Front-loaded yet both X1 and PS4 are still selling much faster than their predecessors at the same point their respective life cycles. These are typically the slowest months of the year in sales regardless yet Sony are having trouble keeping up with demand.

And Gamecube shipments were well under 1 million by 2006, so it'd still end up lower than the 2013 total. If you actually add up the PS3 and 360 from last they're actually around 14 million so that's actually in keeping with the end of the previous gen.

The first full year is usually the transitional period (this year) where total growth is slow due to the decline of the older consoles. I'd expect to see significant growth in 2015 but I would still expect a decent amount of growth YOY. The PS4 is actually on track to sell similar numbers to the Wii in 2007 and the X1, despite what people are saying, is also selling well for a console's first year. Expect low numbers for PS3 and 360, but in keeping with the decline of the PS2 in 2007.

xbox1 is only looking good because xbox360 coming off xbox. Coming off of xbox360 it should be better than it currently and is alarming.

Ps4 is now readly available in USA and is not going to even touch wii numbers. Anyone saying wii around 2006 don't realize it was coming off of gamecube so they really didn't expect much. 2007 they were playing caught up. 2008 they were in God mod until 2011. ps4 in japan is a joke to wii numbers. Usa its beat it because it was trying play caught up. The decline is coming because of wiiu and Japan. Plus more people are buying there kids tablets inside of console which it hurt next gen and later this gen.

X1 and PS4 are the best selling consoles nowadays. Their predecessors weren't (in their respective time). It would be a very bad sign if X1 and PS4 weren't selling faster. That's why it's preferable to look at the aggregated values per year (to avoid these kind of traps in the reasoning).

Selling 100k-150k weekly, Sony is having trouble with demand? Even if that is true, do you think that should count as an argument to this market shrinking/expansion discussion?

1M GC + 14M PS2 + 11M 7th gen = 27M in 2006 = 27M in 2013. Lower how?

First full year is usually the "slow growth" period? Then why has 2007 sold so well in comparison to the previous year and even to 2013? This is very simple: if 2014 sells significantly less than 2007 (both are first full years), then there should be no doubt that the market is shrinking.

If you look at the worldwide numbers it's selling approx. equal every month this year as the Wii was in 2007. So its on course to sell similar number to the Wii this year.

X1 is selling better than PS3 and 360 were at the same point in their life cycles. The only console that's down on the 2007 numbers is the WiiU vs the Wii, but the PS4 numbers have that covered when taking into account the total.

PS4 is selling at just under 1 million a month depending on production. Compared to 2007 it's pretty good. The Wii was doing similar numbers to PS4 whilst X1 and WiiU combined are doing similar number to PS3 and 360 in 2007. If the trend continues for the rest of the year then we'll see a similar YOY growth rate to that in 2006-2007 (so around 32 million home consoles by the end of the year). This is not including the effects exclusives and game releases may or may not have to each consoles sales vs 2007.

I honestly see this gen selling a lot better than last gen in the long-term. For one thing I see Sony and Microsoft supporting this gen for as long as possible like they did last gen. If that's the case then PS4 could see strong sales in its 4th-6th years unlike the Wii did last gen where Nintendo effectively stopped supporting it in terms of software after the fourth year on market. With X1 on course to outsell 360, this gen is still poised to grow.

Secondly, we have emerging markets which will slowly grow in significance as time goes on.

Then we also have micro  (Android) consoles cropping up. Any of them could potentially expand the console market well beyond the current 3 company dogma.

Why lump sales together and miss all the detail behind the numbers?

Gen 7:
 + PS3 massive drop from PS1/PS2 for Sony due to it's cost, and 360 putting up major competition in price, specs, and features.
 + 360 massive increase over original Xbox for same reason.
 + Wii massive increase over N64/GC due to never before seen hype and casual reach for a console.  Unfortunately the hype for many was short lived.
 + PSP piracy and a few popular exclusives give it good legs.
 + DS beats iPhone to the punch with casual touch based games.

- The 7th gen consoles sold roughly 30M in 2012 and 27M in 2013. The PS2 never sold that many in its entire life. WHAT are you talking about?

- The PS2 is the most successful console of all time and it was $129 in 2006 (how much are the PS3 and 360 STILL selling for!?).

Well we know it's shrinking in Japan, verdict's still out on North America and Europe.

If you acknowledge this year will account for 32M consoles, which is far less than in 2007 (14M difference, it seems) then you must admit that the market is shrinking.

When you separate the values, you incur in a lot of fallacies. Now you are considering the Wii's premature death and disregarding the fact that PS3 and X360 improved their sales because of that. You think PS4 and X1 will present the same behaviour and, once they will be the market leaders, they will make the market to grow. That's insane. You can't pull clients out of thin air. Look at the aggregated values and see what's trully happening...or learn it the hard way as time goes by.

Emerging markets will grow, that's true, but they still won't be significant in this generation. And the general consumer's migration out of the console market may largely surpass that trend.

I don't want to consider "micro consoles" dominated by trash software as consoles. This videogame console market that we love is shrinking, that's all.

Very good posts, specially the first one. You've made a deep, comprehensive and intelligent analysis about the market size. I would just add the failure rates to the analysis, once that ends up being an important factor to go from sales to households. Anyway, good job.

However, even with your analysis we can conclude that this 8th generation won't sell as good as the previous one. Therefore, I would say that the market is shrinking. Is it because of the WiiU's failure? Is it because of the similarity between PS4 and XOne? We really don't know for sure, and honestly it doesn't matter that much. What matters (to this discussion) is that the market is shrinking.

I had pointed out the fact that smartphones and tablets are taking a lot of people out of the console market and that is relevant already because, even if the effects are not yet visible (I will suppose there is an equal amount of people entering the market, but it could be another reason too), they will be extremely drastic in the long-term in case this trend continues.

So we may be experiencing a first (soft) decline due to, let's assume, WiiU's failure to appeal to the casual market and then we will face a hard decline due to the alternative forms of media entertainment that are emerging. Unfortunately, that's my prediction for the future.