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Video-Game Sales Soar Despite Weak Economy

Even in a seasonally slow month and with the economy in the doldrums, U.S. sales of video game hardware and software soared 28 percent in July, hitting $1.19 billion.

According to data from market researcher NPD Group, Americans bought $446.9 million worth of video game hardware during the month, a 17 percent jump from the same month a year ago.

The portable Nintendo DS was the top-selling gaming system with 608,400 units, followed by the Wii at 555,000.

The pricier, fancier consoles, the PlayStation 3 from Sony Corp. and the Xbox 360 from Microsoft Corp., came in a distant third and fourth. The classic PlayStation 2, nearly eight years after its release, still managed to sell 155,500 units.

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Over time, Sony hopes to convert the throngs faithful PS2 owners to the PS3, but it faces a formidable rival in the Xbox 360.

On the software side, people spent $591.1 million on games during the month, up 41 percent from the previous year. This is slightly below what Michael Pachter, an analyst with Wedbush Morgan, had forecast. He had predicted software sales of $605 million, a 44 percent increase.

As expected, "NCAA Football 09" from Electronic Arts Inc. and "Wii Fit" from Nintendo were among the month's top-selling games, along with Activision Blizzard Inc.'s "Guitar Hero: On Tour" for the DS.

Nintendo has boosted production for the Wii last month in an attempt to keep up with relentless global demand for the console.

Denise Kaigler, vice president of corporate affairs at Nintendo of America, said customers "continued to respond well to Nintendo products" in July, even in the face of the economic downturn.

Microsoft spokesman David Dennis said July was a strong month for the Xbox though it is one of the quieter periods for the gaming business. Companies focus much of their attention on the yearly E3 Business and Media Summit, a gaming conference held mid-July in Los Angeles.

"We certainly didn't expect to see a major spike" Dennis said, at a time when the company didn't have any major game launches.

The economy, he added, is "certainly something we keep our eyes on."

But Dennis said that when it comes to entertainment value, video games actually offer a lower cost per "minutes of fun" — compared to going out to dinner or a movie, for example.

As such, the industry is somewhat insulated from the ups and downs of the economy, even when people are tightening their belts.