Who could have ever imagined the video game industry growing into a multi billion dollar behemoth of profits?  Starting with a humble game named Pong and quickly morphing into Space Invaders, Pac Man and others, this once tiny niche business for “nerds” has morphed into a true powerhouse in the financial world.  Hot game titles and new hardware can and do propel unknown public company’s shares into the stratosphere very quickly, and the video fan base has grown exceptionally.

Has the current economic slowdown hurt the video gaming business?  Quite the contrary, sales are up across the board in November and the industry is expecting a record holiday season.  The basic psychology behind this surprising recent growth is that when people are uptight about real life situations, they look for diversions to get their minds off the real stresses.  Video games fill this need perfectly for a reasonable cost.  One can be entertained and de-stressed by interactively shooting zombies or whatever, harmlessly, instead of holding the tension inside.  Let’s dig deeper into the latest figures and top names in the business.

Video game sales surged 8% in November according to the retail research firm NPD Group.  This was the strongest November ever recorded.  Shopper’s purchased an astounding $2.99 billion worth of gaming consoles from Microsoft (Nasdaq:MSFT), Electronic Arts (Nasdaq:ERTS), Sony Corp (NYSE:SNE) and Nintendo ( OTC:NTDOY). Interestingly, none of these popular console makers shares have reacted much from the good news yet.  Microsoft (Nasdaq:MSFT) has the best selling console with its X-Box.  Activision Blizzard’s (Nasdaq:ATVI) latest battle themed game “Call of Duty: Black Ops” was the biggest selling title heading into the holiday season with 8.4 million sold.  This makes it the seventh best-selling game of all time so far.

Despite the fanfare, great pre-holiday season sales and the perfect economic climate for gaming, 2010 is not likely to surpass 2009 in performance.  Sales are expected to be between $18.8 billion and $19.6 billion making the industry approximately flat with last year.  While growth addicts may look at this as a negative, it is indeed impressive to see any entertainment industry hold its own year to year regardless of the continued dismal economic picture.  My opinion is the video game industry should continue to perform with stock prices keeping pace.

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