One thing I've noticed in my various discussions about games across the internet is that many people seem to be personally threatened by the thought of the PS3 making a serious comeback in this gen.  I am curious to know why that is.

What has PS3 done exactly to suggest that it will return and over take the Wii?

Wii is outpacing PS2 worldwide, in the Americas, and in Others. Sony's best PS2 year was 22m PS2s shipped (production shipments) in the year ending March 2003, and about 20.2m PS2s sold in 2002. Wii has already sold 24m units, and Nintendo has shipped over 26m Wiis for the year ending March 2009, and sales are still trending upwards.

The system costs a third less ($400) than it did when it launched ($600) in most markets. In the year ending March 2008, Sony shipped 9.24m PS3s when the cost of the system ranged from $400 to $600. For the year ending March 2009, Sony will just meet its target of shipping 10m PS3s, even though the system was $400 the entire year. For the USA, what is effectively a 33% price reduction in April-June, a 16% price reduction over July-October should have resulted in more than an 8% increase in PS3 sales, because of the number of big games PS3 had in the fiscal year - Little Big Planet, MGS4, GTAIV, Resistance 2, GH, RB, SF4, Resident Evil 5, Yakuza 3, and others. Without a price cut in the next six months, it is very likely that PS3 shipments will decline on a worldwide basis, while Wii shipments will increase once again even though the system has had far less 'must have' content released in early 2009.

At ~$400 * 10m, Sony earns something like $4b in revenue on PS3, and still loses money on the system, while Nintendo sells Wii at ~$250 * 26.5m, and earns something like $6.6b in revenue on Wii, making a slim profit on each system sold. If PS3 sales began to eclipse Wii sales at $350 vs. $250, Nintendo could afford to cut the price of Wii and we would return to the current situation.

The truth is though, even though one of the HD Twins can be bought at prices at or below the Wii in the west already, the Wii still outsells that device (the 360) by a large margin. Two of the three Xbox 360 models can be bought for less than Wii in Europe, Wii still trounces it. In the Americas, most people buy the Arcade model, bringing the average purchasing cost of a 360 to like $270 in the Americas, less than 10% above the Wii, but Wii still routinely beats the 360 by 2:1 or 3:1 on what is essentially momentum from early 2008 (Wii Fit, Mario Kart) and the overall catalogue of games for the device.

In 2007, when the Wii-PS3 price gap was the largest, Wii outsold PS3 worldwide by a 19:9 ratio. As the price gap narrowed from ~$350 in early 2007 to ~$150 in 2008, the Wii outsold PS3 worldwide by a greater ratio - 19:8. In the absence of major new games for Wii, a big swath of major games for PS3, and no price changes, Wii has outsold PS3 by the same 19:8 ratio worldwide in 2009.

Focusing on Japan for five weeks, which is a single month is not a good idea. For consoles, Japan is now only the third biggest market in the world, behind the USA and UK.  The games which had such an important impact in pushing PS3 above Wii and 360 in Japan (Resident Evil 5, Street Fighter IV, Yakuza 3, Demon Souls, Musou) simply do not have the type of impact in the west. Last generation, Gamecube was second in Japan, and third overall. PS3 is clearly going to be second in Japan, but it launched a year and millions of units behind Xbox 360 worldwide. In September 2007, on a price cut and Halo 3 Xbox 360 outsold Wii in the Americas. Did that prevent Wii from outselling 360 in 2007? No. Will the late Feb-late March spike for PS3 prop the system ahead of Wii for the year in Japan? Doubt it. In Japan, the Wii and PS3 price points are the closest so it wouldn't be surprising to see Wii only top PS3 by a 2:1 ratio, as the case was in 2006, instead of the ~3:1 ratios we have seen in 2007 (3.6m:1.2m), and 2008 (2.9m : 1m).

The most important point though is that top machines in this industry are popular for an exceptionally long time. Historically speaking, every system to sell over 50m units has done so over a period of over ten years. The systems which have sold over 100m units - whether from Sony (PS1, PS2) or Nintendo (GB, DS) have seen a period of 3 years where sales are at least 10% of the overall total. In the three years ending March 2004, Sony shipped 60.7m PS2s. In the three years ending March 2000, Sony shipped 59.4m PS1s. In each of the three years for both Sony systems shipments stayed within 10% of the best of the three years. For GB, Nintendo shipped 49.3m units in the three years ending March 2001, while for DS, Nintendo shipped ~85m DS in the three years ending March 2009 - and that may not even be the three year peak phase of the DS - it could be the three years ending March 2010. The Wii, for the three fiscal years ending March 2009 - which includes the short FY ending March 2007 - has totalled 51m units and that is without a price cut and supply constraints for most of the period.

What has PS3 done exactly to suggest that it will return and over take the Wii?

Wii is outpacing PS2 worldwide, in the Americas, and in Others. Sony's best PS2 year was 22m PS2s shipped (production shipments) in the year ending March 2003, and about 20.2m PS2s sold in 2002. Wii has already sold 24m units, and Nintendo has shipped over 26m Wiis for the year ending March 2009, and sales are still trending upwards.

