The games industry chalked up $925 million in sales over the past year, according to a report from the Interactive Entertainment Association of Australia (IEAA).
Most of the growth was driven by game hardware sales, which experienced a 7 per cent increase compared to 2005 to reach $329 million. A total of 12.5 million games were sold last year; the highest amount on record.
IEAA CEO, Chris Hanlon, said the increase in game hardware sales could be attributed to the launch of the Xbox 360 last March and the Nintendo Wii console in December.
"I think sales will exceed the $1 billion mark this year. This is not only because we will have 12 months of three next-generation systems, but because there is also intense competition in the games development arena," he said. "There is a whole raft of new games coming out that will incorporate a lot of the new innovation and technology.
"With the PlayStation 3 launching in March, this time next year we will see an even greater increase in hardware numbers."
Sales of games for handheld platforms rose by 11 per cent to $210 million, while static platform sales crept up by 7 per cent to $593 million. Even though game software sales reached $596 million, they were only up 1 per cent year-on-year.
"The reason for this is because there has been a transition phase in 2006: we were expecting three next-generation systems to be released," Hanlon said.
"One of the standout trends was the increase in the number of social games that have been sold, which is attributable to a lot of innovation. Some now include motion sensors where the user can play guitar, dance in front of a video camera and insert themselves in the game."
The sales results were compiled by analyst firm, GfK.