Tracking results from the NPD Group for new U.S. retail video game sales in December showed industry revenues for the important December sales period shrinking 9 percent compared to the same month last year, leaving the industry down 5 percent for the entire year.

Just over $5 billion in December spending on new hardware, software and accessories at retail contributed to $18.58 billion in new retail sales for the year, down 6 percent annually. With PC game sales included, however, that number rises to $19.3 billion, just a 5 percent decline from last year.

"This year, declines in portable and console game sales were offset by new physical PC game sales, which increased by 3 percent, and increases in the consumer spend occurring via digital download, mobile gaming apps, social network games, and used games," NPD analyst Anita Frazier said. The NPD Group said it plans to issue a final analysis of 2010 in March.

“December 2010 represented one of the strongest monthly performances the industry has ever had at retail," said Entertainment Software Association president Michael Gallagher. "It was a robust finish to a year marked by innovation and engaging millions of consumers through a multitude of delivery models."

Hardware

Sales of $1.84 billion in hardware in December 2010 -- down 16 percent from 2009 -- led the industry to finish 2010 around 13 percent behind 2009, at $6.29 billion in hardware sales.

While NPD no longer reveals hardware sales numbers for all systems, Microsoft announced the Xbox 360 was the only system to see year-over-year sales growth in 2010, rising 42 percent above 2009's unit sales. That rise includes 1.86 million units sold in December 2010, making the month the best ever for Microsoft's system, according to NPD.

[UPDATE: Nintendo trumpeted sales of 2.36 million Wii systems in December 2010, down 38 percent from the same month last year. Despite the decline, that figure still snaps a six month streak for Microsoft's system atop U.S. retail home console sales. The Wii also led home console hardware sales for the year, with over 7 million units sold.

Xbox Group Product Manager David Dennis told Bloomberg Microsoft's hardware position slippage was due to previously reported supply constraints for the month. “We air-freighted stuff in December, but you can only see as many as you can make," he said.]

Nintendo also revealed the Nintendo DS sold 2.5 million units for the month and over 8.5 million for the year.

Sony, for its part, sold 1.21 million units in the month, according to the L.A. Times, down 11 percent from December 2009.

The Nintendo DS led hardware sales for the month, NPD revealed, finally surpassing the PS2's total installed base with sales of 47 million units overall, by NPD's calculations.

Software

For December, total new retail software sales, including PC games, were down 5 percent to $2.53 billion. That number was buffered somewhat by strong PC software sales growth of 62 percent in the month, thanks mainly to Activision Blizzard's World of Warcraft: Cataclysm, the third-best-selling overall game for the month.

Activision Blizzard's Call of Duty: Black Ops once again led monthly software sales this month, with somewhere north of 3.6 million sales across five platforms.

Number two Just Dance 2 and number four seller Assassin's Creed: Brotherhood helped Ubisoft join Activision in rounding out the month's top four sellers, with number eight seller Michael Jackson: The Experience also ranking for the publisher.

When single-system SKUs are separated out, NPD revealed that non-traditional titles including Microsoft's Kinect Sports and Dance Central and THQ's uDraw Tablet software (which comes with the included hardware) make the top 10 list.

"Outside of Black Ops and Assassin’s Creed, the top list on both a SKU and title level basis reflects an array of content that is appealing outside the core audience for gaming that you might expect to sell well during the holiday timeframe," Frazier said.

The Top 10 new retail sellers in the U.S. for December 2010 (with sales combined across systems) were as follows:

1. Call of Duty: Black Ops (Activision Blizzard) - Xbox 360, PS3, Wii, DS, PC - over 3.6 million
2. Just Dance 2 (Ubisoft) - Wii
3. World of Warcraft: Cataclysm (Activision Blizzard) - PC
4. Assassin's Creed: Brotherhood (Ubisoft) - Xbox 360, PS3
5. Donkey Kong Country Returns (Nintendo) - Wii
6. Disney Epic Mickey (Disney Interactive Studios) - Wii
7. Madden NFL 11 (Electronic Arts) - Xbox 360, PS3, Wii, PS2, PSP
8. Michael Jackson: The Experience (Ubisoft) - Wii, DS, PSP
9. NBA 2K11 (Take-Two Interactive) - Xbox 360, PS3, Wii, PSP, PS2, PC
10. Need for Speed: Hot Pursuit (Electronic Arts) - Xbox 360, PS3, Wii, PC

Sales of new retail software, including the PC, reached $10.1 billion for the year, down 5 percent from 2009's mark of $10.6 billion. When used game sales, rentals and digital revenue streams are included, NPD estimates money spent on games would hit between $15.4 and $15.6 billion, which is flat compared to 2009.

Between them, Cataclysm and Starcraft II led new retail PC sales for the year, representing 14 percent of such sales for the period.

“The dynamics of games content purchasing changed dramatically in 2010 with options ranging from the physical product to digital downloads on connected devices as well as in-store digital kiosks,” said NPD analyst Anita Frazier. “The increasing number of ways to acquire the content has allowed the industry to maintain total consumer spend on content as compared to 2009, and we should expect 2011 to be a growth year in the games industry as the consumer demand for gaming continues to evolve.”

Call of Duty: Black Ops was also the top-selling title for the year, selling more than 12 million units to come in twice as high as number two seller Madden NFL 11. This concentration of sales in one title did not extend to the entire top 10, which represented roughly the same proportion of total industry software sales as 2009, according to NPD.

Three of 2010's top ten sellers -- New Super Mario Bros. Wii, Wii Fit Plus and Call of Duty: Modern Warfare 2 -- were actually released in 2009, indicating an extremely extended sales life for at least a few of the year's biggest hits.

The Top 10 new retail sellers in the U.S. for all of 2010 (with sales combined across systems) were as follows:

1. Call of Duty: Black Ops (Activision Blizzard) - Xbox 360, PS3, Wii, PC, DS - more than 12 million
2. Madden NFL 11 (Electronic Arts) - Xbox 360, PS3, Wii, PS2, PSP
3. Halo: Reach (Microsoft) - Xbox 360
4. New Super Mario Bros. Wii (Nintendo) - Wii
5. Red Dead Redemption (Take-Two Interactive) - Xbox 360, PS3
6. Wii Fit Plus (Nintendo) - Wii
7. Just Dance 2 (Ubisoft) - Wii
8. Call Of Duty: Modern Warfare 2 (Activision Blizzard) - Xbox 360, PS3, PC
9. Assassin's Creed: Brotherhood (Ubisoft) - Xbox 360, PS3
10. NBA 2K11 (Take-Two Interactive) - Xbox 360, PS3, PS2, PSP, Wii, PC

Accessories

NPD dubbed December 2010 "the biggest month for accessories sales in history," up 10 percent from December 2009 to represent over $853 million in accessory sales. For the year, accessory sales were up 13 percent to $2.93 billion.

Unsurprisingly, NPD attributes the rise to "a hefty increase in the average retail price driven by specialty controllers," including the Kinect, which was the best-selling accessory for the second month in a row and also for the entire year.

Point and subscription cards sold in stores saw the largest unit volume increase among accessory types in 2010, pointing to the increased relevance of digital sales in the video game market.