One thing to consider is that a console will typically sell somewhere between 40% and 60% of its yearly total in November and December; this means that if you're averaging 250,000 units per month (Jan-October) you would expect sales to be somewhere between 4 and 6 Million units. It would not be unrealistic to say that if there was no shortage the Wii could easily average 400,000 units per month, this would mean that you would expect yearly sales to be somewhere between 6.5 and 10 Million units.

The Wii should be able to maintain this pace (at least) until 2009 simply because it will be the only one of the consoles which is selling at a truely mass market price; if Nintendo is successful at expanding the market then they could easily surpass their estimate.

But that doesn't really apply for a supply constrained console.

Let's just think quarters. The first 3 quarters you sell 3/4 of what you produce, and keep 1/4 for that last busy quarter. That means you'll sell an extra 3/4 in that last quarter, or twice as much. But this is still only 2/5 of your yearly sales, or 40%. To get to 60%+ (we're talking Oct-Dec), you need to stockpile a lot more.

Nintendo will stockpile some units for the fear of "ruining Christmas", that's for sure. But to sell 3-6months from now what you've already paid for is not a very sound business practice, especially if you can sell it now. I don't expect Wii sales to more than double in Nov-Dec compared to Sep-Oct, not in supply constrained markets.

Beyond 2007, though, I agree with you. We'll start seeing the classic Nov-Dec spikes on the Wii.

How many units has the Wii sold in the US so far...we know it's sold 3m in NA, but what are the US sales within this amount?

Don't forget that Nintendo anticipate that they will be able to produce and ship around 1.2m units per month over the next 12 months and this is will increased production as it is.

Anticipating that NA gets 60% of the total produced Wii's, potentially, if they sell every one of them then potentially, they could sell 8.4m units in NA within the next 12 months.  So by May 2008, there could be 11.4m units in NA alone.  What percentage of NA's figures are the US though?  80%-90%.   So maybe 10m units in the US by May 2008.  This would mean that 7m Wii's would be sold in the US in 12 months.  This would also mean that the same number of Wii's would have to be sold until the start of 2012 for the magical 35m units to be sold.

Thats a constant 7m in the US alone every year for the next 4.5 years to make it 35m.

Can it be done?  We will wait and see!

I suspect that it will be closer to 25m come 2012. 

I agree, Nintendo have already stated that they have upped production to 1.2m a month.  Which means that they can produce around 7m until they need to ship them for Xmas in early November.  What they will likely do, is create demand again by reducing the number being sent to retail from July to September to stockpile more units for Xmas.

I reckon they will want around 3.5m units ready for Xmas coming in droves from the start of November.

So don't be surprised to start seeing the numbers being reduced shortly to accommodate this. 

Whether Nintendo makes enough consoles to meet demand in 2007 won't restrict them from meeting 35 million by 2012. They can sell 12 or 13 million per year in NA at their peak. I'm not sure if people realize that in April, Wii sold more than PS2 ever sold in any April. Between the US and Canada, they did 400K units. According to VGC, they're selling even more in May. Wii is doing this without a mass market price, with only 3 major games, with supply problems, and a 10-week drought of 3rd party games from Dec 13-Feb 20! Are sales going to decrease as supply improves, the console becomes affordable, mega-franchises like Animal Crossing, Mario and Nintendogs debut for the system, and third parties fill the gaps so there are no more software droughts? Obviously Wii is only going to accelerate in sales as we move forward, like every other winning console has done. Other people may be shocked to see Wii sell 500K/month NA regularly for its entire cycle, but I won't.

Accelerate? Being supply constrained it probably can accelerate in its second full year, if production is upped. But beyond that?

Do have look at the American PS2 charts an tell me if it looks to you it accelerated. Apart from it's second full year, and the Christmas bumps it didn't - it slowly decelerated. And the Christmas bumps were also progressively smaller year after year, after its 3rd Christmas (the first one is, as usual, almost imperceptible).

The only recent system I see accelerating is the DS with the introduction of Light. Acceleration is certainly possible, for a DS like phenomenon, but it hasn't happened with "every other winning console".

I don't find your scenario compelling.  Why would the PS2/xbox users NOT upgrade to PS3/360 if they don't enjoy motion control?  Perhaps the PS3 will not be considered because of the sticker price. But the 360's price is relatively reasonable and it's getting pretty much the range of games that PS2 had (except in Japan).

You're assuming that 80% of the people don't enjoy casual games (Wii "stealing" only 30M of 150-160M.  I'm not even going to go into how there aren't 150-160M ps2/xbox players).  I would posit that 80% do and only 20% are "hardcore" (the very term is defined by being a elite minority). 

wrt 2/3 of the GC players.  That is just a weak assumption.  How many people bought GC for the control scheme (moderately similar to ps2/xbox)?  They bought it for the Nintendo franchises.  I'd dare say that GC players are hardcore Nintendo loyalists and they'd buy it just for the next gen of their fave franchises.  I'd expect you lose 10% who "outgrow" Nintendo franchises.  So I'd see Wii getting 90+% of GC

 So, redoing your numbers.  We have 120M + 35M (rounding down in both cases) for 155M.  But honestly, large number of those were overlaps and repurchasers of last gen (1st gen PS2 does NOT last 7 years with any significant usage).  I'd put the real number at 110M (including Wii repurchasers).  I'd dare say that at least 1/3 of PS2/xbox players would go for 360 or ps3 putting that number at ~50M (pessimistically).

So, by your calculation style, it would 155M prev gen wii buyers +40M new wii buyers +50M ps3/360 buyers = 245M > ~200M total prev gen 

Tho in reality, I'd expect to at least see total sales of 110M + 40M + 50M = 200M with more roughly the same number of consoles sold but more players overall, roughly corresponding to pop growth.  Also it's 200M/6yrs vs 200M/7+yrs.

In short, I'd expect a net growth of gamers, not a net decline