I've posted my new lifetime predictions for the end of 2008 in my sig.

This is the flaw in your argument and the reason why Nintendo is slaughtering Sony and MS. You assume the video game market is a fixed size. It is not a fixed size. The existing video game consumer only represents a small part of the population at large. There is a huge untapped market that Nintendo is only scratching the surface on. 

You do realize that Nintendo choose to use flash rather than a hard-drive, right?

They're already there, they just need to choose a more apropriate capacity; with the exception of the N64 their choice of 512 MB was adequate for most of what people will download, but 2 to 4 GB would have been better and still drastically cheaper than a hard-drive (and would see noticeable cost reductions over time).

Alright here's my contribution to the thead, although I think my predictions for a few things such as Wii, are too high, bare with me as they are only rough estimates.



Now using source's numbers we can see how much they did in 2007. End of January 5th 2008 WW HW sales are as follows:

NDS- 65.64 million
AM- 20.73
EO- 23.23
JP- 21.67

PSP- 30.12 million
AM- 11.31
EO- 10.89
JP- 7.92

Wii- 19.72 million
AM- 8.64
EO- 6.21
JP- 4.87

360- 16.33 million
AM- 10.44
EO- 5.34
JP- 0.56

PS3- 8.96 million
AM- 3.54
EO- 3.65
JP- 1.77

Now very broadly its important to note that in general The Americas are about 50% of the worldwide market, Europe/Other is 35%, and Japan is about 15%. This is not 100% accurate nor do I want it to be that, but in general it is good enough for this prediction. Now obviously the way to get the most hardware sales is to have this kind of proportion, unless of course you are the top brandname, then really you look at it the other way, meaning if the proportions are off it'll show you which markets have more or less room to grow, such is the case of the DS.

First we'll cover DS and PSP at least in analyzing up to 2007 data. DS has a very odd proportion. It is as follows: AM- 31.6%, EO- 35.4%, and JP- 33%. As you can tell America and Japan sales seem to be quite flip flopped. Its apparent that because DS is the top brand an not capturing all of the American market percentage, that it has a lot of room to grow. This is evne support by recent huge spurts in DS sales in 2007, showing this. Also you can see that it has a lot more sales in Japan, which means that in time sales will decline. Many have wondered why the Japan market and DS sales have been down lately. Well this is why. Diminishing returns, as DS can't sustain that number. PSP has these proportions: AM- 37.6%, EO- 36.1%, and JP- 26.3%. Now because its not top brandname and really not in any immediate competition it must be looked at differently. It doesn't have the same proportions for American market share, and with DS having the same problem and increasing, its only more likely that PSP sales over time will not do as well in the Americas. EO like DS, is pretty proportional to normal sales, so it likely won't show any declines unless DS goes up in EO, which is unlikely as DS has probably piqued in that region. In Japan it is a lot higher than normal, most likely caused by the recent increases due to DS declines and PSP lite, ect. This will although likely start to fall after holiday season 07, as it once again isn't dominant brandname.

Now Wii, then 360, then PS3. Wii's proportions are as follows: AM- 43.8%, EO- 31.5%, and JP- 24.7%. Once again Wii is of dominant brandname so we look at it the same way as DS, but another factor comes into play and that is shortages. Meaning that these proportions are really based on how many is allocated to each region. Although I think the most important thing to look at is, America is its domiant market, and that its percentage will only get higher as more shipments come. EO, due to stronger competition from PS3, will probalby stay about the same, as only UK, France, and Germany are really suffering from huge shortages now. Japan is a little deceiving though. It will go down, but not because its not selling, but simply cause more will be allocated to the other 2 regions, which will get it closer to what it should be at about 15%. Overall Wii fits the 50:35:15 structure quite nicely, and thus you have seen pretty nice sales.

360's proportions are as follows: AM- 63.9%, EO- 32.7%, JP- 0.03%. 360's proportions are easly the most atrocious. Its market share in Japan is awful suggesting that MS will not be allocating much to that and that number will only continue to drop, despite nowhere left to drop. EO seems to be on track, but as MS moves into 3rd place there, more will be sold in America pushing that percentage down even further. The American number will continue to rise as this will soon be the only place where the 360 will be selling at. 360 sales could be 80% American by the time we finish this generation.

