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Success of Halo 2 Puts Xbox Over the Top

Video games sales rocketed to record levels in 2004, and one of the most popular games of the year came from an unexpected source. Microsoft's Halo 2, which runs only on the Xbox video game system, sold 4.2 million units in the US between its November 2004 release and the end of the year, making it the second best-selling game of the year. Take Two's ultra-violent Grand Theft Auto: San Andreas" came in first with 5.1 million units sold. But consider this: GTA San Andreas shipped a full month earlier than Halo 2 and is available only on the Sony PlayStation 2, a system with three times the market penetration of the Xbox. And Halo 2 beat out the multi-platform hit Madden 2005, the third best-selling title of the year with 3 million units sold. Madden is made by Electronic Arts.

Overall, US sales for video game hardware, software, and related accessories reached $9.9 billion, slightly down from the $10 billion figure recorded in 2003. However, that number does not include game sales for personal computers, which will be announced next week. When that happens, sales of video games in 2004 will surpass those from 2003 and set an all-time record.

What's amazing about this growth is that, for the first time ever, it's happening during the waning days of a current generation of video game console hardware. Both the market leading PlayStation 2 and Microsoft's Xbox are expected to be replaced by next-generation consoles in late 2005 or early 2006. Typically, at this phase in their lifetimes, sales begin to fall. In 2004, for the first time, that did not happen. Also, both the Xbox and PlayStation 2 experienced shortages during the crucial Holiday 2004 selling season, which should have adversely affected sales growth.

For Microsoft, this news is heartening. Written off as an also-ran when the PlayStation 2 shot to first place, the Xbox has seen a massive resurgence in recent months and has even out-sold the PlayStation 2 in some markets. Part of the reason for that success is excitement over Halo 2, but much of it must be attributed to the Xbox's simple online multiple player capabilities, which make the system uniquely suited to both Internet and LAN-based deathmatches. Sony, sensing the trend, re-released the PlayStation 2 in late 2004 to include the Ethernet port required for online play.

The top ten list of best selling video games from 2004  is rounded out by ESPN NFL 2005 (Take Two), Need for Speed: Underground 2 (Electronic Arts), Pokemon FireRed with Adapter (Nintendo), NBA Live 2005 (Electronic Arts), Spider-Man 2 (Activision), Halo (Microsoft), and ESPN NFL 2K5 (Take Two). Interestingly, Nintendo's entry, Pokemon FireRed, is a title for the company's mobile machine, the GameBoy Advance, and not for its lagging GameCube video game console. No GameCube titles appeared in the top ten, and the GameCube, unlike the Xbox and PlayStation 2, was readily available throughout the holidays.

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