Another analyst, another prediction... PS3 on top in 2011
by Nick Doerr 
{ Aug 17th 2006 at 1:30PM }
Aw, man! Another analyst's prediction! Boston research firm Yankee Group has predicted that the PS3 will lead the pack in 2011, followed fairly closely by Microsoft and then the Wii taking up the far, far rear. Numerically, PS3 is expected to sell 30 million units, the 360 will sell 27 million, and the Wii shall sell 11 million units. These numbers are lower than usual predicted total sales because these next-gen consoles are a bit pricier (except the Wii, of course).The analysts did confirm that the 360 has a pretty fancy hold on the market right now and are in a good position to cut the price of their console by Spring of 2007. They also say Microsoft will probably continue this pricing pressure against Sony throughout the 360's and PS3's life cycle. What a bully, but, business is business. Speaking of pressures, the Yankee Group also noted that games will become a more popular distribution channel for advertisements and stuff. Many billboards in the less fictional games have been "sold" to companies for ads already -- will there be commercials during load screens? What could companies do to advertise to gamers other than having signs in games?
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Reader Comments (Page 1 of 1)
Adam @ Aug 17th 2006 2:36PM
Do these analysts even play video games? Uh, I am sure Nintendo will sell more than 11 million Wii units by 2011.
Moron.
boots @ Aug 18th 2006 7:55AM
Adam, you can't be sure. The analysis is based on expected values, not fanboys' dreams or hype. Besides, those numbers probably apply to United States only.
flancyboy @ Aug 18th 2006 4:12PM
couple of points as an analyst .
1. this next gen "war" is not about systems, it's about software. all new consoles are sold at a loss, while software is sold at a premium most consumers fail to comprehend. That $40-$50 DVD/CD game you purchased costs the publisher about ) $0.12 per unit. That 12 cents! If the console maker owns the format they make more money.
Now pay attention. Both DVD and CD are in fact formats developed by Sony (and others). If Sony can develop a format that is widely established, while being the sole proprietor of both the hardware and the software, then after the initial production cycle expenditure they make countless profits. Thus "forcing" you to buy Blu-Ray. Microsoft is doing the same thing and had done it forever. Microsoft partially owns HD-DVD but most importantly owns the VC-1 codec and wants licensing money from that.
Now how does this matter to the consumer. Both are trying to subtely force the consumer into a corner which will make them tons and tons of money.
A well known fact is that MS could not launch during the same window as Sony, they would have gotten beaten to a bloddy pulp. Sony has too much brand recognition and market share. MS had to launch early and before it's hd-dvd drive was complete, trust me they REALLY, REALLY wanted to force you to buy their next gen format. BUt blu-ray was sooo far off and cell so much harder to develop for that they decided to go early and piecemeal. Thus the "you choose model without real choice. It's no accident that the accessories that make the 360 a "complete" machine add up quickly to a price similiar to the PS3.
While I get into spirited discussions about the PS3 launch both here (at work) and online. A few to consider
-The PS3 will sell out it's initial launch window. That's roughly 1-2 million units.
-The 360 HD-DVD drive will not sell 1-2 million units unless it has a price point below $100. No one can price the parts (chip set and optics, etc) for less than $120.
Thus the PS3 will likely successful "shove" 1-2 million highdef blu-ray players into the market.
Speculation from here: That much of an advantage in the format war gives Sony a huge advantage in addition to profits from owning the media. It also forces studios towards blu-ray. This in no way takes blu-ray quality vs HD-DVD quality into effect, in fact it's almost unimportant.
Sony will have gained an huge lead in the domain that's important to them. Making Blu-ray an industry standard. Once the market moves in that direction. They will have an easier time making recordable BR media a personal computing high capacity media standard. This is what makes them money.
So despite Sony's poor PR (they truly need to hire a better firm), they are well positioned to win the HD-DVD vd BR war.
flancyboy @ Aug 18th 2006 4:14PM
2. The console war is important to sony as it helps the true money generating machine of Blu-ray, but "winning" is not necessary. Since most behemoth corporations now that licensing media (see above) and format (see above) gets the money, they just need a "storefront" to get consumers on board.
They have such a huge brand loyalty and name recognition (deserved or not) that even priced at up to $600 dollars they will not slip to less than 30 percent of the market. This 30 percent represents about 3-4 million gamers a year and more importantly 3-4 million "locked in" Blu-ray users, while the competition is still using primarily DVD.
3. The television market is adapting to hdtv faster than any previous market upgrades including
-color
-stereo
-cable/satellite
-DVR's
Growth forecasts for HDTV are off the charts. Despite the average marty (wal-mart, k-mart, target shopper...kinda the average joe middle america person) not having an hdtv now, we think up to 50% will have one by christmas 2009. The prices will shift that quickly. Look in wal-mart or target next time you are there and count the number of hdtv's compared to regular ones. That ratio is only going in one direction.
To sum up:
- Blu-ray is better positioned than HD-DVD for winning a war that is much, much, MUCH bigger than you imagined.
- PS3 vs xbox360 vs Wii is about lucrative content on media, and thus the PS3 getting market share of 30% or greater is a slamdunk win. 30% is almost assured.
- Your next television will likely be an HDTV and you will naturally adopt as much hd content as possible. whomever wins the format war by domination in early installed market share is what you will be watching on your hdtv.
flancyboy @ Aug 18th 2006 4:16PM
final 2 points
-everyday consumers will likely eventually adopt one of the two next gen formats within the next 3 years. analysis points (despite 360's early lead) to blu-ray, as the lack of an included hd-dvd drive gave too many "opt-out" options to the 5 million or so installed customers. The next wave of customers looking to go next gen will be pricing out essentially identical systems and the PS3 will have a significantly larger media lead at that time (i.e. more blu-ray players versus hd-dvd players).
-Sony's PR has been notoriously bad, but this is not a recent phenomenon. They have a very sound marketing strategy. For sony to fail they would have to push through 70% or less first wave sales, but pre-order polling in both Japan and the US indicate a complete sell out.
Sponge @ Aug 18th 2006 6:50PM
-PS3 vs xbox360 vs Wii is about lucrative content on media, and thus the PS3 getting market share of 30% or greater is a slamdunk win. 30% is almost assured.
You mean, if Sony only gets 30% market share, it will be practically impossible for Sony to make any money.
- Your next television will likely be an HDTV and you will naturally adopt as much hd content as possible.
I have an HDTV and have no HD content and won't until I buy a 360 next summer.
And on another note, even with all PS3 owners having a blu-ray player won't matter if none of them buy blu-ray movies.