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How Wii Game Consoles Outsell Competition

Now that Microsoft, Sony, and Nintendo all have their videogame consoles in the market, the transitional phase of the console cycle is in full effect as each vendor has entered the game.

What is interesting about this particular generation of gaming manufacturers is that each vendor has clearly differentiated hardware and strategies. So, who will win when the dust settles?

IDC says none of the three new consoles will dominate the market in the next five years like the PS2 dominated last cycle; however, Nintendo's Wii will outship and outsell the 360 and PS3 in 2007 and 2008.

IDC says Microsoft's Xbox 360 was the best selling current generation console for 2006 because it enjoyed a full year lead in the market. Microsoft is relishing in the PS3's launch slip-ups, where PS3 supply deficits diminished profits. The battle is heating up between the 360 and PS3, as the two gaming manufacturers target the same hardcore/enthusiast gamer to dominate the market.

Nintendo, on the other hand, is the only one of the three manufacturers working to grow its total accessible market for its hardware and software by broadening its audience beyond the traditional market. Nintendo has designed its latest hardware and software to be more inviting and fun, and less intimidating for non-gamers including those who may never self-identify as a gamer.

Nintendo also enjoys support from the fan base it has captured with successful first party franchises. IDC believes hardware shipments of Nintendo's Wii will capture a little more than a third of the worldwide market by 2008, rising slightly above Sony's PS3 and Microsoft's Xbox 360.

"With the Wii, Nintendo is abdicating the specification war, leaving Sony and Microsoft to slug it out between themselves for the hardcore market," says Billy Pidgeon, program manager of IDC's Consumer Markets: Gaming program. "We believe concerted efforts to broaden the appeal of videogames beyond the traditional enthusiast base will deepen the industry's penetration. This is good news for an industry that seemed to be receding last year due to over-saturation of the core base."

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