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NPD: Behind the Numbers, November 2008
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NPD: Behind the Numbers, November 2008

December 15, 2008 Article Start Previous Page 2 of 7 Next

A Brief History of The Great Race

When the Wii launched in November 2006 it was 3 million systems behind the Xbox 360. Today, two years later, the roles are reversed and it is the Wii ahead of the Xbox 360 by the same margin.

Simultaneously, the PlayStation 3 has struggled to make up ground against the Xbox 360. During 2007 the Xbox 360 consistently outsold Sony's newest console, but then for a few months in early 2008 the PlayStation 3 made modest gains. The September 2008 Xbox 360 price cuts have since eliminated those gains.

This story is difficult to perceive in traditional installed base graphs because holiday sales spikes distort the figures. Here is the race as we have often pictured it.

LTD Sales for Current-Gen Consoles

The following graphs, however, provide a much more informative reading of history. The first figure below covers the period from November 2006 to November 2007.

Wii and PS3 Relative to Xbox 360 Installed Base

The above graph shows the installed bases of the PlayStation 3 and Wii, relative to the Xbox 360's installed base, starting in November 2006. Each started around 3 million systems behind the Xbox 360, represented as a vertical displacement of -3 million on each curve.

Starting with November 2006, the PS3 lost ground to the Xbox 360 at a nearly constant rate through much of its first year, with a slowing during July 2007 when Sony first adjusted the prices of the PlayStation hardware. Microsoft's own August 2007 price cuts and strong software lineup then pushed the PS3 further behind through November.

At the same time, the Wii was catching up to the Xbox 360, slowed only momentarily when Halo 3 launched.

The next graph, covering the period from November 2007 to November 2008, tells a much different story.

Wii and PS3 Relative to Xbox 360 Installed Base - Year 2

Sony's November 2007 price drop was very effective. Instead of losing ground to the Xbox 360, it actually made some modest gains through July 2008, with a bump from the June sales which accompanied the release of Metal Gear Solid 4.

When Microsoft cut prices again, this time in August 2008, Sony began to lose ground and has ended its second year about twice as far behind the Xbox 360 as it was when it launched in November 2006.

By comparison, Nintendo was still hampered by hardware shortages during Holiday 2007 but then caught up to – and surpassed – the Xbox 360 by mid-2008. This is clearly shown in the graph as the Wii curve passes through zero and up toward a positive 3 million.

Article Start Previous Page 2 of 7 Next

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