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Industry tracker NPD released console hardware & software totals for the 5-week period ending March 5, 2007 after the close yesterday.  While sales of the next-gen consoles were below industry expectations, there were some known supply issues with the Wii during the month, which dampened sales to about 260,000 for the period, and allowed the hardware winner for the month to be, that’s right, the PS2.  Total hardware figures are as follows:

Nintendo DS    508,000

PlayStation 2    280,000

Wii     259,000

Xbox 360    199,000

PlayStation Portable   180,000

Game Boy Advance   148,000

PlayStation 3    130,000

GameCube    22,000

The handheld DS crushed its estimates, which called for anywhere from 250k to 400k.

With the March numbers in tow, here’s where the U.S. installed base currently stands:

Wii   2.1 million

Xbox 360 5.3 million

PS3  1.2 million

It is very likely that someone got their hands on the NPD data a little early, as evidenced by the chart for Electronic Arts (ERTS) yesterday; as of 1:45 Eastern, shares were set to trade about 2.9 million for the day, a little less than the 3-month average of 3.5 million.  But in the last 2 ½ hours of trading, ERTS shares dropped 3.25% on a huge spike in volume, as over 5.5 million changed hands (and 7.4 million on the day).  No news, just someone who was adamant on getting out of the stock as fast as possible. 

Electronic Arts is known to be weak in their current Wii offering, and really needs the PS3 to start surprising on the upside with its sales figures. 

Another concern for the software publishers with regards to the Wii relates to the upgrade cycle, which some feel will happen to the Wii first.  By all accounts the Wii is a breakthrough iteration in the console landscape, Nintendo may already be working on an improved version to leverage their interface technology.  PS3 and Xbox 360 will likely have some longer legs; one need look no farther than the continuing PS2 success for evidence of this. 

Despite the action in ERTS shares, total software sales were very strong, as NPD reported $574 million for the March period, a 15% rise year-over-year and well ahead of estimates for $510 – $520 million.  Sony’s (SNE) God of War II title for the PS2 was the biggest seller during the period, with 833,000 copies shipped.  There are enough titles for the PS2 being released during the summer to likely keep sales figures strong – and ahead of the PS3, which is in desperate need of a haircut to its $600 price. 

The upside surprise should bode well for retailer Gamestop (GME), which has been running since they upped guidance at the end of March.  GME shares are currently up 1.88% to $33.64 as of 12:00 EST.

Ryan Barnes

April 20, 2007

Ryan Barnes can be reached at ryanbarnes@247wallst.com; he does not own securities in the companies he covers.