So..Historical Saturation Theory Suggests

[TheSource]

http://www.vgchartz.com/forum/thread.php?id=34697&page=7

According to the research we did in old that thread, NES penetrated 1/3 American households (likely a shipment figure though) between 1986-1990. Figures are something like this...

1993 Onwards - 1m (34m)

1992: 2m (33m)
1991: 3m (31m)
1990: 7.2m (28m)
1989: 9.2m (20.8m)
1988: 6.4m (11.6m)
1987: 4.1m (5.2m)
1986: 1m (1.1m)
1985: 0.09m (0.09m)

1990 USA Census: 248.7m People in the United States. Probably about 83 million households. NES penetration ~ 33.7% of USA households.

1992 USA Census Est: 255m people in the United States. 255m / 3 = 85m households. NES penetration ~ 33m/85m households ~ 38.7% of USA households.

So NES penetration peaked at 39% of USA households. Now, take a look at the Wii.

 Wii   Yearly   LTD  Growth/Decline   USA Population  / USA Households      Penetration = Wii LTD / Households

2006: 1.08m (1.08m) (298.6m Americans / 99.5m Households)  Wii: 1% Penetration

2007: 6.29m / 500% / (7.37m) (301.6m Americas / 100.5m Households)  Wii: 7% Penetration

2008: 10.16m / 62% / (17.53m) (304.4m Americans / 101.5m Households) Wii: 17% Penetration

2009: 9.59m / -6% / (27.12m) (307m Americans / 102.33m Households) Wii: 26% Penetration

Going from when NES launched nationally in 1986, Wii/NES have sold nearly identical amounts in four years. The difference is that NES was at 33% penetration, while Wii is at 26% penetration...and NES ended up at 38% in in 1992 at its absolute zenith of ownership/households.

Going by the NES model, 38% penetration, you can use that to model when Wii will really slow down:

Estimates

2010: 8.15m / - 15% / (35.27m) (309.2m Americans / 103m Households) Wii: 34% Penetration  (Note: NES only did 6m after 33% pent.)

2011: 6.53m / -20% / (41.80m) (311.3m Americans / 103.8m Households) Wii: 40% Penetration (My estimation for $200 Console market is ~45m)

Now, if Wii is really like the PS2, it can keep going beyond 40%. But if it is like NES, this is where sales may start dropping by 40%-50%, even if no new systems released. There is no reason to believe it is going to fail to get to 40m though, given that 40m will be less than 40% of USA households in 2011. PS2 has been purchased by 45m out of 102.3m USA households through 2009 - 44%. That figure should peak at 45% (~47m out of 104m USA households) in 2011, although obviously most PS2 owners aren't purchasing games and many sold their systems to GameStop or whoever a while ago. I don't see any reason why Wii can't get to at least mid 40% penetration as it is going to become the budget device in two-three years.

2012: 4.8m / -27% / (46.60m) (313.5m Americans / 104.5m Households) Wii: 44% Penetration (See Note Above: Spring 2012 Price Cut)

2013: 3.2m / -33% / (49.80m) (315.8 Americans / 105.3m Households) Wii: 47% Penetration (Would expect Wii to be under $100 by this point)

2014: 2m / - 38% / (51.8m) (318m Americans / 106m Households) Wii: 48.8% Penetration

2015: 1m / - 50% / (52.8m) (320.2m Americans / 106.7m Households) Wii: 49.5% Penetration

2016: 0.2m / -80% / (53m) (322.4m Americans / 107.5m Households) Wii: 49.3% Penetration

What it boils down to is, Wii is at least capable of 40% penetration of American households by the time it stops selling, based on NES and PS2 which seem to be the machines most similar to Wii. If Nintendo keeps cutting price when necessary, and the gaming population continues to expand (or at least holds flat) as a percentage of the USA population, its concievable that Wii will top 50m in the USA.

NES/PS2 needed 6 full years (1987-1992...given that NES didn't launch nationally until late 1986 when test runs in NYC and LA, CA proved successful, PS2 launched in October 2000 so the full years were 2001-2006) to top 35% penetration in the USA. Wii looks like it will only need five full years to do so - which suggests either a very short tail at the end (Wii stops around 40m) or a very long tail given how deep the penetration is with high sales remaining. I lean towards the latter but we'll have to see.

Thoughts?