The Xbox 360 has overtaken the Nintendo Wii as the most searched for gaming console based on share of US Internet searches for the first time since the Wii’s launch in November 2006. The Xbox 360 is #1 console based on sales volume but the Wii has enjoyed the fastest growth in market share. We often find that Internet searches are a leading indicator and can be predictive of future sales growth.

Searches can also be driven by other factors – namely recalls So is the growth in searches for Xbox 360 simply a result of the recent “warranty extension” and “Red Ring of Death”? Hitwise search data indicates it is not. The following table lists the top search terms entered into search engines in the past four weeks that include the words “xbox 360”:

Searches for “xbox 360 problems” and “xbox 360 repair” figure at #13 and #15 on the list. I found the term “xbox 360 price drop” (#6 on the list above) particularly interesting. Since Sony announced a drop in price for one of the PS3 models two weeks ago, rumours have spread about a possible price drop for the Xbox 360, with the latest rumours predicting a price drop in August.

Demand is high for a price drop - in the past four weeks, the top search term with the words “price drop” was “xbox 360 price drop”. There were 70% more US searches for “xbox 360 price drop” than for “ps3 price drop”.

So what is driving the increase in searches for Xbox 360? It appears to be a combination of hype for new games, rumours of a price drop and no doubt some queries about the recent problems.

December may be months away, but with PwC predicting that the total number of dollars spent on video games will exceed the total dollars spent on music in the United States by the end of the holiday season, the battle for the must have Christmas gift will no doubt centre once again on gaming.

Bill Tancer

This post originally appeared on Bill Tancer's blog here. Bill is the General Manager, Global Research at Hitwise. His bio can be viewed here.

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