US consumers spent $4.5 billion on video game hardware, downloadable content and accessories during the second quarter of 2011. The figure represents a 1 percent gain from the same time period a year ago, however spending on such items in the first quarter was significantly higher at $5.9 billion, says research firm NPD in their quarterly Games Industry: Total Consumer Spending report.

Gamers spent $1.4 billion in physical stores on console and PC gaming software. It is further estimated that consumers spent $1.7 billion on subscriptions, digital game downloads and mobile games. These numbers were also lower than first quarter estimates which were around $1.85 billion.

"While the new physical retail channel still generates the majority of industry sales, our expanded research coverage allows us to assess the total consumer spend across the growing number of ways to acquire and experience gaming, including mobile apps and downloadable content," said Anita Frazier, industry analyst at NPD.

CNET points out that the gaming industry downturn is due to sluggish demand for both hardware and software. Hardware like the Nintendo 3DS hasn't moved nearly as well as the company had hoped, only selling 110,000 units in the US in the second quarter. In August it was reported that game sales had hit the lowest point since October 2006.

Things are expected to pick up in the second half as blockbuster titles like Battlefield 3 and Call of Duty: Modern Warfare 3 will be launching across all major platforms. The much-anticipated Diablo III went into beta last month and many thought it might launch before the end of the year, but it wasn't meant to be. Blizzard announced just a few days later that the game was being delayed until early 2012.