"Revenue from U.S. video game sales dropped 31 percent to $1.17 billion in June, compared with $1.7 billion a year earlier, according to data released Thursday by market research firm NPD Group."
CNET and others are quoting NPD data that are truly miserable and getting worse. And I think that expectations for the rest of the year are way too high.
Apple announced earlier this week that there have been 1.5 billion downloads from the iPhone app store. I don't own an iPhone so I went to the app store to check it out. It is mostly games as far as I can tell. There are just too many options for gaming these days.