Back in the game

CALL IT Super Mario’s Revenge.

Nintendo introduced the mustachioed hero Mario in the hit 1981 arcade game Donkey Kong, and made him the star of its first game console in 1985. But Mario was eclipsed a decade later by Sony’s PlayStation, which quickly ground Nintendo and other game manufacturers into the virtual pavement. Sony then scored a follow-up hit with PlayStation 2 in 2000.

Now it’s Round 3, and the results are dramatically different. Sony’s PlayStation 3, with its gargantuan buildup and matching price tag ($499 for the basic version), is being easily outsold by Nintendo’s Wii, a less powerful but significantly more affordable machine (list price: $250). According to Nintendo, 400,000 Wiis were sold in the U.S. in its first eight days on the market. Sony isn’t saying how many PS3s were sold, but a leading game executive estimated the number was about half that many. By year’s end, Nintendo plans to ship 4 million units worldwide, to Sony’s 2 million.

The price difference alone doesn’t explain the gap in sales. Reviewers have raved about the Wii’s motion-sensitive controllers, which turn games into arm-waving workouts, while offering more restrained notices for the PS3’s graphics. But the simpler truth is that retailers have been selling every console in stock, and Sony hasn’t been able to supply as many of them as Nintendo.

Still, Nintendo’s fast start is attributable at least in part to its decision to produce a more affordable game machine than Sony’s uber-console, not least because the Wii’s more modest specifications make it easier to manufacture. The PS3 would have arrived months earlier and in much greater supply had it not been for production problems with its revolutionary microchip and high-definition Blu-ray disc player.

Nintendo’s lower-tech strategy was more affordable to Nintendo too. The company claims to make a profit on its hardware, unlike Sony, which loses an estimated $240 to $300 on every PS3 it sells, on the theory that subsequent sales of games, movies and downloadable add-ons will turn the consoles into loss leaders. That’s one reason they’re packed with boundary-pushing technology that can support more types of entertainment and forestall obsolescence.

Many analysts expect the PS3 (and Microsoft’s Xbox 360) to outsell the Wii in the long run. But for this Christmas at least, more affordable means more successful.