Sales of video game hardware and software in the United States increased by 16 percent last month, increasing to $514.3 million compared to $443.1 million in July of last year, according to the NPD Group.

Soaring sales continue to lift the video game industry, which was previously languishing in years of decline before the spending surge brought about by the new generation of consoles.

Hardware is the focal point of the sales increase, offsetting the revenue generated by software sales.

"Similar to the pattern seen in seven out of the last nine months, strong growth in hardware sales offset declines in software sales," said an analyst for NPD, Liam Callahan.

Hardware sales doubled from $99.4 million reported last year to $198.8 million. Sony's PlayStation 4 once again beat its competitors, Microsoft's Xbox One and Nintendo's Wii U, in terms of console sales for the seventh straight month. According to Sony, they led Microsoft by a "considerable margin," with Jitendra Waral, a Bloomberg Intelligence analyst, stating that Sony sold double the number of PlayStation 4 units in July compared to Microsoft's 5 million units of Xbox One sold during the month.

Sales for the Xbox One, however, have been surging since Microsoft released a $399 bundle for the gaming console that decreased the price from $499 by removing the Kinect system from the package.

"Xbox One continues to sell at a strong and steady pace following the release of the $399 console in June, when month-to-month sales more than doubled," a spokesperson for Microsoft told GamesBeat. "We continued to see this momentum in July."

While hardware sales boomed, software sales for the month of July decreased by 15 percent to $178.2 million, which reflects the lower purchases made for games of older consoles and the restrained spending as gamers are looking forward to and saving up for the holiday shopping season, when several popular game titles will be released.

For the month, the best selling games were Sony's zombie action thriller The Last of Us Remastered for the PlayStation 4 and PlayStation 3 and block-building simulation Minecraft for the PlayStation 3 and Xbox 360.

Football simulation FIFA 14, open world hacking game Watch Dogs and racing game Mario Kart 8 round out the top five best selling games for July.

"July is typically a quiet month for software sales, representing about 5 percent of annual sales," Callahan said. "Typically, EA's NCAA Football launches in July, and often ranks as the top game. As that title is no longer being produced, new launch sales declined steeply by close to 70 percent in July 2014."

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