The video-game sales report for the month of March is in. The NPD Group, a market-research company, said that sales of hardware and software jumped 57% compared with March of last year, coming in at $1.7 billion. Hardware revenue grew 46%, while software sales leaped by 63%. One of the best analysts of the video-game sector, Michael Pachter of Wedbush Morgan, thought that software sales might increase 47% from last year.

That's okay, though -- video games certainly have the right, as well as the ability, to surprise to the upside, especially when Nintendo (OTC: NTDOY) released the incomparable Super Smash Bros. Brawl for the Wii in March. I don't think there's one soul on the planet that didn't expect that title to be tops in March -- it sold 2.7 million units. Seriously, many gamers are addicted to this. I know one individual who still plays several rounds of smash-brawling antics twice a day! The title definitely drove Wii sales -- the console sold 67% more units in March than it did in the previous month.

The data continue to show that video gaming is hot, and that quality publishers such as Electronic Arts (NASDAQ: ERTS) and Activision (NASDAQ: ATVI) should be investigated as potential ideas on pullbacks. However, I think Nintendo is the bigger one to look at now since the Wii continues to do well and since it has an interesting putative catalyst coming up in May with the Wii Fit exercise system. Of course, you may just want to look right now. 'll like Nintendo's stock a whole lot better if it gets below $60 per share. No matter what, though, the company is still giving Sony (NYSE: SNE) and Microsoft (NASDAQ: MSFT) a nice run for their collective money. With the DS, the Wii, Mario, etc. -- Nintendo certainly commands respect, I'll say.

Disclosure: I own shares of Activision; positions can change at any time.

Nintendo Co., Ltd (ADR) (OTC: NTDOY) has taken the gaming console world by storm with a combination lower-price and highly-interactive "Wii" gaming platform that has sent Microsoft Corporation (NASDAQ: MSFT) Xbox 360 and Sony Corporation (ADR) (NYSE: SNE)'s PlayStation 3 to the back of the line since late in 2006. Nintendo seems to have a knack for paradigm shifting, as its $250 Wii gaming system combines high levels of physical player interaction along with a highly-enjoyable gaming experience. It's not the most technologically-advanced gaming system out there, but Nintendo seemed to know (before anyone else) that geek-specs like graphics and polygon count mean very little if the games themselves don't draw players into the environment. It's like the difference between watching a movie on a 19-inch TV screen and seeing a Broadway play from the tenth row (you get the idea).

Nintendo, though, is not resting on its laurels as Microsoft is wooing moms and others with more family-friendly games as well as making it easier to find gaming titles meant for younger audiences via re-vamped in-store displays. Yes, there are more markets for gaming outside of the teenage and twenty-something male set. Surprised?

This is precisely what Nintendo did with the launch of the Wii gaming console back in November of last year, and that strategy has worked perfectly for the Japanese company. By appealing to more of a mainstream audience (like sports players, parents and even the elderly), the market for Nintendo's Wii goes far past the tech-gamer set that higher-end gaming consoles generally try to court right out of the door. Contrast this to Sony's PlayStation 3, which is so advanced and pricey, it's cornered itself into a severe niche -- and the niche market where it's lumbering is just not enough (yet) to get it selling where Sony can actually make some money with the thing. Maybe it never will, although the original PlayStation consoles took years to build their own highly successful franchises. Nintendo, though, has already built its "Wii" little empire and it's getting larger by the month.

While the dismal performance of Sony's (NYSE: SNE) PlayStation 3 continues to weigh on the company's fortunes, the competition is making waves all over the place. First, the scrappy Nintendo has outdone everyone and has shown that consumer engagement means much more than technical performance and brilliance. The less-advanced Nintendo Wii has outsold the Sony PlayStation 3 for almost the entire time both gaming consoles have competed (since November of last year), and the numbers for the Wii continue to add up while the PlayStation 3's numbers are hunkering down looking for an escape from any media coverage.

