PS3 to lead in market share with 44% by 2011 says analyst [update1]

by Blake Snow on Aug 16th 2006 12:55PM

From the "more good news for the PS3" feed comes a positive forecast by the Yankee Group regarding the pricey console. The analyst group believes Sony will lead in next-gen market share by 44% in 2011, with Xbox 360 taking a close 40% share, followed by Wii with a wee little bitty 16% share. That's a safe projection considering the PS2 sold a gazillion units this last generation.

Also of note, the group believes fewer total consoles will be sold this next go-around due to higher console prices than were sold during the PS2, Xbox, and GameCube era. I thought the industry was suppose to grow? Either way, the Yankee Group also predicted constant Microsoft price undercutting. Next-Gen writes: "Microsoft is 'well-positioned' to cut the price of the Xbox 360 in spring 2007, potentially undercutting the $500-$600 PS3 by a wider margin. This pricing pressure from Microsoft is likely to continue throughout the course of the PS3's lifecycle, according to Yankee."

[Update 1: fixed crappy English in headline]

Source

Tags: GameCube, PS2, PS3, Wii, Xbox, Xbox-360

Reader Comments (122)

Who are these analysts? Are they paid by Sony?

It would be nice to know what they base this on...

Yet again, analysts don't understand the video game sector at all. These are the same people that tell you to sell Take-Two stock months before GTA: Vice City comes out.

If they would only look at forums, they'd see how many rapidly crazy people are going to buy a Wii.

man i'd love to get paid for stating the obvious

So less people are going to buy consoles...because they are so expensive? But the wii will do badly because it is so cheap? What?

The PS2 sold a gazillion units due to latching on to DVD early (most people planned on getting it then, and it was a cheap player. Most people don't even know what bluray is, let alone want it.), having a bunch of exclusives (not so much anymore)and it sold the vast majority of its units when the PS2 hit around 200 dollars.

I have to agree with this analist, this sounds like a very reasonable and likely thing that is going to happen.

I know nintendo fans are going to flame this guy though.

5+ hour lines to play Wii, and 20 minute lines to play PS3 and they churn out THAT prediction? To say the PS3 will be succesful is one thing, but this is just downright stupid.

lol, they predict that the wii will sell less consoles than the PSP has with 3 less years out. These people are clearly high. The market is growing, I say they would all be right, if you increase each ones numbers be at least 30 million.

hmmm.....by 2011? Actually, that sounds feasable....

IF!!!!!

Bluray succeeds in becoming a true standard.

If that happens, by 2011 the price will drop DRAMATICALLY. The PS3 will have the most staying power of any console.

On the other hand, the Wii's controller scheme will be 5 years old and won't seem so "revolutionary" any more. And it's graphical power will be more than TEN years old.

Since HD TVs will also have exponentially more penetration, the Xbox 360 may age with grace as well. And if HD-DVD becomes the standard, you may see Xbox as #1 in Western markets.

However, if bluray fails....these numbers are a joke.

bluray fails = PS3 fails.

heyy though, at least not everyone is dead set against the ps3! this Yankee Group will make gigantic logical leaps just to give it some good press. Way to go ps3, you still have some people fighting in your corner.

Console sales are based on must have 'system-seller' titles (like Halo and Metal Gear) and the strategies that each console maker employs. These findings seem to have some insight into games that haven't even yet been conceived of. And as far as strategies go, only MS seems to be delivering what they promiss and at a reasonable price at that.

#3 socrates, you are so right! If I had not gotten the gamecube I still would be getting a wii! Why? Dragon quest! And sadly the wiimote! lol!

Next time a analyst tells you to sell something remember (they have clients that are selling AND buying). If it is free advice they are doing the opposite for the PAYING customer.

This of it like this if you want the price of something to go down. You just need to make the supply outstrip the demand! Advise the public to sell , you can ALWAYS make a stock look good or bad on ANY given day.

Fist off, I'd sure like to know what magical crystal ball these analysts have been looking into. These are some serious drastic numbers for being 5 years away.

