Despite Nintendo's large lead in the console race, many still debate whether the Wii can maintain its dominance through the remainder of the cycle. After all, the PlayStation 3 has gained a tremendous amount of steam and the Xbox 360 maintains robust monthly sales. However, with the Wii’s commanding lead, is it enough to crown the Nintendo home console the winner of the 7th Generation race?
The graph above is a combination of historical data (NPD) and forecasted data through the end of the year. When dealing with the Wii, it would be unfair not to include a forecasted November and December since the Wii is expected to outsell its competitors in November and especially December. Plus, it makes year-over-year forecasts much simpler.
To decide whether the Wii can maintain its lead, we should forecast a worst-case scenario for the Wii and a best-case for the PS3 and Xbox 360.
For the Wii, let us assume a 25% decline in sales next year; followed by two years of 30% declines, and a 50% decline in 2013. For the Xbox 360, we'll assume a 10% increase through 2012, and a 30% decline in 2013. For the PlayStation 3, a 25% increase next year, followed by two years of 10% increases and a 30% decline in 2013. I project that 2013 will be the last year of the cycle, and it is typical to see declines at these levels when a new cycle begins.
This is, of course, a worst-case scenario and highly unlikely to occur since the combined sum of hardware sold is nearly 60% more than that of the 6th generation consoles, but Wii sales will only be at par with PS2 sales (in this worst-case scenario). However, even if this scenario were to occur, the Wii would still come out the winner, with some room to breathe.
Maybe this is concluding the obvious (it is what Analysts do!), but I prefer to have data to back up any claims, even if the claim is a little on the predictable side.
There are some complications, however, with this conclusion. First, it assumes that Nintendo will do nothing from now until 2013 in terms of upgrades for the Wii – no new hardware, networking features, or special edition bundles, and Nintendo isn't likely to just stand by. Additionally, we know that Sony plans to support the PS3 through 2016, which means there are three additional years where Sony could gain a tremendous amount of ground on the Wii and Xbox 360 by being able to offer an affordable Blu-ray player to consumers (very similar to the late success the PS2 had by being able to offer consumers an incredibly cheap video game system/DVD player).
Nevertheless, it is probably safe to say, based on the data above, that catching up to the Nintendo Wii at this point may prove to be futile.
Now that it is clear the Wii will remain on top through the cycle, the focus and debates should be on the current battle for second place between the PS3 and Xbox 360, which has only increased in intensity since the PS3 $299 price drop.
While the Xbox 360 does have a generous lead, the $299 price cut on the PS3 has clearly shifted momentum into Sony's favor. Is it enough to change Sony's current ranking or could Sony's ten-year support of the PS3 push its installed base ahead of the Xbox 360 in the long-term? Unfortunately, we will need another year of hard data before a comfortable projection can be made, but I am sure until then the heated debates will continue.
14 Comments
December 7, 2009
Jesse, do you have averaged attach rate data for the three consoles? I have always thought the Wii attached rate was very low. Perhaps under 3 games per unit.
December 7, 2009
Wii is the winner? Well . . . duh.
You really went out on the limb with that one.
December 7, 2009
The useful numbers for publisher who aren;t also console manufacturers is the number of titles sold per unit hardware. If users on Xbox 360's buy just one title more on average than a Wii owner, then the 360 "wins" as far as being a better target for development.
The key challenge here is longevity; which console will hold up sales of third-party software better over the next couple of years? Part of that will be based on how the hardware is updated... right now, in terms of what's announced, the Natal looks like the add-on most likely to spur sales.
December 7, 2009
Wii is not even in this generation. It has the worst controller of any console ever (from an ergonomic standpoint and a usability also), the Wii does not support even 720p, something the XBox supported, but is limited to 480p like the PS2. It has almost no games worth paying even $20 for, no hard drive, no real internet connectivity (anyone who says otherwise has very low standards or does not own a current generation system like the PS3 or XBox360. If I have to use a phone to talk to friends when trying to get smash brothers to run unplayably... it is worse than no internet at all. Friends Codes? Is this Compuserve?).
Why don't you show PS2 numbers there, I would say PS2 was the winner of the last generation, Wii came to the party 5 years too late and will never catch up. Somehow I suspect the Wii HD will still be inferior to the PS3 and 360.
December 8, 2009
As the owner of two video game stores I can guarantee that the Wii is NOT the winner for this generation. We sell a lot of Wii systems but virtually no games. Our sell rate for games on the different systems is 2:1 360 vs PS3 with Wii titles rotting on the shelves. The only titles that move are Nintendo titles with most 3rd party titles sitting until we discount them down to $19.99. To be blunt, the Wii customer is not a real gamer, it is a system for young children and their grand-parents. These are not the type of people that purchase more than 1 or 2 titles. The graphics are horrible and control is none existant.
