Total sales in September, a 5-week retail period, soared to $1.36 billion, up from $779 million a year earlier, according to market research firm NPD.
Halo 3, the latest installment of Microsoft's flagship franchise, sold 3.3 million copies, more than twice as many as the next nine games combined, the data showed.
The game received such positive buzz that it spurred consumers to buy Xbox 360s just to play it. Microsoft sold nearly 528,000 of the consoles in September.
"True to its name, the game rubbed off on hardware sales too--the Xbox 360 realized its best month ever in unit hardware sales outside last holiday season," NPD analyst Anita Frazier said in a statement.
Microsoft said Halo 3 set the stage for a steady flow of highly anticipated games through the holidays.
"People keep asking me, is it all about Halo? It's about the games. We've got a great lineup of games and it just keeps coming. A game of a month of system-sellers isn't going to hurt our business," said Microsoft spokesman David Dennis.
The Halo effect did not dim enthusiasm for Nintendo's Wii, which sold 501,000 units, the most since last December.
The Wii has been the best-selling console this year, thanks to its low price and ability to appeal to gamers outside the traditional young male audience.
"The Wii went up against the self-proclaimed 'biggest entertainment launch ever' and we emerged with our best month of the year," said Reggie Fils-Aime, president of Nintendo of American. "They fired their bullet and our gun is loaded and ready to fire throughout the holidays."
Nintendo's Wii Play, which is bundled with an extra Wii controller, was the No. 2 title, selling 282,000 copies.
Sony's PlayStation 3 continued to languish in third place with sales of 119,000 units. With a price tag of up to $600, the PS3 is the priciest of the new consoles due partly to its inclusion of a high-definition Blu-ray DVD player.
The company said it would introduce a new PS3 model for $400 and drop the price of the high-end version to $500.
"Next month, with the PS3 price reduction, we should see a notable increase in sales of that platform," Frazier said.
Sony's Heavenly Sword was No. 10 on the list of top-sellers, moving 139,000 copies.
Electronic Arts, the world's biggest games publisher, had three games in the top 10, led by the PlayStation 2 version of Madden NFL 08 at fourth place with 205,000 copies.