U.S. game sales rise 28 percent in December

By Scott Hillis

SAN FRANCISCO (Reuters) - U.S. sales of video game hardware and software rose 28 percent in December from a year earlier as holiday shoppers snapped up new consoles like Nintendo Co Ltd's (7974.OS: Quote, Profile, Research, Stock Buzz) top-selling Wii, market research firm NPD said on Thursday.

But after setting a 43 percent pace for all of 2007, growth is expected to cool off this year as attention moves away from the transition to a new generation of hardware and more toward games.

"While I wouldn't count on similar growth in 2008, I would expect to see ... more growth proportionately coming from software sales," NPD analyst Anita Frazier said in written commentary on the data.

"While we will continue to see strong hardware sales, particularly if prices come down again, the spotlight now turns from hardware to software."

Sales were $4.82 billion in December and nearly $18 billion for all of 2007, NPD said in its latest monthly report.

Nintendo sold 1.35 million Wiis, bringing its total U.S. user base to 7.4 million, NPD said. The Wii's success has been fueled by its motion-sensing controller and simpler games that have won over consumers outside the traditional gaming audience of young men.

Microsoft Corp (MSFT.O: Quote, Profile, Research, Stock Buzz) sold 1.26 million of its Xbox 360 machines, boosted by games such as Activision Inc's (ATVI.O: Quote, Profile, Research, Stock Buzz) "Call of Duty 4", which topped the December charts with 1.47 million copies sold.

While much of the attention for the holidays was focused on shortages of the Wii, Microsoft spokesman David Dennis said the company had seen tight supplies of the Xbox 360 as well.