Are the 7th Gen Console Wars Already Over?

April 10, 2009 2:58PM

(bettertrades) - Nintendo (NTDOY) just keeps handing Sony (SNE) and Microsoft's (MSFT) gaming divisions their hats. Despite the infatuations of hardcore gamers for clearly superior operating machines in the PS3 and xBox 360, casual gamers are beating serious gamers to the trigger (or the Best Buy in this case), making Nintendo's Wii the undisputed winner of the 7th generation console wars.

The NPD Group recently affirmed that Wii Fit is now outselling the ultra-popular xBox port, Halo 3. Fit's conquest is made more noteworthy considering Halo sells for $30 more and has been on the market 8 months longer.

Of course, Fit has Nintendo's flagship console to thank with the Wii outselling the PS3 and xBox 360 by a wide margin. At year-end 2008, Wii sales topped 10.1 million, Microsoft moved 4.7 million xBox units, and Sony managed just 3.54 million unit sales. Nintendo's handheld unit, the DS, is hammering Sony's PSP at a better-than 2 to 1 clip as well.

Heading into the seventh generation console wars, Sony was at the helm of the all-time best-selling console. But where the PS2 succeeded, the PS3 has fallen short, at least as it relates to hardware sales. The PS3 was late getting into the game, sells at the highest price tag of the 3 major consoles, has suffered from a lack of titles, as well as a meek footprint in the online gaming market.

Similarly, Microsoft's revolutionary xBox system was a technological success (red rings of death aside) but expensive hardware costs and warranty expenses put the console underwater. The xBox 360, while holding a considerable lead over Sony's PS3 in console sales, is still getting drubbed by the Wii on a monthly basis.

All the while, Nintendo just keeps chugging along, targeting casual gamers with relatively cheaper games and brand recognition. Nintendo has managed to thrive in the diminishing shadow of two technology conglomerates who have poured billions into their respective platforms.

Nintendo's Wii already boasts 2 games of the top ten best selling games of all time - over 21 million units shipped for Wii Play, more than 14 million units for Wii Fit - and their library continues to grow. Following in the footsteps of the NES blockbuster Mike Tyson's Punch Out!!, the heavily anticipated Punch-Out!! is set for release this coming May.

While gaming revenues account for a modest percentage of total income at Microsoft and Sony, the two tech giants could have benefited greatly at the outset of the recession from strength in their gaming divisions. The recession economy is clearly signaling demand for lower priced hardware and software primed for casual gamers, much to the chagrin of serious gamers.

Can Nintendo uncork the champagne and celebrate its first victory since the 16-bit era already?