By Scott Hillis

SAN FRANCISCO (Reuters) - U.S. sales of video game hardware and software in June rose 31 percent from a year ago, driven by stronger demand for gaming consoles from all three major industry players, market data showed on Monday.
June sales of $1.1 billion were also up about 35 percent from May, showing strong momentum at the start of the traditionally slow summer season, the report from market research firm NPD showed.

"The industry continues to realize substantial gains, month after month, and on all fronts it's great growth," said NPD analyst Anita Frazier.

With few blockbuster games hitting the shelves, consumers focused on hardware, increasing their purchases of Sony Corp.'s

PlayStation 3, Microsoft Corp.'s Xbox 360 and Nintendo Co. Ltd.'s Wii.

The sales rankings were unchanged from recent months, with the $250 Wii retaining its top spot with 381,800 units sold, about 13 percent more than the previous month. Nintendo's "Mario Party 8" was also the top game in June, selling nearly 427,000 copies.

"It's just further evidence that both our platforms, the Wii and DS (handheld), are certainly capturing a wide audience. We are delivering on our message of reaching out to new gamers," said Nintendo spokeswoman Beth Llewellyn.

Microsoft sold 198,400 Xbox 360s, a jump of 28 percent from May, while Sony sold 98,500 PlayStation 3 units, up more than 20 percent.

Sony said the June gains reflected growing enthusiasm among gamers for upcoming PS3 titles, and added that a 17 percent price cut on the PS3 in mid-July was building on that. Sony said PS3 sales at its five largest retailers had soared 135 percent in the last two weeks of July.

"This jump in sales bodes very well for us heading into the fall as we launch an impressive arsenal of hardware and software," Jack Tretton, head of Sony Computer Entertainment America, said in a statement.

Microsoft, which said earlier this month that the failure rate of the Xbox 360 was "unacceptable," booked a charge of $1.06 billion to extend warranties and repair broken machines.

Nintendo's DS handheld sold 561,900 units as it continued to ride enthusiasm for a pair of new "Pokemon" games, while Sony's PSP, which has been boosted by an April price cut, sold 230,100 units.

On the software side, Nintendo titles captured six of the top 10 games for June. Capcom Co. Ltd.'s "Resident Evil 4" for the Wii was the only one not published by Nintendo itself.

Microsoft's Xbox 360 had three games in the top 10, with its car racing simulator "Forza Motorsport 2" coming in at No. 5 with sales of 197,000 copies.

Activision Inc.'s "Guitar Hero II" continued to rack up strong sales, moving 375,000 copies for the Xbox 360 and Sony's older PlayStation 2. The game, which comes with a guitar-shaped controller, sells for up to $90, about 50 percent more than a typical new console game.
© Copyright 2007 Reuters.

Photo:
An employee of an electronics store in Richfield, Minnesota, wheels a stack of new Sony PlayStation consoles in this November 17, 2006 file photo. U.S. sales of video game hardware and software in June rose 31 percent from a year ago, driven by stronger demand for gaming consoles from all three major industry players, market data showed on Monday. REUTERS/Eric Miller