Secondly, in 5 years time I'm sure the PS3 will be quite affordable. Either the PS3 will cost $250 or the money being earned then will equal $250. In either case the system will be way more affordable and justifying in 5 years.

I've never heard of the "Yankee Group" and to be honest, I'm not sure I trust them. This seems to be based largely on the previous success of the PS2 but the PS3 is quite clearly a very different product. The PS2 had DVD capability but it was very much a games console. Sony's trying to emphasise the multimedia and Blu-Ray features this time.

The share for the Wii seems extremely low, considering that it is often touted as a secondary console which should boost its sales. Also it seems a little odd that while the total market is supposed to be going down due to higher prices, the least expensive console will have the least market share and the most expensive will have the most.

I'm not trying to sound too negative about the PS3 (though I am very much a Nintendo fan) but these analysts seem to be unique in their predictions of a failing Wii and they don't seem to have any eveidence to back up their claims.

Why do you constantly bash Sony and the PS3. Haters!!

;)

@Marty,

I second that. I'd bet they just looked at market share this gen and made a guess at percentages. Regardless of who comes out on top, does ANYONE expect the order (1-Sony, 2-MS, 3-Nintendo) to stay the same? Nearly EVERYBODY is expecting a market shift... predictions should be about what's coming, not what's already taken place.

@3

I agree with you there to some extent. I here so many people wanting a Wii but the forums are a small voice. Just like those who complain about problems with overheating 360's at launch. There was only a 3% defect rate but everyone was saying it like it was the whole damn load of them. The smallest group has the loudest voice and just because a lot of hardcore gamers want a Wii doesn't mean mainstream audiences do. I know that the Wii is aimed to be a mainstream console but the price won't be everything. The gamecube launched at 200 bucks and look how well it did. Its up to Nintendo's marketing team this holdiay.

Personally I'm still doubting the Wii. People went crazy about it at E3 but remember, those are 15 minute play sessions. I don't like excersise and I don't know if I'll really like moving my arms around like a maniac while playing Twilight Princess. I'll probably get a DS before I get a Wii.

This is the same Michale Goodman who predicted that the 360s price and lead-time would be a significant hurdle for Sony this past May. THis is the same Michael Goodman who predicted that the name Wii would prevent widespread enthusiasm for the Nintendo console. This would be the same Michael Goodman who predicted that we'd all be using our cellphones for iPods two years ago. This is the same Michael Goodman who predicted that it would be years before broadband services were delivered to customers outside of major cities, three years ago. This is the same Michael Goodman who predicted that Satellite internet service would be all the rage, especially with it's ease of install compared to dsl, five years ago.

You'll pardon me if I don't take his predictions terribly seriously. He's a soundbite glory-hound. I've worked with analysts...many really have no idea what they're talking about, or have no more knowledge of the market than you or I.

Actually, if these numbers are true then it is bad news for Sony, and a huge win for Microsoft given that the percentages for last gen sales were 70% (probably higher) in favor of Sony.

40 to 44 is like 50/50. This will create stiffer competition. The consumer benefits most in these situations.

Remember, people...

This is a LONG term prediction.

I think most people believe Wii will have stellar sales at first. PS3 probably won't sell that way at first because of price and hardware production challenges.

But through the years, Wii has some challenges.

It's whole marketing scheme of the Wii is about being "fresh" and "new". How long can it keep that reputation with just a new controller scheme and ALREADY antiquated graphics technology? Sales could, then, very well taper off dramatically as the years go by.

PS3, on the other hand, is a bit ahead of its time and may grow into its userbase by 2011.

I'm not saying that will happen. There are just too many "ifs".

- if the devs can keep the Wiimote "fresh".

- if bluray takes off

- if dev costs and unit costs for the PS3 go down

- if cell truly has the power to last 5-8 years.

- who gets more 3rd party support over the years.

Short run, I believe Wii will dominate. Long run....I really do believe this will be an interesting race.

These figures are five years off, and given that, they could be feasible... by that time, it's reasonable to assume that the difference in price between the three system will have levelled out dramatically. By then, how competitive each machine will be will be due to things other than price, such as software library, functionality, installed userbase, marketing...

