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.