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UBS: Nintendo Wii Winning Game-Console Market

14 Mar, 2008 By: John Gaudiosi

Nintendo's Wii will continue to outsell the competition, with Sony's PlayStation 3 and Microsoft's Xbox 360 in a tie for the year, according to a report from UBS Investment Research.

“We estimate that the Nintendo Wii and Sony PS3 will sell 6.5 million and 5 million units, respectively, in the United States this year for unit growth of 4% and 96%,” said UBS analyst Ben Schachter. “We expect that Microsoft will sell through 5 million Xbox 360s in the United States this year (unit growth of 9%).”

Schachter predicts that Sony and Microsoft will cut the cost of hardware this year, while Nintendo will keep its $250 price for the Wii, which continues to sell out at retail. Nintendo could offer promotions with Wii games, since many consumers are sticking with the pack-in Wii sports games and Nintendo staples and not buying third-party titles.“We are more bullish than most on the PS3, but its recovery is certainly not assured,” Schachter said. “While Sony's Blu-ray [win of] the high-definition format war may help re-ignite the PS3, we think that Sony has done a poor job of marketing this feature properly. Additionally, we continue to see exclusive software as the key to Sony's recovery. If there are weaker reviews of high-profile releases (particularly GTA IV) on the PS3 versus the Xbox 360 (as there was with Madden last year), that would be serious trouble for the PS3.”

Schachter expects Sony to cut the price of its PS2 to $99 this year and forecasts sellthrough of 3 million units. For next year, UBS projects the Xbox 360 and PS3 console installed bases will exceed 18.2 million and 13.2 million units, respectively, in the United States, while the Wii installed base should surpass 18.9 million units.

“For 2010 we assume that the combined current-generation console installed base (PS3, Xbox 360, Wii) tops 62 million units in the United States,” Schachter said.

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