I just posted this in Artofangels Wii 50% Market share thread, but I don't want it to get lost so I thought I would post it in its own thread. It is a long read, but I hope at least a few people can get through it and give a good response. I will catch back up after catching a few ZZZs.

Now I am not saying that the Wii is doomed and it will never sell another console after X date. In fact based on previous generations Wii has already made it, another Nintendo home console will be made even if the Wii droped to 100k units worldwide starting next week. What I want to get across is that their are a lot of variables still left in this console generation. This is the first time in the history of gaming that we have had consoles that were so very differant, all conected to the internet, all upgradeable via software, and had such huge price differances.

Many want to argue that the price of the Wii is a non factor of its success, now I will admit price is not the only thing moving units, but it has to be taken into consideration. When you compare the price differances in this generation to past generations, you find that the price gaps have never ben this tremindus. In the days of the N64 and the PSone it was 199 to 149 for a very long time. In the last generation the PS2 and Xbox were price at 199 while the Gamecube sat at 149. This gen we have seen the 360 at 399 for most of its life, while the PS3 has maintaned around a 499 average price point. IMO the lowest priced 360 right now is the Pro at 349, as it is the lowest priced option to be able to give you the full expeciance right out of the box with no added price,while the 40GB PS3 at 399 is the lowest priced PS3 option as it gives you all of the functionality that you need to do PS3 related tasks without any added cost. Based on what I would view as the fully functional skews Pro and 40 that gives nintendo a 100 dollar price advantage over one competitor, and a 150 dollar price advantage over the other. This is quite a differant story compared to the useal 50 dollar price advantage Nintendo has usally placed them selves in. Another factor to this is that in previous generations, the differance was also at lower prices. Before all of the platforms were at a very acceptable 199 or lower price point, selling at 400 dollars is very hard to do in mass quantites. Moving forwards in this generation all three companies will continue to drop prices, and even if nintendo keeps its current price advantages, to the general public 99 to 199 is a lot easyer to swallow than 249 to 399.

Now of course price is not all of what sells consoles, the most important thing in this buisness is the software. Software is a funny word on Video game forums, many believe software is only in one form when it is talked about in a console world, but in reality that is far from the truth. All three of these new generation consoles expand beyond software as just games, weather it be Live on the Xbox, Blu-ray on the PS3, or channels on the Wii each of these are no game software that helps to sway people in the direction of each console. One thing that I think many of the people that surf internet gaming forums need to remember is that casual gamers are what makes up the majority of the consoles sold. These people do not speand hours on end playing games. There are a wide range of casual gamers. Their are gamers that will pick up every title on a Nintendo console if it has the name Mario on it. Their is the FPS casual gamer that plays Halo, and the one that playes only WWII shooters. Their are people that own systems for only a spicific title such as Zelda, MGS, GT, Halo, Medtroid, or WoW. As hard as it is for some to believe these casual gamers, sometimes use their systems for things other than gaming. Believe it or not their are millions of kids and adults alike who own either a PS2 or Xbox as their primary DVD player, because just as the video games are not just about hardcore gamers, DVD players are not all about 19.99 wal-mart players. Sure 19.99 is a great deal, for the 7 year old girl that wants to watch Naked Brothers Band, or Barbie movies it is the way to go. Many parents however, understand that their teenage children may like video games also, the same goes for many 30 to 50 year old men with low salaries. These people see that they can pick up a PS2 today for 129, and they get a DVD player, and there is a huge selection of games between 9.99 and 29.99. It is true that these people exist, the PS2 sells very well dumfounding many analists and hardcore gamers to this day. These are the people that have to be thought about later on down the road, these are the people that could potintally build more steam for the HD consoles. When they pick up their brand new 40in HDTV in 2011 for 349, they are ready to go high def, and there sits a PS3 or Xbox 360 with the ability to play Blu-ray for only 149. Just remember these people.

