Wii Expected To Take Installed-Base Lead From Xbox

If Nintendo succeeds, then it would be the first time that the Wii has taken the lead among new-generation home video game consoles.

The popularity of Nintendo's Wii among casual gamers is expected to power the video game console's installed base this year ahead of current leader Microsoft Xbox 360, a market research firm said Thursday.

The installed base of the Wii is expected to rise to 30.2 million units in 2008, up from 18 million last year, iSuppli said. This will take the Wii beyond the Xbox 360's projected total of 25.7 million this year.

If Nintendo succeeds, then it would be the first time that the Wii has taken the installed-base lead among new-generation home video game consoles, a market that consists of the Wii, Xbox 360, and Sony's PlayStation 3.

"The Wii's performance illustrates the success of Nintendo's strategy of targeting casual users with an inexpensive console and entertaining titles, rather than addressing hard-core gamers by offering highly sophisticated and spectacular titles and systems," iSuppli analyst Pam Tufegdzic said in a statement. "In this stage of the new-generation video game console market, consumers are showing they'd rather be entertained and pay less for their consoles than shell out more for the latest and greatest technology."

While hardcore gamers have been the traditional targets of console makers, the market is shifting as the number of casual gamers grows. A casual player is defined as someone who plays a video game occasionally for an hour or two.

However, hardcore gamers are expected to eventually push the installed base of the PlayStation 3 beyond that of the Wii, iSuppli said. By 2011, the PlayStation 3 is expected to have an installed-base of 38.4 million units, rising at a compound annual growth rate of 39% from 10.3 million units last year.

Wii's base is expected to grow to 37.7 million units by 2011 with a CAGR of just more than 20%. The Xbox 360 is expected to fall to third with a base of 32.3 million units in three years, rising at a CAGR of 15.4% from 18.2 million units last year.

Last year was a record year for the video game industry. Sales of hardware, software, and accessories soared by 43% from 2006 to $17.94 billion, according to the NPD Group.

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