I could be wrong, but I believe that one of Microsoft's biggest problems is they never bothered to define the XBox in a distinct way for most potential consumers. For someone to choose to buy the XBox 360 over the PS3 they have to see it as being better (or at least different) from a PS3 in a way that they care about ...

HappySquirrel, u know i think your correct there. What did they offer at the time, "the best graphics", not anymore.

Seriously if your going to act like that I can just ban you.

You didn't understand the point and I was adding an edit to it before you even posted to clarify the point anyways.

His use of loss of momentum is clearly wrong.  However his point is valid as he's stating (badly as agreed) that the momentum gains of 360 are less than the momentum gains of its competitors... which of course is not a good thing.

But we all know this.  MS started the race first but was quickly overtaken by the plucky little Wii while the PS3, after a lumbering start (falling on its face even?) has begun to accelerate and is now slowly closing the gap threatening to leave MS in third.

Note I'm not saying MS will end up in third (there's a lot of manouvering left in this race yet) but I am saying that is the conclusion you'd draw right now based on current trends (as US would not, I believe, make enough difference to offset Japan and Others in the long run) and that's the conclusion this guy has drawn.

At the end of the day analysts are often in the position of stating what is clearly evident and this is just another example of that.

Not FUDing, but watching Microsoft you wonder who their chair are, are they run by tazmanian devils?

First rule of business is you don't compete, they knew this and pushed Xbox in to compete with Sony as that's the last thing Sony wanted - or needed. Now their agenda seems to have shifted to making money - but they keep on talking about competeing with the Wii... which leads me to believe that they actually believe that this gaming industry is their industry, or that they have some kind of grasp on it, which would explain why they decided to co-opt a toy company. It’s actually very weird but if any company needs direction it may just be Microsoft, they don’t seem to have a winning business model at all.

Sony is very close to being a mix of Nintendo and Microsoft maybe because of the Japanese nature of the company, but they have this idea that they want to be a major software and now hardware developer in the form of applications, but the PS3 would be their test run at this with XMB and Home – imagine instead of Windows Vista you had Home – exactly. Heck Home is even an OS sounding name – Microsoft must know that if Home takes off the next place it’s going is PC, and Apple’s already worried about it and are trying to push into this industry.

I can see them both mimicking Nintendo because of their run-away success with the Wii, but they don’t realize that the Wii isn’t attacking Sony or Microsoft analysts seem to keep emphasizing that it is, when Microsoft co-opt it’s going to look similar to the mmorpg craze – where you have WoW and then you have everything else.

Microsoft need to find their own strategy either this cycle or next and run away with that – and pray it’s the winning strategy because rule number one of any business is never to compete, copying another strategy or co-opting is competing which is nothing more than self-destruction for a businesses and industries.

I kind of wish personally that all 3 console makers had done something ‘different’ if none of the 3 consoles were alike but they all sold video games, that would be amazing.

Now that I've had a chance to look at this a bit closer I'd like to point out that it's a whole hell of a lot harder to lose market share when you have 22% than it is to lose when you're at 50%.  This is the way percentages work.  If you and Bob have 25% share and I have 50% share then I'm selling 2 units for every 1 you do.  Assuming the market was 200k units per month, if you increase your sales by 50k units per month it means the new market is 250k and now I'm at 40% market share, you're at 40% market share and Bob was at 25% before but is at 20% market share now.

Percentages shift non-linearly.

That MS has lost momentum (at least) in terms of market capitlization.

                      2007                    2008                   % increase
360          2,397,432               3,695,503                   54.14%
PS3          2,512,322              4,966,312                   97.68%
Wii           5,942,801              9,263,120                   55.87%

First 6 month sales for three consoles. Looks like all three companies have improved significantly in comparison to last year.

Yes I agree it is losing ground but not by enough for it to be worrying.
they make it sound like it is doomed when in fact it is in second place by A rather large margin.
the gap between the 360 and ps3 in sales weekly is actually reducing if you take out the mgs4 spike.
I am talking ww sales not region specific.

Isn't it hard to compare the first six months of 2007 and 2008 since the PS3 was not for sale in Europe until March 2007?

Nevertheless, using those numbers, 360 is up 54%, Wii up 55%, and PS3 up 98%.

Thus, the 360 has gone from a near-tie for second to 1.3 million units behind in third (and it is closer to 5-1/2 million units behind the Wii as opposed to 2-1/2 million units).

It is that last fact (and the additional fact) that have it being perceived as losing momentum.

Mike from Morgantown

PS -- Based upon current growth rates, the PS3 and Wii will be in a near dead heat in the first half of 2010. Of course, if you are selling 20M units in the first half of the year, it does not matter if you are first or second.