The economy is in the doldrums, and shoppers everywhere are cutting back on spending. Yet in stores and Web outlets selling video games, times have rarely been better.

Thanks to the spread of video games to older demographics, to the mature product cycle of all three leading game consoles, and to the incredible popularity of the sector-changing Nintendo Wii, the video game industry is bucking the recession.

From harried housewives getting in some exercise on the Wii Fit to teeny-boppers playing along with bands on music games, or hardcore gamers enjoying the spectacularly immersive effects of titles like Gears of War 2, the industry is offering something for everyone at relatively modest prices.

That assertion may surprise those who think that splashing out 50 dollars or more per game and hundreds of dollars for a console is a bit excessive. But when you figure out how long a successful game can hold a player's attention, the investment seems a lot more worthwhile.

The enthusiasm for this most modern of entertainment devices is hardly confined to the United States.

Microsoft reports that November was its biggest sales month in Europe for the Xbox 360 console - sales rose 124 per cent from a year earlier. In the US, the Xbox had its best Black Friday, the day after Thanksgiving, with sales up 25 per cent on the year.

According to retail research firm NPD, US industry sales are up 25 per cent so far this year, with game sales in October rising 35 per cent on 2007's total. Search engines Yahoo and Google both report that gaming terms are the most searched category online, and once again stores are sold out of the most popular items like the Wii Fit, which are selling for hefty premiums on online auction sites like eBay.

Even the Wii console itself has been routinely sold out, two years after it was introduced - prompting Wal-Mart to issue a press release Monday boasting that it had 'tens of thousands' available online.

Consumers have been encouraged to splurge because prices for the latest generation of consoles have come down, three years or more after they were first introduced. At the same time, with more than 75 million Nintendo Wiis, Xbox 360s and PlayStation 3s in consumers' hands, software makers are churning out more games than ever.

Analysts say that people are turning more to in-home entertainment, viewing it as a better value than splurging on nights out or expensive holidays.

That theory was on display Tuesday in a Silicon Valley branch of Game Stop, the biggest US game chain, where a stream of lunchtime shoppers was searching for presents. Accountant Trevor Willis was buying a Sony Playstation 3.

'Nominally it's for my teenage son, but really the whole family is going to enjoy this, because there are so many games out there,' he said. 'It brings the family together, so spending a few hundred bucks seems justified.'

So what are the hot products this year?

The Wii remains far and away the top seller, with an installed base in the US of 13.4 million units, largely because of its lower price and its unique controllers, which respond to body movement. In addition to the Wii Fit game, which allows players to perform a series of exercise routines, Wii Music is in similarly high demand.

For the Xbox 360, with an installed base of 11.6 million units, the top sellers are Left 4 Dead, Gears of War 2, which sold 2 million copies on the day it was released in early November, and Call of Duty: World at War. Other popular titles include the Rock Band games, Grand Theft Auto IV and Shaun White Snowboarding.

Sony's Playstation 3 has only 5.7 million installed units in the US, even though it also functions as a Blu-Ray DVD player. Its most popular games according to are Warhawk, Little Big Planet and Ridge Racer 7.

Willis chose to buy the PS3, even though it's more expensive than its competitors.

'I watch a lot of movies, so it will be great to have the Blu-Ray player,' he said. As for the games, 'I'm sure there are good ones for all the consoles.' More PlayStation 3 News...