Don't get cocky, Nintendo (OTC BB: NTDOY.PK).

The Wii is the hot console heading into the holiday selling season, according to market researcher NPD, outselling rivals Microsoft (NASDAQ:MSFT) (with the Xbox 360) and Sony (NYSE:SNE) (with the PlayStations 2 and 3) last month.



Nintendo Wii


Xbox 360






Source: NPD Group

In and of itself, that isn't much of a surprise. Despite price cuts on both the Xbox 360 and PS3, the lower-priced Wii remains rarely available at retailers. Wiis are selling as quickly as they're stocked, and the only real challenge for Nintendo is on the manufacturing side.

Microsoft's console managed to emerge victorious a month earlier, fueled by its Halo 3 release, but that buzz has died off about as quickly as most players in the game's next-to-last level.

The Wii is sitting pretty. In the battle between the next-generation consoles, the Wii outsold both the 360 and the PS3 combined (in number of units).

Here's where Nintendo can't afford to ignore the rearview mirror. The October gap should narrow for a few reasons. For starters, the latest wave of PS3 price cuts didn't go into effect until this month. There's also the availability factor. If shoppers can't find the Wii in stock over the next few weeks, they may eventually settle for a readily available alternate console to wedge beneath the Christmas tree. Retailers like Gamestop (NYSE:GME) won't mind the shifts in shopping patterns -- they're console-agnostic. What if shoppers have little choice but to think that way as well?

After all, last month's hot-selling video game was Activision's (NASDAQ:ATVI) Guitar Hero III, available on all the leading platforms. Unless shoppers are restricted to exclusive titles (like Halo 3 on Xbox 360 or this week's release of Super Mario Galaxy for the Wii), any system will have to do in a pinch as the Advent calendar counts down.

The fact that both the PS3 and 360 offer high-end DVD playback functionality make them easy sells as home theater appliances, too.

A year ago, the Wii surprised the market by being the hot console. It's not surprising anyone now. Everyone expects it to come out on top. That can be a dangerous place to be, especially if the retailers' shelves aren't replenished as quickly as they're being depleted.

Don't get cocky, Nintendo. Don't.

Wii would like to read:

Microsoft is an active stock pick for Inside Value newsletter subscribers. Yes. Mr. Softy is now a value stock! Nintendo, Gamestop, and Activision are Motley Fool Stock Advisor recommendations. Curious? Take a free 30-day trial of either newsletter.

Longtime Fool contributor Rick Munarriz is a fan of all three consoles, but finds himself spending way too much time with the family on the Wii at the moment. He does not own shares in any of the companies mentioned in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.