Sorry this is long but lots has been said to respond to. I’ve lost track of who said what so I apologize for any unnamed references. Like everyone else I have no idea how many Wiis Nintendo can sell. Certainly if you expect Nintendo to release a Super Wii in 3 or 4 years then the Wii could never match the 7-8 year sales of the PS2. For the same reason it’s unfair to say the PS2 couldn’t match the 18 year sales of the various Gameboys (not that anyone said that). However, if the Wii showed the potential to hit 100 million by 2012 I can’t imagine what possible manufacturing problems would stop Nintendo from reaching that goal over the next 4.5 years. It would be impossible for Nintendo to produce say 2.5 million Wiis by the summer even if they would all be sold. Should demand hold up I don’t see why they couldn’t in 2011. Yes the DS is currently having supply issues, but it’s turning into the fastest selling video game system in history. In addition to that it’s usually better to be just short of demand than it is to overshoot it. The DS’ sales are so high it would be easy to overshoot in a big way if Nintendo got carried away with increasing supply. Nevertheless, Nintendo has almost doubled production in a year from around 1.2 million to at least 2-2.2 million which is no mean feat. I don’t see how long-term graphics and price will adversely affect the Wii in any significant manner. Despite their dominance of forums and video game websites, the number of people who buy a system because of graphics is quite small in the wider world. As it’s already been pointed out elsewhere, the most powerful system has won exactly once, and it was the only near run victory (the SNES). The reason being that the most powerful system is usually much more expensive and/or harder to make games for which limits the initial sales and developer interest which further limits sales and developer interest, and so on (essentially the very feedback loop slamming the PS3 as we speak). By the time the more powerful system can have games that really put its competition to shame, the race is over. While the difference between the PS3 and Wii are greater than the PS2 and Gamecube on HD they are less on SD which is how the vast majority will play video games over the next 5 years. True at the end of the 5 years HDTV may be approaching a majority of households, but most of the systems will be sold before then. Also, those sales projections are, well, projections. The actual result could be higher or lower but I’ll bet lower since we are only now beginning to see the effects of the housing bubble ending, interest rates rising, and new bankruptcy laws. The situation over the last 4 years was an almost perfect coalescence of conditions for the rapid uptake of expensive technology. With that ending I wouldn’t be surprised if we see slower sales HDTV’s or at least their confinement to non-video game use in households. On price, Nintendo could have cut the price further on the GameCube but what was the point. By the time the price cut would have come the race was over. Why waste $500 million to push another 10 million GameCubes in 2004/5? Especially since those were bad years for Nintendo profit wise when it fell under half a billion. The bigger question is whether Sony can cut to $300, still not really a mass market price, before it’s too late for them. Sony as a $60 billion company will have lower profit last year, and probably next, than the $6-8 billion Nintendo. Sony also has over $13 billion in debt, massive liabilities, and little cash on hand (compared with $0, low, and lots). They need the PS3 to be profitable and will be hard pressed to reduce the price until they can do so and stay even. Sony’s bigger problem is Microsoft who could always undercut their price and claim the title of hard core system of choice. Like the US automakers, they’ve placed themselves into a no win situation where they have to be profitable but they can only do that by having a much lower market share, but that is something the former titan of the industry, like its fanboys, can’t fathom. Another issue that may be worth its own thread is how the video game battle will shape up outside the North America, Japan, and Europe. Those three markets have dominated video game sales in the past but this could be the first generation that countries like China, India, Brazil, Russia, and S Korea have an impact in world sales. Since even Americans and Japanese are balking at a $600 video game system I’m going to guess the PS3 and Xbox360 will not be able to make any inroads into those markets. Especially since developer cost would have the same calculation. American and Japanese devs are openly wondering how they can afford $20+ million per game on the PS3 I think the $5 million Wii budgets will restrict even more games to the Wii (of course cost would be proportionally low for those countries but I assume the relation will be the same). Nintendo, I think, is also in a better position to release a market specific model like the iQue in China. Even so the Wii will have a very limited number of people who could buy it but if only 1% of those 5 countries buys a video game system that would be almost 30 million units. Since I think it’s safe to say almost all of those will be Wiis that could significantly bolster the Wii’s sales figures. This is all highly conjectural of course. Essentially I think the question of how well the Wii can sell boils own to just how large of a market did Nintendo tap and did they even tap a long-term market in the first place. If Nintendo truly is bringing gaming to old people (like the 50+ year old couple at my church who waited in line last week outside Circuit City to get a Wii, for themselves, not their grandkids), girls (like my gf and her sister who never played video games before but both have Wiis, mine in the former case), older gamers who left the hobby (like my older brother who hasn’t played games since the NES but just got ever star in Excite Truck), and the various developing nations then there is no telling how many systems they could sell because the market has never been that large before. As I already said, I doubt Nintendo will fail to meet such demand should it exist. So if I had throw numbers around (numbers I don't know) I would say the Wii could sell anywhere from 60-150 million (the last assuming all the new markets are right), the 360 and PS3 each somewhere between 25 million and 45 million (but with only 65-75 million between them regardless). I do believe that the loser of the 2nd place race between MS and Sony, maybe even both, will be forced to exit the almost certainly loss making video game business by their shareholders. I apologize again for those who had to read all that.

