Nintendo wins December game title

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The official numbers are a few weeks away, but it appears that Nintendo has emerged as a big video game winner of the holiday season.

Wedbush Morgan Securities video game analyst Michael Pachter said Nintendo sold about 1.3 million Wii consoles in December. Microsoft sold about 1.2 million Xbox 360 consoles in the month, bringing its U.S. installed base to about 4.5 million consoles, and Sony sold 600,000 PlayStation 3s, though that low number was because of supply constraints, not demand.

Although Sony didn't have ample supply of its PS3, which comes equipped with its next-generation Blu-ray Disc DVD technology, it did sell 1 million PS2s and another 1 million PSPs in December. Sony has a three-front approach for games for at least another three years, as it will continue to support the PS2, which has a global installed base of more than 100 million consoles.

Nintendo also did well in the portable hardware department, selling another 1.5 million Nintendo DS players in December, Pachter said.

"It's pretty clear that Nintendo was a winner," he said. "The DS sold remarkably well after the DS Lite was introduced, and the Wii surprised everyone with how fun it was. It looks like the Wii will sell out for another couple of months."

Traditionally, the video game industry makes more than 50% of its annual profits in November and December, when many big games ship and new consoles traditionally launch every five or so years. In November, Nintendo launched its Wii and Sony introduced its PS3; the Xbox 360 debuted in November 2005.

Xbox 360 has a U.S. installed base of 3.4 million, with Wii at 1.8 million and PS3 at 800,000, Pachter said.

Regarding software sales in December, Pachter estimated that current-generation platforms (PS2, GameCube, Xbox, GBA) generated $948 million in the month and next-generation platforms (DS, PSP, PS3, Xbox 360 and Wii) generated $928 million. PS2 and Nintendo DS games were the top drivers of games.

Among the top sellers were Activision's "Guitar Hero 2," THQ's "WWE SmackDown vs. RAW 2007," Microsoft's "Gears of War" and Nintendo's "Legend of Zelda: The Twilight Princess."

"I think next-generation sales will be quite strong the first few months of the year as the supply situation on the PS3 and the Wii corrects," Pachter said. "It's tough to predict the middle part of the year, as there are few blockbuster titles scheduled. Next generation gets a huge lift in October, when (new) 'Grand Theft Auto' and 'Halo' (games) launch."

NPD Group video game analyst Anita Frazier forecasted 2006 total video game sales to reach nearly $13 billion, and that number is $14 billion if PC game sales are added.

As to which company came out a winner in the first holiday showdown among the three companies, Pachter has mixed feelings.

"Nintendo wins because it will double its market share," Pachter said. "Microsoft wins because it will double its market share. Sony loses because it loses share but will win the overall war by ending with the greatest market share. I know that sounds diplomatic, but it happens to be true."
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