Xbox 360 Wins the Holiday Battle, But Nintendo's Wii Positioned to Win the War

For many people this past holiday season, a next-generation video game console was the must have gift. Microsoft’s Xbox 360 enjoyed a breakout sophomore year, outselling both the Wii and the PS3 combined during the holidays. The latter, of course, faced major supply shortages leaving one to only wonder how many additional units Nintendo and Sony might have sold if sufficient quantities were available to meet demand.

The following chart presents Compete’s estimate of weekly in-market video console demand based on the number of U.S. consumers observed shopping online for each console.

Key findings from our analysis of video game console shoppers in December:

  • The Wii, the clear underdog with its relatively modest specs, surprised many skeptics by sustaining its post-launch interest and outselling the PS3. This won’t come as a surprise to anyone who tried in vain to find a Wii at anywhere close to its suggested retail price.
  • The PS3 was a quick flash in the pan that fizzled on the backs of negative publicity, its lofty price and supply shortages. After only a few weeks on the market, the PS3 was attracting barely as many shoppers as the year-old Xbox 360.
  • Xbox 360 demand spiked at the start of the holiday shopping season thanks in part to a highly publicized sale on Amazon, spill-over interest in the Wii and PS3, and the introduction of the smash hit Gears of War.
  • With Xbox 360 and PS3 demand now running in lock-step, it will be difficult for Sony to gain ground on Microsoft due to a perceived price disparity between the two consoles and Microsoft’s broader game catalog.

Compete also analyzed the degree to which each console’s shoppers considered the rival systems in November and December.

Of particular note:

  • There was a clear shift away from the PS3 in December as Wii and Xbox 360 shoppers considered it less and PS3 shoppers considered rivals more.
  • Wii shoppers are less likely than Xbox 360 and PS3 shoppers to consider the rival systems. This can be attributed to the Wii’s lower price and broader target market. Regardless of the reason, this loyalty is great news for Nintendo.

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About Matt Pace:
As VP of Millward Brown Digital’s financial services, retail and consumer products practices, Matt is responsible for vertical growth and strategy and the delivery of digital insights and best practice marketing consulting to leading Fortune 500 advertisers. Follow Matt on Twitter @mattpace.

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