The Business Side of Fun: Which Game Console Rules the Market?

Far be it from us to suggest that you should buy a game console simply because it's popular, but popularity can often tell a very interesting tale. When it comes to business - and the gaming market specifically - popularity isn't everything, but it does mean a lot.

So who rules in the gaming world? Microsoft, with its ever-popular Xbox and the exploding Xbox Live? PlayStation 3 and its handle on everything electronic? Nintendo, with its aptly-titled "Wii" and unique position in the hearts of gamers everywhere?

Measuring Popularity

Saying "this is not a popularity contest" is often a cliche, but in this case, it does ring true - if only because it's difficult to measure popularity accurately. According to GameSpot.com, as of December 31st, 2009, the Wii has sold an astounding 60 million-plus units worldwide. Why not give you the precise figure? Because it's pointless to measure, considering the PlayStation 3 and Xbox 360 are both trailing distantly in the realm of around 30 million units sold apiece.

Raw sales like that seem to indicate a landslide for the Nintendo Wii, but no one statistic can tell the entire story.

Measuring popularity isn't only about seeing who has sold the most, but also considering which console gets the best reviews and who provides those reviews - heck, a relatively cheaper product like the Nintendo Wii can simply skew the numbers by selling more simply through costing less.

Still, it's hard to argue with the sales numbers for the Wii, as well as the fact that Nintendo is back on top after the dark ages ushered in during the GameCube era and the emergence of Xbox and PlayStation as the dominant, popular consoles.

Other Trends and Contexts for Statistics

Reading statistics should be about the cold, hard truth. Sadly, that's often not the case. When it comes to video game market share, we have to examine the context and trends surrounding the statistics.

• Movement over time. Let's say I have a 90% market share of a particular market. Pretty good, right? Well, what if I've always had a 100% market share, and suddenly losing 10% of the market was completely out of the ordinary? That would be bad news for my company, despite a clear statistic showing that I've got 90% of one particular market. A great illustration of this effect is cited in the Sydney Morning Herald: despite the gaming market's strong numbers, it only increased some 4% in 2009, down from the massive growths around 40% from a couple of the previous years. Movement over time helps establish context.
• Context. What is this idea of context? Well, let's say I said "hello" to a woman on the street and she just ignored me, going along her merry way. That might seem rude, but if I'm holding a bunch of pamphlets trying to sell her something, then she may actually think I'm the rude one. Context is important.
• Correlation/causation. You may see a lot of studies that have trouble in sniffing out the difference between correlation and causation. Just because one thing is true, and another thing is true, does not mean that one is the cause and the other is the effect.

With these concepts in mind, can we still say that Nintendo has a dominant market position? Of course. It's hard to argue with overall sales numbers, unless there was another variable that skewed them. If Nintendo Wiis only cost $1 each, then we'd understand why they were selling so well. Understanding the context behind sales numbers helps us view who really holds control of a market.