Video Game Nerd and Wedbush Morgan Securities analyst Michael Pachter is predicting the video game market to show incredible sales numbers this year — more specifically a 50 percent increase over last year. The boffin’s forecasted sales for 2007 are $555 million USD compared to $369 million USD last year.

Gamers this year have sucked on the teets of titles such as Guitar Hero III, Halo 3, and Call of Duty 4. The milk money that flowed out of Guitar Hero III’s swollen breast accounted for over $100 million USD in sales.

Pachter also predicts that the Wii will continue to lead the market in hardware sales, stating Wii will stand at 450,000, PS3 at 125,000 and the 360 at 325,000.

Basically, Guitar Hero III + Halo 3 = huge e-boner.

Today marks the first day in the history of the Xbox console where Microsoft has produced a yearly profit that was positive. Earlier today, the big M’s Xbox Entertainment and Devices Devision posted an unaudited operating income for the quarter ending September 30 of $165 million. Compared to last year, we saw a loss of $142 million. Obviously, all fingers are pointing to the successful Halo 3 release.

In the first day of the game’s US release, Halo 3 generated a whopping $170 million, making it the most popular selling game in video game history. Over the course of the week, Halo 3 sales grew to $300 globally.

Microsoft predicts its total revenues in 2008 will exceed the $58 billion mark, with an operating income of approximately $23 billion.

Now that the Halo 3 honeymoon is over, most 360 gamers are already rallying up for Halo 4, and I can only imagine the crazy profits that game will turn out. The big question on the plate is how Bungie will twist their way out of the awful Halo 3 ending.