I have no doubt that in the beginning, Wii will utterly wipe the floor with PS3. It's practically a foregone conclusion, especially given that Sony will have maybe a fifth of the units Nintendo will make available at launch. After that period, though? Well... anyone's guess, really. But it'll be interesting to watch, I'll bet!

I could care less about market share. So long as good games come out for my system, i'm happy.

Man, I swear Joystiq is a bunch of Sonybots! Two positive articles in as many days!!! Blech!

Ok, now that the sarcasm is out of the way....

If you actually read the article, while it does claim sony will win out, it is really the most positive on xbox. According to the prediction, both Sony and Nin, will LOSE marketshare, and sell FEWER consoles next gen, whereas MS will GAIN marketshare and sell MORE consoles next gen. If anyone "bought" this study, it was MS.

That aside, I don't see these numbers as being very likely but wtf do I know?

Ok, here is my sage prediction for the results in 2011.

PS3 60 Million (+ or - 20 million)
360 45 Million (+ or - 20 million)
Wii 40 Million (+ or - 20 million)

"#3 socrates, you are so right! If I had not gotten the gamecube I still would be getting a wii! Why? Dragon quest! And sadly the wiimote! lol!"

Indysurfn -

What the bloody hell are you talking about?!?

Additionally, MS has already stated that the 360 will have a 5 year life span (putting it at an end in roughly 2011). Sony will have just started making a profit by the time the 'next big thing' comes along. Plus, if the PS3 is like a PC, there will be so many different versions that early adopters are going to feel stupid for dumping $600+ on 1st edition console.

I really don't understand why gaming new sites even bother posting these stories, since most anlysts know far less about the industry than the person making the post. Just shoot me an email next time, and I'll make up some crazy BS for you to put up.

"According to an industry analyst, the PS3 will sell more units than games, weigh 300 pounds, and will double as a handheld by transforming into a tiny robot!"

Good for the PS3...but is it realistic?

Bluray is already faltering, just like Sony as a whole, so let's not base the PS3's success on Bluray (thedvdwars.com).

I don't think the Wii will do that badly. However, I do agree that there is a possibility of the Xbox 360 and the PS3 being neck and neck with market share.

By 2011 this is feasible, assuming that Sony lowers their prices effectively and is still able to pump out triple A exclusives. A lot can happen in 5 years.

By the way, the title makes it sound like the PS3 is predicted to have a 44% LEAD in market share. This is misleading, because he article is actually about having a 44% of the total market share, which is only a 4% lead over the Xbox 360 according to the numbers.

Well... even if the analysts are right and Sony comes out of 2011 with a 44% market share, that's what, down from 85%+ domination that it saw before the last round of console wars (Xbox1 that is).

In other words, they're saying in 2011 Sony will be leading but fighting a losing war.

Way to go? o_O

Analysts look at sales figures and sales trends today to "predict" what MIGHT happen in the future. Since when did analysts have to be "fans" of a certain industries to do their job? I wouldn't discount every analyst on the planet just because they didn't pick my favourite company as the winner.

My predictions for 2011:

1. PS3 : 70 million sold

2. Wii : 55 million sold

3. 360 : 50 million sold

Within 10 million consoles sold, I think this will be correct. I truly think that once people realise what they are spending on live isnt worth it,(since both sides of the competition have free online) They will cut down drastically on 360 purchases. I only see the PS3 taking the lead, if Blu-ray does win the format war, but even if it doesnt, sony can always switch back to putting everything on DVD, since that is what the competetion is doing. BUt if you think down the line, since the competition doesnt have a next gen storage format, the same risks are on them, if a next gen format does catch on they will be left in the dust. Sony and the PlayStation have a strang brand name, and you cannot just say they eill lose this next round.

LordMinogue -

Units sold isn't entirely irrelevant to the question of having quality games. If you're buying a console early on, then you want it to be hot so developers always make games for your console. If the PS3 really does tank big time, then come 2009/2010 we won't be getting nearly as good of games.

