On the handheld sales front, the Nintendo DS is off to an amazing year.



In February 2008 the Nintendo DS bounced back from January shortages with sales of 147,000 systems per week. The rebound was so strong, in fact, that February's sales are the highest ever for the handheld system outside of the Holiday months of November and December. The next closest such month would be June 2006 when its price dropped to the current $130 level, but even then it only managed around 120,000 systems per week.

Sony's PlayStation Portable continues a steady level of sales, right where it left off before the rush for Christmas 2007. At around 61,000 systems per week it is still not in the same class as Nintendo's DS. While its relatively strong sales keep it from the dustbin of history reserved for previous handheld competitors, it still fills a rather awkward position in the marketplace: just successful enough to survive. The release of high-profile games in March – like God of War: Chains of Olympus – may push the system temporarily, but will probably not drive system sales higher than their current level in the longer term.

The Great System Race

Let us take another look at the installed bases of the current consoles, and how they stand relative to each other.



The current installed bases are 9.6 million for the Xbox 360, 8.1 million for the Nintendo Wii, and 3.8 million for the PlayStation 3. While the graph above is interesting in its own right, it is difficult to discern the change in Sony's fortunes for the past two months. The following graph, which shows the installed bases for the Xbox 360 and PlayStation 3 relative to the Nintendo Wii, shows the shift in momentum a little more clearly.



We first used this graph in January 2008 to demonstrate how the Xbox 360 had been losing ground and the PlayStation 3 falling behind relative to the Wii during all of 2007. However it is now easy to see a corner in the PlayStation 3 graph starting this year. Some of the change in January 2008 is that the Nintendo Wii was in shorter supply while the PlayStation 3 was selling relatively well; however, even in February 2008 this graph shows that the PlayStation 3 is not falling behind at quite the rate it did for all of 2007.

Sony's first job is to keep the curve in this graph as level as possible, falling no further behind the Wii. Then, if possible, they must begin to close the gap. That latter goal is a very tall order indeed – Sony would have to begin sell in the neighborhood of 500,000 PlayStation 3 systems a month, or roughly double their current sales. However, should Wii sales slow, Sony's job will get a bit easier. Even then, Nintendo clearly holds the upper hand as it can cut prices to spur sales far more easily than Sony can.