Sales of game consoles and portables were up 5 percent compared to October 2007, at US$495 million, while software sales jumped 35 percent to $697 million, according to figures from NPD Group. Sales of video game accessories, such as extra controllers, fell 8 percent to $120 million.
The strong rise in software sales was helped by some popular titles for the Xbox 360 and Wii consoles.
Overall the entire video game market in the U.S. was worth $1.3 billion in October, up 18 percent from the same month last year. Year-to-date the market stands at $13.1 billion, up 25 percent compared to the first 10 months of 2007.
The figures will be welcome news for the gaming industry. Conventional wisdom has industries like gaming holding up well during recessions because people spend more time at home, but some analysts have questioned whether this still holds true given the many competing home entertainment options that are now available, from multichannel TV and video-on-demand to the Internet.
It also contrasts with the dire conditions that consumer electronics companies are seeing in other markets such as flat-screen TVs and cameras. In recent weeks several major manufacturers including Sony have downgraded their financial outlooks on weak sales.
The best-selling game in October was Microsoft's "Fable II" for its Xbox 360 console, which sold 790,000 units, according to NPD. In second place was Nintendo's "Wii Fit," which sold 487,000 units. "Fallout 3" from Bethesda Software for the Xbox 360 came in third at 375,000 units, followed by "Mario Kart Wii" and "Wii Play" to round out the top five.
The highest-ranking game for Sony's PlayStation 3 was "Socom: U.S. Navy Seals Confrontation," which came in seventh place with sales of 231,000 units.
In hardware, Nintendo's Wii outsold its nearest competitor by more than two-to-one with sales of 803,000 units. That made October the console's third-best-selling month yet, after November and December last year.
The Xbox 360 sold 371,000 units and the PlayStation 3 sold 190,000 units. While the PlayStation 3 remains in third place, the sales increase it achieved over October 2007 was 57 percent, significantly higher than the gains recorded by the other consoles.
Sony's older PlayStation 2 managed sales of 136,000 units. The console is still popular because of its low price and the wide variety of software available for it.
In the portable market, Nintendo's DS sold 491,000 units to easily beat the PlayStation Portable's 193,000 units.
"The console portion of the market made significant gains at 26 percent across hardware, software and accessories, while the portable side of the market stalled, declining 14 percent," NPD said. "Year-to-date the portable segment of the market is still up 7 percent."
Top Ten best-selling games in the U.S. in October were, according to NPD Group:
1) Fable II, Xbox 360, 790,000 units
2) Wii Fit, Wii, 487,000 units
3) Fallout 3, Xbox 360, 375,000 units
4) Mario Kart, Wii, 290,000 units
5) Wii Play, Wii, 282,000 units
6) Saints Row 2, Xbox 360, 270,000 units
7) Socom: U.S. Navy Seals Confrontation, PlayStation 3, 231,000 units
8) Little Big Planet, PlayStation 3, 215,000 units
9) NBA 2K9, Xbox 360, 202,000 units
10) Dead Space, Xbox 360, 193,000 units