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Analysts Predict Consoles Sales Peak Reached
Thanks to Yahoo News for reprinting the press release regarding financial analysts' predictions that the current videogame console cycle has peaked. According to a spokesman for U.S. Bancorp Piper Jaffray, "We believe spring 2003 marked the midpoint of the current video game cycle", suggesting 2003 "will be the peak year for unit sales of current generation hardware." This may mean leaner times before the next generation of console hardware debuts, predicted by Piper Jaffray for "autumn 2006", and meanwhile, the company is forecasting "...that 22.3 million hardware units will be sold in North America in 2003, a modest increase from 21.1 million units in 2002 and will subsequently decline in 2004 to sales of 20.3 million units as the installed base of video game hardware becomes saturated."
I suppose a 10% decline is quite steep, but considering the console itself isn't the money maker for the companies, aren't they still expecting huge profits? Consider...if each console owner purchases 1 game per year, with sales as they are you're talking about an increase of ~20 million games per year. This compounds each year of the consoles' "life" such that after 5 years worth of sales like this, you'd be expecting 100 million games sold per year, with a yearly increase in the number of sales. That seems like a decent profit margin.
--trb
It was announced today that IBM will be making processors for Nintendo's next generation console. So that means IBM will be involved in developing the processors for all 3 next-gen consoles. Sony obviously has its own thing with the Cell processor, but what about Nintendo and Microsoft. Is it possible that they have basically decided to team up (against Sony)? It is possible that they will both use a PowerPC-type processor on their next console, as well as an ATI graphics core. Could it be that a) they are going to develop one XBox/Nintendo console, or b) that they will make their hardware so similar that porting a game from one to the other would be child's play? Option a) seems very intriguing to me. There would be no question that I would get the XBox/Nintendo console over the PS3-- especially if I could play both Gamecube and XBox games on it.
Also, in an interview with Denis Dyack of Silicon Knights, he said "...it wouldn't surprise me if sometime in the future there is a collaboration [between console makers]. It doesn't mean that there's a less-competitive environment, but it would mean that everyone could worry about making good content instead of the technology. And I think that would be a huge positive shift for our industry." Denis Dyack is very close with Shigeru Miyamoto, and is likely to have some insight and input on Nintendo's plans for the next generation.
What does everybody else think?
There are so many good games out right now that by the time I can _get_ to the next great game I'm going to play, it's in the budget bin. There are also tons of BAD games, which compete for the low-price sales.
Maybe it's because we have THREE top-notch consoles now, instead of two? The console companies are splitting three ways right now, moreso now that Xbox sales have tapered off and GCN sales have jumped a lot recently. Compare to three years ago, when it was just Nintendo and Sony with Sega as a failing and distant third.
And finally, emulation andn classic games are really good now. I play a lot of classic games on PSX that I pick up in bargain bins, as well as emulated SNES/NES games. They're cheap, they're good, and I can play some of them on my GBA, others on my PS2. Contrast this to SNES/early PSX era, when emulation was still young and most people didn't have broadband.
I'd really like for the market to bear 3 console vendors, but I'm afraid someone will get driven out or be forced into a niche (hello, Nintendo!). I'd be happy to buy into that niche if it were Nintendo.
Every mention of sales so far this year says that year-to-date sales of consoles are lower than they were last year. GameCube sales are up, but that's not enough to counter a large drop in PS2 sales combined with a small drop in Xbox sales.
Check Nintendo's recent press releases. I think the PS2 year-to-date sales are down 17%, Xbox 5%, and the GameCube up a few percent or so.
Looks like 2002 might've been the peak, unless something unexpected happens next year to drive up sales.
If I recall correctly, I'm pretty sure that SNES having Street Fighter 2 as an exclusive (for a while) sold like 1 million SNES console sales.