Wii U shortage helping Xbox 360, PS3

Xbox 360 outsold Wii and Wii U combined during Black Friday week. Analysts chime in...

Yesterday's news that Microsoft sold 750,000 units of Xbox 360 hardware in the US during Black Friday week shows just how strong the platform still is this late in the cycle, but it could also mean that consumers looking for Wii U and not finding one decided to go with the cheaper option this holiday. Is it bad news for Nintendo? Not really, say analysts.

"If we had to estimate, about 400k units of the 750k Xbox 360 units were from new consumers who did not own an Xbox 360 prior vs. the Wii U where 400k consumers did not have a Wii U prior. So in terms of who picked up the most new consumers, it's probably a dead heat. And of course there were about 200k to 300k consumers who couldn't even purchase a Wii U due to shortages, so I do have to wonder if the Xbox 360 and PlayStation 3 picked up some users due to the Wii U shortage," observed EEDAR's Jesse Divnich.

Reading into it anything beyond this holiday would be a waste of time, he added: "It's a little too early for us to make any declarations on the Wii U's long-term potential. They are off to a fair start and it will probably take another month to gauge where demand may be long-term for the Wii U."

RW Baird's Colin Sebastian agrees. "I do think the Wii U faces a lot of challenges, but one week's worth of data isn't enough to put the nail in the coffin," he said.

"Microsoft's short-term MSRP reduction was and is aimed directly at undercutting Wii U sales out of the gate"

Lewis Ward

Sony has yet to release its Black Friday numbers, but both Sony and Microsoft have been offering attractive bundles to consumers this holiday season, and the fact is that the economy is still depressed and consumers want value. Sure, Wii U is supply constrained, but for some, spending less money is just too appealing.

"The economy is still a bit weak, and consumers are looking for value. PS3 and Xbox 360 bundles are priced for value and are more likely to be gift purchases," noted Inside Network analyst Billy Pidgeon.

Wedbush Securities' Michael Pachter added, "I think the strong Xbox 360 performance tells us that consumers remain price sensitive, and the recent cuts/bundles for the 360 present a compelling value. Once Wii U supply increases, I expect the console to sell better. That may not happen until next year."

IDC research manager Lewis Ward acknowledged that he thinks "Microsoft's short-term MSRP reduction was and is aimed directly at undercutting Wii U sales out of the gate" but he also remarked that what we're seeing now in the discrepancy between Xbox 360 and Wii U is nothing unusual.

"I never expected Wii U to outsell the Xbox 360 or for that matter the PS3 this holiday season. Nintendo effectively sold out the available Wii U units during the Black Friday week so it remains to be seen how many total units will be available at retail and will sell before the end of the year. Look at this another way: In late 2006, PS2 sales exceeded those of the Wii by a healthy margin - does that mean Nintendo should have thrown in the towel on Wii? Of course not. We've just seen the launch of brand new platform that will have growing pains and it's like judging a book by its cover in the extreme to draw long-term conclusions from Black Friday sales alone," Ward continued.

Ultimately, we'll have to wait several more months to properly assess how Wii U is faring, but strong interest in Xbox 360 could pose a problem for Nintendo, noted DFC Intelligence's David Cole: "Long-term the Xbox 360 doing well could be a problem because many of those buyers are potential Wii u consumers."

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Latest comments (10)

Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.7 years ago
Very few consoles have provided more than 400,000 units upon their US launch regardless of the week of the year therein. So it was pretty obvious the Wii U would not be the top selling console for BF week when it's very common to have an already established console sell beyond 400,000. Combine that with the fact it sold out of that initial allocation and this is a non-issue that I'm really surprised evens needs to be discussed.
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Rolf Moren Freelance Marketing Consultant 7 years ago
so there was 400 000 new hard core gamers this week? Don't think so. My guess is that almost all of the Xboxes sold was replacement boxes. It was a great priced bundle with the Halo 4 game and people just wanted a more silent thing sitting under their TV:s.
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Art C. Jones Writer / Blogger 7 years ago
This is not news but it is terrible reporting!
(It is something that by quality of research, reporting and focus on the fantastic headline should go in the National Enquirer or The Sun!)

Every launch is like this, it's due to manufacturing.
The X360 launch in 2005 was the same. In November, when it launched, it was outsold nearly 2:1 by the PS2.
Then in December, boy, it was just terrible! Outsold handily by the PS2, Gamecube and even the original Xbox!

Dec 2005 - PS2(1,500,000) Xbox (415,000) GameCube(606,423) Xbox360 (281,441) (NPD Publicly Reported numbers)

Yes, the Gamecube outsold the X360 2:1 in the Xbox's second month! And the PS2 outsold it nearly 6:1!!!!
Oh how the sky was falling! The 360 was doomed! It was clear the GameCube was going to outsell it! It was reported wait, it was normal for a launch to be supply constrained, every console launch has been, websites didn't fabricate news stories out of that fact in 2005. But, boy, 7 years later, look how far we've come!!