Meanwhile, I constantly see the argument that the PS2 only sold so many units due to the DVD playback....but that was a relatively small reason for the sale rate. Even back then DVD players could be found for $150 or so - few were paying 300 just for the dvd player. Plus the fact that PS2 sales are STILL so brisk - shows that it was more the extensive game library. Which is why I'm sure the PS3 will do just fine, with or without crazy analyst figures.

So taking the last 5 years of this gen and comparing the next 5 years...

Gamecube sold ~21M units -> 11M for the Wii
XBox sold ~24M units -> 27M for the XBox360
PS2 sold 70+M units -> 30M for the PS3

I agree the PS3 will be a slow burner and come on strong in 2 years time, but the Wii will sell much more based on DS owners loyalty alone. The XBox360 will no doubt have an amazing xmas taking PS3 wannabe sales. I'd be surprised if by the end of next year we aren't totalling 30M units for the new gen already, with 4 years to go until the predicted 70M

The headline seems misleading. If Sony was leading BY 44%, then they'd need to be 44% over the next competitor; this prediction has them leading BY 4% over Microsoft, WITH 44% of the share.

The post is slightly misleading - the article it links specifies that it's estimating North American marketshare. The post doesn't specify, so I was kind of wondering how the 360 could be expected to get 40% worldwide when Japan has not embraced the 360 at all. I can believe those numbers if Blu-Ray takes off, though I think the Wii will do better than 16% - a lot of people, after all, will have a Wii as their second console.

These figures are a moot point. Chaos Theory makes it impossible to construct accurate representations of any market beyond the immediate future. There are too many subtle/unknown varaibles that have a drastic effect on the outcome. Just go outside, enjoy the summer, and worry about this stuff in 2010 if there is a 2010.

"bluray fails = PS3 fails."

Come on, Derbeste--that's like saying if the UMD fails, the PSP fails. Oh, wait...

The statement about WII i completely agree with, i dont hear anyone locally talking about anything but 360,ps3 then wii in that order. no one wants wii i know

Holy crappy English. It should say the PS3 with lead "in next-gen market share WITH 44%" not "BY 44%". "BY 44%" would mean that it had 44% more market share than the next leading console, not 44% of the market.

"I truly think that once people realise what they are spending on live isnt worth it,(since both sides of the competition have free online) They will cut down drastically on 360 purchases."

Its August. The PS3 is set to launch in November. Has anyone found out how their "Live" service is going to work? Do we know how their price structure is?Ethan...youre counting chickens before they are even thought of being conceived.

These are analyst who are looking at the next race from an outsider perspective. They saw numbers where the Playstation dominated and the PS2 dominated and made a safe prediction. There is also an impression felt that they made there prediction on Nintendo based off of the ignorance that seems to be perpuated by people outside the industry that Nintendo is doing terrible and needs to get out of the video game market all together.
The truth is we here ,fanboy or not, who read the blogs and post to forums probably know a whole lot more of whats currently going on and to be expected in the industry than this particular group of analyst.
Also unless there is seperate stock for Sony Computer Entertainment division that controls PS2 or Microsoft Home Entertainment Division that controls XBOX, the analyst still have nothing to lose by suggesting either of those. Those company has other revenue generating ventures to keep the afloat.

hmmm.....Joystiq:

It really does seem like you need a new headline if you want to accurately relay news and not skewe it for drama.

Try:

"PS3 will be North American market share leader with 44% in 2011 says analyst"

There. Now you're not sensationalizing.

"I truly think that once people realise what they are spending on live isnt worth it,(since both sides of the competition have free online)."

You don't really hear many people that actually have Xbox Live complaining about it...and if it's making MS a ton of money, there's no way Sony doesn't charge for their service.

If the Wii's online service is anything like the crap they're pushing on the DS, it damn well oughta be free...

If we are going to be making sales predictions:
North American figures by 2011-
360 - 35 million
Wii - 20 million
PS3 - 17 million

Worldwide figures by 2011-
Wii - 55 million
360 - 45 million
PS3 - 32 million

I don't even think I'm going to touch this one. It's gone to the f@nd0gs...

Halladay: "Analysts look at sales figures and sales trends today to "predict" what MIGHT happen in the future. Since when did analysts have to be "fans" of a certain industries to do their job? I wouldn't discount every analyst on the planet just because they didn't pick my favourite company as the winner."

