -10% and so far this year software sales also down a similar amount. Its over. This cycle has peaked and is in decline. It going to likely keep declining until new consoles are launched and thats not likely for a few more years.



The thing that is a giveaway is how bad the software sales are in spite of decent hardware sales. The implied attach rates are terrible.



This is why every publisher is looking to shift its business away from packaged goods retail sales and more towards online MMO/FTP, social networking games, and mobile games.

Christian Keichel
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@ Ian



" I think it might be a simple value proposition. Are you going to spend 80 dollars on a game for the whole family or 80 dollars on a game for a single player? NSMBWii just seems like much better value when viewed as 20 dollars a person. "



For 80 dollars, you can buy NSMW Wii und SMG2, neither of these games costs as nearly as much as 80 dollars.



@ Topic



When I look at the Top10, I can't see a slump in Wii sales, as far as I see it the Wii has sold about 1.2 million units in this Top10 (assuming Wii Fit sold about 160k). No other system in June comes close to this. In fact, it is about as much, as the HD console sold combined. Would love to read an article on this fact.

Chan Chun Phang
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@T K

Or possibly, just cheaper games. All those other alternatives you mentioned all also have the benefit of being cheaper than console games.



@Christian Keichel

Could possibly be exchange rates though, he MIGHT not be referring to US dollars when saying that.

Of cause, this month's gonna have a bumper crop of DQIX sales..

E Zachary Knight
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I am glad to see the 360 rise in numbers over last month and be ahead of the Wii. Unfortunately that is a bit of a two edged sword. They are selling more consoles, but I highly doubt their customer base increased in proportion. Most of those sales are from current 360 owners upgrading to their new hardware.

Christian Keichel
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Interesting also is the fact, that the Wii is up in units YoY for the second month in a row.



12 months ago, when the Wii sold much lesser console, Anita Frazier said about the numbers:

"And despite Wii's relative decline, the system is still doing quite well, said Frazier. "Compared against historical performance of other systems this far into the console lifecycle, the unit sales performance is still strong," she pointed out."



So I guess, the performance has to be seen as much better, now we are ever further in the console life cycle.

Mark Harris
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Honestly, did this surprise anyone?



No new software releases, software sales and revenue are down.



New hardware, hardware unit sales and revenue are up.



All three systems are actually doing pretty well. Revenue is down, but so are costs across the board. As long as profitability stays relatively constant and positive the big 3 aren't going to worry. We're seeing the biggest issues in software, and a lot of that has to do with cost issues. A 100 person team doesn't cost any less this year than it did last year, so you don't have a linear declining cost structure like you do with hardware; which is also why games haven't seen a price cut.



I'm waiting for publisher metrics for this year, since that's the only big unknown. Are publishers actually making an effort for efficient production and continuity between projects to reduce waste and cost or are they simply continuing their high cost boom/bust hire/layoff cycle stuff? Recent evidence suggest the latter, unfortunately.

Christian Keichel
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@ Mark



I don't know, if it is possible to bring production costs for software down so much more. MS made big efforts to supply the developers with cost efficient tools, like XNA and Sony already cut the price for their developement tools last year.

Additionally with the Unreal 3 Engine, there was a working Next Gen engine for the 360 and PS3 nearly from day one, to which developers got used in the last years, so they should be able to use it much more efficient, then in 2006. So my guess is, the companies will count on hire for (rushed) developement, with much cruch and fire after development, at least, as no DLC is planned for a title.

How extreme this situation is, shows Sega's decision to cancel any support for Alien vs. Predator. The game was released in february this year it seemed to do ok in retail and it is already dead.

Mark Harris
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Yeah, Christian, the efficiencies are going to come in process and project management, streamlining pipelines, increasing communication channels and employee buy-in, etc. Basically reducing waste and rework so that the same amount of content at a given quality value is produced more quickly with less personnel. Static costs are probably down, but the variable costs are where you can find your gains. I think you'll agree with me that spending $30 million to make an 8 hour campaign with some multiplayer seems a bit inflated. Even shaving 10% off that with minor efficiency gains keeps an extra $3 million dollars in your pocket.



It's not easy, but there are always places to find some savings.

Kevin Jones
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@ Ephriam Knight



"They are selling more consoles, but I highly doubt their customer base increased in proportion. Most of those sales are from current 360 owners upgrading to their new hardware."





