According to IDC, none of the three new videogame consoles - the Microsoft Xbox 360, Sony PlayStation 3 and the Nintendo Wii, will dominate the market in the next five years like the PS2 dominated last cycle; however, Nintendo's Wii will outship and outsell the 360 and PS3 in 2007 and 2008.

IDC's study, "Worldwide Videogame Console Hardware and Software Forecast 2006-2011: Ready for a New Game", provides an analysis of the worldwide videogame console and handheld hardware and software markets. The research group said that what is interesting about this particular generation of gaming manufacturers is that each vendor has clearly differentiated hardware and strategies.

The study said that Microsoft's Xbox 360 was the best selling current generation console for 2006, because it enjoyed a full year lead in the market. Microsoft is relishing in the PS3's launch slip-ups, where PS3 supply deficits diminished profits. The battle is heating up between the 360 and PS3, as the two gaming manufacturers target the same hardcore/enthusiast gamer to dominate the market.

Nintendo, on the other hand, is the only one of the three manufacturers working to grow its total accessible market for its hardware and software by broadening its audience beyond the traditional market. Nintendo has designed its latest hardware and software to be more inviting and fun, and less intimidating for non-gamers including those who may never self-identify as a gamer.

The company also enjoys support from the fan base it has captured with successful first party franchises. IDC said it believes hardware shipments of Nintendo's Wii will capture a little more than a third of the worldwide market by 2008, rising slightly above Sony's PS3 and Microsoft's Xbox 360.

"With the Wii, Nintendo is abdicating the specification war, leaving Sony and Microsoft to slug it out between themselves for the hardcore market," said Billy Pidgeon, program manager of IDC's Consumer Markets: Gaming program. "We believe concerted efforts to broaden the appeal of videogames beyond the traditional enthusiast/hardcore base will deepen the industry's penetration. This is good news for an industry that seemed to be receding last year due to over-saturation of the core base."