June 24^th, 2002 (12:00am) - LONDON (Reuters) - The video games industry is on track for a record year in 2002, with global sales projected to increase by 12 percent to $31 billion, a new report by British research firm Informa Media Group said on Monday.

The popularity of new video game consoles, including Microsoft’s Xbox, Sony’s PlayStation 2 and Nintendo’s GameCube, is contributing to the torrid growth.

Steep competition has forced the three console makers to engage in an aggressive price war in the U.S., Asia and Europe for their 128-bit machines in Europe, stoking record demand.

Combined console and hardware sales will account for $22 billion, or nearly 70 percent of the market in 2002.

In the past decade, home video games sales have soared, creating a market that now rivals film and music as the most popular entertainment past-times.

By year end the three manufacturers will have sold cumulatively 70.4 million so-called next-generation consoles. Sony accounts for 69 percent, with the sale of 48.4 million PlayStation 2 units.

Nintendo is expected to have sold 15.1 million GameCubes with Microsoft selling 6.9 million Xboxes, the study said. GameCube and Xbox made their debut in the U.S. and Japan last year, a year after Sony’s PlayStation 2.

"The assumed launch of new console hardware in 2005 and 2006, and the resultant software boom, will keep the market buoyant," the study reads. "The global market is forecast to peak again in 2008, with revenues of $40 billion."

Conversely, sales of PC games plus hand-held games and hardware are showing signs of weakness. Groups’ sales are expected to dip by a combined 8.5 percent to $8.5 billion this year.

Meanwhile, sales in the nascent categories of online, mobile phone and interactive television games is expected to double this year to $873 million, Informa Media Group said.

The sale of mobile, online and interactive TV games is expected to rise to 54 percent by 2010, the group added.