Google used its booth at Macworld this year to show off some of the things it was working on with Apple, particularly for the iPhone. But the coolest thing at their booth didn’t have much to do with Apple at all: A hacked Nintendo Wii Balance Board (from the game Wii Fit) used to control Google Earth.

Using the Google Earth application programming interface (API), a Google engineer was able to get the Balance Board to talk to the program after decoding the Bluetooth packets being sent from the board (that’s how the device wirelessly interacts with a machine like the Nintendo Wii). The result (which you can see in the video below) allows users to move forward by leaning forward, move backwards by leaning back, etc.

The developer says he made this neat little demo to inspire others to code their own programs using these open source methods. Hopefully, someone comes up with a hack to make it so I can use my Wiimote to control my Apple TV, so I can stop using that damn directional pad.

As always, my other top-ten games lists were chock full of the violent fare that I enjoy. But family games are big in my house too, so here’s my list of the best family games of 2008:

1. Wii Fit (Nintendo Wii) Nintendo. May 2008. Yes, this game made multiple lists, but for a good reason. It’s fun. Itgot gamers off their couches and running around in circles, jumping up and down, and trying to keep their balance. Talk about a great social achievement. I love logging in and measuring just how lousy my posture is and how far short of my weight-loss goals I fall. The game came with the Wii Balance Board, an ingenious device that is nothing more than a scale with a lot of springs under it. It can measure which way you lean and thereby capture your movements in a way that no controller can. The device is flexible enough to be used for everything from yoga to step aerobics. With this innovation, Nintendo redefined video games and pioneered a new category of fitness games — an area littered with boring titles. Nintendo makes exercise fun by getting players to block soccer balls, walk a tightrope and play with a Hula Hoop. It’s no wonder that Wii Fit is on its way toward selling 10 million copies.

2. Mario Kart Wii (Nintendo Wii) Nintendo. April 2008. I don’t have a lot of sophisticated commentary about this Nintendo game featuring classic characters. It’s just a lot of fun to go racing round zany tracks, tossing banana peels or turtle shells for the other racers to trip over. In any given race, you can hear lots of cheering because there are so many little power boosts and tricks in the terrain that force frequent changes in the leader rankings. The tracks are where the game gets creative. You can race in the sky, inside volcanoes and underwater. The game makes use of the little plastic Wii Wheel peripheral, which makes it easier to drive with the Wii controller. You can play up to 12 other players and battle online using the Nintendo Wi-Fi Connection.

3. Little Big Planet (PlayStation 3) Sony/Media Molecule. Sony invested heavily in this creative platform game. It’s a two-dimensional side scroller, but with a highly realistic animation style that makes it seem you are looking at Mr. Roger’s Neighborhood come to life. You team up with a group of “Sack Boy” hackey sack creatures who solve puzzles together. They ride on skate boards, somersault and do other circus-like tricks to get past obstacles. It’s also highly customizable. You can add your own content so that it shows up in the game.

4. Spore (PC) Electronic Arts/Maxis. September 2008. The most-hyped game of all time didn’t live up to the highest expectations and angered some who hated its limited digital-rights management policy. But Spore was still a fascinating and original concept. You create your own creatures and play with them on a scale that ranges from a single-cell creature to intergalactic combat. The meat of the game is in the creature, tribal and galaxy levels. You can upload videos of your critter creations to YouTube and post your creatures to the Sporepedia. In turn, they are used to populate your own single-player world and compete against a rapidly-evolving enemy. Spore has sold millions of units, but it doesn’t look like it will match its spiritual predecessor, The Sims, which has topped 100 million sold.

5. Wii Music (Nintendo Wii) Nintendo. Wii Music promised to take the burgeoning music genre to a higher level. It did so by introducing the user into active creation of music. While other games let you play back somebody else’s hit, you create your own music in this game. You use familiar melodies from Twinkle Twinkle Little Star to Every Breath You Take, and then make them your own, on your own or in a band. The Wii controller becomes your instrument. You swing the controller and its Nunchuk like drum sticks to play the drums. You strum an air guitar to play a guitar, and turn the remote sideways to play a flute. There are dozens of instruments to master, and the settings make a difference in how things sound. You can, for instance, record in an outerspace venue that creates an echo. Making music is easy. But doing it well is the challenge. Once you record a song, you can make an album cover for it and share it with others via the web.

6. Rolando (iPhone) Ngmoco/Hand Circus, December 2008. The iPhone isn’t the greatest gaming device, considering there are no buttons to mash. But its multi-touch screen and tilt-sensitive accelerometer make for some unique game mechanics. Ngmoco has exploited them in Rolando, in which you tilt the screen to make your little Rolando balls move where you want them to go. It’s a lot like Loco Roco, but the control schemes are different. You can select multiple Rolandos at once to get through a particular puzzle, or tap to use just one of them. You roll them one at a time or as bunch into different landscapes to solve puzzles and keep them moving.

