There are two stories told by the numbers in the video game industry. The first is the massive sales of software made by the biggest publishers in the world. Activision (NASDAQ: ATVI) stockholders thrilled to the over 8 million copies shooter Call of Duty – Modern Warfare 2 sold in the last two months of calendar 2009. The same for Nintendo (OTC: NTDOY) stockholders and the 5 million copies of New Super Mario Bros. sold in the same period. Also for Electronic Arts (NASDAQ: ERTS) and the massive success of this fitness video game EA Active. Nasdaq stock Activision Call of Duty

But for all the success ATVI and ERTS had with their software last year, they still felt the burn of an overall decline in the video game market. According to sales reporting outfit NPD Group, game revenues dropped by 11% in 2009, down to $10.5 billion in sales. Both ATVI and ERTS saw major drop offs in the music game sector, previously their biggest earner. ERTS and MTV Games (VIA) developed The Beatles Rock Band underperformed while ATVI oversaturated the market with new releases in their Guitar Hero franchise, including expensive failures like DJ Hero. Even NTDOY’s reliable hardware, the Nintendo DS and Wii, lost some momentum.

Two weeks ago, ATVI, ERTS, NTDOY and many other players in the games sector showed off their new initiatives to bring back the record-breaking sales of 2008. The theme at this year’s Electronics Entertainment Expo was sequels and new technology, particularly new 3D products from NTDOY and motion controllers from Microsoft (MSFT) and Sony (SNE).

ERTS embraced the lot, showing off new software for every device. An edition of Tiger Woods PGA Tour ’11 developed for SNE’s new Move motion controller showed off the precision of the new device, while Dance Central for MSFT’s new hands-free device Kinect promised to tap into the lucrative market of dancing and fitness games simultaneously. ERTS also looked to court traditional, hardcore video game players with their new shooters Medal of Honor and Dead Space 2.

That shooter market, however, is still largely ATVI’s domain. The aforementioned Modern Warfare 2 will be joined this fall by the new Call of Duty: Black Ops for MSFT’s Xbox 360 and SNE’s Playstation 3. ATVI is also resurrecting the ’90s cult classic Goldeneye 007, a shooter based on the James Bond film of the same name, for NTDOY’s Wii. Despite the decline in the market last year, ATVI also showed great support for their line up of music games with new versions of Guitar Hero and DJ Hero.

NTDOY, however, stole the show with their new handheld device, the Nintendo 3DS. A successor to the Nintendo DS handheld, the 3DS boasts stereoscopic three-dimensional graphics that do not require users to wear a pair of glasses. Excitement over the device’s announcement caused a surge in Nintendo stock, with shares spiking upwards by nearly 10% by June 18th.