Sales of videogames in Japan have risen by more than a third in the first half of 2006, an industry survey reveals.
The Nintendo DS is the most popular handheld machine in Japan
Revenue from games and hardware totalled 277 billion Yen (£1.3 billion), up from 207 billion Yen in the same period of 2005.
The increase was driven by sales of handheld consoles including the Nintendo DS, the report says.
Enterbrain, the company behind the survey, collects retail data from nearly 35,000 stores across Japan.
Some analysts estimate that the global gaming industry is worth $25bn (£13bn) annually.
The new figures reveal that Nintendo produced the best-selling handheld console in Japan.
The company sold 2.6 million units of its handheld DS lite and a further 1.3 million of the original DS. Sony sold less than a million of its PlayStation portable.
Nintendo also made the best-selling game: Dr Kawashima's Brain Training: How Old Is Your Brain?
Overall, the Japanese software market grew over 30% to nearly 175 billion Yen.
Shares in Nintendo also hit a four year high of 20,390 Yen.
The report revealed that Japan's console market is still dominated by Sony's PlayStation 2. However, this may all change.
Sony's PlayStation 3 and Nintendo's Wii are due out by the end of the year.
They are part of a new wave of gaming that started last November with the debut of Microsoft's Xbox 360.