WATERLOO -- Zach Goddard lives in an 8-bit world.

Playing Super Mario Bros. 3 on the Nintendo Entertainment System, he guides Mario in a race through the Mushroom Kingdom on a mission to save Princess Toadstool from Bowser's line of enemy forces that include Koopa Troopas and Goombas.

Goddard, 18, is testing the game, ensuring it works before making the purchase and adding it to a collection that includes more than 170 NES games.

"I collect to play," he said. "But I do want to get as many games as I can."

Goddard's affair with the NES, which catapulted the home video game industry when it was launched in 1985, goes back to when he was 5 years old. At that time he had 40 games. He only began adding to his collection again during the past year.

With multiple controllers, joysticks and other accessories to go with his NES systems and games, Goddard can't put a price on his collection. He estimates his games cost an average of $5 each, with a few rare and popular titles -- such as "Mike Tyson's Punch Out" -- going as high as $10 to $15.

A handful of new businesses in the metro area have contributed to his and other gamers' growing collections.

Since November retailers like Rhino Video Games and Game Crazy in Waterloo and GameStop in Cedar Falls have opened and filled a niche for gamers looking for retro titles and systems, as well as current offerings.

"The industry is growing a lot," said Ryan Sealock, Rhino Video Games store manager. "When I was younger video games were almost nerdy. Now it is more mainstream. There's something for everyone. There are not that many people who haven't touched a system."

In 2004, computer and video game software sales set a record, reaching $7.3 billion, according to the NPD Group, a global market information company that measures product movement and consumer behavior. An average of eight games sold every second during the year.

The year featured the release of popular video game titles "Grand Theft Auto: San Andreas" and "Halo 2," which combined to sell more than 9 million units in the United States. Electronic Arts also released "The Sims 2," the sequel to the best-selling computer game of all time.

"PlayStation 2 is probably the most popular system, but the Xbox is catching up," Sealock said. "The old 8-bit and Super Nintendo stuff is selling well, too. We get a lot of old-school gamers."

Phantom EFX, a Cedar Falls-based developer and publisher of popular PC titles, has watched profits grow as sales maintain their torrid pace. Its line of Reel Deal casino games has made the 5-year-old company the dominant player in its genre.

Darin Beck, chairman of the board and one of four founding partners at Phantom, said the company has grown between 200 percent to 1,000 percent each of the last five years.

"We've been growing by leaps and bounds year after year," he said. "We're now in every major retailer in the United States, Canada and the United Kingdom.

"We never dreamed it would get this good this fast. All we hoped for in the beginning was that we would get some traction in the marketplace," he added.

Beck said there are huge dollars involved in the gaming industry, but few find the success Phantom is enjoying.

"It's a difficult industry to get into," he said. "A series of unlikely events occurred for us to get where we're at. To accomplish what we did in Iowa is unheard of."

The industry will continue its push in 2005 and 2006.

Phantom plans to tap new markets and also will become the first in its genre to launch an online multiplayer casino game. The yet-to-be-announced title is scheduled for released in August.

"We'll just continue to add to the product line and stay on the forefront of technology," Beck said. "We'll continue to look at new ways of delivery and work with other companies on some products."

Sealock and other video game store managers will see increased traffic come March 23 when Sony launches the PlayStation Portable. The PSP will be like a handheld version of the PlayStation 2, according to Sealock.

Rumors also put the release date for the Xbox 2 in late 2005. And 2006 could see new consoles from Sony and Nintendo.

Goddard, though, has little interest in the new systems. He will continue his quest to enlarge his NES collection.

"I have a lot of games to go," he said.

Charles Emerick can be contacted at (319) 291-1418 or charles.emerick@wcfcourier.com.