Is Mobile Killing Traditional Video Game Sales?

Gone are the days when a new release could send video game industry sales soaring. For the third straight month, both hardware and software gaming sales fell. The slump came despite March seeing Electronic Arts (NASDAQ:EA) launch the best-seller “Mass Effect 3,” which sold twice as much as its earlier version had sold in its introductory month.

Mobile gaming is the culprit. An analysis found Apple’s (NASDAQ:AAPL) iOS and Google’s (NASDAQ:GOOG) Android mobile game sessions have grown more than 20 times in the first quarter of this year compared to the same quarter in 2010. Gaming dominates mobile app usage, too, with a little more than half of 64 billion app sessions measured worldwide having been spent on gaming.

Video game software sales fell 25 percent in March to $553.1 million, from $735.4 million a year ago. Hardware sales were down 35 percent to $323.5 million, from $494.5 million a year ago. Total sales for the industry fell 25 percent to $1.10 billion, according to researcher NPD Group.

Total sales fell 20 percent in February and 34 percent in January, relatively quieter months in terms of releases. The launch of the sci-fi game “Mass Effect 3” on March 6 did help, but not enough.

High-definition console systems like the Xbox 360 and PlayStation did better than any other hardware platforms, but unfortunately for game makers, the trend in sales is likely to continue, at least this year, as Microsoft (NASDAQ:MSFT) and Sony (NYSE:SNE) have both delayed plans to launch next versions of their consoles until mid-2013.