December 8, 2009
Thanks! Yes, you are right, there are many measurements for success. If you are talking just pure software units, the Wii and 360 are very close. Attachment rates would go to the Xbox 360 and pure processing power would make the PS3 the winner.
Wii attachment rates are higher than 3. They are north of 5.
December 8, 2009
Already XB360 has exceeded Wii in LTD software sales on dollar terms, and I don't see the Wii passing it. As far as what matters most to the industry at large, I would say that is the contest that matters - who is moving the most $$ in software.
For North American (NPD) numbers, that's XB360 by a safe margin, a margin that will only increase this Xmas season.
For Worldwide, who knows, maybe it is Wii since XB360 does poorly in Japan. Even Europe/Japan probably won't put PS3 in the pole position for software dollars quite yet.
Moving the most hardware doesn't really matter except to those three companies if the software money doesn't follow.
December 8, 2009
As a person who owns Allt hree current systems. and every american relesed system from intellivision up, i will say this i own 36 wii titles, and they are all outstanding games, to say a system isnt "this gen" because of raw graphical horsepower is redicuolous, yes it is not as strong as 360 or PS3 but that doesnt matter when they innovated in a the control space, and if you think that doesnt matter, then i beg you to think if controllers hadnt been innovated at all what good would ir be to have a console as powerful as 360/ps3 with a atari 2600 joystick...it wouldnt, I work at a electronics store and we sell Wii system 3-1 on both 360 and PS3 and I cant keep a copy of NSMBwii or Mario Kart in stock...The argument on the software sides of things is moot in point, because Nintendo would win that argument again with their 1st party games out selling everything except call of duty which is across 4 platforms on just the wii... So yea Nintendo isnt just moving hardware, its also Moving Software, even if its Their software, if you think theres nothing good to play on the system simply because its not in HD then i Say to you, You are not a true gamer. and heres a list of games that re IMHO great and stand up to any game on any system as far as fun and design.
Boom blox 1/2
Conduit
Driver
ghost squad
Godfather black hand
House of the dead 2/3/overkill
Legend of Zelda Twilight Princess
Links crossbow training
Madworld
Madden
mariokart wii
Medal of honor heroes 2
Metroid prime trilogy
No more heroes
okami
Rabbids go home
resident evil 4/umbrella chronicles/dark chronicles
Scarface
Speed racer
Super paper mario
New Super Mario bros wii
Super mario galaxy
Super smash bros brawl
Tiger woods golf
TMNT
Tomb raider
Wario ware smooth moves
wario land shake
Wii sports resort
WWE Smackdown VS raw
Zack and Wiki
Thats probably more games than any of you own on one system. and thats just a few.
you can have your console of choice and thats great i love my PS3 and 360 play uncharted all the time, and i love Modern warfare 2 but the winner is judged by raw numbers int he business world and thats going to nintendo both in the hardware side of things and on their software.
December 8, 2009
innrloop, you don't have any evidence for your claims. Besides, Nintendo has made a profit on EVERY Wii they've sold. Microsoft didn't start making a profit on Xbox 360 systems until 2008, before that they were losing money on every system sold. Besides, the real money comes from software sales and Wii outsells the Xbox 360 and PlayStation 3 in both first party AND third party sales.
Stephen, the Wii has already won this gen, their closest competition is 25 MILLION behind them. Even if you own a store, then yours is the exception as NPD data shows Wii games sell more than the competition.
December 9, 2009
Hehe vi får vell se då :P. Ska bli spänande och se om dom har rätt :)
December 10, 2009
TJ: I have evidence via NPD, but re-posting that data is prohibited.
Grab a recent NPD report and look at platform lifetime-to-date software sales, XBOX leads Wii by about 20% on a $ basis for the territory they cover (North America).
December 13, 2009
innerloop..Split those sales into each respective third party company, Microsoft is doing ok, but only recently have they started to make PROFIT on their gaming business....Dollar wise nintendo has ALWAYS made profit on their hardware AND the software sides of business.
December 21, 2009
You might want to consider that 360 games typically retail for $10 more than Wii titles, barring a few exceptions from money grubbing music games.
May 1, 2010
the wii seems to be a fad, its sales have slowed in recent months, and will be surpassed soon. ps is coming out with a motion control which is kinda late.
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