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Games Expected To Top $47 Billion in 2009

28 Sep, 2007 By: John Gaudiosi

The Wii and the PlayStation 3 will come out ahead of the Xbox 360, according to a new report from video game market research firm DFC Intelligence.

The report, “Worldwide Market Forecasts for the Video Game and Interactive Entertainment Industry,” looked at three different scenarios for the future of next-generation consoles and raised the forecast for the Wii and the PS3 and lowered the forecast for the Xbox 360.

The Xbox 360 will need to build a strong base outside North America to avoid being in a fairly distant third place, according to David Cole, president of DFC Intelligence.

DFC forecasts that the Wii will be the strongest system through at least 2008. However, the PS3 could start coming on strong in 2009.

“We could have a situation where the Wii sells more hardware units, but by 2012 the PS3 is generating more software revenue,” Cole said. “The Xbox 360 system has been stuck in a no-man's land. The Wii has mass-market buzz and excitement, and the PS3, in theory, offers more power. Many consumers are sitting on the fence and/or buying a Wii system to wait and see how the Xbox 360 and PS3 play out. Microsoft needs to get those consumers to make the jump now and buy an Xbox 360, before the PS3 becomes more competitive.”

Cole said it's imperative for the Xbox 360 to do well this holiday and next holiday if the system wants to remain competitive with the Wii and eventually the PS3. In addition to the Halo 3 launch, Microsoft also has the clear advantage with Xbox 360's software library, and with a lower price than PS3. But starting in the second half of 2008, the PS3 will catch up fast, so Cole said the pressure is on Microsoft to build its lead now.

When it comes to the battle between Sony and Microsoft, which seems to be a separate, high-end battle for the living room than the mass-market Wii; Cole doesn't see HD DVD or Blu-ray Disc playing a role in the ultimate victor.

“We don't think Blu-ray will have much of a say on the potential success of the PS3,” Cole said. “Once again with this generation, we think consumers will still evaluate game systems based on how well they do their core function of playing games.”

The anticipated release of Sony's online entertainment offerings for PS3 and PSP, which will include music, TV shows and movies, may have an impact on the ultimate success of Sony's next-generation system.

“Historically, Sony's game systems have been successful because they offer a wide variety of content for all tastes and age ranges,” Cole said. “Music and video offerings are a small part of the overall mix, but combined with big high-end games, low cost, digitally distributed games, a 3-D virtual world, etc., these factors all can help make the PS3 start to look like a more compelling offering.”

There looks to be no end in sight for Wii, especially with Nintendo increasing the amount of hardware at retail this holiday. More consumers are buying multiple game systems, so that should be a great opportunity for Nintendo, even among those who also will want an Xbox 360 and/or PS3.

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