7. Bloons (PC) Ninja Kiwi. This is an addictive Flash game for the web. Like Solitaire, it’s a wonderful way to while away the minutes when you’re bored. You use a little monkey to throw darts at balloons, trying to pop as many as you can. You can unlock as many as 50 different levels. Taking out many balloons with one shot is kind of an art. Who would have thought that popping balloons with darts could be this fun? This title came out as the most popular Flash game of 2008, according to a list compiled by game ad firm Mochi Media. It’s fairly primitive in terms of its interface, but the price is right — free — considering how many hours people have put into it.

8. Lips (Xbox 360) Microsoft/Microsoft Game Studios. This is a karaoke game set to some of the most popular music videos. It’s part of Microsoft’s attempt to come up with a game that can broaden the demographic reach of the Xbox 360. The Microsoft console is a hardcore gamer’s box that has reached 25 million. But to get beyond that, Microsoft needs to pull in the gamers who enjoy the social nature of the Wii. This party game is surprisingly good, considering how it’s turned my youngsters into singers, when few other animated karaoke games have succeeded. Your score is measured based on how well the sounds you make into the microphone are synched with the words that appear on screen. It’s the quality of the videos, from Duffy singing “Mercy” to Alicia Keyes belting out “No One” that keeps gamers crooning. You can also download additional songs when you run through the 40 included with the game. With the motion-sensitive microphone, you can shake it to change songs. It compares well to Sony’s SingStar series for the PS 3 and the PS 2.

9. Mario and Sonic at the Olympics (NIntendo Wii) Sega. This title from earlier in the year made wonderful use of the Wii controller to get players active to simulate a variety of Olympic sports. You can play familiar characters or insert your own Mii avatars into the game to play the various sports. Much like Wii Fit, you have to exercise to get through a lot of the games. After a session playing this game, my kids are usually winded. Their favorites include jumping on a trampoline, swimming and running races. All of them involve shaking the Wii controller as much as you can. Score another point in the cause of getting gamers off their couches and actively involved in something healthy.

10. World of Goo (Nintendo Wii, WiiWare downloadable game, PC). 2D Boy. This game is one of the indie hits of the year. It’s a puzzle game with a lot of physics-based play. You do something and it causes a chain reaction of events, helping you solve puzzles and build things. Your construction tools are little balls of goo that you use to build towers to bridge chasms and what not. The goo balls are escaping from the oppressive World of Goo Corp. The graphics are cute and the music is creative. It scored the top prize at last year’s Independent Game Festival and is the surprise hit of the year.

Please check out our link to VentureBeat’s inaugural game conference, GamesBeat 09, on March 24.

Also, see our top 20 game stories of 2008.

The top 10 iPhone games of 2008.

The 10 most-anticipated games of 2009.

The game and virtual world fundings of 2008.

And Dean’s top 10 picks of the holiday season.

Here’s the latest action:

Cisco offers digital stereo — The shift to digital entertainment is a big change from the company’s roots in routers and Internet pipes.

The Internet does another round of arguing about Twitter — Loic Le Meur, founder of video site Seesmic, sparked a discussion about the micro-blogging site Twitter by suggesting that the service should allow users to search by something he calls “authority.” Frankly, I got bored with the debate pretty quickly, but hey presto, there’s now a third-party application called Twitority that fulfills Le Meur’s wishes.

EEStor files (possibly) important battery patent — The battery company’s patent lends credence to the its claims that EEStor technology will revolutionize transportation.

Fired VP of Fry’s Electronics is accused of extracting $65M in kickbacks — It looks like Ausef Umar Siddiqui (pictured left) was a big spender in Vegas. The latest development of the story, which has been unfolding over the past few days, is that Fry’s itself has now sued him.

Beta test version of Windows 7 leaks online — That’s probably several weeks ahead of Microsoft’s planned release.

Nintendo to offer streaming video to the Wii in Japan — The competing (and less successful) Xbox 360 and Playstation 3 consoles already offer similar services.

Florida, the next hotbed of venture capital? — That’s what the state government wants, but it will take more than a $29.5 million fund to make that happen.

Hedge fund Tiger Global Management reduces stake in leading Russian web portal Mail.ru — The hedge fund sold 27 percent of the company to shareholders Digital Sky Technologies and Naspers.

Music labels might partner with Hulu to take on YouTube — Rumors of a single site for music videos from Universal, EMI, Warner, and Sony BMG were reported by Silicon Alley Insider last week, and confirmed by the Financial Times.

