XBOX-HQ.COM - Can Xbox 360 and PS3 Capitalize on Wii's Woes?

Given the publicity surrounding Nintendo's supply problems with the Wii, it is not surprising that Nintendo's competitors -- Sony and Microsoft -- are trying to take advantage of the Wii's woes in the weeks leading up to the holidays. Sony has been the most aggressive by far, slashing the prices of PlayStation 3 and its developer kit.

The smoke has barely cleared from the Nintendo Wii's first birthday candles, and already the next big challenge is looming: the 2007 holiday season. For Nintendo, the critical question is whether the revolutionary gaming platform will continue to be a consumer favorite or a lingering manufacturing hangover will stifle sales.

According to industry analyst Video Game Chartz, it was a stellar first year for the Wii, which passed the PS3 in total worldwide sales at Thanksgiving last year, and then passed the Xbox 360 at the end this past summer. VG Chartz compiles its figures by sampling sales data from retailers around the globe.

The Xbox 360 has fared better in head-to-head sales in the U.S. VG Chartz reported that as of this week, Microsoft has sold nearly 8.5 million Xbox 360 consoles in the past year, compared to just over 6 million Wiis and 2.3 million PS3s.

A Wii Manufacturing Problem

Given the robust sales and continued demand for the Wii, the upcoming holiday season should be a good one for Nintendo, but the company has been hampered by manufacturing delays.

"Here's the good news," Roger Fils-Aime, the president of Nintendo America, said in an interview with the San Jose Mercury News. "The good news is we're flowing more and more product into the marketplace, and the amount of Wii hardware that will be in North American stores will be unprecedented. Substantially more than the launch, substantially more than has been seen to date."

But Fils-Aime conceded that Nintendo is having substantial difficulty keeping up with consumer demand for its console. Fils-Aime said that retail outlets would receive regular shipments, and that consumers should periodically check with retailers in their area to see when new shipments would arrive.

"But the fact is," Fils-Aime said, "that demand outstrips supply on a worldwide basis."

Are Sony Price Cuts Enough?
Given the publicity surrounding Nintendo's supply problems, it is not particularly surprising that Nintendo's competitors -- Sony and Microsoft -- are trying to take advantage of the situation in the weeks leading up to the holidays. Sony has been the most aggressive by far, slashing prices not only on its console, but also on its software developer's kit, in an effort to expand the number of third-party titles available to its players.

Just last week, Sony took $100 of its 80-GB PlayStation 3, and introduced a 40-GB model priced at $399, just $150 more than the difficult-to-obtain Wii. The cut in price for the software developer's kit was even more dramatic -- Sony slashed the price in half.

The sale appears to be working: According to the weekly figures compiled by VG Chartz, the company has managed to sell more than 120,000 PS3 consoles in the United States over the last two weeks. That's a significant increase over its weekly average of 25,000 to 30,000 units.

But the sobering news for the Sony, which has been mired in third place in the console wars for the past year, is that during the same period, Microsoft sold over 300,000 Xbox 360s. And despite its supply problems, Nintendo sold nearly 340,000 consoles. Sony still has a steep hill to climb.

News-Source: NewsFactor