Gaming industry sales grow by 43% in 2007

— -- It's official: 2007 was the year of the Wii.

In December, Nintendo had its biggest month ever with the hot-selling game system. Holiday shoppers bought 1.4 million Wiis, according to sales data released Thursday by the NPD Group. The Wii's success helped drive the video game industry to a record-setting $17.9 billion in sales, about 43% higher than 2006's $12.5 billion, which was also a record.

The Wii's competitors among the latest generation of console game systems, the Microsoft Xbox 360 and Sony PlayStation 3, also had their best months ever in December. Microsoft sold nearly 1.3 million 360s (bringing total U.S. sales to 8.5 million), while Sony sold about 800,000 PS3s (2.8 million total). Wii's total U.S. sales reached 6.3 million.

And hot-selling games such as Guitar Hero III: Legends of Rock and Call of Duty 4 each sold more than 2 million copies in December alone.

The industry set new highs in every category of hardware and software, says NPD analyst Anita Frazier. "Both the PS3 and the Xbox 360 realized strong hardware sales increases," Frazier says. "The 360 in particular seems to have benefitted from a killer slate … including Call of Duty 4, Assassin's Creed and Halo 3."

Despite the Wii's success, it was only the top-selling console system. Nintendo's handheld DS actually sold more — 2.5 million in December.

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"With the Wii and DS we are providing innovative experiences to core gaming fans, and we're bringing in new consumers," says Reggie Fils-Aime, Nintendo of America president.

Many analysts are pointing out the industry's historic ability to be unaffected by economic woes. "The numbers are great across the board," says Michael Pachter of Wedbush Morgan Securities. Guitar Hero and Rock Band "aren't just played by 25-year-old guys. They are bringing families together, and so is the Wii."

Not surprisingly, Halo 3 emerged as the year's best-selling game, selling 4.8 million units. "This performance certainly puts it among the elite in gaming history with performance similar to that of Grand Theft Auto: Vice City in 2002, and GTA: San Andreas and Halo 2 in 2004," Frazier said.