Even though Microsoft Corp. is substantially ahead of Sony with the release of the new-generation console, the creator of the PlayStation will still dominate the market of game machines, according to market research firm In-Stat.

Sony will continue its domination of the video console market through 2010, though its lead will likely shrink due to stronger competition from Microsoft and Nintendo, reported the research firm. Through 2010, the Sony PlayStation 3 will account for just over 50% of the installed base of next-generation consoles, while the Microsoft Xbox 360 will have 28.6%, and the Nintendo Revolution will have 21.2%, the high-tech market research firm says.

“Microsoft will outship Nintendo in the next generation of consoles due to its head start in launching, its strength in the North American market, and its appeal to older gamers, a demographic that seems to widen with each new generation of consoles,” said Brian O’Rourke, In-Stat analyst.

A recent report by In-Stat also found that Due to higher prices, the peak year for shipments of next-generation consoles is expected to be about the same as the peak year for current-generation consoles. However, overall In-Stat does expect a greater number of next-generation console shipments than for current-generation consoles.

Last year Wedbush Morgan analyst predicted that in 2010, Sony is going to have 55%, Microsoft is going to have 35% and Nintendo 10%, with all three of those having +/- 5%.