Now as far as Games alone go, even in the more core gamer group the PS3 and 360 have a lot of big hits coming down the tube this year that are going to help get attiontion on their consoles very quickly. Nintendo can not be counted out however. Their is a lot of year left to go, and they can not afford to let the ened of this year go buy without one of their big guns being released. We all know Brawl, Kart, and Fit will hit all regions buy August or September at the latest. This leaves to much of a drout at the end of the year. IMO it is obvious they have somthing ready for that christmas time, they are just to smart not to. So what will it be? Well go down the list, what is left? Starfox could still be coming, or how about Animal crossing? Mabye a Pokemon game i in the works, it really could be anything, and whatever it is I am sure it will be an awsome game. Now even with a possability of multiple hit franchises from Nintendo, unlike on the handheld side were they only face Sony, here they have to face multiple opponents. They still have to deal with major franchises from both companies, and the new stuff that is coming from PC that we have never seen on conoles. With the likes of GTA4, Too Human, FFXIII, GT5, Halo Wars, Splinter Cell Conviction, Little Big Planet, Getaway 3, Fable 2, Killzone 2, Resistances 2, Gears of War 2, Alan Wake, MGS4, and many many more major exclusives on their way to the HD consoles, it is not going to be a smooth ride for Nintendo. In America High Def equals sports in many minds, and their are a lot of MLB The show fans, Madden Fans, NHL fans, NBA fans, and Soccor fans that are still picking up theri yearly fills on the PS2, and Xbox. Of course HD and sports is not set in stone, but it is a very logical direction, and one that I think will pose problems for the Wii. How many of thouse Madden fans will be looking to upgrade for their new Super Bowl HD TV for this year Madden? Then you also have to consider that Nintendo is not the only kid playin the casual side of the fence, Sony has games for the Eye, Singstar, Buzz, Little Big Planet, and PSN while MS is hitting the market quite well with XBLA, Viva Piyata, Scene it, and Banjo Kazooi. These kinds of games will only expand as prices drop and the companies start developing to a broader appeal.

The last thing I want to point out is that these are the first consoles ever to all upgrade. In the last generation we got a console and thats was it. The PS2 had a few more things over the Gamecube, and the Xbow had even more over the PS2. This time around is differant. Although all three have this capability two are not so limited. The goal of the all in one box is going to be a reality before the next gen wave comes in, and only to consoles are currenty capable of that. Thanks to comatition Sony and MS will be cramming as much out of these boxes as possable. Both will have IPTV, DVR, HD movies download services, music, and TV services. Both will undoubtably begin at some point in this generation start pushing more and more towards disc and network versions for many games. I believe GT5 will be the first major franchise to make the leap, and once the flood gate is opened it will only get mudier. One thing to note about this is that these features will not work for all regions. In Japan, South Korea, US, and select EU contries it will be a reallity, but many contries will only be reaching current US speeds buy 2013 or later.

I hope that I did a better job of looking at the hole generation a little deeper, in a better way this time. I really have no problem with any of the consoles. I own all three and have a very well built PC, but I think it is quite obvious which I perfer. I believe that this generation needs to expand for a long time. Game companies are still a ways away from hitting their stride for this generation, I think EA, Activision, Ubi, and Take Two will not hit their comfort zone until about 2009 or 10. It would be nice to see them really get to pump out some awsome conent for about 2 to tghree years before the next consoles are announced. Based on our current situation I think it is obvious that many people are not ready to move up yet and we would have been just fine with the PS2, Xbox, and Gamecube for at least tell the end of this year. The next transition will be even harder, as many are going to find upgrading harder and harder to justify. I am really looking forward to this gen lasting tell about 2015 to 2017. We have reached a point were we no longer need to be upgrading any faster. It is time to get to really know these systems, and sit back and watch some great adventures unfold.

Wow

Very nice analysis.

Now to pick it apart.  Somewhat.

 "Many parents however, understand that their teenage children may like video games also, the same goes for many 30 to 50 year old men with low salaries. These people see that they can pick up a PS2 today for 129, and they get a DVD player, and there is a huge selection of games between 9.99 and 29.99. It is true that these people exist, the PS2 sells very well dumfounding many analists and hardcore gamers to this day."

Agree.  As the price goes down, the market gets bigger (up to a certain point, probably around $99, where the reduction in price net out larger than the number of people brought in to get total revenue).

"When they pick up their brand new 40in HDTV in 2011 for 349, they are ready to go high def, and there sits a PS3 or Xbox 360 with the ability to play Blu-ray for only 149. Just remember these people."

The 7 year old / teenager / low salaries are NOT going to afford a $349 new TV, imo.  At best, they might get one for Xmas, and that's it.  So, even if they get one in Dec 2011, it's not until Dec 2012 / birthday or other special event that they can justify another video game system, even at $199 or $249.  And by that time (Dec. 2012) a new Nintendo set might be coming out.  At $249.  No way will they raise the price if they can help it.  Unless they get too arrogant about their win this generation.  

One thing to consider is that the Wii and the Nintendo DS are the cause of a lot of unprecidented growth in the industry; this is partially caused because they appeal to new gamers who are not likely to become interested in a PS3 or XBox 360 regardless of the price, and also caused because of how unique they are in the market place encourages growth in multiplatform ownership.

On top of this the XBox 360 and PS3's main selling features are technological and feature improvements which (for the most part) the mainstream audience is not ready for, and will not be ready for until the next generation; HD is wonderful, but with the slow adoption rate and the potential slow down in the world economy it will not be a key feature until 2011 or later; at the same time, online gameplay is also a great feature but we are still years (or decades) away from most gamers playing multiplayer games online.