AMD lays off 600 people, incurs cost of $70 million — The chip maker is making about 100 more layoffs than expected.

Facebook scrapping plans for payment system? — The social networking site initially promised that a method for direct payments would be part of its application platform, but there are signs that the project is on-hold indefinitely.

Internet access on rural school buses makes long rides more productive — But will this lull parents into accepting longer rides?

U.S. agrees to stake in GMAC — The Treasury Department plans to inject $5 billion into the automobile financing company. The deal should help GMAC turn itself into a bank holding company.

Here are my picks for the best games of the year. Each and every one of these games was so good that they could all easily be picks for game of the year. It’s a reminder that 2008 was one of the best years we’ve ever had in the video game business.

1. Gears of War 2 (Xbox 360) Microsoft/Epic Games, Nov. 2008. It’s probably no surprise that my favorite game of the holiday season is also my favorite game of the year. Epic livened up the dark and gloomy world from the previous game with more vibrant colors, only to plunge much of the action deep underground. But the theme of destroyed beauty — both on the grand planetary scale and on the individual human level of the loss of a wife — runs through this game and really motivates you to strike back at the damned Locust mutants who come from underground. Flamethrowers, chain guns, and the the familiar chain saw bayonets keep this game as bloody as they come. It has a sick sense of humor, like when your squad has to chain saw its way through the bloody belly of a giant worm. This one is worth playing all the way through to the end of the single-player game and then going online with multiplayer play.

2. Resistance 2 (PS 3) Sony/Insomniac Games, Nov. 2008. This first-person shooter is a big improvement over the original 2006 game in almost every way. There is a constant pressure to move forward because your character, Nathan Hale, is infected with a virus and could succumb at any moment. This one-man crusader has to take down as many of the alien Chimera before collapsing. Big bosses, including a 300-foot tall Leviathan, can seem like insurmountable obstacles until you figure out the creature’s weak points. There are creative new weapons like the Splicer that shoots a circular disk that saws enemies in half. The game has beautiful graphics and a variety of enemies that are difficult to take down, even with a wide selection of choice weapons. But it ultimately falls short of the combat intensity of Gears of War 2.

Grand Theft Auto IV (Xbox 360, PC, PlayStation 3) Take-Two Interactive/Rockstar Games. April, 2008. I almost picked this title as game of the year, but it didn’t hold my attention as long as the first two games. GTA IV took the gritty realism of street crime and a living world to a new level. It featured a storyline with the anti-hero Niko Bellic, an Eastern European immigrant in Liberty City (which closely resembles New York). He is surrounded by cowardly thugs, drug addicts, and maniacal bosses. But he is only as good or as bad as you make him out to be. In a game where you can do anything violent, the lesson is that there are consequences to everything you do. You can find the limits of behavior. Kill a cop and you’ll probably find yourself in a high-speed chase that ends in a rain of lead. While there are many copycats for this genre, nobody beats Rockstar in creating interesting characters, realistic environments, and a world that includes both outstanding game play and a good story.

4. Call of Duty: World at War (PC, Xbox 360, PS 3, Wii) Activision/Treyarch, fall 2008. This uses the same graphics engine as last year’s Call of Duty 4. While it’s still eye-popping visually, it is a little too familiar to be considered innovative. But now the action is back in the familiar territory of World War II. It takes place in the Pacific theater and introduces all the elements of a fierce race war, jungle warfare with realistic foliage, and flamethrowers. The Japanese make fierce rivals, with everything from ambushes to suicide attacks. What I liked about this one is that even though it wasn’t made by star developer Infinity Ward, it still lives up to the franchise’s reputation and doesn’t feel like a follow-up product.

5. Wii Fit (Nintendo Wii) Nintendo. May, 2008. This game got gamers off their couches and running around in circles, jumping up and down, and trying to keep their balance. Talk about a great social achievement. I loved logging in and measuring just how lousy my posture was and how far short of my weight-loss goals I was. The game came with the Wii Balance Board, an ingenious device that was nothing more than a scale with a lot of springs under it. It could measure which way you leaned and thereby capture your movements in a way that no controller could. With this innovation, Nintendo redefined video games, pioneered a new category of fitness games, an area that was littered with boring titles. Nintendo made exercise fun by getting players to block soccer balls, walk a tightrope, and play with a Hula Hoop. It’s no wonder that Wii Fit is on its way toward selling 10 million copies.

