Console Wars: Who Won '08?

Despite early predictions that 2008 would be the year Sony regained momentum in the bitter video game console wars, it turned out to be false hope. Industry leader Nintendo stayed ahead of the pack all year, thoroughly dominating both the home console and handheld hardware markets with their Nintendo Wii and Nintendo DS systems, respectively.

According to NPD Group, Nintendo flat-out owned the all-important month of November by selling over 2 million Wiis, better than twice as much as the next closest competitor, Microsoft's Xbox 360 (836,000). And at over 1.5 million DS systems sold, Nintendo tripled the output of Sony's PSP (421,000). While those numbers weren't nearly that high through most of 2008, the general order -- Nintendo, Microsoft, Sony -- held strong throughout.

But this was hardly a banner year for Nintendo in terms of software. The biggest games -- Super Smash Bros. Brawl, Mario Kart Wii and of course Wii Fit -- came relatively early in the year, and their biggest holiday release, Wii Music, has been labeled something of a dud. Miffed that the company was focusing too heavily on catering to its relatively new mass-market audience, the usually loyal Nintendo fans complained about a lack of core games. Meanwhile, Microsoft and Sony enjoyed a wealth of blockbuster games all year long, including top-sellers Grand Theft Auto IV and Fallout 3. So how did Nintendo compete, much less lead the way?

By finding a new niche, of course. While gamers lament the deluge of cheaply made games (dubbed "shovelware") aimed at capitalizing on the Wii's mainstream popularity, many of those titles speak to their broad audience and support the company's new directive. Nintendo knows on which side its bread is currently being buttered, and while Microsoft and Sony battle for the hearts and minds of the core gamers, Nintendo is content getting their moms to play, too. And their moms often have a lot more money.

Microsoft, on the other hand, found itself in second place by keeping its eyes on the prize: core gamers willing to shell out for great downloadable content. The recently released "New Xbox Experience" system update has nearly tripled sales over Xbox Live Arcade, while huge releases like Gears of War 2 and Fable II cemented their status as the go-to console for most gamers.

As the newest kid on the block, Microsoft is less concerned with catching Nintendo than they are with kicking Sony's butt, which is pretty much exactly what they're doing. Take, for instance, the November NPD numbers for Activision's best-selling first-person shooter, Call of Duty: World at War. The 360 version of the game sold an impressive 1.4 million copies -- over twice that of the PS3 version (597,000). It's hard to play catch up when you're getting beaten that badly.

As for Sony, well, they just can't catch a break. The company scored a major coup when Blu-ray officially trounced HD-DVD in the hi-def format war, but few believe the technology will catch on with consumers. Strong sales of big-time exclusive Metal Gear Solid 4 were promising, but the troubled launch of their 'Home' network coupled with relatively weak holiday sales (only Resistance 2 cracked the Top 10 list in November, all the way back at number 9) cramped their style. The once-promising PSP is getting whomped by both the DS and Apple's surging iPhone. Did a witch cast a spell on these guys or what?

Hopefully next year will bode better for the one-time king of the consoles, but for now, they'll have to get used to the view from the back of the pack.