Sales of Xbox 360 hardware have remained on a path to achieving an estimated 4.9 million units sold through in North America in 2006 – a significant improvement over the original Xbox’s first full calendar year of 3.4 million units.

However, sales still trail the PS2’s impressive “GTA‐fueled” 6.1 million units in its first full calendar year of 2001, and the system continues to be outsold on a monthly basis by the PS2 today. The 2006 holiday season will prove particularly important as the industry’s first live test of next‐ generation console market share.

IDG does not anticipate a price reduction on the core Xbox 360 hardware in 2006, but bundling at the retailer level seems likely. Sales should also benefit from the constricted supply of both PS3 and Wii. The installed base of the Xbox 360 is also projected to lead all other next‐gen platforms until 2009.