6. Metal Gear Solid 4: Guns of the Patriots (PlayStation 3) Konami, June 2008. This game took realistic 3-D animation to its greatest height in a video game. It was a signature game that helped justify the PlaySation 3’s high ticket price at a time when there weren’t many other titles that pushed the limit. While the storytelling is fairly convoluted, the game itself is a great blend of graphics, environment, cinematics and stealth game play. You play Old Snake, an aging super soldier in a world where private military companies have replaced governments as ruling entities. It is another game where sneaking around, rather than going in with guns blazing, pays off. It’s one of the few games that stands up to the description “movie-like.”

7. Fallout 3 (PC, Xbox 360, PS 3) Bethesda Softworks, Oct. 2008. You can freeze time for as long as you need in this role-playing game. Much like last year’s Mass Effect, you can then choose the actions that your character will take to make it through a nearly impossible firefight. Then you unfreeze time and watch the action unfold. It thus becomes a thinking person’s game rather than a twitch shoot-em-up. The game is set against the backdrop of nuclear devastation. It has 1950s-style bomb-shelter commercials and cheerful music that are reminiscent of my favorite game from last year, BioShock. If you liked last year’s surprise from BioShock, this one from the makers of Oblivion will suit you just fine. The action isn’t nearly as crazed as BioShock, but it’s still fun to watch your plans unfold in a tight situation.

8. Mario Kart Wii (Nintendo Wii) Nintendo. April, 2008. There is not a lot of sophisticated chatter I can say about this Nintendo game with classic characters. It’s just a lot of fun to go racing round zany tracks, tossing banana peels or turtles for the other racers to trip over. In any given race, you can hear lots of cheering because there are so many little power boosts or tricks in the terrain that force frequent changes in the leader rankings. The tracks are where the game is creative. You can race in the sky, inside volcanoes, and underwater. The game makes use of the little plastic Wii Wheel peripheral which makes it easier to drive with the Wii controller. You can play up to 12 players and battle online using the Nintendo Wi-Fi Connection.

9. Star Wars: The Force Unleashed (PS 3, Xbox 360, Wii, PS 2, PSP, DS), LucasArts, Sept. 2008. Star Wars junkies feared the worst after the end of the last trilogy. But they’ve been pleasantly surprised with the animated film Clone Wars and a new game have extended the life of the franchise to end all franchises. I like the moral dilemma that the main character faces. You start as an evil apprentice to Darth Vader at the beginning of the Rebellion against the Galactic Empire, after the end of the Episode III film. The game also uses two innovations that bring The Force to life like never before. Everything in the game’s setting has physical attributes, meaning you can use the objects in the environment in the game. Everything is destructible, from glass to giant beams. You can toss this stuff around at hapless enemies. And those enemies are smarter and embued with self-preservation. Use the Force to pick up a Stormtrooper and the poor guy will hang on to something for dear life.

10. Fable 2 (Xbox 360) Microsoft/Lionhead Studios, Oct. 2008. I neglected to include this in my top 10 games of the holidays, but better late recognition than never. Peter Molyneux, the head of Lionhead, always gives eloquent demos when he shows off his titles. He creates a kind of reality distortion field, and sometimes there is a comedown when the games don’t come out as good as he says they will be. But Molyneux is going down the right track with the Fable series. He’s trying to make great works of art that provoke an emotional reaction. Fable 2 sets up moral dilemmas and dramas. You can solve them with violence or you can use your pet dog to get you out of them, but you’ll regret it if you let Rover die.

Please check out our link to VentureBeat’s inaugural game conference, GamesBeat 09, on March 24.

Also, see our top 20 game stories of 2008.

The top 10 iPhone games of 2008.

The 10 most-anticipated games of 2009.

The game and virtual world fundings of 2008.

And Dean’s top 10 picks of the holiday season.

2008 has been a big year for the games market. Game sales soared to new heights this year and resisted the onset of the recession. Here’s a recap of our biggest game-market stories this year (including some links for related stories) for those of you who may have missed them:

1. The Nintendo Wii broke all sales records and expanded the market for gaming beyond nerds. The Wii tapped into a need to play more casual and social games. We had a Q&A with Nintendo of America’s president, Reggie Fils-Aime, about the phenomenon.

2. The industry hit a record $22 billion in the midst of a recession. A census estimates there are 44,400 people working in the U.S. game industry.

3. The iPhone emerged as a game platform. With companies such as Ngmoco making iPhone-only games, the market took off. Thousands of games are now available on Apple’s App Store.

4. Activision closed its merger with Vivendi Games, which included the crown jewel Blizzard Entertainment, maker of World of Warcraft. In post-merger life, the crown jewel was left to operate as its own independent company.

5. VentureBeat uncovered the behind-the-scenes story of Microsoft’s Xbox 360 Red Ring of Death hardware failure. Microsoft fired the game tester who talked to Venturebeat.

