Microsoft's head start will give them the market share lead through 2007, but Sony will win in the long run with almost 60 percent of the market by 2012. That's the determination of research firm Strategy Analytics, whose Connected Home Devices service predicts Sony's 121.8 million PS3s will dwarf Microsoft's 59.7 million Xbox 360s in this console generation. The company sees the Nintendo Wii as almost a non-factor with only 23.3 million units sold through 2012.

Among the other predictions in the report:

• 9 million total consoles sold this holiday season
• 39.1 million consoles sold in 2007
• 204.8 million consoles sold through 2012
• 50 percent of all console sales coming from North America this generation.

The report sees this holiday period as crucial for Microsoft, which has to prove there is still demand for the Xbox 360 past the early adopters who have bought over 6 million systems so far. The key for Microsoft, they argue, is to lure away enough disappointed potential PS3 buyers in the next few weeks to maintain their early lead well into the future.

The report seems to put a lot of stake in the name recognition and current dominance of the PlayStation brand, which will force other console makers to convince consumers to "switch camps." Only time will tell whether customer loyalty can overcome high prices, hardware shortages and heavy marketing from Sony's competitors.

Read - Report summary
Read - Press release announcing results

[Via GameDaily]