Wii Sales Soar as Console Overtakes Xbox 360, Drives Revenues

Sales of the Nintendo Wii video game console soared in the second calendar quarter of 2008, easily surpassing sales of rival consoles from Microsoft and Sony. But Nintendo set a few other milestones in the quarter as well: The Wii surpassed total sales of the Xbox 360, as expected, and drove strong revenue gains at Nintendo.

The company racked up a $996 million profit on revenues of $3.92 billion, a 34 percent year-over-year increase. But profits would have been even higher were it not for the poor performance of the US dollar against the Japanese Yen. In fact, this currency rate issue is the only dark cloud hanging over the company, which is otherwise dominating the industry.

Nintendo shipped 5.2 million Wii consoles in Q2 2008, compared to 1.6 million Sony PlayStation 3s (PS3s) and 1.3 million Microsoft Xbox 360s. (Nintendo sold 3.4 million Wiis in the same quarter a year ago.) But Microsoft's latest console can't even be credited with a dismal third-place rating: It actually came in fourth once you factor in the previous generation Sony PlayStation 2 (PS2), which sold 1.5 million units in the quarter.

To date, Nintendo has sold 29.6 million Wii consoles worldwide, compared to just 19 million Xbox 360 consoles and 14.4 million PS3s. Sony's console is widely expected to catch up to the 360 by early 2009 as well.

Nintendo and its partners shipped 40.4 million Wii software titles in the quarter, also outpacing the competition. 22.8 million PS3 games were sold in the quarter, compared to 19.2 million for the PS2. (Microsoft does not provide software sales figures for the 360, though the company does claim to have the highest attach rate--software titles sold per console--in the industry.)

Nintendo's aging DS handheld continues to sell well too, with 6.9 million units sold in the quarter, almost double number of Sony PlayStation Portable (PSP) unit sales, at 3.7 million. (DS handheld sales are actually flat from a year ago, suggesting that the device is finally running out of steam.) DS software sales were even better: 36.6 million units compared to 11.8 million units for the PSP. Nintendo has sold 77.54 million DS handheld devices overall.

Looking forward, Nintendo says that strong Wii sales should help offset the punishing Yen-to-dollar conversion rate. The company expects to sell 25 million Wii consoles and 28 million DS handhelds in its current fiscal year, which runs through June 2009.

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