Parks Associates Blog

Friday, April 18, 2008

Nintendo. Sony. Microsoft. Ready: Fight!

The big three console manufacturers; Sony, Microsoft and Nintendo are set to release their latest quarterly results in the next few weeks. The last quarter will probably be pretty sunny for two for the three: Nintendo cannot keep the Wii on store shelves and Microsoft just dropped prices on the Xbox 360 in Europe and reported that sales have more than doubled. Sony will surely be content with third place; waiting in their cave and thinking of the day they finally get back into the lead. That won’t be anytime soon though.

With more than 20 million consoles shipped, Nintendo leads the pack for worldwide console sales. Nintendo’s innovative motion-based controls and refusal to compete with Sony and Microsoft on the graphics technology front has freed the company to deliver a console with more appeal across all consumer demographics. The upcoming US and European release of Wii Fit, a yoga and exercise focused game and wireless balance board peripheral, should only increase the mainstream and non-gamer appeal of the Wii console. Wii Fit was released in Japan on 12/1/2007 and has sold in excess of a 1.4 million copies to date. The $89.99 Wii Fit bundle would surely help move more Wii consoles; if only there were more on store shelves to purchase.

In the Sony and Microsoft camp, the release of Grand Theft Auto IV will help sell consoles and is already set to be the largest media release in history. It is the first time the franchise has been released on two formats simultaneously; and with pre-orders through the roof, both PlayStation 3 and Xbox 360 versions of the game will surely sell untold millions of copies. Currently, the Xbox 360 version is anticipated to sell more copies due to a larger installed base of the Microsoft console and a downloadable content deal with publisher, 2K Games. While the deal is exclusive to the Xbox for the time being, it is widely speculated that the downloadable content will eventually be available for the PlayStation 3. However, Microsoft’s marketing team is not going to let anyone forget that the content will arrive on their console first, and among gamers this is a significant fact.

In addition to the significant game releases in the next few weeks, there is another category that console owners are starting to weigh in their purchase decision: premium video downloads. Next-generation game consoles such as Microsoft’s Xbox 360™ and Sony’s just-launched PlayStation®3 are a new device category capable of acting as a media server or adapter. Microsoft’s Xbox 360 provides a glimpse at the potential role a networked game console can serve in the connected home. Since Xbox 360’s debut in November 2005, Microsoft had sold more than 17 million units globally as of January 2008. The console has incorporated Microsoft’s Media Extender technology, which can stream multimedia content from the home network (most likely a Microsoft Media Center PC) to a home stereo or a TV set. Most recently, Microsoft added hundreds of full-length TV shows for download to own and movies for download to rent from major TV networks and movie studios through the Xbox Live service.

Although Sony’s PlayStation 3 game console has lagged behind Microsoft’s Xbox 360, worldwide sales have now exceeded ten million units. Sony has also recently announced that – like Microsoft – it will begin offering premium content through its PLAYSTATION Network service, although it has not provided much in the way of specifics, saying only that they will be offering a video download and streaming service.

Examining sales of the three major consoles (the Xbox 360, the PlayStation 3, and the Nintendo Wii), last year saw 32.6 million units sold to consumers. Among that figure were 15.6 million Xbox 360 and PlayStation 3 consoles. For 2008, we are projecting Xbox 360 and PlayStation 3 sales to tally more than 14 million units.

Labels: , , , , , , , ,


Blogger James Kuai said...

This is insightful. Thanks, Peter!

10:20 AM  

Post a Comment

Links to this post:

Create a Link

<< Home