How hot is the video game sector right now? Forget the fact that developers such as Electronic Arts(Nasdaq: ERTS), Activision(Nasdaq: ATVI), and Take Two Interactive(Nasdaq: TTWO) are within shooting distance of their 52-week highs. Well, maybe we shouldn't forget that, with so many stocks in the drink, but let's go retail.

This morning, Gamestop(NYSE: GME) reported a 23% surge in same-store sales for the second quarter. Twenty-three percent? That's not a figure one usually associates with comps. Last night, Electronics Boutique(Nasdaq: ELBO) posted a profit on a similarly huge 20% spike in comparable store sales.

There's big news, even in the smaller numbers. While Electronics Boutique mustered a scant $0.03-a-share profit for the period, it's the first time the company has closed out the July period in the black in three years. Video game retailing is a seasonal business with the logical holiday spikes, but demand for the Xbox, PlayStation2, GameCube, and their related software titles continues to fuel the industry, even during the traditionally sleepy lull of summer.

History indicates console sales don't peak until the third year, and the systems are just one or two holiday seasons young, so the fundamental upside should continue through at least a few more quarters.

In short, the game's not over yet.