The video game industry has been fading for three years, but you wouldn't know it by the way that Microsoft (Nasdaq: MSFT) is gushing.

Here's last night's tweet from the Twitter account of Microsoft's corporate communications department:

#Xbox360 is No. 1 U.S. console for 18th straight month & top three selling titles are Xbox games

Microsoft claims to have sold 257,000 Xbox 360 units last month, and that's good enough for a thick 47% of the market that it shares with Sony's (NYSE: SNE) PlayStation 3 and Nintendo's (OTC: NTDOY.PK) Wii.

What Microsoft won't tell you is that -- according to industry tracker NPD Group -- it sold 507,000 a year earlier. It's part of another gloomy monthly update out of NPD showing that the sale of video game hardware, software, and accessories plunged 29% last month. This is no longer a shock to gamers. The precipitous dives have been taking place for three years.

The data doesn't include digital downloads -- which continue to grow briskly -- but the lack of hardware sales, and the freefalling state of stateside shipments of PCs, should tell you that the traditional players of PC and console gaming aren't the ones benefiting from the digital disruption.

This is Apple's (Nasdaq: AAPL) world now.

Sure, Nintendo argues that it's doing just fine on the handheld front. It claims to have sold more than 5 million 3DS units since being introduced in this country early last year. That may be good for 75% of the market, but that's because it's only pitted against the overpriced PS Vita.

Apple has hundreds of millions of iOS devices that dive right into its growing collection of App Store games. Google (Nasdaq: GOOG) revealed two weeks ago that there have now been more than 400 million Android devices activated. We're looking at two ecosystems that will soon combine for a billion activations for platforms that weren't even around a little over five years ago.

Anyone who thinks that the traditional gaming industry will ever bounce back to what it was in its heyday is living either in the past -- or in Microsoft's corporate Twitter feed.

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