Nintendo Plays for Keeps

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The video console battle has tipped in favor of Nintendo(NTDOY Quote) for the time being. Portable console domination and a solid performance on the home console front may give the company a major boost in software support next winter and beyond.

Post-Christmas Buoyancy

January and February are interesting months in the game industry. The massively hyped game launches of November and December are history. Production of newly introduced consoles is beginning to catch up with demand. Even as the overall sales volumes of consoles and games dwindle, a new balance of power emerges.

What do consumers do when they are not being bombarded with massive marketing blitzes and major new titles? Apparently, they gravitate toward Nintendo's consoles -- despite or perhaps because of the absence of appealing new games. Word of mouth from the game and console launches of 2006 is now percolating from household to household, and the result seems to be highly favorable for Nintendo.

In the U.S., Nintendo was the surprisingly clear January champion twice over: With 436,000 units sold, Wii outpaced both Sony's(SNE Quote) PlayStation 3 and Microsoft's(MSFT Quote) Xbox 360 by more than 100,000 units, according to figures from market research firm NPD Group. And Nintendo's portable consoles also moved more than 400,000 units during the month.

It's interesting that Xbox 360 still hasn't outpaced the unit sales the original Xbox had at the same point of its life cycle. It may be too early to judge PS3, which has not yet launched any of its real blockbuster games. But Xbox 360 has already used plenty of its big guns: the revamped Internet service, the rapturously reviewed Gears of War and a classy cluster of expensive Japanese fantasy games.

None of this has changed the sales trajectory of Xbox 360; it's selling almost exactly as Xbox did. The upcoming Halo sequel will no doubt delight Xbox 360 owners. But if the nearly identically reviewed and themed Gears of War couldn't seduce new consumers, it's unlikely Halo will expand Xbox 360 appeal.