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Home Console Sales Analysis

It has been approximately 60 weeks since the Wii and PS3 launched. In that time the Xbox 360 has seen the Wii evaporate its 12 month head start in console sales to take the top position in global sales. While the Xbox 360 remains the number #1 selling console in the United States, the question is not whether the Wii will over take the mean green machine, but when. At this point, it looks like Nintendo's innovation over graphics philosophy, which was initially mocked by some, will prevail.

The more interesting console war is being waged for second place between the PS3 and the Xbox 360. At this point, the Sony haters are feeling pretty confident that the PS3 is destined for third place. But a closer look at the sales numbers reveals a different picture. The PS3 actually sold through more consoles than the Xbox 360 did in its first 60 weeks on the market.

First 60 weeks on the market:

Nintendo Wii - 19.7 million
PS3 - 8.7 million
Xbox 360 - 8.2 million

Moreover, the PS3 is projected to sell its first 10 million units in just 65 weeks. That is one week faster than its predecessor, the PS2, which is the best selling home console of all time. By comparison, however, the Xbox 360 initially sold at a snail's pace not reaching the 10 million threshhold until week 78. So while Microsoft likes to tout the fact that it has sold 16 million units compared to the PS3's 9 million, there is some sweat on the brow of Mr. Gates.

Meanwhile, the Wii has become the fastest selling console of all-time reaching the 10 million mark in 36 short weeks. Quite a remarkable feet considering there are few killer apps for the console and none from third party publishers.

Number of weeks to achieve 10 million in sales:

Nintendo Wii - 36 weeks
Xbox 360 - 78 weeks
PS3 - 65 weeks (projected)
PS2 - 66 weeks

So while the PS3 is currently more than 7 million units behind the Xbox 360 in global sales, there are reasons for PS3 owners to be optimistic. Not only is the PS3 selling faster that the PS2 initially did, but it still remains the console of choice for the Japanese third party developers such as SquareEnix, Atlus, Capcom, Konami, Nippon Ichi, Namco Bandai, Banpresto, Koei and the like. Why? Because the Xbox 360 does not sell in Japan and third party publishers prefer not to compete against Nintendo's first-party developers. Expect Sony to close the gap between the PS3 and the Xbox 360 with the releases of Devil May Cry 4, Biohazard 5, Metal Gear Solid 4, Final Fantasy XIII and God of War 3. While some of these titles are not exclusive to the PS3, it will matter little in Japan as 90% of consumers will choose to play these games on the PS3 over the Xbox 360.

A potentially bigger problem for Sony is losing exclusivity to Nintendo. SquareEnix's decision to make Dragon Quest IX exclusive to the NDS and Capcom's decision to make Monster Hunter 3 exclusive to the Nintendo Wii were both crushing blows to Sony. These franchises are two of the most popular in Japan and their upcoming releases are certain to cement Nintendo's dominant position in Japan for both the NDS and Wii. Hopefully for Sony, these are just anomalies and Japanese third party publishers will remain solidly in Sony's camp.

More troubling for Sony, however, is the manner in which Capcom made the announcement:

“Due to high development cost of titles for PS3, we have decided to switch the platform to which we release our Monster Hunster 3 title.”

Total hardware sales to date:

Nintendo Wii - 19.72 million
Xbox 360 - 16.33 million
PS3 - 8.96 million

That said, don't expect the PS3 to ever overtake the Xbox 360 in North America. Why? For one, the lack of exclusivity of key titles such as Devil May Cry 4 and Resident Evil 5 is a bigger deal in North America where the Xbox 360 enjoys a large installed user base and a large library of killer apps. Why buy a PS3 to play Resident Evil 5, when you can get a 360 and also play games like Bioshock and Halo 3, etc. Second, the Xbox 360 has Live and Sony's ineffective counterpunch, the Playstation Network, is not Live.

