Next-generation consoles may not meet sales projections: analysts

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

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  • Nintendo will be hardest hit

    Much of the Wii's success was based on sales to casual gamers. These are the gamers that are being stolen by Apple. Xbox and PS3's core customer base (me) has tried iOS gaming and sure, some of it is fun but it hasn't even come close to replacing more traditional gaming platforms.

    I can't speak about Sony (I don't own a PS3) but Microsoft has clearly seen the writing on the wall and is trying to make the Xbox a media portal as well as a gaming console. I've written previously that Xbox and Apple TV are on a collision course in the living room where Apple TV is going to get more gaming capabilities and Xbox is going to get more media capabilities. If MS can convince people that Xbox should be the device they hook up to their TV for gaming and media, their sales should be just fine. If people continue to view Xbox as a gamers only console then yes, sales will probably never go much beyond where they are today.
    • PS3 was the gaming console as a media hub concept...

      ... but it was just too soon before the market was really ready for the concept.
  • Cost of games is a big factor

    While the platform cost of iPad, iPhone and iPod Touch are expensive, there are a zillion options for low-cost and no-cost games. Compare this to the console paradigm where costs continue to rise and gamers now find themselves locked into games that cannot be traded, resold, or (in many cases) even reused.

    There are still hard-core console (and PC) gamers who demand the latest performance technology and are willing to pay for it, but they represent a far smaller market than the ones who purchased consoles in the past. And the fact that there is still a thriving market in Playstation 2 consoles and games tells us that the consumer is willing to make trade-offs in performance if the price is right.
    terry flores
  • They merely need to make the NEXT consoles a replacement for desktops.

    The only thing stopping the next consoles is the ability to use them as a replacement for desktops. Every console I have used is more than capable of replacing a desktop, but the manufacturers decided to disable those capabilities for general use, ever try install Linux on a PS3. Processors are now more than capable of lasting many years to come. The manufacturers would benefit greatly from designing a machine with an interchangeable GPU slot, an upgrade would merely cost the user a newer GPU. If manufacturers take this route, the next generations will be a huge success. Unfortunately, they seem to want to nickle and dime us to death. I'll use Mass Effect 3 as an example. ME3 was released and, almost simultaneously, the DLC was released for an additional cost. I personally became turned off by their current practices and built a gaming PC. The amount of money I saved on games alone paid for the PC. Almost every game on 360 has a PC port for lesser money, and the graphics difference plus mods make buying the 360 not worth the investment.
    • Xbox RT ?

      would it suffice if, say .. the next Xbox shared the same 'desktop' capabilities as WinRT for ARM devices? would be a great interface for metro .. and would fit with some of the rumours of a tablet control pad for the '720' .. (and would boost the dev target audience by another 60m or so)