The system costs a third less ($400) than it did when it launched ($600) in most markets. In the year ending March 2008, Sony shipped 9.24m PS3s when the cost of the system ranged from $400 to $600. For the year ending March 2009, Sony will just meet its target of shipping 10m PS3s, even though the system was $400 the entire year. For the USA, what is effectively a 33% price reduction in April-June, a 16% price reduction over July-October should have resulted in more than an 8% increase in PS3 sales, because of the number of big games PS3 had in the fiscal year - Little Big Planet, MGS4, GTAIV, Resistance 2, GH, RB, SF4, Resident Evil 5, Yakuza 3, and others. Without a price cut in the next six months, it is very likely that PS3 shipments will decline on a worldwide basis, while Wii shipments will increase once again even though the system has had far less 'must have' content released in early 2009.

At ~$400 * 10m, Sony earns something like $4b in revenue on PS3, and still loses money on the system, while Nintendo sells Wii at ~$250 * 26.5m, and earns something like $6.6b in revenue on Wii, making a slim profit on each system sold. If PS3 sales began to eclipse Wii sales at $350 vs. $250, Nintendo could afford to cut the price of Wii and we would return to the current situation.

The truth is though, even though one of the HD Twins can be bought at prices at or below the Wii in the west already, the Wii still outsells that device (the 360) by a large margin. Two of the three Xbox 360 models can be bought for less than Wii in Europe, Wii still trounces it. In the Americas, most people buy the Arcade model, bringing the average purchasing cost of a 360 to like $270 in the Americas, less than 10% above the Wii, but Wii still routinely beats the 360 by 2:1 or 3:1 on what is essentially momentum from early 2008 (Wii Fit, Mario Kart) and the overall catalogue of games for the device.

In 2007, when the Wii-PS3 price gap was the largest, Wii outsold PS3 worldwide by a 19:9 ratio. As the price gap narrowed from ~$350 in early 2007 to ~$150 in 2008, the Wii outsold PS3 worldwide by a greater ratio - 19:8. In the absence of major new games for Wii, a big swath of major games for PS3, and no price changes, Wii has outsold PS3 by the same 19:8 ratio worldwide in 2009.

Focusing on Japan for five weeks, which is a single month is not a good idea. For consoles, Japan is now only the third biggest market in the world, behind the USA and UK.  The games which had such an important impact in pushing PS3 above Wii and 360 in Japan (Resident Evil 5, Street Fighter IV, Yakuza 3, Demon Souls, Musou) simply do not have the type of impact in the west. Last generation, Gamecube was second in Japan, and third overall. PS3 is clearly going to be second in Japan, but it launched a year and millions of units behind Xbox 360 worldwide. In September 2007, on a price cut and Halo 3 Xbox 360 outsold Wii in the Americas. Did that prevent Wii from outselling 360 in 2007? No. Will the late Feb-late March spike for PS3 prop the system ahead of Wii for the year in Japan? Doubt it. In Japan, the Wii and PS3 price points are the closest so it wouldn't be surprising to see Wii only top PS3 by a 2:1 ratio, as the case was in 2006, instead of the ~3:1 ratios we have seen in 2007 (3.6m:1.2m), and 2008 (2.9m : 1m).

The most important point though is that top machines in this industry are popular for an exceptionally long time. Historically speaking, every system to sell over 50m units has done so over a period of over ten years. The systems which have sold over 100m units - whether from Sony (PS1, PS2) or Nintendo (GB, DS) have seen a period of 3 years where sales are at least 10% of the overall total. In the three years ending March 2004, Sony shipped 60.7m PS2s. In the three years ending March 2000, Sony shipped 59.4m PS1s. In each of the three years for both Sony systems shipments stayed within 10% of the best of the three years. For GB, Nintendo shipped 49.3m units in the three years ending March 2001, while for DS, Nintendo shipped ~85m DS in the three years ending March 2009 - and that may not even be the three year peak phase of the DS - it could be the three years ending March 2010. The Wii, for the three fiscal years ending March 2009 - which includes the short FY ending March 2007 - has totalled 51m units and that is without a price cut and supply constraints for most of the period. I would bet that the three year period ending March 2011 will be the highest phase of Wii - with a peak near DS levels, and almost guarenteed to be over 75m.

Given the trouble Sony has in dropping the PS3 price, and the "spike-like" rather than "curve-like" sales nature of gaming machines which fall behind the lead machine, it is very unlikely that PS3 will have anything close to a three year peak of 75m-95m as Wii and DS will, instead coming in at ~35m to ~40m - which is still good - but not at PS1, PS2, GB, DS, or even what Wii has already done to date.

What has PS3 done exactly to suggest that it will return and over take the Wii?

