Analysts: Wii's Slim NPD Lead Due To Smash Bros, Wii Fit Launches

Following NPD's release of January hardware and software sales figures, analysts from Wedbush Morgan and simExchange have said lower than expected Wii sales likely were part of a plan to support Japan's Smash Bros and Wii Fit launches, and that Sony's Blu-ray support may be turning the tides in the PS3's favor. "January overall sales were much higher than our expectations," said Wedbush's Michael Pachter. "Continuing the strong growth trend in 2007, January saw strong demand across the board, despite lower than expected hardware sales due to supply constraints for the Wii, DS and Xbox 360. We believe that underlying software sales strength along with increased hardware supply will position the industry for continued strong sales through 2008." Particularly, Pachter noted, "PS3 hardware demand continues to improve. We think that the Warner Brothers commitment to the Blu-ray format makes it far more likely that the format will prevail over the rival HD-DVD format, and we expect Sony to emphasize that point in PS3 advertising later this year, ultimately driving sales higher." And Sony's fortunes may not be limited simply to its next-gen console, as Pachter notes, "33% of January's PS2 software sales were composed of Guitar Hero and Rock Band sales, leading us to believe that PS2 sales declines in 2008 may be lower than we have modeled." SimExchange's Jesse Divnich saw the PS3 outselling the reportedly hardware constrained Xbox 360 as "the biggest upset of the month," but added that "we do not know to what extent a hardware shortage played on Xbox 360 sales, it is likely the PS3 is beginning to change the tides on its rival." The Wii's slim lead over the PS3, says Pachter, was likely due to "the diversion of Wii units to Japan to support the launches of Wii Fit and Super Smash Brothers Brawl." Divnich agreed, calling the albeit top selling console's sales "dismal results," but concurred a unit shift to Japan was likely the cause. "The market may believe that Nintendo will ensure sufficient supply to support its March North American release of Super Smash Brothers Brawl," he added, "currently forecast to sell 2 million copies in March." "This implies a possible explanation for decreased Wii sales in January and February as being Wii hardware was diverted from the United States to support the Japanese release of Smash Bros Brawl," he concluded.