The Nintendo Wii will be the best selling console of the next five years

A games post by matt, posted on May 24, 2007 at 7:26 am



That’s a pretty audacious title and it’s probably going to rile up a bunch of people. And not just your general fanboy types, either. For the most part, console gamers — or, at least, the type of console gamer who likes to go online and talk about video games — tend to agree that it’s too early to make any conclusion about which console (if any) is going to dominate the market. They point out that it’s only been six short months, and cling to the belief that a combination of price drops, better marketing and the release of certain key software titles (most of which, coincidentally, end in a numeral of some kind) will cause significant shake-ups to sales figures over the next year. Conventional wisdom is that everything is still up in the air.

It’s time to get down to earth, however, and face a fact that’s always been evident when it comes to video games: the launch-window decides everything. There is no such thing as a come-back, a turn-around or an underdog story; the console people buy at the beginning of a product cycle is the console people will continue to buy at the end of the product cycle.

And, for this generation, that product is Nintendo’s Wii.

Exhibit A: The April NPD

Last month’s American sales figures need no introduction:

Nintendo DS – 471,000
Wii –360,000
PlayStation 2 — 194,000
PlayStation Portable — 183,000
Xbox 360 — 174,000
Game Boy Advance — 84,000
PlayStation 3 — 82,000
GameCube — 13,000

The overall message is obvious: Nintendo is the new Sony. Their sales in both the portable and console sphere dwarf their competitors. In its fifth full month of release, Nintendo has cemented their Wii console as the console to beat in this generation’s sales race.

Some less-than-obvious observations:

  • The Wii’s sales figures in April are 360,000. Aside from being a rather coincidental ‘fuck you’ to Microsoft’s brand name, this number also represents the highest non-portable sales for any console in April ever.
  • The Wii outsold the PS3 by a factor of 4.4. The PS3 outsold the Gamecube by a factor of 6.3. There is a very real chance than the PS3 will be closer competitor to the Gamecube than the Wii in future months.
  • The Xbox 360 is consistently tracking below the Playstation 2 each month.
  • The Playstation 3 is consistently tracking below the Gameboy Advance each month.

Exhibit B: History

There has never been a console that has launched poorly then slowly gained steam in the American, Japanese or worldwide marketplace. The best examples of any kind of ‘comeback’ with consumers would be the Super Nintendo in America — which emerged from a bloody battle with Sega to barely take the American market — and the Nintendo DS worldwide.

In the former case, the console was never trounced by its competitor. It was outsold occasionally, but only in the American and Europe territory, and only by small margins. As far as the DS goes, it’s a similar story: it enjoyed a solid launch in all territories, but sold only about on par with Sony’s PSP for most of its first year. It always maintained a bigger userbase than its competitor, however — its sales surge after the Lite redesign and the release of software like Nintendogs and New Super Mario Bros. was far more a phenomenon than it was a comeback.

Four consoles have been the undisputed winners of the video game space. All of them — the NES, the Super NES, the Playstation and the Playstation 2, launched strong. And, from there, they continue to enjoy strong sales over the first four or five months of sales, continuing toward market domination.

Exhibit C: The End Is In the Beginning

Other consoles have launched strong and faded, sure, but none of them sustained their huge sales longer than the first month or two past their release date. The Nintendo 64 was, at the time, the biggest launch of all time (and, in actuality, it sold pretty well for most of its life) but Nintendo was unable to sustain sales even in the short-term (Betting so heavily on the sales potential of Cruis’n USA was probably a mistake). Similarly, the Gamecube launch was huge, but its January was dismal. By then, the damage was done, and Nintendo never recovered.

It’s not about launching first — the Dreamcast and the Xbox 360 are evidence of that. The competition can’t begin without at least two contenders. However, history has never shown us a turn-around on the level it would take for both the Xbox 360 and the Playstation 3 to stage some sort of sales comeback at this point.

Exhibit D: Price is (mostly) irrelevant

A lot of the response to the April sales figures was a collective call for Sony and Microsoft to lower the prices of their consoles. The rationale is, I guess, that $600 U.S. Dollars for the PS3 and whatever the hell Microsoft is charging for one of their nine Xbox 360 SKUs this month is the biggest barrier to widespread adoption of these consoles.

This is incredibly short-sighted. Price is an important part of any consumer’s decision to buy anything, of course, but the PS3 and Xbox 360 are not simply attractive items that are priced outside the normal consumer’s range. They are, for the most part, undesirable items. The barrier to purchase doesn’t come at the first sight of the price tag — it comes far earlier.

The sales figures would not be much different if Sony and Microsoft had priced in the same range as Nintendo.

I’ve said this a few times on this site, but it bears repeating: The Wii was a brilliant move because it has, essentially, saved gaming from itself. The market was poised to contract after the monster success of the Playstation 2. There just wasn’t enough innovation in the pipeline — nothing new to keep consumers interested. The Wii (and DS) changed all of that.

Exhibit E: The Future

My reputation might not be worth much, but I’m willing to put it on the line over this one: Neither Sony nor Microsoft will gain greater (or even comparable) worldwide market share to Nintendo during this generation of consoles.

The writing is already on the wall, and there is no going back. The Wii, despite having more hardware available than any other console ever has had during its launch window, is still extremely difficult to find in stores. Six months after launch, supply has yet to catch up to demand.

And this is all without any Wii-specific major first-party software releases.

There is no tide to turn, there is no card left unplayed. There’s no basis, historical, economic or otherwise, for a predicted worldwide turnaround. Nintendo, after they pass Microsoft’s established install base, will not be caught.