All three combatants claim victory

IT IS a vicious fight—and one that all three participants claim to be winning. Sony, Microsoft and Nintendo are battling for supremacy in the $30 billion video-games industry, a struggle that takes place in rounds lasting five or six years each. The previous round, which began in 2000, pitted Sony's PlayStation 2 (PS2) against Microsoft's Xbox and Nintendo's GameCube. (Sony won, achieving a market share of 70%.) The present round began in 2005, when Microsoft began to sell the Xbox 360. Last year Nintendo came out with its new console, the Wii, and Sony shipped the PlayStation 3 (PS3) in America and Japan. With the start of sales of the PS3 in Europe on March 23rd, all three machines are at last available in all of the world's biggest markets. The fight is just getting started, and already everyone claims to be on top.
Microsoft can justly boast to have sold the most consoles: 10m Xbox 360s since launching the machine in November 2005. The 360 is popular in America and Europe, but is doing badly in Japan (though not quite as badly as the original Xbox did). The head start means that the 360 has by far the best line-up of games, the main reason for buying consoles. Microsoft's online service, Xbox Live, is also impressive, offering game and video downloads and allowing gamers to play together online.
For its part, Nintendo can boast that its new console has taken off the fastest, having sold nearly 6m units since November. The low-cost Wii is proving so popular that it is still hard to come by months after its launch, and is generating by far the most buzz. In part this is because the Wii's motion-sensitive controller means even non-gamers can quickly start playing tennis, golf or bowling. Nintendo hopes this will help to expand the market: non-gamers, it argues, are put off by the complexity of modern games. But sceptics warn that the Wii's novelty could wear off, that it lacks the “high-definition” graphics of its rivals, and that its online features are somewhat rudimentary.
What about Sony? The ageing PS2 outsold both the Xbox 360 and the Wii in America during December, so arguably it still rules the roost. Its maker insists that the PS3's relatively modest sales—2m units since November—are the result of supply shortages, though anecdotal evidence suggests that PS3s are far easier to find than Wiis. The PS3's high price—$499 and $599 in America, and €499 ($660) and €599 in Europe—may be putting buyers off, or prompting them to wait for price cuts. Sony says sales will take off once supply increases. This month it unveiled Home, an impressive virtual world similar to Second Life, which will become available on the PS3 in October and might also boost sales.



Analysts are divided about the outcome. The PS2 “achieved a level of market dominance never seen before, and I'm not sure we'll see again,” says Ed Barton, an analyst at Screen Digest. This time around, he suggests, different winners might emerge in different markets: it seems likely that Sony will do best in Japan and Microsoft in America. The wildcard is the Wii, which could trump the competition by attracting entirely new customers. IDC, a market-research firm, predicts that the Wii will be the bestselling console by 2008, and Merrill Lynch predicts that 30% of American homes will have a Wii by 2011. But Mr Barton warns that the Wii's success depends on publishers producing distinctive games for it. Also, its relatively underpowered hardware could soon look feeble next to the stunning graphics of its rivals.
So far, then, Microsoft has put in a solid performance, Nintendo is doing better than expected and Sony worse. The stakes are highest for Sony, which desperately needs the PS3 to succeed, both to protect its lucrative gaming franchise and to ensure success of its Blu-ray high-definition disc format, on which the PS3 is based. Let battle commence in earnest.