U.S. sales of video game equipment and software fell 31 percent to $1.17 billion in June, research group NPD said on Thursday, the largest decline since 2000.
Sales of game software fell 29 percent to $625.8 million, while hardware sales dropped 38 percent to $382.6 million. Sales of accessories declined 22 percent.
Wedbush Morgan analyst Michael Pachter blamed the decline in part on the high cost of video game consoles.
The consumer is just not buying hardware at these prices ... clearly the consumer is just waiting for price cuts, said Pachter, who expects industry sales to pick up in September with the release of new high-profile titles.
Overall video game sales are down 12 percent year-to-date, NPD said.
Nintendo's Wii was once again the top-selling home console in June with 362,000 units, although sales were down about 45 percent from the same month last year. The Wii has been the top home console in the United States for 21 consecutive months, Nintendo said.
NPD analyst Anita Frazier said the economy is definitely hurting the gaming industry, which was once thought to be relatively insulated from the downturn.
This is one of the first months where I think the impact of the economy is clearly reflected in the sales numbers, Frazier said in a statement.
The size of the decline could also point to consumers deferring limited discretionary spending until a big event (must-have new title, hardware price cut) compels them to spend, the statement added.
Microsoft's XBox 360 was the No. 2 home console in the month -- and the only one to see a year-over-year unit increase -- followed by Sony Corp's PlayStation 3 and PlayStation 2.
Sales of the Nintendo DS family of handheld consoles totaled 767,000, NPD said, well above the 164,000 recorded by the Sony PSP.
Denise Kaigler, vice president of corporate affairs for Nintendo of America, said she had higher expectations for the second half, given the company's release schedule.
Last year the focus was on the first half when you look at the strong launches ... this year our strong titles are coming out in the second half of the year.
The top-selling game title in June was Activision Blizzard's Prototype, which sold about 600,000 units across two platforms.
(Reporting by Gabriel Madway, editing by Leslie Gevirtz, Gary Hill)