Market Overview

Video Game Sales Rise Ahead Of PlayStation 4, Xbox One Release

After two years of declines, the video game industry is beginning to rebound.

According to The Wall Street Journal, sales of new hardware (consoles like Xbox 360 and handhelds like Nintendo 3DS), new software and accessories have risen one percent in the United States.

The collective sales of these items reached $521 million, while game sales alone came in at $305 million (a 21 percent increase).

Electronic Arts' (NASDAQ: EA) Madden NFL 25 became the nation's best-selling game after selling one million copies.

Saints Row IV, which was picked up by Deep Silver after THQ (OTC: THQIQ) filed for bankruptcy, ranked second after selling several hundred thousand copies on PlayStation 3 and Xbox 360.

Disney's (NYSE: DIS) Disney Infinity, a game that incorporates interactive elements with real plastic toys, was the third most popular game in August.

Disney Infinity was largely inspired by Activision's (NASDAQ: ATVI) Skylanders series, which will receive a new installment this October for PlayStation 3, Wii U, Wii and Xbox 360.

That game -- along with Madden NFL 25 and dozens of others -- will arrive on Sony's (NYSE: SNE) PlayStation 4 and Microsoft's (NASDAQ: MSFT) Xbox One when the new consoles are released in November.

Related: Sony To Ship 10 Million PlayStation 4 Units, Topping Xbox One

While Nintendo's (OTC: NTDOY) Wii U was unable to reinvigorate the game industry, Sony and Microsoft's new consoles are expected to bring consumers back to gaming.

That's not to say that consumers ever really left. The older game consoles are still selling millions of units every year. But Xbox 360 came out in 2005; PlayStation 3 and the original Wii were released in 2006. Gamers inevitably lose interest when hardware ages. Sony's The Last of Us may have sold 3.4 million copies in three weeks, but that doesn't change the fact that PlayStation 3 is seven years old.

New hardware excites consumers. It revitalizes the game industry and inspires game developers to build bigger and better worlds. In the best-case scenario, new consoles lead to the birth of entirely new game ideas.

Wii U could have helped the industry grow in 2012. The initial sales were very promising, but its success did not last.

Related: Amazon To Launch New Game Console Alongside PlayStation 4, Xbox One

Earlier this year, Wii U sales dropped from roughly three million units during the fourth quarter of 2012 to a mere 390,000 units during the first quarter of 2013.

During the second quarter -- which came after a nationwide Wii U demo event at more than 100 Best Buy (NYSE: BBY) locations -- Nintendo sold 160,000 units. The original Wii actually sold more, moving 210,000 units during the same period.

PlayStation 4 and Xbox One are expected to perform much better at retail. In fact, Sony has already pre-sold more than one million consoles.

GameStop.com (NYSE: GME) has currently stopped taking pre-order of both machines, but eager customers can still pre-order an Xbox One from Best Buy.

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.

Louis Bedigian is the Senior Tech Analyst and Features Writer of Benzinga. You can reach him at 248-636-1322 or louis(at)benzingapro(dot)com. Follow him @LouisBedigianBZ

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