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Microsoft, Sony lead game console future

02 Apr 2013

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2012 was a tough time for the game console market. Microsoft, Nintendo and Sony (excluding its PS2 shipments) shipped only less than 3 million game consoles—around 10 million less than the previous year. Nintendo is facing a bigger hurdle as it shipped only a little over 3 million Wii U units during the holiday season.

Despite the not so bright indications for the game console market, ABI Research is cautiously optimistic of the 2013 market. However, the market research firm sees Microsoft and Sony paving the way for the future prospects of game console, not Nintendo.

Senior analyst Michael Inouye commented: "Nintendo's Wii U's troubles are not indicative of the expected market reception for the remaining 8th generation of consoles. In fact, the Wii U will likely prove a closer fit with the current generation than the next. The software released to date also bears out this assessment with many cross-platform games that were previously available from Microsoft and Sony. While the Wii U Gamepad offers some novel gaming elements it has not yet resonated with core gamers."

2013 is expected to start a chain of positive growth years for the game console market, ending the previous annual declines. This optimism, however, is predicated on several factors. First, that the Wii U receives a price reduction in 2013. Second, that next gen consoles from Microsoft and Sony launch with adequate time and production to meet holiday demand, with pricing below $450 and ideally at $350. Finally, that the next generation consoles don't adopt significant consumer unfriendly practices that will cause consumers to rethink their purchases, such as steps to inhibit the used game market or requiring an always on DRM/Internet connection to prevent other forms of piracy.

TV & Video practice director Sam Rosen added: "Mobile gaming has certainly diminished the opportunities for console manufacturers in the casual gaming market and this has impacted Nintendo the hardest. The evolving business models and added competition have also created additional pricing pressures that encourage price cuts sooner than manufacturers would like. New entrants into the console market will add an additional layer of complexity, which should make things interesting, but we still anticipate the market will prove a difficult one for the upstarts."




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