My apologies for creating yet another of these threads, in what has been an overdiscussed topic already. However, I wanted to have a reference point for my prediction over the next 12 months, and some of the analysis may prove interesting to other posters. So bear with me, because I have a lot to say here.
First of all, the most important thing to remember is that sales trends in each gaming generation are usually established within the first 12-18 months of all competitors appearing on the market. Once the pecking order has been determined, things usually don't change very much over the next few years. What that means for our purposes here is that we can expect each of the three consoles to sell at about the same rate in 2008 as they did in 2007, within a range of roughly +/- 25%. Expecting the sales of any system (yes, including the Wii) to go up by 50-100% is simply unrealistic.
Let's start by posting the sales for each console in calendar year 2007. These are pulled straight from the VGChartz tables, with the one minor change of subtracting 191k from this week's Wii sales in Japan, to bring them in line with Famitsu numbers (ioi having explained that the Japan numbers were overtracked):
VGChartz Hardware data for the period 07th Jan 2007 to 30th Dec 2007:
These quarterly numbers are courtesy of a post from Sqrl, updated to include the final week of December. (There are some very, very minor discrepencies between these quarterly numbers and the VGChartz totals, but far too small to have any impact whatsoever.)
What have we figured out about 360 sales so far? Everyone knows it sells well in America, not so well in Europe, and very poorly in Japan. 2007 sales were up nicely over sales in 2006, despite a relatively slow first half of the year. After selling 6.78m in calendar 2006, the 360 moved 8.13m in 2007 - an increase of about 20%. The release of Halo and other big titles, combined with a price drop, helped drive sales in the second half of the year. Although the 360 struggles to sell outside of America, the market there should be strong enough to support the platform for the forseeable future.
Thanks to having two years worth of sales data, we can be reasonably confident about how the 360 will perform in 2008. The 360 should continue to see a steady flow of major titles, and sell at about the same pace in the new year. At the same time, however, it's clear that the console is not going to break out and fill the market leader position occupied by the PS2, which will ultimately limit how far it can penetrate into homes. Expect the 360 to sell about the same amount next year; I am estimating 8m in sales, for a lifetime end of 2008 total of about 24m.Playstation 3
The PS3 had a tumultuous year in calendar 2007. After debuing to much fanfare at the end of 2006, the console struggled to move units through the slow months of the year. The European launch moved 600k units in just two weeks, but took four months to duplicate that first 600k afterwards. At its absolute nadir, the PS3 was selling only 50k units per week worldwide. Fortunately, thanks to aggressive pricing and new models introduced by Sony, the PS3 rebounded strongly and enjoyed a much better holiday season, particularly in Europe.
Estimating the sales of the PS3 going forward is more difficult than for the 360. Much is resting upon whether the boosted sales seen in November and December will prove to be permanent, or a temporary result of Sony's latest hardware push. Expect to see post-holiday sales fall dramatically, yet remain higher than they had been in 2007. It's virtually impossible for the PS3 to do worse in 2008 than last year, when it was tracking behind the Gamecube and Dreamcast in many regions. Due to the lower entry price point, sales will be up, but not that much higher. The PS3 still costs $400/500 (and higher in Europe), which will not have units moving very fast in, say, February or April. I am estimating PS3 sales to be 20% higher in 2008, the same growth that the 360 saw in its second year on the market, which would put them at about 9.2m in calendar 2008. This places end of year sales at a little over 18m, so I'll round up and finish with 18.5m.
It will be very difficult for the PS3 to get much higher than this in sales; 20m seems like an absolute maximum to me for end of 2008. That would require over 11m in sales for calendar 2008, an increase of almost 45%. This might sound pleasant to Sony fans, but is not particularly realistic. Both the 360 and PS3 are limited not just by their price points, but by the demographics of their target audience. They both appeal to young males and attract the high-end users - who are a minority of the population.
Let me put this another way: why is it that there is no market where both the 360 and PS3 are strong? It's always one or the other: 360 in America, PS3 in Japan, etc. It might LOOK like both do alright in "Others", but no, even there it's an illusion; the 360 does well in some markets (UK, Australia) while the PS3 dominates the others (Italy, Spain, etc.) The truth is that they both fulfill the same market niche, that of the expensive top-tier console. With 80-90% of the same software, they directly cannibalize each other's success. For this very reason, it will be enormously difficult for either platform to sell beyond 10m units in a calendar year, which necessitates broad support in all regions, from many diverse purchasers.Wii
2007 was clearly Nintendo's year to shine, between the continued success of its DS handheld and breakout of the Wii console. The Wii consistently dominated hardware sales in all regions, at all times of the year, aside from brief intervals when one of its competitors launched a major software title or slashed its prices. Q4 2007 was the only quarter in which the Wii did not (easily) outsell 360+PS3, and it actually came close to achieving that mark as well. Wii sales consistently increased every quarter in 2007, reflecting increased production from Nintendo, before exploding in the final holiday period of the year. The question for 2008 is not "will the Wii keep selling", but "how many units can Nintendo produce".
The Wii sold almost 16.5m units in 2007, and looks to easily break that mark for 2008. Predicting year-end totals revolves around guessing by how much. While it may be fun to get caught up in the Wii fever and predict impossible totals (like, say, 60m?) in reality Nintendo is still limited by production factors and a fear of supply exceeding demand. Keep in mind too that the PS2, in its best years on the market, didn't sell more than 22-23m units. The Wii may eventually be able to exceed that, but in only its second full year, seems unlikely to do much beyond that upper limit.
Nintendo has stated that they are producing 1.8m units per month; over the course of 12 months, that would work out to 21.6m units. Since Nintendo can reasonably expect to sell all of those units (if not during the slow months of the year, then during the holidays), a ballpark figure of 41m for the end of the year seems like a reasonable starting point. Due to Nintendo's incredibly conservative corporate nature, I don't expect them to sell much more than this, even though it would very likely be possible. That's why my prediction for 2008 is just above this number, at 22.5m units, for a lifetime total of 42m. Notice that I've actually gone against my initial warning here, and am predicting Wii sales about 35% higher than in 2007. The ONLY reason that I feel comfortable in doing so is the fact that the Wii was so consistently supply contrained during this past year. This has prevented us from determining where demand actually stops; in contrast, we have a pretty good idea of how demand sits for the 360 and PS3.
360 8m (24m LTD)
PS3 9.2m (18.5m LTD)
Wii 22.5m (42m LTD)
Note that this puts the Wii right around 50% marketshare at the end of 2008; I think it's about even odds whether it happens before the end of the year or not. Regardless, it's a near certainly in 2009 unless sales trends dramatically change. As a final note, expect to see the Wii do very, very well in the first two quarters of 2008. A lot of posters on this site are new, and don't know what sales look like in the slow months of the year. There was a period in 2007 where the Wii outsold 360+PS3 combined for almost 30 straight weeks in the slow months of the year, interrupted only by the European launch of the PS3. Unfortunately, we'll probably see (even more) Nintendo fansboys running around here in the future. Sales for the other systems will pick up in August, when the yearly sports titles are released and the annual slow buildup to the holidays begins, but for the next six months... Nintendomination looks very likely.
I'm sure I've missed something critical, but what that is will only appear in retrospect. We'll have to wait and see what that is.