Sony's ( SNE) $100 price cut to its PlayStation 3 video game console seems to be paying off.

Although the device continues to be outsold by Nintendo's ( NTDOY) Wii, sales of the PS3 are picking up in the U.S., according to data from research firm NPD.

PS3 sales in June were up 21% from May to 98,469 devices sold, NPD said.

And since the new $499 price for the PS3 was announced two weeks ago, sales have increased more than 135% at the company's top five retailers, said Sony.

Total PlayStation hardware sales increased 161%, software sales increased 15% and peripherals sales grew 60% in the two-week period since the price drop was announced on July 9, said Sony.

Still, Nintendo has little to fear. The company sold 381,800 Wiis last month and also dominated the software charts with six of the top 10 games belonging to one of Nintendo's devices.

Rival Microsoft ( MSFT) sold 198,400 Xbox 360s, and the company's Forza Motorsport 2 game came in fifth on the charts with 197,400 copies sold in June.

In addition to being outsold by its rivals, the PS3 continues to struggle against its earlier generation. Sony's older PlayStation 2 console remaind strong and sold 270,763 devices last month. The overall PlayStation brand, including PS2 and PS3, showed a 21% increase in total retail dollars generated year-over-year in North America with sales of $393 million, Sony Computer Entertainment America said in a statement.

Among independent game publishers, Activision ( ATVI) scored with the company's Guitar Hero 2 game for the PS2 and 360 consoles, ranking sixth and seventh, respectively, on the charts.

Activision sold 197,350 copies of the game for the PS2 and 177,600 copies of the game for Xbox 360.

Activision's Tranformers: The Game for the PS2 console ranked 12th on the charts.

Game publisher Take-Two Interactive ( TTWO) was the only other independent publisher in the top 10 with its game, The Darkness, for the Xbox 360.

Overall, the video-game industry, including hardware, software, and accessories grew 31% in June to $1.1 billion, up from $843.6 million the same period year-before.

Video-game hardware sales in the month rose 34% to $398.6 million from $297.6 million in June 2006.

Consoles sales drove much of the growth, with console hardware up nearly 69% to $268 million.

Sales of Sony's handheld game console, PlayStation Portable, increased 31% year-over-year with 290,108 devices sold in June.

That still lagged Nintendo's handheld device, DS, which sold 561,900 boxes during the month.

Game sales were up 28% in June to $393.3 million, and sales of game accessories rose 58% to $161.3 million.

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