

Video game sales fell 28 percent in May, with total industry sales falling to $516.5 million from $718.9 million a year ago, according to consumer market research firm NPD Group. That happened despite the launch of the fantasy action role-playing game Diablo III from Blizzard Entertainment and the first-person shooter Max Payne 3 from Rockstar Studios.

The poor performance in May was a little better percentage-wise compared to April, when sales fell 42 percent year-over-year. The strong sales of Diablo III did create a bright spot: PC game sales were up 230 percent for the month.

But the weak brick-and-mortar store sales aren’t necessarily something to fret about as retail is becoming a smaller piece of the pie, accounting for 50 to 60 percent of sales. The total spending on games, when adding digital and other sales such as used games, adds up to more than $1.17 billion in the month.

In May, hardware sales were $138.9 million, down 39 percent from $228.8 million a year ago. Software was $255.4 million, down 32 percent from $375.9 million a year ago. Accessory sales were $122.3 million, up 7 percent from $114.2 million a year ago. Accessory sales were up because of strong game-card sales as well as the success of Activision’s Skylanders products, which are hybrid toy-game devices.

The estimated total consumer spending on games includes physical video and retail games, used games, game rentals, subscriptions, full-game digital downloads, social network games, downloadable content, and mobile games. Not counting hardware, sales were $335.2 million, down 16 percent from $400.1 million a year ago.

NPD is working with video game research company EEDAR to try to come up with more accurate numbers for global digital and physical game sales worldwide. The top-selling game of the month was Blizzard’s Diablo III (pictured above).

Microsoft said that total spending on the Xbox 360 was $209 million in May. The company sold more than 160,000 hardware units in the month in the U.S., and that meant that it capture 45 percent of the U.S. market share for hardware.

Following is analysis from The NPD Group’s video game industry analyst, Anita Frazier: