Nathan is a guest editor today on Tech Jaws.
You can read more of his insights over on his blog. –The Raging Tech

In a press release dated May 14th, Microsoft announced that they had reached 10 million Xbox 360 consoles sold in the United States market, and had a total worldwide install base of 19 million Xbox 360s.

In the press release, Senior Vice President of Interactive Entertainment Don Mattrick states, “This year will be the largest in the history of the video game industry, with Xbox 360 leading the charge in the U.S. and abroad. History has shown us that the first company to reach 10 million in console sales wins the generation battle. We are uniquely positioned to set a new benchmark for the industry.”

Read more of Nathan’s article after the jump.

Is Microsoft claiming an early win in the next-generation console battle? According to NPD sales numbers for 2007, Microsoft’s Xbox 360 console had sales of approximately 4.6 million for the year. The Nintendo Wii and Sony’s Playstation 3 had sales of almost 6.3 million and 2.5 million over the same time period.

With those sales numbers, Microsoft was firmly in 2nd place for console sales during 2007. How was Microsoft able to beat the blistering sales of the Nintendo Wii to the 10 million mark? The answer lies in release dates and product availability. The Xbox 360 was actually released in the United States on November 22nd of 2005. The Nintendo Wii did not become available in North American until December 8th of 2006. That gave Microsoft a full year of lead time on both the Wii and the PS3 (which was released on November 17th of 2006).

During the time when the Xbox 360 was the only next generation console on the market, Microsoft was able to sell several million consoles and get a head start on the competition. According to recent financial filings from Nintendo that contain sales data through March of 2008, the Wii has actually sold close to 25 million units worldwide and 10.61 million units in “The Americas.”

At first glance it would seem that Nintendo actually beat Microsoft to the 10 million mark, but an important distinction lies in how Microsoft chooses to break down their numbers. Microsoft reported the 10 million sales figure for the United States while Nintendo only releases aggregate figures representing the entire North American continent.

Given that the Nintendo Wii is continually besting both the PS3 and Xbox 360 in sales, it should easily surpass United States sales for next-generation consoles by later this summer.

The question is, can Microsoft honestly claim that they can eke out a win in the next-generation console battle by being the first to reach the 10 million consoles sold mark in the United States? I certainly don’t think so given the continuing sales dominance of the Nintendo Wii even amidst widespread supply shortages almost one and a half years after its release.

Focusing on such mature titles as the recently released Grand Theft Auto IV results in stellar sales to Microsoft’s core market of gamers, but Nintendo has chosen the bold route of expanding the core market instead of competing directly for the same gamers as the 360 and PS3.

This strategy hasn’t resulted in huge software sales so far, with the highest selling title being Nintendo’s own Super Mario Galaxy at 6.1 million – something GTA IV managed in its first week of sales.

However, with Nintendo making a profit on every console they sell while Microsoft and Sony both lose money on hardware sales, Nintendo doesn’t need high software sales to recoup their investment. The best-selling Nintendo Wii titles have also been first-party titles produced by Nintendo themselves resulting in the Wii producing a great deal of profit.

In the end, only time will tell the ultimate winner in the ongoing console wars. Luckily, stiff competition results in tangible benefits for the consumer in the form of innovative games, new console technology, and lower prices.

What next-generation consoles do you own? Do you think Wii, Xbox 360, or PS3 will win out in sales? Will you purchase all three systems in the long run? Let us know in the comments.