Good analysis. I never thought about how much stronger the last-gen consoles are doing now compared to '05/'06.

This is an excellent point. In 2006 only PS2 was still alive and the industry was not nearly as robust as it is today. 360 was out but was considered too expensive (at least until the $600 PS3 released) without a big library of games and most of those games it did have were on PS2 (which people already owned).

Today 360/PS3 are still selling software well (just not as well as in the past) and even Wii can sell millions of units if anyone bothers to put a good game on it (Just Dance, Skylanders). WiiU is now the expensive systems without a lot of games (and most of it's games are on 360/PS3 which everyone already owns).

The issue here though is 360/PS3 and Wii (and mostly Wii at that point) offered experiences the previous gen couldn't. Wii's offering was the most unique and it was the most affordable system. WiiU is offering largely the exact same experience as the previous gen, albeit with a touchscreen added but for a higher price point. This is a fundimental problem.

When next gen systems launch, it gives MS/Sony the opportunity to come out with innovative devices that offer gameplay the previous gen (including WiiU) simply couldn't. MS is also looking to subsidize the cost of it's console with 2(or 3?) year contracts and cable bundles (rumoured). So the 720 could well launch at below WiiU's price point while still offering a more unique and 'next gen' gameplay.

Just looking at the top games is misleading.  The market was different back then, sales weren't so concentrated near the top or in November.  The PS2 shipped 78.6 million games in the Oct-Dec '06 quarter.  That's more than the PS3 has ever done, and the Wii's best holiday quarter was only 8.5% higher.  Now with that said, the PS3/360/Wii software ecosystem is more robust than the PS2/Xbox/GC was at that point in time.  It just isn't quite as substantial as those numbers make it look.

I think the X360 / PS3 will be kicking the behind of the Xbox-Next and PS4 as well

But I was told that Wii U is not competing with PS360. How is this possible?

Its really a more thought out "WiiU outselling PS4 and 720, which have sold a total of 0 consoles"

I applaud you making people agree with the head start logic.

It isn't in direct competition with either of them, more like they just have a lot of momentum going on right now and the WiiU hasn't gotten the head start it kinda really needs right now.

Next year will be a repeat of this year, people are going to get scared and confused why the Ps3 is selling better than the X720 and PS4 and then the momentum will shift again. It's all part of the cycle.

The exceptionally good 360 and PS3 will have a negative effect on Omni and NextBox, but only to some extent. It will be hard to validate the new purchases just because PS360 are so good. The image quality, the sound, the online play experience, the good controlers... there are few flaws. It's not like going from 8bit to 16, 2D to crappy 3D, crappy 3D to good 3D and SD to HD with online and hardrives and downloads. Games will go from beautiful to reall beautiful. That said, it's more about software support. When new MS and Sony systems are launched, PS360 game production will slow down. This will help WiiU but also 720 and PS4. PS360 will probably get COD and Madden and Fifa for at least a year, but there's a good chance we won't see an AC3 or a Batman or other AAA titles. PS4Box won't face what WiiU is dealing with now. They will have to deal with the cheaper WiiU which has been on the market for a year and is probably getting its first wave of big titles truly designed for it, but that's another issue.