Sales declined 29 percent in June to $700 million.
Sales of console and portable software - the video games themselves - fell 29 percent from a year earlier to $329 million. Sales of hardware fell 45 percent to $201 million. That was offset partly by a 4 percent increase in sales of accessories, to $170 million.
Thursday's report by NPD Group tracks sales of new physical products - about 50 percent to 60 percent of the total spending. Excluded are sales of used games and rentals as well as digital and social-network spending.
The top-selling game was "Lego Batman 2: DC Super Heroes," from Time Warner Inc.'s Warner Bros. Interactive.
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