Is this in reference to their annual revenue?

It's an estimate, not a commitment. Notice how MS wanted 360 to be a year ahead of PS3? So, if PS4 was 2012, then next Xbox would be 2011. However, with cell based software maturing in 2008, the 360 may start to show its age by late 2008/early 2009. If so, a 2010 next gen is rather likely. As for MS not being able to afford? This is MS we're talking about, they can even afford a controlling share of Sony in cash (iirc, they had $35B in cash last year). Also, MS is usually not looking for return until they dominate a market. Fact that Xbox is close to operating breakeven is already good enough Actually gameboy color is often counted with gameboy sales (once again, such as on this site) whereas GBA is counted separately. Note that GB and GBC are counted together because they had full compatibility and same form factor (even tho the internals are different and superior in GBC); whereas GBA is counted separately because it had a different form factor. So, I think that a HD Wii/ WiiHD will be lumped with Wii sales because I think they'll keep the same form factor and call it Wii premium. Much like how Xbox 360 standard/premium/elite will be counted together rather than separately Going out a bit on a limb here, but I think that a Wii refresh with HD support (HD Wii/WiiHD) highly likely by end of 2009 if not earlier. Remember, SD signals are being shut off then in the US and people will be looking to update their TVs then. Also, the next gen media wars should be fairly decisive by then and the components will be commodity. Umm, this is why ERP is such a large market. As long as the component IS commodity, you can order by spec. But that's not the point, I'm NOT saying the ramp from 1.2M to 1.5M will happen over night, you generally need a 45-60 day lead time. I'm just saying that it makes business sense to do it this year. As 1M/month is clearly not meeting demand, 1.2M/month will not give them ability to stock for xmas. Moving to 1.5M would allow them to sock away 300k/month for the holidays. It would be prudent to start planning it now (they probably have already) and start it around August, allowing them at least an extra 1M for the holidays

"Going out a bit on a limb here, but I think that a Wii refresh with HD support (HD Wii/WiiHD) highly likely by end of 2009 if not earlier. Remember, SD signals are being shut off then in the US and people will be looking to update their TVs then. Also, the next gen media wars should be fairly decisive by then and the components will be commodity." This has got to be the most quoted piece of misinformation out there. SD isn't going anywhere; analog signals are what is being ended in 2009, and even that is still being fought.

Not to mention it only affects OTA services. Cable and Satellite tv will be unaffected. If people are too cheap to get cable or satellite, they likely will be too cheap to buy video games.

Incorrect, it affects ALL analog services. Cable providers like Comcast, will have to cease broadcasting in analog, and satelite are full digital by nature, and wont be affected at all.

Ok, I was wrong. That being said, most cable boxes are already digital. And for those few that aren't will be able to get two $40 coupons to buy converters.

All cable boxes are digital. Most customers dont HAVE a cable box.

And... so what?

@albionus That was some nice piece. I found your idea that the decline of the housing market might slow down HD penetration in the US insightful. HD TV cost ungodly amounts of money, and if consumers have to start spending their own money instead of the bank's money, they might actually become stingy. Nevertheless, current projections call for the US majority to be on HD in 2009 (with 30% already on HD right now), so we're certainly not talkign about a "vast" minority as you suggested, at least in the US. You also said that the average consumer does not notice technically advanced graphics, however I do think that they can notice seriously sub-par graphics (and then, separately, have to decide if it's still worth it). Some Wii games that were released in 2006 would not be acceptable in 2009. Luckily, the Wii engine still has a lot of untapped power in it, as already evidenced by Super Mario Galaxy trailers and others (and it can do 16:9 480p, which Wii detractors like to look past). On Nintendo making a splash in emerging markets: I'm not so sure if they really have a leg up there. Nintendo have always been notoriously weak in Europe (altough I do think that they have one of the best localisation teams in the industry, I just adore their German translations), so they might have the same problem adapting to other markets. I wouldn't be surprised if the PS2 will have another 3+ successful years in emerging markets.