Research firm NPD Group said Thursday that overall sales fell to $3.21 billion from $4.1 billion in December 2011. NPD estimates that sales of new game hardware, software and accessories account for about half of what consumers spend on gaming.
Sales of video games themselves, excluding PC titles, tumbled 26 percent to $1.54 billion. Sales of hardware gaming systems such as the Xbox 360 and the Wii U - fell 20 percent to $1.07 billion.
"Call of Duty: Black Ops II" from Activision Blizzard Inc. was December's top game.
For all of 2012, total game sales dropped 22 percent to $13.26 billion.