Canadian spent a record $2 billion on video games last year, fuelled by a $500 million pre-Christmas spending spree in December.

Sales including hardware, software and accessories totalled $2.094 billion in 2008, up 32.7 per cent over the previous year when $1.578 billion was spent, according to the NPD Group which tracks the industry.

Despite the economic downtown, December sales were a whopping $502.8 million - up 27 per cent from the same period last year when sales were $396 million. The NPD Group figures do not include PC gaming.

"People were spending money on entertaining themselves, definitely for this Christmas," said Matthew Tattle of the NPD Group.

Tattle pointed to GPS and small screen LCD TVs as other products that also did well over the holidays.

The video game industry enjoyed another year to remember in 2007 - the first full year that all three next-generation consoles were on the market - when sales were up 56 per cent from the previous year.

So will it keep cash registers ringing?

"The video game industry definitely has the potential to grow ... but there's definitely no industry out there that's recession-proof," Tattle said, noting companies like Electronic Arts have closed studios or consolidated in recent months.

Sales last year were helped by "Grand Theft Auto IV," whose April release prompted an early rush to stores. There is no marquee title coming out early this year, although PS3 owners will be looking to "Killzone 2" late next month.

It was another banner year for Nintendo, which accounted for 28 per cent of the Canadian video game market. The NPD Group did not break down the market percentage for Xbox and PlayStation.

The Nintendo Wii led console sales for the year with 838,000 units - up 42 per cent over 2007 when 591,000 units were sold - ahead of Xbox 360 at 485,000 and PlayStation 3 at 422,000.

Nintendo also sold 966,000 units of its portable DS last year, compared to 591,000 in 2007.

"A great year for them," said Tattle.

The top-selling game for the year across all platforms was the original "Rock Band," which edged out "Grand Theft Auto 4." Filling out the top five were "Mario Kart" for the Wii, "Wii Fit" and "Guitar Hero 3: Legends of Rock."