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2007 a Record Year for Video Games

They are easily the most anticipated numbers of the year by Microsoft, Nintendo and Sony: NPD's year-end sales figures for the video games industry. And what a story they tell.

NPD reports tonight a record $17.94 billion was spent on non-PC game hardware, software and accessories; a staggering 43 percent better than 2006.

But the real story is how much of a gap Nintendo and Microsoft continue to build against Sony's Playstation 3. NPD says Sony sold 2.56 million PS3's last year in the U.S., compared to a whopping 6.29 million Nintendo Wii's, and 4.62 million XBox 360's from Microsoft.

PlayStation 3
AP
PlayStation 3

Sony, in the release it sent tonight, says December was the best single month ever for PS3, "an increase of 60% over December of last year," Sony says. Playstation Portable saw an 87 percent increase from November. And, Sony says PlayStation total hardware revenue was $714 million in December (PS3, PS2, PSP, etc.), surpassing the total hardware revenue of Microsoft and Nintendo.

But, the bad news for Sony, and I know there's debate about why I think this indeed is bad news: Sony sold 3.97 million PS2's, the older generation console. So older technology actually outsold the new stuff, and it's the clearest sign yet that Sony is having problems migrating old customers to the newer platform, despite price cuts and ad blitzes.

Nintendo is a kind of double-winner, also racking up a huge, 8.5 million DS units sold, meaning Nintendo is by far and away the preferred game platform.

December was a whopper of a month for Microsoft and its Xbox 360, which tallied 1.26 million units in December alone; but Nintendo came in first with 1.35 million; PS3 was just shy of 800,000.

CNBC.com

Speaking of double-winners, Microsoft's Halo 3 was the year's top title, selling 4.82 million units. Call of Duty came in second at 3.04 million units.

Oh, and Guitar Hero did $820 million at U.S. retail in 2007, which NPD says is a record for any single franchise in one year.

Needless to say, Nintendo is doing a fair amount of crowing, and we'll likely hear the same from Microsoft. As far as Sony is concerned, well, at least it won that Blu-ray vs. HD DVD thing.

In a release just emailed to me from Nintendo tonight, “By the end of 2007 we were sold out of virtually all hardware, and much of our stock of software and accessories was sold out as well," said Cammie Dunaway, Nintendo of America’s executive vice president of sales & marketing. “And that momentum continues here in the early weeks of 2008.”

Nintendo claims its products accounted for 52 percent of all hardware sales in 2007, more than all other competitors combined. Pretty staggering stuff.

Bottomline for Microsoft: Xbox, despite those early losses in the billions, and the billion-dollar charge in Summer 2007 to extend warranties because of Xbox 360 problems, finally seems to have a winner on its hands.

I thought Sony had an uphill climb ahead of it. NPD's figures confirm it.

Questions? Comments? TechCheck@cnbc.com

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