Meanwhile, Microsoft's (NASDAQ: MSFT) Xbox 360, which was priced in the middle of the Wii's ($250) and the PlayStation 3's ($500 and up) price points has sold very well during the same six-month time period, trailing the Wii but ahead of the PlayStation 3. Adding fuel to this fire, Microsoft has announced executive David Hufford said the sweet spot of the market that it will drop the price of the "core" Xbox 360 gaming package is only $199 -- a drop from the previous $299. Was this price drop in Microsoft's business plan? Probably so -- but the company may have had to accelerate the drop based on how well the Wii is performing in sales compared to all the competition.

So there you have it -- the Microsoft Xbox 360 is now at $200 and the Nintendo Wii is at $250. I doubt Sony can even drop the PlayStation 3 price without completely losing its shirt, so I don't see any price drops on the PlayStation 3 in response to Microsoft's price cut, unless Sony is fond of kamikaze pricing schemes. So far, estimates have the Nintendo Wii selling 360,000 units per month, the Xbox 360 selling 174,000 units and the PlayStation 3 selling at an 82,000 per month clip.

[Update: this Xbox 360 price cut has been officially denied as of 6-12-07 -- but we still wonder, when will the price drop?]

While the gaming world watches sales and availability of Sony's PlayStation 3 very closely, competitor Microsoft Corporation (NASDAQ:MSFT) is constantly trying to deflate the wind from Sony's sales by apparently crashing its launch parties around the world with its Xbox 360 game console along with vivid demonstrations of the large price gap between the two game consoles.

Sony is in the midst of launching the PlayStation 3 console in Europe, Australia and New Zealand -- but according to reports, the initial furor Sony saw in the U.S. last November upon the PlayStation 3 launch is not happening in other parts of the world. To top off soft initial sales at launch time in different global markets, Microsoft is adding insult to injury by having (directly or indirectly) jabs poked at Sony in some pretty memorable ways.

Take Paris, where a waterside PS3 launch venue saw a giant boat float by with "Xbox loves you" draped over the side. In Australia, the retailer Gameplanet had a nice Xbox 360 display surrounded by quite a few cases of beer to demonstrate the cost difference between the PlayStation 3 and the Xbox 360. Microsoft seems to have gotten pretty inventive with its competitive marketing here, which is odd considering Microsoft's operating system marketing is decently pathetic most of the time. But when it comes to marketing its gaming console, it's quite a different story.

[Disclosure: I own MSFT shares as of 3-26-07]

Although it's been predicted that Sony Corp. (NYSE:SNE) would have to lower the price of its new PlayStation3 game console to reap the benefit of mass adoption, the company may have to do that way before it was ever planned.

True, technically, the Sony PlayStation 3 is quite a bit ahead of the Nintendo Wii and possibly even ahead of the Microsoft Xbox 360 (debate rages on here). But Sony can't rest on as an excuse that all but a few extremely avid gaming fans are going to care. The processor, graphics, pixel shading and other technical benefits are lost on most of the gaming audience who would rather feel an immersive gaming experience in totality -- not a few more millions of polygons being drawn a second. And yet it seems that Sony is placing its future the entire company's turnaround from a disastrous past few years in the hands of the tiny minority who do care about the technical features.

Case in point here -- the Nintendo Wii (half the price of the PlayStation 3) is outselling Sony's unit 4-to-1 and even a 5-to-1 in some countries, including the U.S. and Japan. Most likely, this is due to Nintendo's capability to price the unit at the correct mass adoption price point -- $250 -- while delivering an experience that is good as or better than Sony's (not just graphics, but total experience).

There will be some who argue about Sony's high price killing its early sales -- and there's quite a bit to that too -- but can Sony even afford to drop the price in 2007? I hope Sony's future doesn't rely on that or SNE investors may see a partial Titanic scenario coming.

The Sony Playstation 3 has been in short supply over the recent holiday season, and the Microsoft Xbox 360 has been selling fruitfully thanks to its edge of having a one-year head start, and the third contender in the current gaming console contest, the Nintendo Wii, showed a pretty strong holiday selling season according to preliminary estimates.