Now why dont you give us the source of that statistic?

Not to mention even if someone goes to trade in their old XBOX 360 at Gamestop for a new 360 "Slim", Gamestop ends up selling the traded-in 360 to another customer anyways, so the XBOX 360 user base ends up increasing by the same amount in the final analysis. Gamestop doesn't bury traded in 360's under the ground do they?

Plus, given that Call of Duty Morden Warfare 2 sold a staggering 4.2 million units on the XBOX 360 in November alone, shattering every single one month games selling record in America and on the entire planet, it gives the lie to those who claim that most new XBOX 360 sales are merely replacements for old XBOX 360's. You cant' sell 4.2 million copies of a game in just one month on the XBOX 360, if half of the users of that platform didn't exist.

Plus, given the near 9 attach rate for the 360, if most new 360 sales were mere replacements, the 360 would then be having an unheard of attach rate of a staggering 18! No game console even comes close to such figures for attach rates.

Kevin Jones
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Month on Month (May 2010 to June 2010):



360: 453K, up 257K (+132%)

PS3: 305K, up 150K (+97%)

DS: 511K, up 127K (+33%)

Wii: 423K, up 88K (+26%)

PSP: 121K, up 62K (+105%)

The increase in 360 sales for June was more than the entire sales of the 360 in May. Same with the PSP.





Year on Year:



360 +88%

PS3 +85%

Wii +17%

DS -33%

PSP -26%





Read Dead sold a combined 965,900 copies in June. That adds to the combined 1,513,000 copies it sold in in May, making a total of close to 2.5 milliion copies sold in the US alone to the end of March.

E Zachary Knight
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@Kevin,



No statistics available. Just my observations from reading comments from 360 owners on various websites. I saw only a few comments from people who did not own a 360 who said they were going to buy one after the hardware redesign.



Yes there will be people who buy traded in consoles, but there are also 360 owners who bought the new 360 and kept their old 360 for spare rooms.



I don't profess that my interpretations of hardware sales are scientific.



"You cant' sell 4.2 million copies of a game in just one month on the XBOX 360, if half of the users of that platform didn't exist."



I don't think I understand what you are saying with this MW2 diatribe. There are easily more than 4.2 million 360 owners out there. I don't recall anyone claiming otherwise.



Additionally, my comments were based on the new hardware. Since the new hardware was released only two months ago, there is no way all 360 owners will have replaced their console. Also, not all 360 owners will be replacing their current console with the new one. Not everyone has that kind of spare income.

Kevin Jones
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@ Ephriam Knight



"No statistics available"





Thought so. You just made it up to pus your agenda just because the 360 happened to beat the Wii this month, and you just can't take it can you?





"Just my observations from reading comments from 360 owners on various websites."





I read the coments on plenty of gaming web sites too (especially negoaf), and I have plenty of friends with XBOX 360's. Most 360 owners who got the Slim traded them in at Gamestop, who were offering a very sweet deal on 360 trade-ins for the Slim. Those traded-in 360's are of course re-sold by Gametop to new 360 owners. The 360 user base ends up expanding by the same amount.

You dont have a point.

E Zachary Knight
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"You just made it up to pus your agenda just because the 360 happened to beat the Wii this month, and you just can't take it can you?"



No agenda here. I am glad that Microsoft was able to move so many units, I just don't see how all of those sales represent new customers. I highly doubt that Gamestop etc were able to sell off all those traded in units at the same time. I am sure they will eventually, but not this fast.



I also find it really funny that you are accusing me of having an agenda. Pot meet Kettle?

Kevin Jones
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" There are easily more than 4.2 million 360 owners out there. I don't recall anyone claiming otherwise."





The US install base of the 360 today is approx 20.5 million.

YTD 2010, the 360 has sold 2 million units. In December, the 360 sold 1.3 million units.

So back in November, the 360 had an install base of 17 million.

If most new 360s are being bought by teh same old 360 owners (because of RRDs and whatnot), then the "real" 360 install base back in Novemeber would be only 8.5 million, no?

With an 8.5 million instal base, it means that MW2 sold to 50% of the instal base of te 360 in just 3 weeks. in November That never happens wit hany console in its' 4t hyear, outisde the launch window, and has never happened to any console in video game history.

It just doesnt add up.

