Analyst Michael Pachter admits he was surprised with the strong sales of the Microsoft Xbox 360 in July, saying that consumers didn't seem to mind the issues concerning the console's warranty policies.

Pachter earlier predicted that the Sony PlayStation 3 will beat the Xbox 360 for the first time in sales last month due to its US$ 100 price drop, but says the market behaved in unexpected fashion.

"Xbox 360 demand was far stronger than we expected this month, with sales just above those for the PS3," he says. "We had expected a decline in demand due to the warranty issue and price competition from Sony. We now expect Xbox 360 sales to increase, as the warranty issue appears to be of little concern to consumers, and the recent price cut should stimulate demand."

For its part, Fantasy video game prediction market simExchange said that they were equally amazed with the developments. Given the new data, they were compelled to comment that they now expect the Xbox 360 to continue outselling the PS3 well into the holiday season.

While the two hardcore consoles duke it out, the clear winner is the Nintendo, selling 425,000 units in North America alone. Analysts were again surprised that Nintendo was able to ship that amount of hardware, but they have a hypothesis on how the Kyoto-based firm was able to pull it off.

The analysts say that the probable reason is a diversion of supplies from Japan into the US. Hardware production wasn't stepped up sharply, leading the industry's think tanks to assume that a balancing of shipments was made to appease the world's biggest market.