November was another lousy month for the video-game industry on the whole.

Industry watcher NPD Group's report finds video-game sales plunging by 8% last month, with hardware sales taking a steeper 13% loss than the 3% slide in November.

The hardware end was supposed to be weak. Microsoft (NASDAQ:MSFT), Sony (NYSE:SNE), and Nintendo (OTC BB: NTDOY.PK) have slashed prices heading into the holidays. Lower system price tags will weigh on the top line, even if there is improvement in the actual number of units being sold.

However, the weakness in software is unforgivable. The video-game industry has taken year-over-year hits in eight of the past nine months. November was supposed to be a winner. Activision Blizzard (NASDAQ:ATVI) set initial sales records for Call of Duty: Modern Warfare 2. Nintendo's New Super Mario Bros. for the Wii had all of the makings of a slam dunk.

Unfortunately, the industry is pitted against record results in 2008. Folks were paying up for costly music games and accessories, and that's a trend that's fading quickly. Viacom's (NYSE:VIA) The Beatles: Rock Band gave the industry a positive September, but that has been the exception to the brutal rule.

Sorry, publishers. Gamers just don't want your plastic DJ turntable simulators or Tony Hawk skateboard accessories.

I've been criticized since my bearish turn on CNBC this summer, but has my pessimism not been vindicated? Diehard gamers that claim that I was wrong to slam GameStop (NYSE:GME), and most of the software companies laughed at my suggestions that casual gamers were perfectly fine with ad-supported Facebook games or nearly free App Store titles. Maybe the industry needs these casual players more than the diehards think.

I also have to argue that connectivity is extending the playable life of titles like Call of Duty: Modern Warfare 2, and therefore drying up the demand for more games.

Am I wrong? I haven't been wrong so far.

Take-Two Interactive (NASDAQ:TTWO) shocked investors last week, when it warned that it will post a steep loss for the year ahead, even though its marquee BioShock2 game is still on track for a February release.

Analysts who think 2009 is just a breather after a huge 2008 had better start drawing circles around 2010.

The game is still ugly.

Take-Two Interactive Software is a Motley Fool Rule Breakers recommendation. Activision Blizzard, GameStop, and Nintendo are Motley Fool Stock Advisor selections. Microsoft is a Motley Fool Inside Value recommendation. Motley Fool Options has recommended a diagonal call on Microsoft. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz admits to still playing video games, when he can find the time. He owns no shares in any of the companies in this story and is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.