E Zachary Knight
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@Kevin,



Again I ask, Who is claiming that "most new 360s are being bought by teh same old 360 owners (because of RRDs and whatnot)"? I don't recall making that claim. I did say that a good number of June's sales were current 360 owners trading up for the new hardware, but I have never made that claim or anything similar for other months.



I think you protest too much.

Maurício Gomes
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@Mr. Jones.



You look to me like you are trying to troll Mr. Knight. I mean, he only stated a simple opinion, and you are lashing all out aggressive on him, talking about agendas and provoking... Don't do that, we are supposed to be professionals talking in a professional site.

Kevin Jones
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@ Ephriam Knight



"I just don't see how all of those sales represent new customers. "





Traded in consoles are resold to new constumers, who can't afford new ones. Gametsop does a very good business selling traded-in consoles and games.





" I highly doubt that Gamestop etc were able to sell off all those traded in units at the same time. "





If you read back on Gamestop's earnings reports, you'd notice that used Games/consoles are making up an ever increasing slice of their business.

E Zachary Knight
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@Kevin,



Fine. I know that you don't get to see the 360 top the Wii very often, so I will concede just so that I don't have to keep following the discussion as I have meetings to attend.



Just don't get your hopes up that the 360 will stay on top for much longer. ;)

Kevin Jones
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@ Ephriam Knight



"Again I ask, Who is claiming that "most new 360s are being bought by teh same old 360 owners "



Now why dont we go back to your original post eh?

This is what you said, and I quote:



"MOST of those sales are from current 360 owners upgrading to their new hardware."



Those are YOUR words, not mine.

Christian Keichel
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@ Kevin

What you are saying doesn't make any sense, you are desperately trying to push your 360/MW2 agenda here. What Ephraim Knight said, is that he BELIEVES most of the XBox360 sold in JUNE are going to existing 360 owners. It completely makes no sense, to say, he said 10 million people bought 20 million 360s, cause he was clearly talking about the month june and the new Slim model.

Kevin Jones
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@ Homer Simpson



" I bet a lot of 360 sales were old models heavily discounted. "





Sites like Dell, Amazon, Walmart etc have often had deals on the 360, PS3 etc, whereby by they give $50 discounts or gift cards and watnots. Those deals didn't start in June. They have been around since over 2 years ago, and the 360 still never sold 422,500 in those non-holiday month apart from the Halo 3 month in 2007 .

This is the second highest non-holiday month for the 360 ever

Kevin Jones
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@ Christian Keichel



"What you are saying doesn't make any sense"



Said the guy that is yet to make the slightest sense after over 100 posts on here.





What Ephraim Knight said, is that he BELIEVES most of the XBox360 sold in JUNE are going to existing 360 owners





Fine.

So I asked him to provide his SOURCE were he got those statistics from. NPD, Neilsen, Comscore whoever.

He failed to do that, apart from refer to posts on gaming sites. Thing is, I read most of the gaming sites too. Most 360 owners who got the slim traded in their 360's using Gametsop's really great deal. Gamestop in turns, turns round and sells the traded in 360's to the less well off folks. The 360 instal base ends up increasing by the same amount.

Fábio Bernardon
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@ Gamasutra staff

Can you implement some sort of ignore button so if a certain comment receives ~10 hits (from different users, of course) it gets removed / censored? I am tired of seeing Kevin trolling in every possible discussion on Nintendo / games / hardware sales. Thank you.

Maurício Gomes
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@ Gamasutra staff:



I have the same with as Mr. Bernadon.



@Mr. Jones.



Fuck you.

Ryan Schaefer
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I think Ephriam Knight is correct; many of the new xbox sales are probably from existing owners. I myself want to trade up as well, but it has been hard to track down available "slims."

Mark Harris
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You don't really need a fancy website mechanic, just don't read his posts. :-)

E Zachary Knight
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@Kevin,



I recall in the last article for May, you made quite a few comments about Wii sales and were repeatedly asked for sources and your provided none.



What makes you so special?



I provided my source. My own observations and impressions. I openly admitted that and that I have no verifiable proof that my OPINIONS are fact, yet you keep treating them like I am claiming they are fact.

Fábio Bernardon
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@ Mark Harris

yes, but the problem are the replies other people post. If we all agree to ignore him that would indeed work :)

Kevin Jones
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@ Maurício Gomes



"@Mr. Jones.

