The first quarter saw record sales driven by digital content spend across console, mobile and PC gaming platforms, according to market research firm The NPD Group.
Nintendo Switch devices had an especially good sales quarter, helping push hardware sales up 2 per cent over a year ago to $773 million.
Overall total industry consumer spending on video gaming saw an increase of 9 per cent, compared to the same time period last year.
Sales of video game content reached $9.58 billion in the first quarter, up 11 per cent when compared to a year ago.
"Gains were seen across digital console and PC content, mobile and subscription spending, as well as across hardware and accessories categories," according to the report.
Games such as Animal Crossing: New Horizons, Call of Duty: Modern Warfare, DOOM Eternal, Dragon Ball Z: Kakarot, Fortnite, Grand Theft Auto V, Minecraft, MLB The Show 20 and NBA 2K20 were among the best-performing titles of the first quarter.
"Video Games have brought comfort and connection to millions during this challenging time," said Mat Piscatella, games industry analyst at The NPD Group.
"As people have stayed at home more, they've utilized gaming not only as a diversion and an escape, but also as a means of staying connected with family and friends. Whether it was on console or mobile, PC or virtual reality, gaming experienced play and sales growth during the first quarter," Piscatella added.
Sales of video game accessories, including gamepads, headsets, cases and other peripherals increased 1 per cent in the first quarter, reaching $503 million.