SAN FRANCISCO -The video games industry grew 37% last month on strong sales of the Grand Theft Auto IV game. However Microsoft ( MSFT) saw sales of its Xbox 360 console lag rival Sony's ( SNE) PlayStation 3. Meanwhile Nintendo/s Wii console and its handheld DS system bagged the top two spots in terms of overall hardware sales for the fourth consecutive month and continued to outsell rivals, said industry research firm The NPD Group in its monthly report on video games sales. Take-Two Interactive's ( TTWO) Grand Theft Auto continued to burn the charts bagging the top spot for the second month. The title, which was released on April 29, sold about 1.3 million copies across the Xbox 360 and PS3 systems last month. So far, the game has generated combined sales of 4.2 million units, making it the year's top-selling title, said NPD. Take-Two is currently battling a $2 billion hostile bid from its larger rival Electronic Arts ( ERTS). EA has a tender offer open for Take-Two shares at $25.74. Shares of Take-Two closed down 19 cents to $26.56 Thursday. On the hardware side, Sony sold 208,700 PS3s in May, up from 187,100 units in April, while Microsoft sold 186,600 Xbox 360s last month, down from 188,000 units in April. The Xbox 360 was released a year before PS3's November 2006 launch but competes closely with the PS3. Nintendo outsold the two with 675,100 Wiis in May but down from 714,200 units sold the month before.