6. Electronic Arts struck out with its holiday line-up. Spore disappointed, and EA was forced to lay off 10 percent of its staff.

7. Both Microsoft and Sony tried to make console games into a more social experience. Sony launched Home virtual world for PlayStation 3, while Microsoft debuted its new Xbox Experience including movies from Netflix. Sony was able to get a bunch of partners to launch inside Home, but users overwhelmed Home in its early days.

8. Electronic Arts courted Take-Two Interactive with a $2 billion hostile takeover bid, but the maker of Grand Theft Auto IV wanted a higher price and the companies gave up on merger talks.

9. Microsoft cut console prices, finally addressed Red Ring of Death with Jasper-based models of the Xbox 360.

10. Advanced Micro Devices took leadership in graphics chips back from Nvidia. It did so by shooting for the sweet spot of the market. Previously, Nvidia owned the gamer market. But now the tables have turned.

11. World of Warcraft expansion pack Wrath of the Lich King sold 2.8 million units in 24 hours.

12. Google launched, then buried, Lively virtual spaces. But it got off the ground with in-game advertising.

13. The redesigned E3 trade show — once a signature extravaganza that drew 80,000 people — was a train wreck, drawing only a few thousand underwhelmed media and business people. Afterward, the game industry vowed to bring the old show back.

14. Music video games overtook sports games, thanks to Guitar Hero and Rock Band franchises.

15. Nintendo DS ran away with the portable market, outselling the PlayStation Portable by two to one. Then Nintendo announced the DSi improved version of its handheld.

16. Grand Theft Auto IV sold 10 million copies, despite the criticism of anti-violence critics. The biggest game industry critic Jack Thompson was disbarred for unprofessional conduct.

17. Scrabble clone Scrabulous took off on Facebook, Hasbro sued, the game was shut down and the replacement Scrabble tanks.

18. Wii Fit broadened the video game audience and brought the exercise genre — which had been just a niche in the past — to mainstream audiences.

19. Funware — the use of game mechanics in non-game applications — expanded the game industry’s reach beyond games.

20. YouTube became a huge channel for game marketing.

Please check out our link to VentureBeat’s inaugural game conference, GamesBeat 09, on March 24.

Video game sales defied the tough economy and rose 10 percent in the U.S. in November, according to market researcher NPD Group. Nintendo had another outstanding month, selling more Wiis than Microsoft and Sony combined.

While sales were up 18 percent in October compared to a year ago, the November numbers are strong considering there were seven fewer shopping days after Thanksgiving this year compared to a year ago. NPD believes that the industry is on a course to hit a record $22 billion sales in 2008.

Last month, the U.S. video game industry defied economic doomsayers, the first month of the industry’s critical sales season. That strength was surprising, given the weakness of U.S. retailers in October. It fed the theory that games are at least somewhat recession resistant, because entertainment provides an escape from the real world. Surveys show that gamers view games as offering a good value — $60 per game with many hours of play time — compared to movies or other entertainment.

The strong November sales should keep the perception alive that games are an island in a sea of economic malaise. Anita Frazier, an analyst at NPD, said that the company’s consumer index shows that games are the area where consumers are least likely to cut their spending. Earlier this week, Electronic Arts gave the industry a scare because it said its sales of holiday games were not meeting its expectations and it would have to lay off more people than it previously expected. But that may just be EA’s problem.

Overall game sales were $2.91 billion in November, up 10 percent from $2.64 billion a year ago. Hardware was up 10 percent at $1.21 billion, up from $1.1 billion a year ago. Software was up 11 percent to $1.45 billion, up from $1.31 billion a year ago. Accessories were $255.4 million, up 7 percent from $238.6 million a year ago.

Nintendo sold 2.04 million Wii consoles, and 1.57 million DS handhelds. Microsoft sold 836,000 Xbox 360s while Sony sold 378,000 PlayStation 3s. 206,000 PlayStation 2s and 421,000 PlayStation Portables.

Microsoft still had a big month in terms of game sales. Microsoft’s Gears of War 2 was the No. 1 game with sales of 1.6 million in the U.S. in November. Roughy 13 percent of all Xbox 360 owners bought the game. The Xbox 360 version of Activision Blizzard’s Call of Duty: World at War was No. 2. Electronic Arts’ Left For Dead on the Xbox 360 was No. 8. Nintendo had three titles in the top 10: Wii Play, Wii Fit, and Wii Music. The latter had a slow launch in October but came back nicely in November. Sony’s only top ten title was Resistance 2, which came in at No. 9.

Microsoft has 14 million active Xbox Live members online worldwide, with the average number of unique visitors rising 66% in the past year. Microsoft said more than 1.5 million transactions and nearly 4 million game sessions take place on Xbox Live each day.

