alot has been going on in the last 5 months that have sort of prevented the wii from reaching 50%: gta4, death of HDDVD, supply constraints, brawl, mario kart, wii fit etc.

now i know what you're thinking "how can brawl,mario kart and wii fit prevent the wii from reaching 50%? shouldnt they help?" well the reason they arent helping hardware sales is because they have to hold back consoles to help software sales in the long run.

after the release of guitar hero aerosmith, which is about the biggest game before the summer seasons(i think), the wii sales will do extremely well for 3 reasons:

1) nintendo will have no reason to withhold supply so they will be able to ship the full 1.8 million wii's a month averaging out to around 450k a week.

2)ps360 sales will likely temporarily dry-up due to lack of big-hitters. there are a few but none that would make someone go buy a ps3 or 360.

3)if nintendo DOES increase production then that will almost guarantee 50% marketshare.

so overall during those undisturbed 8-12 weeks of summer the wii sales will be much higher due to the casual gamers wanting to get a wii for its fabulous line up such as: SSBB, MKWII, wii fit, mario party 8, mario and sonic, rock band wii, guitar hero: 3 and aerosmith.

ps360 sales will be low because the hardcore gamer will be waiting for gow2, fable2, killzone2 etc. meaning sales will be ESPECIALLY low.

to sum everything up: wii sales will be high this summer due to casual gamer and big line up of games. ps360 will have low sales due to absence of new releases.

I don't think there's a very firm understanding of "market saturation" going on in this topic... Sales levels over time indicate demand, but not the market saturation point. It doesn't matter how fast a product sells initially, what matters is when it starts to drop off consistently (which is when it's approaching saturation). At that point, it's unlikely to ever double its total sales again. With the 360, it saw a high early adoption rate compared to the original XBOX (which is good for MS, since the original XBOX was all but ignored for much of its lifespan), but it's also reached the drop-off point on its sales curve quicker.

One simple way to describe it is using physics...

For every systemsystem there is the force of momentum which allows them to continue selling at the same (a similar) level, and inertia which has to be overcome in order to raise sales to the next plateau. Once a system hits a saturation point the sales level off and friction begins to slow the sales of the system, at this point you have to apply enough "force" to the console in order to overcome inertia and increase sales just to maintain the same sales level.

The price of a system represents the Mass of the system, and by reducing it you reduce the necessary force to surpass inertia or to accelerate the console's rate of sales.

In this system "Force" is an abstract concept which represents the desireability of the system ...

That's a good way of putting it, HappySquirrel. But another factor to consider is demographic, which would be like the surface friction source of the object being pushed. The wider the demographic targeted, the less initial friction. Picturing it as a sort of enormous circle, the larger demographic you have means you're further out on the circle, but as you get closer to the center of the circle, the friction gets progressively (indeed, possibly even exponentially) greater. At the dead center of that circle is the point of "full market saturation", where your product has reached its maximum appeal and cannot possibly sell any more units no matter what you do.

I made an illustrative model of the theory:

 The product begins somewhere along the demographic circle.  The Market Friction Effect (where the lighter color means less friction, and darker means more) actually exists on the entire demographic circle; it was simpler to only illustrated it on one part.  As the product approaches the Full Saturation Point, its inertia becomes harder and harder to maintain as it slows down.  Movement to the side (expanding demographic appeal) becomes more difficult as you go further in too.  The full saturation point acts as a sort of gravity well; you cannot, strictly speaking, retreat backwards from it; you can expand by going sideways, but you will always be approaching the full market saturation point even when you do that.

Consider that console saturation points are for various price points.   For example, the 360 may be approaching saturation at its current price point, but would likely sell like crazy at $99 in America.

The 360 hasn't significantly dropped in price, and is still $280 or $350 to most gamers. A significant price drop (Say, $199/$249 for the arcade/premium respectively) could increase sales significantly for a while.

The first problem is that the 360 seems to cost significantly more than the original Xbox did, so Microsoft has to keep its price higher. The second problem is that MS is trying very hard right now to maintain profitability on their Xbox division, which means they're reluctant to drop their price. Sony, also is focused more on profits than sales numbers, suggesting that both systems could weather 2008 without price drops.

Understand that full market saturation is essentially unattainable. That would be when everybody has a system, and I do mean everybody. Most systems fall far short of that, as the amount of market force necessary to overcome market friction at that point is too great. Even with the mass (price) reduced to a minimal level, the friction of the market is just too heavy for any meaningful progress.

Giant disruption upcoming! With the mighty XBiimote and XBMii(too) it will be XBox 360 to get leadership and exceed 50%!!!   










OK, just joking   

Your post, and HappySqurriel's post, make perfect sense to me.  I guess the only point I'm considering is that it seems the 360 is reaching a wider market and hasn't had the mass reductions than the original Xbox had, and therefore when its mass is reduced it may significantly outsell the original Xbox.

I'm pretty sure that the Wii will hit 50% share maybe even 55% by the end of  this year. Wii fit just came out, I think the Star Wars game coming out later this year will be a huge seller of the system. Come on, who doesn't want to swin the wiimote around like a lightsabre?!?