Next-generation consoles may not meet sales projections: analysts

Summary:Games consoles are battling against a whole host of other distractions for attention, such as social media and tablets.

The next-generation games consoles from Microsoft, Sony and Nintendo will fail to match the sales of the current hardware, according to Piper Jaffray analysts.

Analysts Michael J. Olson and Andrew D. Connor believe that there will be an average drop in software sales for the systems of 53 percent during the first 14 months after their release, based on "meetings with industry sources".

But it gets worse.

According to Gamesutra, the analysts predict that sales of Nintendo's Wii U will only be 35 percent of that they were for the Wii during its first 14 months on sale due in part to the "disappointing" hardware specification of the new system. Sony's PlayStation 4 is predicted to do a little better; with sales during the same period being 50 percent of that they were for the PlayStation 3.

Microsoft's Xbox 720 is the one the analysts think will do best. They predict that sales of this console during the same period following launch will be 55 percent of what they were for the Xbox 360.

The problem, according to Olson and Connor, is that games consoles are battling against a whole host of other distractions for attention, such as social media and tablets.

"Unfortunately, we do not expect a console refresh to fully offset the secular declines in console gaming," the analysts said. "We believe console gaming will continue to be a time-share donor to social networks, mobile games and tablets. We therefore favor companies with increasing exposure to social/mobile gaming, including Zynga and EA."

Sales of the Xbox 360 seem to have already hit a wall. While the console has managed to cling on to the title of best-selling console in the U.S. for fifteen months, sales are down by almost a half compared to a year ago.

Microsoft blamed a "soft gaming console market" for a 16 percent fall in revenue at its Entertainment and Devices Division.


Topics: Mobility, Enterprise Software, Hardware, Microsoft


Adrian Kingsley-Hughes is an internationally published technology author who has devoted over a decade to helping users get the most from technology -- whether that be by learning to program, building a PC from a pile of parts, or helping them get the most from their new MP3 player or digital camera.Adrian has authored/co-authored technic... Full Bio

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