Wii sales beat PlayStation 3 in January

Consumers also buy more PS2, Xbox 360 units than PS3

By George T. Chronis -- Video Business, 2/21/2007

According to the NPD Group, Nintendo of America’s Wii sold 437,000 units last month, far ahead of Sony Computer Entertainment of America’s PlayStation 3 at 244,000 units. Gamers also preferred the Wii over the Xbox 360, which sold 295,000 units.

Through Jan. 31, 1.5 million Wiis have been sold at retail in the U.S, compared to 933,000 PS3s. With a year’s head start, more than 4.8 million Xbox 360s have been purchased.

The cumulative total of PlayStation 3s sold bears watching, however, because at the Consumer Electronics Show in Las Vegas on Jan. 8, Sony said it had shipped 1 million PS3 units to the U.S. by Dec. 31, out of 2 million total, and that it expected to ship 6 million units worldwide by March 31.

“It is also our understanding that Sony has been refilling the channel in large chunks over the past two weeks but that the rate of replenishment will likely slow down in the last half of January as SNE shifts production numbers in advance of its expected March 23 European PS3 launch,” American Technology Research analyst Paul-Jon McNealy reported on Jan 22.

Ray Maguire, managing director for Sony Computer Entertainment Europe, said on Feb. 1 the company plans to launch in the European market with as many as 1 million PS3s, with 220,000 slated for the U.K.

Whether U.S. consumers are eager to purchase as many of the $499 to $599 PS3s as are arriving remains to be seen. As for sales goals, Sony maintains that it is on track to meet its 6 million unit target.

More good news for retailers was the strength of videogame software sales in January, which were up 53% to $549 million, compared to January 2006.

“We believe that the growth trend in January will persist until April,” Wedbush Morgan Securities managing director of research Michael Pachter said in a note. “Total 2006 software sales—including PC—were plus 6% compared to 2005, and we believe that 2007 software sales will be plus 12%, with strong sales in the first quarter moderating to mid-single-digit growth during the second and third quarters when year-over-year comparisons become difficult.”

Pachter admitted he was pleasantly surprised by the strength of software-to-hardware tie-ratios: 2.6:1 lifetime for the Wii and 2.2:1 for the PS3.

“We estimated $65 million in software sales for the PS3 and Wii, which was based on our expectation of a tie-ratio of 1.5 units for each hardware unit sold,” he observed. “Overall sales for the two platforms came in at almost $87 million, with tie-ratios of over 2 for each platform.”