Who's Winning The Console Wars? (MSFT, SNE)

Dueling stats from Sony and Microsoft about their game console sales make it difficult to figure out who’s winning the next-gen console race. Our guess is the two companies are complicit in providing these apples and oranges stats: Last week, MSFT announced it had sold 4.3 million Xbox 360 machines, worldwide, over the last 3 months of 2007; today SNE says it sold 1.2 million in the U.S. during the Thanksgiving – New Year’s period.

So who’s ahead? We don’t know, though we suspect that Sony will enjoy a nice bump now that the PS3’s Blu-ray capability now seems like a bonus instead of an unwanted investment in a potentially dead technology. What we do know – the next boom in the video game business shifts from console makers to software makers, as gamers start to stock up on titles for their newly purchased machines.

The Consumer Electronics Association predicts that hardware sales will slow this year, increasing 13% to $17.9 billion. That compares with a 22 per cent increase from 2006 to 2007. Meanwhile software sales should jump 26%, from $9.5 billion to $11.5 billion. That’s great news for the likes of EA (ERTS) and Take-Two (TTWO); it’s also built into their stock prices.

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