New York - U.S. video game sales jumped 43% in 2007 to a record $17.9 billion, fueled by strong growth in every product category, including a 54% rise in hardware sales for the year and a 28% overall increase in the key month of December, according to sales data compiled by market research firm NPD Group. "While hardware sales realized the greatest percentage growth over 2006 due to the closely scrutinized console hardware transition, each category under the video games industry umbrella reached their own 'personal bests' in terms of annual sales," said NPD analyst Anita Frazier.

NPD predicted slower growth for this year. "While I wouldn't count on similar growth in 2008, I would expect to see 2008 increase over 2007, with more growth (proportionately) coming from software sales. While we will continue to see strong hardware sales, particularly if prices come down again, the spotlight now turns from hardware to software," added Frazier.

Nintendo led console hardware sales in December with 1.35 million Wii units, compared to 1.26 million Microsoft (NASD: MSFT) Xbox 360s and 797,600 Sony (NYSE: SNE) PlayStation 3s; Nintendo also sold 2.47 million DS handhelds, compared with 1.06 million Sony PSPs.

Activision (NASD: ATVI), the top-selling publisher in 2007, led December sales with its "Call of Duty 4" (1.47 million copies), and also took third place with "Guitar Hero III" (1.25 million).

Microsoft's "Halo 3" was the top seller for all of 2007 (4.82 million copies), followed by Nintendo's "Wii Play" (4.12 million), "Call of Duty 4" (3.04 million), "Guitar Hero III" (2.72 million) and "Super Mario Galaxy" (2.52 million).

"If Halo 3 was the game of the year (in terms of sales), one has to recognize the tremendous success of the Guitar Hero franchise. Guitar Hero games sold over $820 million at U.S. retail which is a record for any single franchise in any one year," said Frazier.

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