PS3's proportions are as follows: AM- 40%, EO- 40.7%, JP- 19.3%. PS3 definetly has good proportions, but its American sales are scary. As EO continues to be where it sales best it might continue to push that number down. Japan is at a very good percentage, and probalby will stay that way as Wii dominates that market and it continues to sell at a consistent pace. EO and AM are the areas to watch for PS3. We are hoping that the AM percentage will go up, as it has more to gain, as EO only has to go down. As if the EO goes up then its going to be the AM going down.

So your looking at all this and wondering why. I know. Well the point of these percentages is explaining where do these hardwares have the most potential userbase. Like let's take the 360 for instance. It has the most potentinal userbase in EO and JP yet trends are showing bad sales there comparatively. Now although its doing well in America, its important to understand how much is possible to gain out of that market.
That's another reason, drying up a region. Take DS for example. It sold amazing in Japan for awhile, but percentages of worldwide market shows it can't maintain that and feed off that forever. Thus you see diminishing returns. Its important to find these thigns out, along with sales boosters to be able to decide how sales will go down in the future. Cause for instance if you only sell in 50% of the market but have uneven proportions there and can't gain a 1st place market share in that one region, then you can't win this generation, which is why 360 can't be 1st in the 7th generation console wars. This is all necessary to find, and throughout I explained how these percentages can predict future increases, although only PS3 is the hard one to find, as both EO and AM are at the same percentage but not far off from what it should be, which can suggest it can go either way.

Thus going from that lets look how these percentages could be affected. DS and PSP first of off, let's start with Japan. Going into 2008, DS has some huge games, most importantly DQIX. This could possibly return higher sales to the DS, or not much at all seeing that most people have probably already bought the DS. Depending on which way DS goes will depend on how much PSP sales. It is most likely though that if the top brand is in a decline due to diminishing returns, then the "off brand" will most likely fall as well, and not pickup where it left off. Meaning in Japan in 2008, DS and PSP sales will be down from 2007 sales. They have both piqued. As for America, DS is going to take off like a rocket, as its the only way it can go. In the wake of this, PSP is going to falter. Isn't enough room for 2 to increase at the same time. Most likely 2007 was the last huge year for PSP in America suggesting that it'll be on decline from now. This is its death stage. As for EO, DS has piqued, but not enough to cause it to decline as its market share is pretty close to what it should be there. Meaning both PSP and DS will probalby stay the same in 2008 and 2009 there until natural declines start to slowly bring them down. Not exciting there.

As for the Big 3, let's start with Japan. Wii has dominant brandname there, and this is unlikely to change especially with Wii Fit out, Wii Music coming, and SSBB coming. No big game really that PS3 or 360 have could probably stop this, including FFXIII. Especially with the biggest Japan franchise, DQ, now a Nintendo exclusive, or at least that's how its playing out. Not to mention Japanese devs are coming over to Wii. All and all its going to be a very Nintendo dominated area in the country of the rising sun. America is a different story though. As its really hard to tell where things are going, but Wii has only to gain, as shortages caused it to not have as many sales. And this is 360's only strong market, so with a good brand there, its hard to see it faltering. This doesn't leave many options for PS3. PS3 probably can't stop Wii in America, but it can stop the 360, as although this is where 360 is big at, due to it faltering around the world, things fall like dominoes. It's just got a very large dominoe to tackle. It's going to need well timed games, HOME, and some pricedrops, as 360 has no big guns left really to stop any knocks made by the competition. All 360 has is a huge stone wall in America. Chisel away at it and it will fall. As for EO, 360 will only decline and it'll be a 2 man race in Wii and PS3. But this market could be a split market, as Wii seems to take some markets, and PS3 takes the others. Now is disproportional, as Wii takes the bigger markets, and PS3 takes the smaller ones, usually giving Wii 60% of the sales and PS3 40% of the sales, when only talking abou them 2. And really this could go undisturbed for the entire generation, as there are no signs of them changing, unless of course Wii's brandname grows so big, that PS3 just can't stop it, although this is unlikely as long as the PS2 continues to sell well.

So using all these ideas here's how I see the progression of sales up til 2012. Now unlike Source, this will be very general, but bare with me:

End of 2008

NDS- 92.00 million
AM- 32.00
EO- 33.00
JP- 27.00

PSP- 40.00 million
AM- 15.00
EO- 15.00
JP- 10.00

Wii- 44.00 million
AM- 20.00
EO- 14.00
JP- 10.00

360- 23.00 million
AM- 15.00
EO- 7.30
JP- 0.70

PS3- 19.00 million
AM- 7.00
EO- 8.50
JP- 3.50

Once again very general but the point is taken. It'll be DS and Wii on top. 360 will decline and PS3 will take its place. But remember very general and possibilities of change are always there. Now onto 2008, noting that 2008 will be Wii's biggest year, meaning it piqued, meaning decline from here on out. Luckily its the brand so that means everyone will fall with it. I don't expect that to change, but this will cause 360 to die well faster than most would have planned. So I'll do through 2012 in straight succession with an explanation at the end.

