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iSuppli: Wii to rule this year's game console arena

Posted: 19 Feb 2008 ?? ?Print Version ?Bookmark and Share

Keywords:Xbox 360? Nintendo Wii? PlayStation 3?

Powered by its strong appeal to casual gamers, Nintendo's Wii this year is expected to displace Microsoft Corp.'s Xbox 360 as the new-generation video game console with the world's largest installed base.

The global installed base for the Nintendo Wii will rise to 30.2 million units in 2008, up from 18 million in 2007, forecast iSuppli. This will put Wii ahead of Xbox 360's total of 25.7 million units in 2008. Reports the market analyst, this will mark the first time the Wii has taken the installed-base lead among the new generation of home video game consoles, a market consisting of the Wii, Microsoft's Xbox 360 and Sony Corp.'s PlayStation 3.

Wii the people
"The Wii's performance illustrates the success of Nintendo's strategy of targeting casual users with an inexpensive console and entertaining titles, rather than addressing hard-core gamers by offering highly sophisticated and spectacular titles and systems," said Pam Tufegdzic, research analyst for multimedia content and services at iSuppli. "In this stage of the new-generation video game console market, consumers are showing they'd rather be entertained and pay less for their consoles than shell out more for the latest and greatest technology."

Hard-core gamers traditionally have been the target for most video game console and software makers. However, this is beginning to change due to the rising numbers of casual gamers. iSuppli defines a casual gamer as someone who doesn't play games daily, but occasionally will play for an hour or two. Games that appeal to such users are easy to play without much of a learning curve.

The Nintendo Wii is suited for the casual gamer with its mass-market appeal, its fun motion-sensor controllers and its quickly growing portfolio of games. The installed base for the Nintendo Wii will grow to 37.7 million units by 2011, rising at a CAGR of 20.3 percent from 2007.

iSuppli's forecast of the global installed base for new-generation video-game systems. The figures do not include older-generation consoles or handheld game players. (Click to view full image)

Wii want to play
However, the hard-core users aren't out of the game yet; in 2011, the installed base of the PS3 will exceed that of the Wii, iSuppli predicts. The PS3 will reach an installed base of 38.4 million units in 2011, rising at a CAGR of 39 percent from 10.3 million in 2007. The Xbox 360 by 2011 will grow to 32.3 million installed base units, rising at a CAGR of 15.4 percent from 18.2 million in 2007.

While the PS3 will lead by 2011, the percentage of the installed base controlled by the three consoles will be remarkably even. The PS3 in 2011 will account for 35.4 percent of the installed base, while the Wii will take 34.8 percent and the Xbox 360 will be at 29.8 percent.

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