The US video game industry is in a tail spin after sales fell in September and a grim picture has been painted by analysts for the crucial holiday shopping season. Video game software, hardware and accessories fell to about $1.2 billion, a drop of 8 per cent from roughly $1.32 billion in the same month a year earlier.

Beancounters at market research outfit NPD Group say the slowdown particularly hit video game hardware makers, whose sales fell 19 per cent from the previous year. The problem is that recession-weary punters are pinching pennies.

NPD said that the results may be overly dramatic because its reporting method includes only new retail sales. Electronic, used game and mobile app sales, for example, are absent from the company's methods.

Halo was also the top-selling among software titles, followed by Electronic Arts "Madden NFL 11" and Capcom's "Dead Rising 2." Sony's "Move" products for the PlayStation 3 were also a standout success.