End of 2009

NDS- 112.00 million
AM- 40.00
EO- 40.00
JP- 32.00

PSP- 47.00 million
AM- 17.00
EO- 18.00
JP- 12.00

Wii- 65.00 million
AM- 30.00
EO- 20.00
JP- 15.00

360- 29.00 million
AM- 19.60
EO- 8.60
JP- 0.80

PS3- 32.00 million
AM- 13.00
EO- 14.00
JP- 5.00

End of 2010

NDS- 127.00 million
AM- 46.00
EO- 45.00
JP- 36.00

PSP- 52.00 million
AM- 19.00
EO- 20.00
JP- 13.00

Wii- 80.00 million
AM- 38.00
EO- 24.00
JP- 18.00

360- 33.00 million
AM- 22.00
EO- 10.20
JP- 0.80(DEAD or sales to small to care about)

PS3- 41.00 million
AM- 17.00
EO- 18.00
JP- 6.00

End of 2011

NDS- 137.00 million
AM- 50.00
EO- 49.00
JP- 38.00

PSP- 55.00 million
AM- 20.00
EO- 21.00
JP- 14.00

Wii- 92.00 million
AM- 44.00
EO- 28.00
JP- 20.00

360- 36.00 million
AM- 24.20
EO- 11.00

JP- 0.80(DEAD or sales to small to care about)
PS3- 50.00 million
AM- 21.00
EO- 22.00
JP- 7.00

End of 2012

NDS- 144.00 million
AM- 53.00
EO- 52.00
JP- 39.00

PSP- 57.00 million
AM- 21.00
EO- 22.00
JP- 14.00

Wii- 100.00 million
AM- 47.00
EO- 31.00
JP- 22.00

360- 37.00 million
AM- 25.20
EO- 11.00
JP- 0.80(DEAD or sales to small to care about)

PS3- 56.00 million
AM- 24.00
EO- 25.00
JP- 7.00

"This is the flaw in your argument and the reason why Nintendo is slaughtering Sony and MS. You assume the video game market is a fixed size. It is not a fixed size. The existing video game consumer only represents a small part of the population at large. There is a huge untapped market that Nintendo is only scratching the surface on. "

You shouldn't assume that i think it is a fixed size. I don't believe that is a fixed size, and it's very ignorant for you to assume that i do.

but anyway, what HUGE market is there left that is so "untapped". Kids? Older people? Africa? please explain.

How about girls above the age of 10 and Women in general? How about adults over the age of 40? What about people who are generally active and see gaming as too passive of an activity?

Certainly, we're running out of 13 to 30 year old single males to buy consoles but when you look outside of that demographics videogames have a very small penetration levels.

There are over 6 billion people on this planet. At best, we could estimate that around 120 million of them buy consoles. That's about 2% of the world population. Even factoring in a generous 5 people per console owned (upping it to 10% of the world population as gamers, hardcore or otherwise), that's still tiny. There is room for growth in this industry, massive room for growth. It's unlikely video games will ever exceed 50% use worldwide, but even if they did, that'd be (in a worst-case scenario) a growth of 5 times the size of the industry as exists now.

Gaming will never be a billion person entertainment network haha. It just doesn't have that kinda appeal. I think at the most it could get up to a 500-750 million world appeal, that's as countries such as China and India become more developed.  Not to mention most of that growth will be in the handheld market as it's cheaper and more accessible. 

Another consideration is how many households only have one person or one kind of gamer in them?

In households where the Wii was bought by/for non-conventional gamers there is a high probability that conventional gamers will also be in the household. How many gamers would honestly say that they wouldn't buy a high quality conventional game for the Wii if they already owned a Wii?

The same can not be said about unconventional games on a conventional platform. Being how they're marketed, the PS3 and XBox 360 are not (particularly) interesting to unconventional gamers and they're not going to go out of their way to research a game that may be interesting to them; often potential unconventional gamers will see a gaming console as "off limits" in their house, and as being owned by someone else.

Of course the farther out the prediction, the harder it gets to be even close. But I don't understand these ones for 2012+. One of these three will have a new box out by then, and if it is any good at all, it should start rapidly eating away at the sales of the now previous generation machines.