The fact that this story exists is shameful.
The general bias against Nintendo creates so many fantastically idiotic news stories.
I'd be laughing if the great majority people didn't believe this kind of trumped up garbage to be factually relevant.
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Show all comments (10)
Greg Wilcox Creator, Destroy All Fanboys! 7 years ago
This makes almost no sense. If I want to buy a certain game console I'm set on as a gift or for myself, I'm not going to substitute something else that won't do what I want it to. How many copies of Nintendo Land, New Super Mario Bros. Wii and so forth and so on can be played on those Xbox 360s?

I think people who want to buy a Wii U are going to hold out for restocking and not say something like "well, I'll get an Xbox 360 instead - games are games!"

OK.... SOME people are like this, but not as many as this article would like us all to believe...
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Germán Vázquez Executive Producer, Neggi Studio7 years ago
@Greg I think it actually is like the article suggest, lets say grandma or a relative wants to buy a console for Christmas, 90% will buy something else if they can´t find the Wii U, does it sucks for the kid who wanted a Wii U but got a 360 instead? You bet but almost no one will get home in Christmas and tell the kid sorry its sold out I will buy it later, they will get home and bring a 360/Kinect bundle and tell the kid: But look it has motion control thing that we can all play now that all the relatives are here for the holidays plus later you can play here that Halo 4 game everyone keeps talking about.

Its the pure pressure of the holidays and the fact that all the family is right there and they should play together with the kids, I´ve seen this too many times, to tell him to wait kind of sucks during that time cause you need something at that precise time.
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Neil Sorens Creative Director, Zen Studios7 years ago
I don't know if the Wii U is as supply-constrained as some people think. Both models are listed as in stock at about 85% of the Walmarts and Targets in my area, and the seller's premium on ebay is negligible.
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Hugo Trepanier Senior Game Designer, Ludia7 years ago
@Greg, informed gamers like you and I would not make that mistake but the average person who's just looking for a cool gift for the kids might. We must not forget that insiders like us know a ton more than those who don't share our hobby on the same level. Just recently my dad took interest in acquiring a console for the first time and I had some difficulty to explain to him the difference between a Wii, a Wii U and a Wii Mini -- he had in fact never heard of the Mini or U before.

This brings me to say that the Wii U is the most ridiculous name for a console in a long while. They should have branded it differently to avoid confusion with the previous Wii, which has very little in common with its new U sibling anyway. For instance, my father doesn't like the Wii's "wiggle remote thing" so he would never consider the new Wii U because of the association in name.

Back in the day, we used to call all consoles a "Nintendo", much like people still use the brand "Kleenex" to define a facial tissue. That might have been a regional thing but it proves that the big N really did own the branding back then. Now I hear PlayStation and Xbox names a lot more often... I work, as we all do in this industry I'm sure, in a circle of geeks and for the first time in history very few of my friends and colleagues were really excited by this new console. I'm not saying it will fail but it's something I noticed anyway. Everyone was much more ecstatic at the release of the original Wii, in comparison.
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Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.7 years ago
German, that's not been my experience with families and retail sales surveys. While some will buy a different console, 90% is way beyond the real total.

Neil, you are partially correct. It did sell out of its initial shipment but was quickly replenished with stock. I know a few places that are on their 3rd shipment on units. That's a rate of replenishment I've never seen in any other console launch. So if Granny missed it on Black Friday, come back over the weekend and get it.
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Daniel Hughes Studying PhD Literary Modernism, Bangor University7 years ago
If this was a stock shortage outside of the launch window, I'd agree. This time next Christmas, when parents want to get their kids a console and they can't find a Wii U, then they'll spend their money on someone else's system. By not keeping the Wii U in stock, Nintendo lose out on sales during the busiest period of the year: this is common sense. But it's one thing to assume that, and another to leap to the logic that the early adopters looking to buy Wii U will then spend the money they'd set aside for Wii U on another games machine. What Nintendo lose out on right now is the money early adopters have if demand exceeds supply, which is almost always the case at launch. If demand exceeds supply this time next year, then we will be in a situation where by Wii U (more established on the market, perhaps at a lower price, definitely with a wider range of software) will be a more common gift item, more commonly wanted by families; families more likely to take their money elsewhere if Nintendo fail to keep supplies steady. Right now, that isn't a problem for Nintendo. Selling everything they can manufacture during the launch window is exactly what they need to do. If their supply chain appears faulty next Christmas, then that's the time they should be worried about losing potential sales.
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Nintendo president Satoru Iwata has apologised to early Wii U adopters for the system's initial firmware update and the unavailability of some features at launch.
The exec told IGN he was sympathetic to users experiencing firmware download issues and regretted there being restrictions on console features.
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