Sony's biggest problem is that its console does a lot of things but none of them exceptionally well. PS3 is caught in the mediocre middle - its online features are poor compared to the Xbox 360 and its six-axis controller cannot compete with the Wii-mote. For cheaper than an 80 gig PS3, gamers can buy a Wii and an Xbox 360 to enjoy the best of both worlds. And in North America, more and more gamers appear to be doing just that.

Total hardware sales by region

Nintendo Wii

North America - 8.64 million
Japan - 4.87 million
Other - 6.21 million

Xbox 360

North America - 10.44 million
Japan - .56 million
Other - 5.34 million

PS3

North America - 3.54 million
Japan - 1.77 million
Other - 3.65 million

Nintendo's new philosophy with both the NDS and Wii is to expand the gaming market. Has Nintendo succeeded? The answer is unquestionably yes. Consider for a moment the above graph. This shows how well the PS2, Xbox and Gamecube sold in the first 60 weeks on the market. The PS2 dominated with 8.98 million units sold. That same number would place the PS2, the best selling home console of all time, a laughably distant second behind the Wii, which sold through 19.7 million units for the same period. In fact, the Wii alone nearly beat out the combined sales of all three last gen consoles in their first 60 weeks on the market.

While Nintendo is currently the primary benefactor in the ballooning gamer demographic, Sony and Microsoft are sure to reap the benefits in the future as these new gamers seek to expand their gaming horizons beyond Nintendo's realm. That was certainly the case in the NES days with Sega taking advantage, and there is no reason not to assume that history won't repeat itself.

First 60 weeks on the market:

PS2 - 8.98 million
Xbox - 7.36 million
Gamecube - 5.26 million

Handheld Sales Analysis

The handheld battle between Nintendo and Sony is a little less dramatic. Nintendo's DS is the clear winner and the only question that remains is by how much. While the NDS got off to a slow start compared to the GBA, the dual screen is a juggernaut with no signs of slowing down. Expect the NDS to surpass the GBA sometime in 2008 and make a run at the Game Boy (over 150 million units) for best selling videogame platform of all time.

First 60 weeks on the market:

GBA - 16.86 million
NDS - 14.36 million
PSP - 10.51 million

Total sales to date:

GBA - 79.57 million
NDS - 65.64 million
PSP - 30.12 million

But does that mean that Sony's PSP has been a failure? Not at all. In fact, Sony could fairly pronounce the PSP to be an unmitigated success. Prior to the launch of the PSP, Nintendo dominated the handheld market with a 95% share that no one dared challenge. The PSP currently retains a very respectable 31.5% market share. The PSP has enjoyed more success than the Ngage, Atari Lynx, Game Gear, Turbo Express, Wonderswan and Neo Geo Pocket combined.

Market share:

GBA - 95% in its heyday
NDS - 68.5%
PSP - 31.5%

When all is said and done, the PSP's market share will likely shrink to the 20-25% level, but expect the PSP's successor to benefit from lessons learned and fair even better.

Number of weeks to achieve 10 million in sales:

GBA - 38 weeks
NDS - 53 weeks
PSP - 57 weeks

Conclusions and Predictions:

Time for third party publishers to start making quality titles for the Wii as it now has the largest installed user base and has the potential to become the best selling console of all-time.

To that end, the Wii will sell through nearly 40 million units by the end of 2008. By comparison the Xbox 360 will sell through 22 million units (assuming they ever fix the Xbox Live server issues) and the PS3 will sell through 17 million units as it begins to close the gap on Microsoft.

PS3 is not performing nearly as poorly as people believe - outperforming both the PS2 and the Xbox 360 after the first 60 weeks on the market. The PS3 should do well in 2008. While the PS3 is unlikely to ever surpass the Xbox 360 in North America, the battle for the second spot in global sales is likely to be fiercely contested and wage on through 2011.

Considering Nintendo once held a 95% market share in the handheld gaming arena, Sony's PSP has done quite well. Sony has effectively positioned itself as a strong contender in the next generation of handhelds.

The NDS will challenge the Game Boy as the best selling gaming system of all time.