A Tale of Two Consoles

Posted by jgaudiosi :: Industry Trends

Wii2_1While both Sony and Nintendo sold out of their initial stocks of PlayStation 3 and Wii at retailers this weekend, the aftermath of the two consoles is painting different stories. While retailers are expecting plenty of Wiis this week and beyond, PS3s are nowhere to be found and when they'll be replenished at retail is up in the air. Nintendo has said there will be 1 million Wiis in the U.S. by the second week of December and 2 million hardware units by the second week of January. In contrast, Sony officially is targeting 1 million PS3s by the end of the year in the U.S., although many analysts don't expect the company to come close to that number.

There's a huge price difference between the $250 Wii and the $600 PS3, but shortages are about the only thing driving PS3's momentum right now. Even Ebay sales of the device have dropped significantly with gamers only willing to spend a few hundred dollars more for the new console. The New York Times gave Sony's system a terrible review, after celebrating the Xbox 360 last year amond its shortage-plagued launch.

A friend of mine happened into a Wal-Mart and bought a $500 PS3 yesterday with no fanfare. He then swapped it for some cash, a Wii and some games, telling me now he had a game console he could play with his wife (who's not a gamer). Over the long run, I think this speaks volumes for what Nintendo is doing for gaming and the mass market route its forging for the industry, as a whole. The high-priced PS3, which does have a killer app with "Resistance" and great HD Blu-ray Disc movies like the pack-in "Talladega Nights;" isn't going to be a mass market machine for a few years. In the meantime, Nintendo will own this market.

Microsoft is selling plenty of "Gears of Wars" these days, which is now the number one game on Xbox Live, knocking "Halo 2" off its perch; but the high attach rate the next gen console holds shows that it's not reaching beyond the core gamers. This is according to analysts at SIG, who said that a lower attach rate would show that more mainstream gamers, who don't buy as many games as hardcore gamers, were buying the console. Sony's PS2 has been outselling Xbox 360 all year.

Nintendo DS Lite has been outselling Sony's PSP all year, but Sony is ramping up a new marketing campaign to promote the new functions of the portable, including its remote play with PS3 games and content. Gamers will also be able to buy and download PS one games to PSP in a few weeks. Also, the cross-platform sharing for PS3 and PSP requires the $600 Wi-Fi system.

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