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U.S. video game sales of hardware, software and accessories declined 31 percent in June to $1.17 billion, according to the NPD Group.

The year-over-year decline was the sharpest since a 41 percent drop in September 2000. "This is one of the first months where I think the impact of the economy is clearly reflected in the sales number, said Anita Frazier, NPD Analyst.

Anita Frazier

"While the aggregate of content may not be as strong as what we saw in the first half of last year, and while the consumer base willing to spend dollars on hardware at the current price points may be thinning, the size of the decline could also point to consumers deferring limited discretionary spending until a big event (must have new title, hardware price cut) compels them to spend."

Nintendo's Wii remained the most popular game console in June, selling 362,000 units, but down 45 percent from the same period a year ago. The Wii has been the top-selling console in the U.S. for 21 consecutive months.

Microsoft's Xbox 360 was the second best-selling console in June with 240,600 units sold, up from 175,000 in May. The Xbox 360 was the only console to see a year -over-year increase.

Sony's Playstation 3 sold 164,700 units and Playstation 2 sold 152,700 units.

Among handhelds, the Nintendo DS sold 766,500 units up from 633,500 in May, while the Sony PSP sold 163,500 units up from 100,400.