Now, follow me here as we look at the console prices:

• Sony Playstation 3: $499 or $599
• Microsoft Xbox 360: $299.99 or $399.99
• Nintendo Wii: $249.99

That is quite a disparity in pricing. Although there are technical discussions and rationales about who has the better graphics, which platform is technically superior, and which console has the best game support, none of that matters a bit. What does matter is results. Even if the Sony Playstation 3 has the best "everything" it will flop if developers don't write games for it, and particularly if the furor wears off this year with the $500 and $600 price tag dragging it down. That leaves 2007 as the year of the gaming console -- and the year that someone will win the contest. Well, at least this round.

The Wii is the cheapest, but features a pretty immersive experience which requires physical movement (exercise and movement as entertainment, what a concept) is reportedly outselling the Sony and Microsoft consoles at the moment. I can see why. The console has such a unique niche (physical interaction with the content), design, and low price that it just seems like Nintendo may once again rule the crown of gaming consoles, at least for the moment (year). With the Xbox 360 way ahead in terms of sales right now -- with its year-long head start -- the end of 2007 will tell the tale of which console customer prefer.

[Disclosure: I own MSFT shares as of 1-3-06]

Where in the world is the Sony Playstation 3? That is a question Microsoft execs probably don't care to have answered, since the most visible contender and competitor to the Sony PS3 is Microsoft's own Xbox 360, which was launched almost a full year ahead of the Sony PS3 in a rather marketing and manufacturing coup for Microsoft. Of course, the geek squad will most likely tear apart the PS3 and explain how much more radically advanced it is compared to the Microsoft Xbox 360, but the market will perceive that Microsoft was a year ahead of Sony.

GameStop, a large national retailer of video games and video game consoles, has stopped taking pre-orders for Sony's upcoming PS3 -- which makes me scratch my head a little. The obvious, one-question word is -- why? The same day the pre-order promotion began -- this past Tuesday -- is the same day it closed. Is that a possible technical snafu or did Sony shake the change out of GameStop's pockets?

Reuters reported on Tuesday that GameStop said it had sold out of its pre-order quota , which was perhaps the reason that the retailer quit taking in-store pre-orders the same day it started. GameStop said that each of its 3,600 stores had no less than eight and no more than 13 of the anticipated next-generation players available on pre-order. With an expected short supply of the Sony PS3 this holiday season, will demand shift towards the Xbox 360 to make up for the shortfall? The Xbox 360 also had a well-publicized inventory shortfall when it debuted, but that is apparently over with. It's Sony's turn now.

[Disclosure: I own MSFT shares as of 10-12-06]

The lines between gaming entertainment and passive, video-based entertainment are blurring every day. Gaming consoles like the Microsoft Corporation's (NASDAQ: MSFT) Xbox 360 and the Sony Playstation 3 feature full DVD players and functionality, and the Sony Playstation 3 will even feature a next-generation Blu-Ray DVD drive. With Microsoft's Xbox 360 having an almost yearlong headstart on Sony in the latest piece of the battle, are upgrades coming to the Xbox 360 to combat the upcoming Sony Playstation 3? You bet -- but in Japan first.

Microsoft will launch an HD DVD (High-Definition Digital Versatile Disc) for its Xbox 360 gaming console in Japan in late November for $177US as the software giant tries to one-up itself from the impending Sony Playstation 3 release in Japan around the same time. Whether this will even have an effect remains to be seen, but HD DVD and the Blu-Ray DVD format are direct competitors and won't be inter-operable in both consoles. Stubborn Sony and maniac Microsoft are forcing consumers to choose one -- but then they cannot have the other. Consumers are left in the dust, yet again.

Microsoft, which launched Xbox 360 in November 2005, has shipped five million units worldwide by June and hopes to top that figure up to 10 million by the time December 2006 comes around. This includes a rather paltry 160,000 units in Japan so far, which has been a sore thumb in a rather successful game console launch by Microsoft.