Overall U.S. video game sales fell 17 percent in March to $1.43 billion, research group NPD said on Thursday, a revealing figure for an industry that had so far shown resilience in the economic downturn.

Video game software sales dropped 17 percent to $792.8 million in the month, while hardware sales fell 18 percent to $455.6 million.

Nintendo's blockbuster Wii was again the top-selling console in the U.S., selling 601,000 units. Microsoft's Xbox 360 was No. 2 with 330,000 units, while Sony's PlayStation 3 was third, with 218,000 units.

Nintendo's DS was the top-selling handheld console, selling 563,000 units, ahead of Sony's PSP, which sold 168,000.

Capcom's Resident Evil 5 was the best-selling video game in the month, selling 1.5 million units for the Xbox and PlayStation 3, according to NPD.

(Reporting by Gabriel Madway; Editing Bernard Orr)