Numbers are fun: Year end edition – The handhelds

A few months ago I reported that the DS was an unstoppable juggernaut that had put quite some distance between itself and the PSP. Elsewhere on this site we have mentioned that PSP software sales have fallen off. After looking at some year end numbers on handheld sales, I hold to the argument that the DS will be (already is?) the victor in this generation of portable video games I think it may be a bit early to buy Sony’s product a headstone. Lets go to the proverbial video tape.

Both handheld companies entered 2006 with approximately 3.7 million units of hardware sold (DS had slightly more, PSP slightly less, but DS also had a three month head start). In the US the DS then outpaced the PSP by selling 5.3 million units (combined DS and DS Lite) while PSP managed a very respectable 3 million. The software sales tell a similar story. Nintendo sold over 23 million DS games while Sony mustered 14 million with the PSP. This represents a 46% increase over 2005 PSP sales. So how do can it be said that PSP sales have fallen off a cliff? Those reports are based on the fact that no PSP game appears in the Top 10 lists of games sold in 2006. The reason for that (besides the fact that Madden is number one on the list every year, meaning 10% of the available real estate is gone off the bat) is that the DS is an unstoppable juggernaut. The 23 million games sold are a 185% increase. So while the rising tide that has lifted all ships (sales) across the board has benefited the PSP, it has benefited the DS quite a bit more. Think of it as a slanted ocean. If a product is considered a reasonable success, and then increases its sales by 46% its tough to go all the way to calling it a failure. And now that the PSP has shown signs of building itself a library of non-ports, there is a realistic possibility it will continue to make a dent in Nintendo’s long running dominance of this market.

Its unlikely they will be able to make a similar splash in the Japanese market, since there may be more DS units sold than there are residents of Japan by the time you read this. In a country with 128 million people Nintendo has sold over 14 million handhelds. More than 10% of the total population has purchased the machine. By contrast Nintendo has sold 9 million of them to those of us who live in North America. The United States has a population of 300 million people. It is barely an exaggeration to say that the DS could assassinate the Emperor if Iwata commanded it. During 2006 Nintendo sold an epic 35 million DS games. This is well above any software sales number for any system since at least 2001 (when my numbers begin) including the PS2, which has set all kinds of global sales records. Sony has done some decent business in Japan as well, selling 4.1 million games and 2 million PSPs during 2006. A passable showing, but considering the success of the DS, Nintendo may not have even noticed the competition. Sony is right when they say the PSP isn’t competing with the DS.

It is clear that Nintendo has taken the lead over Sony in the current handheld generation in both the US and Japan. While the PSP may be able to make up significant ground in my homeland, the lead the DS has in Japan may be insurmountable. I will once again give Sony credit for showing up to play in a market that has been completely cornered by Nintendo for basically my entire lifetime, but it seems as though they may not yet be able to compete with the boys from Kyoto.