NEW YORK (CNN/Money) – Consumers continued to buy games at a record pace in 2004. Software sales for the video game industry came in at $2.9 billion, up nearly 8 percent – and $400 million – from the 2003 totals. And some high-profile sequels provided handsome rewards for their publishers.
Industry sales on the whole were off slightly, though. Retail sales (including hardware, games and peripherals – but excluding the sale of PC games) came in at $9.9 billion, according to The NPD Group, which tracks video game sales in the U.S. That's less than 1 percent off of 2003's $10 billion total.
Hardware sales fell $500 million (over 17 percent), due to widespread shortages of the PlayStation 2 and Xbox.
"This is the only entertainment sector that has shown sustained growth over the past decade," said Doug Lowenstein, president of the Entertainment Software Association. "That reflects well for the future of the game market relative to the entertainment industry."
Take Two Interactive Software's "Grand Theft Auto: San Andreas" proved to be the year's biggest game, with more than 5.1 million copies sold in just over two months. Microsoft's (Research) "Halo 2," which went on sale two weeks after "San Andreas" sold more than 4.2 million copies. (The original "Halo," which went on sale in November 2001, remained one of the year's 10 best selling games, moving over 1.1 million copies this year.)
The success of the two action shooters was indicative of a growing trend in the industry. Both the action and shooter genres saw sales increase more than 20 percent last year. Racing games saw the biggest decline, falling nearly 11 percent as anticipated titles from Sony and Microsoft both failed to meet their release dates and were pushed into 2005.
In the much-watched battle of football titles, Electronic Arts' (Research) "Madden NFL 2005" was the winner, selling more than 3.2 million copies for the PlayStation 2. Take Two (Research) and Sega's "ESPN NFL2K5" sold just 1.5 million copies. That battle was short-lived, though, as EA has since signed an exclusive licensing deal with both the NFL and ESPN.
Portable gaming also saw a spike, with software sales topping $1 billion for the first time. Virtually all of those sales were for a Nintendo machine – either the Game Boy Advance of the Nintendo DS, one of the holiday's hottest toys. Handheld software sales should go higher this year, once Sony (Research) introduces its PSP handheld gaming device.