Nintendo Wows With Wii

The Nintendo Wii outsold both its competitors, the Sony PlayStation 3 and the Microsoft Xbox 360, in March, according to the latest figures from the NPD Group.

Nintendo continues to say it is having problems keeping up with demand for its units, citing “widespread shortages” for both the Wii and its handheld DS unit. While some industry observers wonder if Nintendo is purposely throttling down the production of its product to create an artificial over-demand situation, the company stressed “Wii remains the fastest-selling new console in more than a decade, based on NPD sell-through information over the first five months of availability.”

Nintendo has increased production of Wii hardware to meet growing demand, the company claims. It points out that it has sold more game systems than all other manufacturers combined so far in 2007.

Profits in Portables

Buried in the NPD numbers is another Nintendo success story, one that might be even more compelling than that of the Wii: The Nintendo DS portable platform outsold everything else on the shelves by a very large margin.

If NPD’s figures are accurate, Nintendo sold about 508,000 DS units in March. That means it significantly outdistanced the Sony PlayStation Portable, of which 180,000 were sold, said NPD.

While most of the gaming world is concerned about which of the so-called next-gen home consoles is on top, Anita Frazier, industry analyst for NPD, told TechNewsWorld the sales of DS consoles should not be overlooked. “Portable gaming, fueled by the success of the DS and the many innovative games for that platform, is a very substantial portion of the video games industry,” she said.

Not Yet Next-Gen?

Nintendo sold 259,000 Wii units last month while Microsoft sold 199,000 Xbox 360s and Sony sold 130,000 PlayStation 3 units, according to NPD. Sony can only hope the PS3 is a slow-starter that enjoys marketplace longevity along the lines of the PlayStation 2, of which a respectable 280,000 were sold in March, NPD reported.

The fact that PS2 sales stay strong makes Frazier question those who consider it outdated.

“We can’t any longer call the newer console systems ‘next-gen,’ which in turn implies the older systems are ‘last-gen,’ since the performance in March of the PS2 was the best-selling console hardware system,” she said. “The PS2, Wii, Xbox 360 and the PS3 are now all part of the ‘now-gen’ group of console systems which, by the way, are being outsold significantly by the Nintendo DS.”

Speaking of older devices, the venerable Game Boy Advance is still pulling in some dollars. NPD said 148,000 GBAs were sold last month. Price might play a part in the seemingly slow adoption of the newest units by Microsoft and Sony. The Wii retails for US$250 while Xbox 360 and the PS3 start at $299 and $599, respectively, and cost $400 and $600, respectively, for high-end versions.

Price Cuts Coming?

“It’s important to remember Q1 is traditionally one of the slowest periods for console sales, so we should read these figures in the context of the full year’s results,” Strategy Analytics gaming analyst David Mercer told TechNewsWorld. “But there’s no question the Wii has the momentum to maintain its lead in the near term. Its success is down to its innovation and appealing price point.”

Mercer believes the PS3 “is having trouble finding its feet, largely because of its premium price and more limited range of titles.” The Xbox360, he said, being the “most mature” of the three systems, “is most under pressure … and these sales figures suggest it may be struggling to keep up.”

Strategy Analytics believes Sony will employ “significant price cuts” for PS3s this year to boost volume, said Mercer. The PS3 “has the strongest proposition in the longer term because it is the most technically-powerful platform, but it will clearly face a stronger challenge from the Wii than many had expected,” he said.

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