Fuck you. "







Same to you and more.

Jonathan Gilmore
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@Flame War



I personally purchased a new "old" 360 to replace my limping, wheezing 360 console. I plan on either reselling or giving my old console to family.



Ephraim has never said an unkind word about a Nintendo product and his post was full of backhanded "praise" for this months success for MS. But, I don't think he was claiming to have any actual knowledge on the issue. Personally, I think a lot of people "jumped in" and bought their first 360's as a result of the Target/Walmart/Amazon sales on the existing consoles. And I also think a lot, if not most of the 360 s's were sold to existing 360 owners. Still, the 360's bottom line is very healthy at the moment, for being the oldest console it is showing long legs.

Kevin Jones
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@ Ephriam Knight



"I provided my source. "





What source was that?

You made vague refrences to posts on gaming web sites.

I countered by pointing out that I visit as many gaming web sites as anyone, and most of the posts I have seen from current 360 owners buying 360 Slims, were from people who traded in their old 360s' at Gamestop, by taking advantage of the sweet deal Gametsop was doing on 360 trade-nis for the 360 Slim. Those traded in 360's then end up getting sold sold by Gamestop to people with lower incomes who can only afford used 360s at lower prices. The 360 install base ends up going up by the same amount.

My own observations run directly counter to yours.

Kevin Jones
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@ Fábio Bernardon





"I am tired of seeing Kevin trolling in every possible discussion on Nintendo / games / hardware sales"





You know of course that you don't have to read my or anyone's posts don't you?

Equally, I dont have to read your posts (I wouldnt be missing anything by not reading any of your posts). I'd probably end up with a better mind by avoiding the polution from your posts.

E Zachary Knight
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@Kevin,



Perhaps you should learn to read. Here is exactly what I wrote:



"I provided my source. My own observations and impressions. I openly admitted that and that I have no verifiable proof that my OPINIONS are fact, yet you keep treating them like I am claiming they are fact. "



I think that is a valid source for an OPINION, but I guess you have much higher standards for opinion than I do.

Joseph Garrahan
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Ephriam loves Nintendo, Kevin loves microsoft. Now, can we all just get along? :-)

Anthony Charles
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i guess some of us started our weekends early, or some of us don't have jobs.

John Giordano
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Everyone here should know that Kevin Jones is either a viral marketer or a deranged fan-boy writing from a mental institution. Ignoring him is the best advice I can give.



In any case, I think somebody should point out that these numbers are all about 30 to 40 thousand off from what we saw in September 2009 with the PS3 Slim, with only a reversal between the 360 and PS3. I expect a similar sales trail.



I also find it interesting how all systems went up from last month. It seems new hardware has a positive effect across the board. The same thing happened when PS3 Slim was released, there were higher sales across the board.



So now we have two slim HD consoles, each with mostly the same game library (except for a few exclusives here and there), and each with about the same power and technical capability. This fall, both of them will have motion control options released at nearly the same time. How this is going to balance out? I can only think the PS3 will eventually top the 360 because of Blu-ray, but even then...



As for the Wii, it's doing just fine. Some viral marketers will try to tell you that it being in second place means Nintendo is on the brink of disaster. But it has higher sales than last month and last year, and it didn't need any hardware revisions to get there.

Leon Terry
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Top Ten Individual Platform Sales (Jan-Jun)



1. New Super Mario Bros. Wii - Wii

2. Pokemon SoulSilver Version - Nintendo DS

3. Red Dead Redemption - Xbox 360

4. God of War III - PlayStation 3

5. Wii Fit Plus w/Balance Board - Wii

6. Wii Sports Resort w/ Wii Motion Plus - Wii

7. Pokemon HeartGold Version - Nintendo DS

8. Call of Duty: Modern Warfare 2 - Xbox 360

9. Just Dance - Wii

10. Super Mario Galaxy 2 - Wii



Top Five Combined Platform Sales (Jan-Jun)



1. Red Dead Redemption (360,PS3)

2. New Super Mario Bros. Wii (Wii)

3. Call of Duty: Modern Warfare 2* (360,PS3)

4. Battlefield: Bad Company 2 (360,PS3)

5. Wii Fit Plus* (Wii)



http://xbox360.ign.com/articles/110/1107064p1.html


none
 
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