The combination of these factors, along with the enevitable boost that the dominat console gets from the additional support it earns, means that it is unlikely that the PS3 or XBox 360 will ever approach the numbers of the Wii, and it is unlikely that they will be able to capture 40% to 50% of the marketshare combined. This (of course) is not a death sentence because of the unprecidented growth I mentioned earlier; it is likely that there will be 220 Million (or more) consoles sold this generation, and at 40% this would mean that Sony and Microsoft would have 88 Million consoles sold between the XBox 360 and PS3.

First, I'd like to say I read the first paragraph, but only really skimmed the last few paragraphs.

You're right. It does. The PS2 was $100 more than the GameCube when the GameCube launched. That didn't help the GameCube much though. The Wii is $100 cheaper than the Pro version 360, and $150 cheaper than the 40GB PS3. And I don't think it's "helping" the Wii very much that it's cheaper. It has other things on it's side. It has momentum, which is something the PS2 had that the GameCube didn't, thus the difference in price didn't help that much. Also, remember that the launch of the PS3, everyone was trying to get one, because everyone though the PS3 would shoot right out of the gate and overtake the 360 really quickly? Also a lot of ebayers were trying to get one, and the PS3s price on ebay was pretty high the first few weeks. But what happened after that? Demand dropped like crazy after the initial wave was over, and the Wiis hasn't died at all.

Even with only a few big games, the Wii hasn't had any problem selling systems. What's going to happen once games like SSB:B, Mario Kart, WiiFit (NA/Europe), and many others that I can't even think of come out? The PS3 and 360 have some very big games coming out too, but so does the Wii.

Finally, I think you're sig is wrong. Unless the 2007 totals are/were your predictions, the end of 2007 LTDs are wrong. I'm going to assume they are your predictions... but you should change them to what end of 2007 was, or at least put in a "these were my 2007 predictions"

Price is a factor.
HD is a factor.
PVR etc is a factor.

That far I agree, but I do think you've given those factors way too much importance, they will not do much to stop the Wii avalanche. And just Wii Fit, Brawl and Mario Kart will be enough to sustain it.

@Renar
That is very true. It is only one scenario however. I believe in 3 years from now you will not find a non 720p at the minimum TV set at any store. The example I gave was geared more towards the 30 to 50 year old with limited income. 7 year olds and teenagers will not be getting 40 inch TVs, I would more expect them to be recieving 26in TVs for 179 + a game console @ 179. I also mentioned that I believe that this gen will go on tell 2015 - 17 with PS3 still going tell 2020. I do believe Nintendo will release a new system before Sony or MS, but it will only be a Wii HD, and all of the games that come for it will be playable on the current Wii at low def as to not effect their market.

@HappySqurriel

Agreed, however, I think your point is exactly why we don't need new systems for at least another 6 years. PS3 and 360 are both more than capable of 1080p 60fps, it will just take devs getting the time to get comfortable with them. In reality that is all we need. We have not even seen 30% of what the PS3 is capable of, and I am sure the 360 has at least anothe 30% to show. This is going to be easly good enough for the next 6 to 10 years. IMO their is really no point for another console tell we have displays that would actually justify them, or ways to imnteract that are actually leaps beyond what we have. HDTV's are not moving past 1080p any time soon, some companies will undoubtably put out 1440p TVs or even 2160p, but really to own one would be pointless, and for the most part they will just be for show much like crazy cars that show a car companies power but are not feasable to release. Broadcasters have not even hit 1080p yet and anything above that is years away. The major players in the CE world know that they have set the new standard at 1080 and if they want to get any kind of success out of it like DVD/Color TV they need to keep it a consistant standard.

@Stever89

I agree that the Wii is selling based on more than just price allown. As I mentioned in the origianl post the prices are 100 to 150 at a high price of 399. In the last gen the 100dollar price gap was with a high point of 199. In that scenario even the high end price is still very casual, were as right now 399 or even 349 for that matter is almost double a impulse buy price. Another thing to take into account is that as I mentioned earleyer, all previous consoles have been set in stone. This has lead to a console race that was set in stone, all consumers knew what the consoles could do and that never changed. This Time Around (Micheal Jackson song) the consoles all have a continuing list of features pouring in. It may not acount for a hole lot, but it is my belief that, people are eventually look at their capable box that they payfor DVR on and rental fees on, and go hey comcast allows for IPTV over the PS3 and 360 for less. Plus I can use PSN/Live to rent movies, TV, Music, and it playes games and Blu-ray. That deal seems like it will become sweeter and sweeter.

@Stranne

We will have to wait and see, but based on history these small features become a big part of the reason a console succeeds to PS1/2 levels. Many consumers want more than just games for their box, or more than just movies on their movie player.