Wii is outpacing PS2 worldwide, in the Americas, and in Others. Sony's best PS2 year was 22m PS2s shipped (production shipments) in the year ending March 2003, and about 20.2m PS2s sold in 2002. Wii has already sold 24m units, and Nintendo has shipped over 26m Wiis for the year ending March 2009, and sales are still trending upwards.

The system costs a third less ($400) than it did when it launched ($600) in most markets. In the year ending March 2008, Sony shipped 9.24m PS3s when the cost of the system ranged from $400 to $600. For the year ending March 2009, Sony will just meet its target of shipping 10m PS3s, even though the system was $400 the entire year. For the USA, what is effectively a 33% price reduction in April-June, a 16% price reduction over July-October should have resulted in more than an 8% increase in PS3 sales, because of the number of big games PS3 had in the fiscal year - Little Big Planet, MGS4, GTAIV, Resistance 2, GH, RB, SF4, Resident Evil 5, Yakuza 3, and others. Without a price cut in the next six months, it is very likely that PS3 shipments will decline on a worldwide basis, while Wii shipments will increase once again even though the system has had far less 'must have' content released in early 2009.

At ~$400 * 10m, Sony earns something like $4b in revenue on PS3, and still loses money on the system, while Nintendo sells Wii at ~$250 * 26.5m, and earns something like $6.6b in revenue on Wii, making a slim profit on each system sold. If PS3 sales began to eclipse Wii sales at $350 vs. $250, Nintendo could afford to cut the price of Wii and we would return to the current situation.

The truth is though, even though one of the HD Twins can be bought at prices at or below the Wii in the west already, the Wii still outsells that device (the 360) by a large margin. Two of the three Xbox 360 models can be bought for less than Wii in Europe, Wii still trounces it. In the Americas, most people buy the Arcade model, bringing the average purchasing cost of a 360 to like $270 in the Americas, less than 10% above the Wii, but Wii still routinely beats the 360 by 2:1 or 3:1 on what is essentially momentum from early 2008 (Wii Fit, Mario Kart) and the overall catalogue of games for the device.

In 2007, when the Wii-PS3 price gap was the largest, Wii outsold PS3 worldwide by a 19:9 ratio. As the price gap narrowed from ~$350 in early 2007 to ~$150 in 2008, the Wii outsold PS3 worldwide by a greater ratio - 19:8. In the absence of major new games for Wii, a big swath of major games for PS3, and no price changes, Wii has outsold PS3 by the same 19:8 ratio worldwide in 2009.

Focusing on Japan for five weeks, which is a single month is not a good idea. For consoles, Japan is now only the third biggest market in the world, behind the USA and UK.  The games which had such an important impact in pushing PS3 above Wii and 360 in Japan (Resident Evil 5, Street Fighter IV, Yakuza 3, Demon Souls, Musou) simply do not have the type of impact in the west. Last generation, Gamecube was second in Japan, and third overall. PS3 is clearly going to be second in Japan, but it launched a year and millions of units behind Xbox 360 worldwide. In September 2007, on a price cut and Halo 3 Xbox 360 outsold Wii in the Americas. Did that prevent Wii from outselling 360 in 2007? No. Will the late Feb-late March spike for PS3 prop the system ahead of Wii for the year in Japan? Doubt it. In Japan, the Wii and PS3 price points are the closest so it wouldn't be surprising to see Wii only top PS3 by a 2:1 ratio, as the case was in 2006, instead of the ~3:1 ratios we have seen in 2007 (3.6m:1.2m), and 2008 (2.9m : 1m).

The most important point though is that top machines in this industry are popular for an exceptionally long time. Historically speaking, every system to sell over 50m units has done so over a period of over ten years. The systems which have sold over 100m units - whether from Sony (PS1, PS2) or Nintendo (GB, DS) have seen a period of 3 years where sales are at least 10% of the overall total. In the three years ending March 2004, Sony shipped 60.7m PS2s. In the three years ending March 2000, Sony shipped 59.4m PS1s. In each of the three years for both Sony systems shipments stayed within 10% of the best of the three years. For GB, Nintendo shipped 49.3m units in the three years ending March 2001, while for DS, Nintendo shipped ~85m DS in the three years ending March 2009 - and that may not even be the three year peak phase of the DS - it could be the three years ending March 2010. The Wii, for the three fiscal years ending March 2009 - which includes the short FY ending March 2007 - has totalled 51m units and that is without a price cut and supply constraints for most of the period. I would bet that the three year period ending March 2011 will be the highest phase of Wii - with a peak near DS levels, and almost guarenteed to be over 75m.

Given the trouble Sony has in dropping the PS3 price, and the "spike-like" rather than "curve-like" sales nature of gaming machines which fall behind the lead machine, it is very unlikely that PS3 will have anything close to a three year peak of 75m-95m as Wii and DS will, instead coming in at ~35m to ~40m - which is still good - but not at PS1, PS2, GB, DS, or even what Wii has already done to date.

I don't feel threatened by it. I might actually get one.

It just seems that PS3 fans are a little delusional sometimes.