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."

Comments

Leaner times?

[Ondo]

This may mean leaner times before the next generation of console hardware debuts

Not really. Even the companies that don't lose money on their console sales aren't making a whole lot. Game sales are what is important, and the larger installed base should help those.

Re:Leaner times?

[kisrael]

Yeah, and frankly, the decline doesn't sound like that big a deal...I mean, from like 21 million to 20 million? Aw, shucks.

Re:Leaner times?

[simoniker]

But then again, if the amount of console software out there are still rising at a certain rate, but the hardware no longer increases at that rate, it still may be a problem - although I agree, not a cosmically bad situation.

Actually, I think more a problem toward the end of a console's life cycle is the amount of good quality older games available at budget prices, and the quick pricing-down of new titles because there's such a glut on the market. But this is probably separate of install-base.

Re:Leaner times?

[WaKall]

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.

1991

[ElleyKitten]

Super Nintendo had some of the best games ever. Illusion of Gaia, Final Fantasy 3(6), Super Mario All-Stars + Super Mario World...Not to mention the Super Scope. Shooting your TV with a bazooka is just... ok, retarded. I'm done now.

Is there any particular reason to listen to this?

[Snowmit]

Who are these guys? Do they speak with any authority on this subject? I read the article and as far as I can tell they're a bunch of financial analysts. Do they have a history of predicting this kind of thing accurately? Is there any reason to listen to these predictions?

Re:Not a fan, but . . .

[kisrael]

Also, with so many people having computers these days, why have a console? Sounds like redundant spending to me.
Sigh. We've been through this many times. Consoles offer different thing than computer games: less online play for the most part, less download mods, and less customization in general, but bigger screens, a different and in some ways much more varied selection of quality games, good standard controls for many games (less so for FPS and RTS) and a pretty much iron clad guarantee that the game will work. The cost is comparable or possibly much less than the cost of keeping a PC up to date w/ video cards and what not.

And despite stuff like the N-Gage and random barely-better-than-homebrew systems coming out, roughly speaking, this generation is defined by consoles released on or before the end of 2001.
(PS2 2000, Xbox, GC 2001, GBA 2001, maybe DC 1999) Every other console has been a day late and a dollar short.

Afterglow

[BeProf]

In other news...

The major console companies all had a post-peak cigarette today. Nintendo was quoted as saying, "Hold me."

Unfortunatly, the lovefest came to a quick end when Sony and Microsoft got into a fight over who would have to sleep in the wet spot.

An odd report

[edwdig]

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.