As rumors swirl that Sony is planning price cuts for its PlayStation 3, Nintendo continued to lead the market for next-generation console sales in March with its low-cost Wii.
According to the NPD Group, consumers in the U.S. bought 259,000 Wii consoles in March, increasing the first-quarter total for its new model to 1.03 million. The sales helped to double first-quarter console shipments in the industry.
Overall, console and portable player sales rose from $659 million to $1.3 billion in the three months ended March 31, NPD reported. Microsoft's
Xbox 360 ranked second last month with sales of 199,000 units, while the PlayStation 3 sold a mere 130,000, less than half the number of Wiis that consumers took home.
House on FireNPD's report is becoming a familiar one. Since Nintendo introduced the Wii last November, the console has outperformed both Sony's PlayStation 3 and Microsoft's Xbox 360 products.
The Wii's performance is typical of Nintendo's historical success patterns, according to Mike Goodman, an analyst at Yankee Group. "Nintendo comes out like a house on fire and gets off to a good start, but it doesn't have legs for the long haul," he said, noting that Nintendo's target market -- youth and nontraditional gamers -- is much smaller than the potential market for Sony's PlayStation 3.
Nintendo has turned heads with its innovative wireless controller, called the Wiimote, that lets players simulate movements of characters in the games. Gamers can swing virtual golf clubs, tennis rackets, or fishing poles, for example. Other games let players wield a virtual orchestra baton or drumstick. But analysts sometimes say the device does not have wide appeal to hard-core gamers.
The Price DebateThis week, speculation emerged in the gaming world that Sony is preparing to slash the price of the PlayStation 3. Sony answered speculators on Thursday when it publicly stated that it has no specific plans to reduce prices.
"PS3 prices and shipment plans for the future should be determined by market trends and competition," the company said in a statement. However, news reports from the United Kingdom indicate that some retailers are selling the consoles for �37 ($74) less than the suggested retail price in an attempt to spark sales.
"Unless Sony cuts $200 of the price of the console, a price cut is not going to make a big difference in the marketplace right now," Goodman argued, explaining that Sony is hard pressed to make significant price cuts until it sells enough units to achieve the scale that can drive prices down. "It's the classic Catch-22," he said.
Long-Term PlayMany analysts believe that, long-term, Sony will be a winner in this generation of consoles with its PlayStation 3. The
PlayStation 2 is still leading overall console sales, selling 280,000 players in March.
And PlayStation 2 gaming titles are still performing well in the market, demonstrating that the games are an important element in the equation. According to NPD, the best-selling title this year is Sony's "God of War II" for the PS2, with 833,000 units sold. Nintendo's "Wii Play," by contrast, came in second with 644,000 units.
Video game related sales rose 54 percent in the first three months of 2007, to $3.3 billion, NPD said.
