The economy is hurting, but that's not stopping people from buying gaming hardware and software, DFC says.

Worldwide, there are now 11 countries with annual games revenue of over $1 billion, according to the firm. 

"Consumer spending on software is at record levels and the game business seems to actually benefit from a recession because games are a relatively cheap form of home entertainment," said DFC analyst David Cole.

The U.S. saw nearly $19 billion in retail console and PC sales in 2007, according to NPD Group, a figure that doesn't include online revenues.

DFC's forecast includes revenues from videogame hardware, software, dedicated handheld hardware and software, PC games and online PC and console games across 25 countries.

DFC expects Wii to be the best-selling console of this generation worldwide, followed by PS3 and then Xbox 360.

"The Wii does not appear to be a fad and it has the chance to be one of the best selling systems of all-time," Cole said.

He expects annual PS3 software sales to equal Wii's by 2012.

In a separate DFC report, analyst Jeremy Miller suggested that third parties will have a tough time competing with first-party Nintendo software on the Wii.

"The Wii not only has unique features and a broad demographic appeal, but Nintendo is dominant as a software publisher," he said. "For many third party publishers this means they will have much greater success on the Xbox 360 and PlayStation 3, even if Wii sales continue to be strong."

The console race garners much of the interest from industry watchers, but it's the PC that was the top platform for games in 2007, DFC said. The firm's Online Game Market Forecasts report pegged PC online sales alone at $7 billion last year, not including retail sales.

DFC forecasts total PC gaming revenue to hit $19 billion by 2013.

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Remember: Most analysts thought people would buy game consoles as multimedia hubs, which the Wii isn't. Months of record sales are forcing analysts to really look at what's going on in the game industry.