Videogame industry readies for potential windfall

It's been about a year since the highly anticipated launches of the Nintendo Wii and Sony PlayStation3 (PS3) video game consoles.

It's been about a year since the highly anticipated launches of the Nintendo Wii and Sony PlayStation3 (PS3) video game consoles. The Wii has not only far outsold the much higher-priced PS3—4.5 million consoles to 1.9 million consoles—since they launched, but the Wii has managed to re-energize and reshape the entire industry while attracting a whole new group of people to the world of video games.

CNN recently reported on the effect the Wii's success has had on Nintendo's stock, and back in October, AdAge named the company its marketer of the year. And while Microsoft and its Xbox 360 game console have had some issues to contend with this year including incidents of hardware failure, it still holds the top spot with 6.8 million consoles sold.

Microsoft's launch of Halo 3, which generated $170 million in sales, setting the new record for opening-day sales in the US by an entertainment property, helped set up what some believe will eventually be a record setting year for the industry. David Riley, a director at market research firm NPD Group, said his company is projecting sales in the US this year will total somewhere in the neighborhood of $18 billion, which would blow past the record of $13 billion set in 2006.

James Brightman, lead business editor for GameDaily Biz, which is owned by AOL, attributes the success to not only the Wii and Halo 3, but to the popularity of Guitar Hero 3, Rock Band, and Super Mario Galaxy, which debuted with a midnight launch at the Nintendo World Store at Rockefeller Center this past Monday morning. Portable gaming, Nintendo's DS system in particular, has also played a big role in the industry's success this year. “The Nintendo DS has sold even better than the Wii,” Brightman said. “The DS could potentially become one of the best selling platforms ever.”

Looking forward to 2008, Brightman said the launch of Grand Theft Auto IV and Metal Gear Solid 4 should help the industry maintain its momentum.

So with record setting sales and debuts and a high level of interest coming from new audiences, the video game industry is in as good a shape as it's ever been. Couple that with the numerous toy recalls over the past few months and that might actually make video games and video game consoles the safest bets for parents this holiday season, just as long they read the ratings on the front of the box.

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