Nintendo primed for holiday console dominance

Nintendo seems ready to resume its dominance over its video game console competitors, Microsoft and Sony, and to shake off several tepid months of sales, an analyst suggested Monday.

Those comments came after Nintendo put out a press release boasting that it had sold 550,000 Wiis in the U.S. during Thanksgiving week, leading Wedbush Morgan analyst Michael Pachter to estimate that the company may have sold about 1.1 million of the consoles for all of November.

Last November, Nintendo moved 2.04 million Wiis, so if Pachter is correct about this month's data--his estimate was based on a formula in which November sales numbers are equal to roughly double the Thanksgiving week sales figures--the company sold only a little more than half the units it did a year ago. Still, Pachter estimated that Microsoft and Sony will have sold about 700,000 Xbox 360s and PlayStations, respectively, during November.

A Microsoft representative said that, while the company doesn't provide internal sales numbers, Black Friday week Xbox sales were the best of the year and at least two times the previous week. A Sony representative said that the PS3 had a banner Thanksgiving week, and that 440,000 of the consoles were sold during the week. Nintendo did not respond to a request for sales numbers for Thanksgiving week a year ago.

Using Pachter's formula, the PS3 sales numbers would mean that about 880,000 of the consoles were sold for all of November.

Since the true beginning of the so-called next-generation console wars in November 2006--when both the PS3 and the Wii were released, joining the Xbox 360, which hit store shelves a year before that--the Wii has been the dominant player, routinely outselling its competitors.

Now the prices for all three consoles are within $100--the Wii and the lowest-priced Xbox are $199, while the PS3 is $299. That has led to an increase in sales for Nintendo's peers, especially for the PS3, which in September won its first month ever for U.S. sales, according to industry analyst the NPD Group.

Indeed, even Nintendo has acknowledged it had lost some of its steam. Last month, the company's president, Satoru Iwata, said, "The Wii has stalled."

But Pachter suggested that the Thanksgiving week numbers show that Nintendo has simply been a victim of its own success, and that the sales of the Wii--and its handheld game machines, the DS and DSi--are still very impressive.

"You can't really criticize Nintendo for" past success, Pachter said. "They're definitely going to be very solid and dominant this holiday season, but last year, they were so large and dramatic, (those numbers) are going to be hard to compare to."

For the Thanksgiving week, Nintendo said it sold more than 1.5 million devices, meaning that it sold almost 1 million of the DS and DSi. And to Pachter, that might be the most impressive data point of all.

After all, he said, the DS first came out in 2004. "When is this thing going to get old?" he said. "It never dies. It's amazing to me, but people just keep buying them."

Still, Nintendo's biggest advantage--over the PS3, at least--is that the Wii costs $100 less. And if Sony ever drops the PS3's sticker under $200, that could mean big trouble for the Wii, Pachter said. Such a move would force Nintendo to do something dramatic to keep up.

While he didn't say that Nintendo would need an entirely new console at that point, he did say that a sub-$200 PS3 would force Nintendo to do something like add a processor and graphics card similar to what is available on the PS3 and the Xbox. And that, among other things, means high-definition.

"I think consumers need that," Pachter said.

Updated at 5:10 p.m. with comment from Microsoft, and at 7:55 p.m. with comment from Sony.