In the financial industry, one of most important phrases you'll learn is: "Past Performance is Not a Guarantee of Future Results." We're not talking about a hedge fund here or a market segment with a long predictable trend. As I've pointed out above, Michael Goodman has guessed wrong more than a few times...becuase he doesn't have any better information than you or I do.

You want some more examples? How about Goodman's prediction that Streaming Media advertising would reach $3 BILLION by 2005? How about how utility computing would be the dominant paradigm in corporate America by 2005? How about how there would be 200 million cellphone users by the end of 2006 (hint: there were 210 by 2005).

They're educated guesses...but they're GUESSES, nonetheless.

I see less than a 1% chance of this happening. By that I mean microscopic, maybe even impossible.

Nintendo should sell 11 million units in year one, worldwide, with the current hype and excitement around the console.

Sony will struggle to get to 10 million in the same period, and will probably be closer to 6 million, and that gives them credit for early adopters.

Microsoft is already bosting 5 million units shipped, though I don't see them getting much past ten million in the next year. Maybe if they lower the price?

Sony just hasn't positioned themselves well. It's over before it's even begun, as far as I'm concerned, and I think there are many publishers who see this writing on the wall.

We don't need Blu-Ray. We can't use Blu-Ray (95% of us!) And we sure don't want to pay an extra $200 for it, when we can have more fun and selection with either Wii or Xbox 360 and both together! (At a similar price...)

Well, I can't bash analysts for stating their opinion (the brokerage firm I work for does Research), but I can say that the write of the article, Kris Graft, didn't leave us with more than a sound bite. I couldn't find the actual report on the Yankee Group's website. I think it's important to see what their basing this analysis on. What indicator's were used?

I have to question whether such a report would even exist though. While *WE*, (the gaming community) care because marketshare usually effects 3rd party support, Microsoft and Sony don't have all their eggs in one basket; they do lots of other things besides make game consoles and license/publish software. You'd be an idiot to be making investment decisions about Microsoft or Sony based solely on how you thought their gaming division would be.

I'm with WizardDru. This sounds more like Mr. Goodman wanted to get some free PR than a real research study. I'd take it with a grain of salt until we can see what they based their data on. And a five-year outlook on a market that's getting two new major consoles...how on EARTH could you possibly think you know how it's going to turn out?

vidGuy -

Your PS3 numbers are low across the board. FF XIII alone will sell 8 million.

And your 360 numbers are absurdly high, especially worldwide. I'd be shocked - SHOCKED - if 10 million 360s were sold outside of North America. Japan has bought, like, 7. So that's Nine million, nine hundred ninety nine thousand, nine hundred and ninety three that would have to be purchased in Europe, South America, and Australia.

I have a feeling the Wii's inovative control scheme is gonna backfire on them. Plus over the next 3 to 4 years well be seeing 3rd, 4th and 5th generation games on the PS3 and Xbox 360. The consumer is not that much of an idiot. Theyll go to a kiosk see a Wii game and see games that look like Gears of War, which the Wii is technically incapable of doing. This is what will hurt the Wii in the long run. These innovative controls wont mean a damn thing.

If were gonna get into XBOX LIVE, i have this to say:

LIVE is the best unified online service compared to...vaperware? How many of you have played PS3 online games? How do you know "free" isnt akin to a Silver membership on LIVE? I got live for Halo 2, and its been worth every penny. I made friends with some Brits, got powned by a clan of Spaniards, and played through 1000 matches over two years. People spend more money on WOW (1 game, mind you) then LIVE. And if you can find that one game you love to play anytime you want to, then its worth it. MS has a generation's lead on SONY.

Also, when it comes to "free" online services are setup and run on servers, require updates, and employees have to ban cheaters, modders, and sore loosers. Patches require hundreds of man-hours each, and the software provider wants to get a piece of the action too. The result is $$$. And Sony wont give those dollars away unless they can get them back, like a development cost.

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PS3 to lead in market share with 44% by 2011 says analyst [update1]

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