A new report released by the Strategy Analytics Connected Home Devices (SACHD) service has forecast that Sony’s PlayStation 3 will eventually outsell both Microsoft’s Xbox 360 and Nintendo’s Wii, and go on to reach approximately 127 million units sold by 2014.

The report, called “Taming the Waves: Games Console Life Cycles and Platform Competition,” notes that while the Wii is by far the current market dominator, the PS3 will continue to be a viable commercial platform for games and media well after the Wii’s successor has been released, and predicts Nintendo’s home console will only go on to sell a total of 103 million units in its lifetime.

SACHD principal analyst and the report’s author, David Mercer, explained the report’s findings:

“Nintendo has done a great job with the Wii in bringing console games to new audiences. But its sales are now falling, particularly in mature markets, and its installed base will peak in 2011. Ownership of both the PS3 and the Xbox 360 will hit their highest points between 2012 and 2014.”

The report also expects home consoles will reach a global installed base of over 220 million units combined by the end of 2010, while ownership of current generation consoles will peak in 2011, at which point hardware vendors will need to begin to introduce the next generation of consoles in order to spark new industry growth. Mercer adds:

“Console industry cycles have given the industry major planning challenges for many years. There are signs that this volatility may be moderating as platforms add home entertainment and social networking services beyond pure gaming.”

Source: Gamasutra