gaming as it is could never reach a billion, but gaming as Nintendo is trying to reshape it into could

The Idea that Wii will top out before the PS2 or something is based entirely on flawed assumptions 

My wife still doesn't know what HD is. All she knows is the picture looks a lot better for some reason. This is why in stores 99% of the time, their HDTV are running a HD signal and it sells. So people who bought TV may not care about HD but they do care about a good picture which is HD. (one of the reason people bought a HDTV) The same with video games, most will only notice the HD games looks better but won't know because it's in HD.

As far as digital TV vs HD signal my wife already seen the difference without know anything about HD. The first thing she noticed was the huge difference in people faces. Also except for sport most programs are not running in HD yet. Then after I first got the HDTV my youngest son noticed SD look like crap compare to watching programs on a SD tube TV.

Upscaling DVD looks ok, better than "on-air" and games yet when watching a Blu-ray you can clearly see the difference in picture quality.

 To a degree, but not everyone can see a difference that they are willing to shell out the big bucks for, see the thing is, you are still trapped in that belief that people will abandon the Wii when they see HD, yet that is far from the truth, even running the Wii on an LCD they still love it, maybe in 5-7 years people might want Wii games to be in HD, but it won't make a difference for many more years to come

"This is why in stores 99% of the time, their HDTV are running a HD signal and it sells. "

That's certainly not true over here. Often you see HDTVs showing SD content, and not looking too good.

As for the predictions, I think most of you are way too pessimistic about X360. Price drop(s) and big games will make it sell more in 2008 than in 2007.

PS3 will also increase sales in 2008, selling around the same as X360 (that year). Blu-Ray makes some sales and old PS franchises too.

Wii will have at least have three new titles (Fit, Kart, Smash) and possibly some of the old ones outselling every PS3/X360 game released in 2008. That and increased production will keep it selling out in the US and close to selling out in Japan/Europe.

2009 and beyond, it's much too hard to even guess. How do you think the weather will be in 2009?

 The difference is in the 3 years of great sales you predict for the Wii while the "fad" lasts, it will sell enough hardware to entice developers to make games for it (it is already happening, just as EA, Capcom, Activision...) and htese games will help maintina a good level of sales whereas Furby and Livestrong were the entire product and did not have the equivalent of games coming out regularly to keep the interest strong. 

Given the percentage of people who currently play games on a console (small fraction of population) vs percentage who don't currently (large percentage of the population) Wii cannot run out of casual or new gamers.  It can fail to win them over - but it's not going to run out of them.

 Fact is right now Wii clearly has far and away the biggest potential market.  360 is strictly for gamers - the number of casual gamers buying it are so small as to be zero.

 PS3 is also failing to pick up casual gamers right now (despite doing so with PS2) and I think the console has become too linked to hardcore gaming and being the other choice besides 360.  If I was Sony I'd be putting serious marketing into getting PS3 seen as casual with media centre capability (ironically somewhat back where they started of course with PS3 positioning).

I think COD4 and AC sales show PS3 is gaining plenty of ground with hardcore gamers - its the broader market Sony has so far failed to get interested in PS3.  IMO pushing hardcore games with squeezed in motion controls that are rubbish is strange way to go about it - the console needs a lot of fun games and fun use of the Sixaxis.

Sony is just as bad as most of the industry analysts

they failed to realize that they were creating a console that most of the ps2 owners wouldn't care for and they were marketing it in such a way that it would further drive away those ps2 owners (crying babies? seriously???!?  they wanted to ensure mostly teenage boys and other 'hardcore' were the only ones buying the machine?)

they didn't get that most of their owners were the more casual gamers...again, only like 1/8 ps2 owners buy even 'semi-casual' games like gta...much less the hardcore games that sell far less

there are only so many 'hardcore gamers' in this world...maybe 50mil?...then there may be another 80-100mil 'casual gamers' and then there are 6 billion 'non-gamers'

ps2 at least got most of the hardcore and casual gamers last gen (plus another 20+mil in 2nd/3rd/4th consoles when peoples' ps2s broke)

this gen they have limited their pool of buyers to mostly the hardcore 50mil...a much smaller % of the 100mil casuals will buy ps3s than bought ps2s

wii has a shot at getting a healthy % of hardcore gamers, the vast majority of casual gamers and then also adding in some small % of the non-gamers in the world...and that is why they should surpass the ps2...not only has the # of hardcore+casuals grown over the years (population growth, ds drawing in many non-gamers to become casuals, etc) since ps2 launched, but wii can get 10s of millions of 'non-gamers' that the ps2 never had a shot at

Fun topic. I won't go into any extended discussion, but I'll leave a few quick comments. FYI, my 2008 numbers are almost identical to TheSource's (check the link in my signature for more information).

I would echo the comments of a few others questioning why so many seem to think that the 360 is suddenly going to fall apart and stop selling. I just don't see that happening. The 360 is too entrenched in the American marketplace by now; it's not just Halo, the 360 also is the dominant platform for all of the yearly American sports games (Madden and ilk) which sell millions of copies annually. There's really only room for one high-end console on the market, and the 360 occupies that niche in America. Millions of 360 owners are not suddenly going to switch over to the PS3 for no apparent reason, not when the two platforms have 80-90% of the same games!

Trying to predict anything more than a year into the future is usually an exercise in futility. Still, I'm equally unsure why so many posters are so bullish on the future of the PS3. Why is it that the console which struggled to a last place finish in 2007 going to "pick up steam" and start selling more and more consoles down the road? That goes against everything we know about how the console industry works; second-tier ("losing") platforms do not start performing better and better against the market leader as time passes! The opposite invariably happens as third-party support switches to the dominant console.

Anyway, the PS3 will do better in 2008 than in 2007. But it's not going to light the world on fire either. None of the arguments for a PS3 surge vis a vis the Wii make any real sense. Cheaper price? Sure, but the 360 and Wii are going to come down in price as well. More games? True enough... except that the 360 and Wii will also continue to fill out their respective lineups. Better graphics? I don't see why this would suddenly become a difference-maker in 2008, when clearly it wasn't in 2006 (Wii Sports vs. Resistance?) or 2007 (Mario Galaxy vs. Uncharted?)... or 2002, for that matter, when the PS2 easily trashed the superior Gamecube and XBox.

At the end of the day, the PS3 still costs $400/500 (at a significant loss, I might add) and we'll see over the next five or six non-holiday months just how difficult of a sell that is to the vast majority of the public. Barring some seismic change in the market, I don't see sales in 2008 increasing by more than 25%, at best.