The struggle for video game market share seems to have been good for gaming overall.

The US video game market grew by more than 40% in 2007, according to NPD Group data cited in a January 2008 Gamasutra article.

"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," said Anita Frazier, analyst at NPD.

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

Video game software sales in particular jumped in the fourth quarter of 2007.

As for the consoles themselves, Microsoft's one-year head start on its rivals and popular online gaming service kept it in front.

The company sold more than nine million Xbox 360s. The surprise of the year was Nintendo's Wii, 7.8 million of which were sold in 2007. Those sales came despite inventory shortages. Furthermore, unit sales doubled for Sony's Playstation 3, according to NPD.

NPD said that game accessory sales were up 37% to $621.6 million. The booming market is good news not only for video game marketers, but also for marketers and advertisers looking to advertise in the games themselves. eMarketer projects that about two-thirds of a billion dollars will be spent on such ads in 2008.

Read more - eMarketer