Microsoft said third-party revenues were $298 million and total Xbox 360 software sales were $408 million. PC game sales were lifted by Activision Blizzard’s World of Warcraft: Wrath of the Lich King, which sold more than 1.4 million copies.

In October, sales were $1.31 billion, up 18 percent from $1.12 billion a year earlier. Year to date sales are up 25 percent. Hardware sales were $494.7 million, up 5 percent from $470.5 million a year earlier. Software was $696.8 million, up 35 percent from $514.6 million a year ago. And accessories declined 8 percent to $120.2 million from $130.8 million.

September’s sales were down 7 percent from a year earlier. But the problem was that there were big game releases such as “Halo 3″ in September of 2007, making it hard to beat last year’s numbers.

In October, the Wii sold 803,000 units in the month, up from 687,000 units in September. Microsoft sold 371,000 Xbox 360’s and Sony sold 190,000 PlayStation 3’s. Nintendo sold 491,000 DS units (down from 537,000 units in September), while Sony sold 193,000 PlayStation Portables (also down from 238,000 units in September). The PlayStation 2 sold 136,000 in October.

The big post-Thanksgiving shopping day known as Black Friday wasn’t as awful for retailers — at least for online retailers — as some had feared, according to new data from comScore. That’s a good sign for the online economy, since Black Friday is usually seen as an indicator of how the rest of holiday shopping season will go.

Online shoppers spent a $534 million on Friday, up 1 percent from last year. That’s not a dramatic increase, but at least it’s growth. PayPal did even better — it told Reuters it saw almost 34 percent more transactions on Black Friday this year than last year. In comparison, for the first 28 days of November, online spending is down 4 percent overall.

Honestly, I can’t imagine why anyone would do their Black Friday shopping anywhere but the web — no sale is worth the insane crowds found in some stores. But then, I was never much of a Christmas shopper, so I’m probably not representative. It does look like online shoppers were taking advantage of the lack of lines, with most of them avoiding the Black Friday ritual of rushing out in the wee hours of morning. Instead, the heaviest traffic came between noon and 4pm, according to comScore. And what were they buying? Apple’s iPod touch was the top electronics item on Amazon.com (so perhaps shoppers then bought some of the on sale iPhone/iPod touch apps), while the most searched-for item on eBay was Nintendo’s Wii gaming console, according to Reuters.

ComScore also notes that today (Monday) may be an even more important indicator for online retail, since many web sites launch their holiday discounts on “Cyber Monday.” Business on Cyber Monday corresponds strongly with the gift-buying season that follows, so get shopping.

Games have come of age on the iPhone, and they’re about to get a lot better. The holiday line-up of game titles being released on Apple’s phone shows that developers consider it a solid platform for games alongside other dedicated gaming devices. Nintendo will have to look over its shoulder.

The iPhone 3G’s stunning success in the past 120 days has highlighted the success of the gaming sector. Apple has said it’s had more than 200 million downloads from its App Store since the store debuted in July. Of 8,000 applications on the App Store, more than 1,500 are games. Just two months ago, there were just 900 games. Exact game sales aren’t available, but titles such as Sega’s Super Monkey Ball and Electronic Arts’ Spore games have had the No. 1 spots as most popular iPhone applications.

This is huge progress for Apple, given that games on the Mac have had a checkered history. Just as with other applications, the best games would always come out on Windows PCs or the consoles first, with Mac versions trailing by a year or more. For years, 3-D graphics on the Mac were far behind the 3-D cards on PCs.

With the launch of Windows Vista, Microsoft actually started losing some users to the Mac. EA noticed and launched a policy of releasing many titles on the PC and Mac at the same time. Games on the iPod also took off, particularly with the launch of the iPod Touch, a version of the music player with the same rich multi-touch display of the iPhone.

But Apple realizes that the iPhone 3G is an outstanding game platform, thanks to the multi-touch display, great sound, good graphics, and the accelerometer-based tilt feature. Nintendo’s DS handheld doesn’t have tilt or multi-touch, and its graphics and sound aren’t outstanding.

Nintendo still has a huge edge, with an installed base of 85 million DS units sold versus Apple’s 12 million or so iPhones. People buy the DS as a dedicated gaming device and it’s had hits such as Brain Age and Nintendogs that have expanded the reach of the device beyond just gamers.

Aware of the competition, Nintendo isn’t just reaping DS profits. It will launch a new version, dubbed the DSi, in the U.S. market next year. That version will have two web cams and the ability to play AAC music (a high-quality music file format)  files. Nintendo considers the latter to be aimed at enhancing games, not playing songs the way people do with iPods. Nintendo will have a digital distribution solution, allowing players to buy games and download them via Wi-Fi to the Wii (and then transfer them to the DSi). The DSi will also have a larger screens, at 3.25 inches. The gestures in Apple’s direction are telling.

