MS & Ninty Profits Up

Please check your fanboy allegiance at the door and simply enjoy the fact that two of "big three" game companies had a great end to their 2006. Regardless of whether you prefer the X360 or the Wii (or think the PS3 pwns all) success had by any one of these companies helps buoy the entire industry. And success by two of the three spells very good times ahead. By the looks of things, full steam ahead! Both articles below from today's Seattle Times.

Microsoft Sees Strong Growth; Xbox Scores Big

The entertainment and devices division, responsible for selling 10.4
million Xboxes by year's end, added $1.27 billion in revenue for a 76 percent
growth rate.

Wand-Wielding Wii an Earnings Boon

Booming year-end sales of the wand-wielding Wii game console sent profit at Nintendo soaring 43 percent for the nine months ended December, the Japanese manufacturer of Pokémon and Super Mario games said Thursday.

Nintendo, which also makes GameBoy Advance and Nintendo DS handheld machines, recorded group net profit of $1.1 billion in the first nine months of the fiscal year, up dramatically from $756 million the same period a year earlier.

Now, it's easy to see that 76 percent growth rate for the Xbox division and get all excited, but lets remember that the original Xbox was DOA as of fall of 2005 and that there were enormous supply problems with the launch of the X360 that holiday season. Kudos to Microsoft for ironing out those wrinkles (and finding a way to make a profit from the console, instead of selling each one for a loss) but the 76% growth rate is as much about 2005 being a disaster as it is 2006 being incredibly good. When you set the bar at ground level, it's sometimes easy to bound over it.

As for the Wii, it is doing very well, but even those not on the Wii bandwagon like myself could predict its tremendous initial sales based on economics and the "newness" and uniqueness of the technology. Not to mention, Nintendo consoles always sell like wildfire when a new Zelda games releases. This will keep up through 2007 thanks to the pending releases of new games in the Metroid and Mario franchises, but I fully expect the sales to decline starting early in 2008 as the novelty wears off and Nintendo's old habit of shortchanging their systems' libraries rears its head.

That said, as long as one, two, or even all three of the big console manufacturers continue to post profits then it doesn't matter which console you own as everyone will benefit.