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Study: Wii, PS3 and Xbox 360 to Finish in That Order

2 Jun, 2008 By: John Gaudiosi

When the dust finally settles on the war that Sony, Microsoft and Nintendo currently are waging with their respective PlayStation 3, Xbox 360 and Wii consoles, video game research firm DFC Intelligence forecasts that PS3 will come in second behind Wii, with Xbox 360 in third place.

David Cole, president of FDC Intelligence, said Sony will overtake Microsoft for second place next year and have a strong finish behind Nintendo by 2011, when new consoles are expected to start entering the market place.

Cole said the price of the PS3 has come down to a reasonable level and that the software lineup is finally starting to look fairly strong. Most importantly, he said, Sony was able to keep the PlayStation 2 installed base active.

“For its recently ended fiscal year, Sony Corp. reported that hardware unit sales of the PS2 were down by 7%,” Cole said. “From our perspective we would say they were only down by 7%. This is amazing for a system that launched in 2000. The PS2 managed to outsell both the PS3 and Xbox 360 in 2007.”

Led by the PS2, the 128-bit generation of video game systems has reached a record global installed base that is expected to exceed 180 million units this year, according to Cole. DFC Intelligence forecasts that sales for the current generation of systems will pass the 180 million mark in 2011, a year ahead of original projections. The record year gaming had in 2007, coupled with the strong performance month-over-month in 2008, resulted in the improved forecast. And as has been the case historically, the current recession is not impacting game sales.

“Ironically, a slowing economy can actually help the game industry,” Cole said. “Video games provide a high rate of entertainment return and high gas prices actually encourage people to stay home and play games. The latest DFC Intelligence forecasts predict that all three systems (360, Wii and PS3) will have a solid installed base.

“Nevertheless, it looks like the Nintendo Wii will be the overall installed base leader. The Wii has enormous momentum and appeals to the broadest audience.”

In fact, Cole believes, Nintendo will set a record for most consoles sold in a year with its Wii sales in 2008. Over the Memorial Day weekend, the new Wii Fit game sold out at every retailer and the console is still very hard to find globally.

Many of the biggest games of 2008, aside from Grand Theft Auto IV, have yet to launch, including the PS3 exclusive Metal Gear Solid 4 and the Xbox 360 exclusives Fable 2 and Gears of War 2.

“The sales performance of the PS3 has been less than stellar, but Sony has survived,” Cole said. “The Xbox 360 was unable to take advantage of Sony's struggles to build the type of large lead needed to maintain a long-term advantage. The PS3 survived the onslaught of AAA Xbox 360 titles that hit the market from late 2006 through 2007. Halo 3 had great sales, but it did very little to enhance the Xbox 360's overall position in the marketplace. “The Xbox 360 is the system of choice for fans of high-action first-person shooter (FPS) games. However, for the 80 percent-plus of game consumers that do not play FPS games, the Xbox 360 is not the system of choice.”

Cole said the biggest story over the next few years might be the declining overall importance of the console systems. Last year Sony's biggest selling game system was the portable PSP. Meanwhile, the Nintendo DS blew out all records for game system hardware unit sales (portable or console) in a single year. But from a pure revenue perspective, the biggest system for software sales in 2007 was the PC, if you include revenue generated from online services.

“2007 blew away sales records on all fronts,” Cole said. “Right now it looks like 2008 will be even better.”

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