I know that Nintendo has been worried about this awakening at Apple. In a couple of ways, the iPhone is a better gaming device than the DS. The tilt feature adds the same kind of ease-of-use to the iPhone that the accelerometer-based sensing system has for the Nintendo Wii. And game developers are exploiting the features. Since games developed for the iPhone also work on the iPod Touch, Apple has a sizable market that is big enough for developers to target.

EA has had great success with the five iPhone games it has launched on the App Store, said Patrick Gunn, a marketing director at EA Mobile. The company is launching a new Need for Speed Undercover game in December on the App Store. The $9.99 game has a bunch of tracks and the ability to choose from a number of customizable cars.

Unlike driving games on the DS or Sony Playstation Portable, it’s actually really easy to play. The speed stays constant, giving the player fewer controls to worry about. To turn, you simply tilt the iPhone one way or another. If you need a speed boost, you tap a button with your finger. You can use several different methods for driving, including tilting. The game graphics look cool — with lighting effects and reflections — and the sound blasts rock tracks.

Gameloft, owned by the Guillemot brothers who run Ubisoft, has embraced the iPhone more enthusiastically than any other game company. It has 18 titles now, with five or six more coming by the end of the year. Among them is a Ferrari GT Evolution driving game. This one isn’t as good looking as Need for Speed Undercover, but it has 33 different types of Ferrari cars to race. It’s likewise easy to control and play; you can actually control the sensitivity of the tilt function so you can take sharper turns if you prefer. The game will ship in December for $9.99.

It remains to be seen where the prices for games will settle. There are a bunch of free games already, some with ad-based business models. Others are mini games with 99 cent prices, such as Topple from Ngmoco. Rolando, an upcoming game from Ngmoco, will debut at $9.99. Ngmoco, founded by EA veteran Neil Young this spring, is an example of the developing iPhone game ecosystem. The company is funded by Kleiner Perkins’ iFund — dedicated to investing $100 million in iPhone-related companies — and it’s one of a number of iPhone application companies that have been formed recently.

The company’s first two games, Maze Finger and Topple, have been downloaded more than 1.5 million times and more than 7 million game sessions have been played, Young said. Ngmoco expects five more games to launch before the holidays. Rolando is a deep game with 36 levels and wide variation in its game play. And it’s an iPhone/iPod Touch exclusive.

These kinds of games and the gaming feature of the iPhone are far better than some other platforms. I’ve played Pac-Man, for instance, on the T-Mobile G1 phone with Google Android software. That phone, built by HTC, has an accelerometer and a touch screen as well. But the accelerometer-based game isn’t all that responsive. And the touch screen on the G1 doesn’t work that well. When I swiped sideways to get the Pac-Man character to turn, the game would fail to recognize the gesture. The unresponsive touch-screen is very frustrating.

There are dozens of games available for free on the G1. One of my favorites is Fishocopter. In that game, you play a fish trying to stay away from predators and other obstacles. You control the fish as it swims sideways by using the pointing ball on the G1. That particular way of controlling the fish works for this game just fine. Of course, the try-then buy business model for this game just doesn’t work.

As I said, the iPhone offers a far better platform for game developers. To me, this is an exciting new branch for the gaming business. Already, game companies are saying the sales on the AppStore are dwarfing their sales on other mobile platforms. I’m looking forward to new kinds of games that take advantage of the iPhone camera or its location technology. Watch out, Nintendo. This game is just getting started.

I’ve been excited about an iPhone game named Rolando ever since a video of it spread throughout the internet back in July right before the launch of the iPhone 3G (and App Store). The developers had hoped to release it in August, but that came and went, and the buzz largely subsided. But today I got a chance to play the basically completed version of the game — it’s even better than the original demo video — the buzz will be back soon.

The game, developed by Hand Circus and being released by one of the fast rising iPhone gaming powers Ngmoco, is now set to launch in December. But unlike Ngmoco’s other iPhone games, Topple and MazeFinger, both of which are hits so far, Rolando will be the first to move away from so-called “micro-pricing,” which is a fancy way of saying “cheap.” Topple is $0.99 and MazeFinger is free, but Rolando will be $9.99.

But in a world where we’re used to paying $20, $30 or even $40 for Nintendo DS or Playstation Portable games, $9.99 seems like a good deal for a game of this quality. Not only is the game a lot of fun and shows off perhaps the best combined use of multi-touch and accelerometer technology within any iPhone game yet, it’s also a pretty big game with four worlds and 36 total levels.

