This Week in Games: Jan. 19, 2007

News from the virtual world:

CASINO ROYALE: The Consumer Electronics Show may be, to quote Stephen Colbert, a "high school science fair on crank," but it's nirvana for gadget geeks.

Video games are just a small part of the gigantic trade show that takes place every January in Las Vegas, but there's always the promise of some good smack talk when Sony (SNE) and Microsoft (MSFT) are both in the house.

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This time it was Bill Gates' crew throwing most of the punches.

First, the Microsoft chairman dissed Sony by telling TV Tokyo, "We see Nintendo as our toughest competition."

Then Microsoft execs Peter Moore and Chris Satchell ganged up on Sony's online service in interviews with the GamesIndustry.biz Web site, with Satchell calling it a "disaster."

"It's going to take (Sony) a couple of years to get up to speed on this, and I'm not sure that they necessarily have the talent," Moore said.

Sony spokesman Dave Karraker fired back, telling GamePro, "I would argue that consumers worldwide ... have decided whether or not Sony has the DNA to deliver hardware, software and services to suit this industry."

So maybe CES isn't a science fair — it's a schoolyard brawl.

GIVE ME YOUR DIGITS: Once CES wrapped, the industry analysts at the NPD Group stepped in to deliver some hard numbers on the next-generation console war. Let's look at the sales figures for December, the first full month in which all the new consoles were available:

Microsoft's Xbox 360 led with 1.1 million sold, followed by Nintendo's Wii (600,000 sold) and Sony's PlayStation 3 (490,000).

Of course, plenty more Wiis and PS3s could have been sold if the companies could have made more. All three consoles were outsold by Nintendo's portable DS (1.6 million) and the six-year-old PlayStation 2 (1.4 million). And Sony sold 950,000 PlayStation Portables.

For all of 2006, U.S. sales of software, hardware and accessories hit $12.5 billion, up 19 percent from the previous year. The year's best-selling game was EA Sports' "Madden NFL 07," followed by Nintendo's "New Super Mario Bros." and Microsoft's "Gears of War."

APPLE CHEEK: Despite all the CES hoopla, the gadget everyone was drooling over last week was introduced 600 miles away, at the Macworld Conference and Expo in San Francisco.

Of course we're talking about the iPhone, Apple's (AAPL) music-playing, Internet-surfing cell phone.

But does it play games? Not yet, but everyone who's seen the device's graphics and touchscreen technology seems to think games are inevitable.

Meanwhile, Microsoft vice president Peter Moore promised games for his company's Zune MP3 player within the next 18 months.

Here's hoping one of the companies can take cell-phone gaming beyond "Tetris" clones and solitaire card-playing.

Right now, neither the iPhone nor the Zune looks like much competition for the DS; then again, no one's ruling out an iGame or an Xbox portable sometime in the future.

VANISHING ACT: In 2004, Microsoft commissioned an "alternate reality game" — a contest incorporating Web sites, telephone calls and real-life events — called "I Love Bees" to promote the release of "Halo 2."

Now Microsoft is using the same type of campaign in advance of the release of its new computer operating system, Windows Vista.

It's called "Vanishing Point," and its Web site includes dozens of very difficult puzzles as well as links to cities around the world, from Los Angeles to Berlin to Singapore. First prize is a ride to suborbital space — "the ultimate vista," according to Microsoft. You can play along at vanishingpointgame.com.

NEW THIS WEEK: There's something new for just about everyone in stores this week.

Online role-playing addicts get "The Burning Crusade," the long-awaited expansion to Blizzard's hugely popular "World of Warcraft." Wii owners get Nintendo's "Wario Ware: Smooth Moves," another fast-paced collection of microgames.

For DS players, there's Capcom's "Phoenix Wright, Attorney at Law: Justice for All," a fresh batch of cases for the dashing lawyer. And Xbox 360 and PlayStation 2 gamers get "NCAA 07 March Madness," the latest edition of EA Sports' college basketball sim.