Despite what should have been busy festive season sales, the latest figures from sales tracking firm The NPD Group show that retail sales over December 2011 in the US dropped by 21% to $3.99 billion from $5.07 billion in December 2010.

Even more alarming was that hardware sales declined by 28% to $1.32 billion while accessories fell 27% to $628.7 million. Software sales suffered the least, recording a 14% drop to $2.04 billion.

“Overall industry results are not entirely surprising given that we are on the back end of the current console lifecycle, combined with the continued digital evolution of gaming. Core gamers continue to be engaged and spend on established franchises across both the digital and physical format using multiple devices for different gaming occasions,” said Anita Frazier, industry analyst, The NPD Group.

Hardware was “particularly hard hit in December,” with sales dipping to the lowest level since 2005. The Xbox 360 sold 1.7 million units, and became the best-selling platform for 2011. The Wii followed with 1.06 million units and the PS3 with 936 000 units.

Software sales

Call of Duty: Modern Warfare 3 was the best-selling game for December 2011, claiming top spot on the Top 10 games for the month. Just Dance 3 came in second place, but perhaps more importantly became the number 1 Kinect game for December 2011 and took first place on the Wii and PlayStation Move.

Elder Scrolls V: Skyrim followed in third, with Mario Kart 7 in fourth place and Battlefield 3 taking number 5. Madden NFL 12 was sixth with Assassin’s Creed: Revelations in seventh and NBA 2K12 in the eighth spot. Super Mario 3D land and Batman: Arkham City rounded off the chart at numbers 9 and 10 respectively.

It is interesting to note that Xbox 360 held seven of the Top 10 console game titles during December. These include: Call of Duty: Modern Warfare 3, Elder Scrolls V: Skyrim, Battlefield 3, Assassin’s Creed: Revelations, Just Dance 3, Kinect Sports: Season 2 and Dance Central 2.

NPD highlighted sales for Skylanders, saying that if you had to combine the sales of software bundles with character packs (which are tracked in the accessories category) the title would rank fourth in December and 10th for Annual 2011 in dollar sales.

Another title that NPD spoke about was Star Wars: The Old Republic which was the 14th best-selling title in December, a remarkable feat given it was a PC exclusive release. Lastly NPD turned to Legend of Zelda: Skyward Sword which would have claimed a Top 10 spot in December if the system was ranked on an SKU basis rather than on a combined platform basis. Link’s latest adventure was the 10th best-selling software SKU for the month.

Frazier commented on the overall performance of the US videogame industry in December such: “December was very rough for new physical sales of video games hardware, software and accessories. Because of the great slate of content that came to market during the fourth quarter, I had expected December sales to represent a larger portion of total year sales than what occurred. This year, December accounted for just 23% of annual sales, while the average for the past ten years has been 28.”

December 2011 Hardware Sales Chart

• Xbox 360 - 1.7 million
• Wii - 1.06 million
• PS3 936 000

December 2011 Software Sales Chart

• 1.) Call of Duty: Modern Warfare 3 (Xbox 360, PS3, PC) - Activision
• 2.) Just Dance 3 (Wii, Xbox 360) - Ubisoft
• 3.) The Elder Scrolls V: Skyrim (Xbox 360, PS3, PC) - Bethesda Softworks
• 4.) Mario Kart 7 (3DS) - Nintendo
• 5.) Battlefield 3 (Xbox 360, PS3, PC) - EA
• 6.) Madden NFL 12 (Xbox 360, PS3, Wii, PS2, PSP) - EA
• 7.) Assassin’s Creed: Revelations (Xbox 360, PS3, PC) - Ubisoft
• 8.) NBA 2K12 (Xbox 360, PS3, Wii, PS2, PSP, Wii) - Take-Two
• 9.) Super Mario 3D Land (3DS) - Nintendo
• 10.) Batman: Arkham City (Xbox 360, PS3, PC) - Warner Bros. Interactive Entertainment

December 2011 Videogame Industry Sales Totals

• Videogame sales: $3.99 billion (-21%)
• Hardware: $1.32 billion (-28%)
• Software: $2.04 billion (-14%)
• Accessories: $628.7 million (-27%)

Source: The NPD Group