The game itself involves manipulating round characters named “Rolandos” around certain obstacles, fulfilling goals and doing so in a set time. There are regular Rolandos, which you move by tilting the device from side to side and make jump by swiping up on the screen; there are groups of Rolandos that you can control all at once by drawing a box around them and doing the same movements; and there are even characters like Spikey Rolandos, which can roll on walls.

It’s kind of hard to describe, but it’s a lot of fun to play. Watch the video below for a better sense of it.

Rolando - iPhone and iPod touch gameplay trailer from ngmoco:) on Vimeo.

Sony has started setting the stage for the launch of its Home virtual world. The company has been running beta tests with thousands of users for weeks now, and the formal launch is still expected to be this fall on the PlayStation Network.

About 18 months in the making, Home is Sony’s “Hail Mary” play in the console battle with Nintendo and Microsoft. It will test whether gamers really want a layer of social networking served on top of the games they play on the PlayStation 3 game console. By contrast, Microsoft and Nintendo believe that gamers might talk to each other via cute little characters. But Sony has built a full-blown virtual online space. The graphics of the characters look good. But they don’t really move their lips or express themselves physically; that’s something that will change over time.

Susan Panico, senior director of the PlayStation Network at Sony’s U.S. game division in Foster City, Calif., said that Sony isn’t the first to market, but it has a big opportunity with Home because consumers already trust the Sony name. While Home could have been many things, Sony decided to focus the content around playing games and the culture around them, said Jack Buser, director of Home for the U.S. game division.

“It’s really a 3-D social network for gamers,” he said.

While it’s not exactly a world like “World of Warcraft” or Linden Labs’ “Second Life,” Home is the most ambitious push by any console maker into creating a virtual world for gamers. It will live or die on whether it’s simple, fun, and deep enough for gamers who have plenty of other things they want to do — like play games. And the price is right: free for those who have a PS 3.

The PlayStation Network — which has 13 million PlayStation 3 and PlayStation Portable registered users — is tightly integrated with Home. The PSN is the network that gamers use to play each other in online matches. They can also use it to download games or videos to the hard drives of their consoles. It has the records of a player’s achievements (trophies) in games, such as the number of victories in an online game.

The architecture of Home is different from Second Life and World of Warcraft. Both dedicate a considerable amount of computer and storage firepower to maintaining a continuous world with geographic parameters. That is, if you buy a house on the corner, it will always be on that corner, next to something else.

But Home isn’t really a world. It’s more like a series of virtual spaces. If you want to visit your own personal apartment, where no one can visit without your permission, then you teleport there. If you want to go to the central plaza, you teleport there. Same goes for the bowling alley or the bar from the game Uncharted. You’re free to decorate your home as you wish. If you want to listen to music, you can walk up to a jukebox.

If you arrive at a bar and it’s too crowded with people, no problem. Sony will generate a new “instance” of the room. This borrows a trick from other worlds that have popular places. Sony creates a new version of the bar and lets in all of the overflow people. It does that until there are enough bars to accommodate everyone. The only problem is that friends who are stuck in one version of the bar may not be able to talk to your avatar in another version of the bar.

You communicate with other avatars by moving next to them and typing words. It’s not so easy doing that with a game controller. But you can plug a universal serial bus keyboard into a PS 3, and you can also use any Bluetooth head set to talk as well. At some point, you will be able to walk up to a group of friends and spawn a multiplayer game.

The bowling alley has a number of social games: bowling of course, arcade machines, and pool. The pool game even has accurate physics. The arcade machines are basically emulators of your old favorites. When you click on a machine to play a game, the game itself fills your whole screen.

In the movie theater, you can go into a room and see what’s playing. You can actually watch that movie with your avatar in a social setting, making comments about it that others in the theater can see. That turns movie-watching into an online social experience. The closed beta is restricted to those 18 years and older now, while the open beta will allow anyone 13 and older. There is a profanity filter, and Home will be compliant with the PS 3’s own parental controls.

The version the Sony folks showed me was still incomplete. Sony hasn’t mentioned a release date yet, but Panico says an open beta will start soon. There aren’t many people around in it now. I imagine it will be fun once there are millions of people, all creatively expressing themselves through wacky avatars. But I expect it will be rather lonely and boring at the outset. It will also grow more interesting when partners like Electronic Arts start building out features such as an EA Sports fan space. Publishers, brand owners and media companies are all creating their own spaces inside Home, Buser said.

He said that Home will constantly change, with some things disappearing if they become less popular, and new spaces appearing as they are built. He said Sony will listen carefully to community feedback as it expands the service.

“Home is a living, breathing space,” he said.