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

Sony loses 68% of it's market share and Microsoft nearly triples it's share... How is this great for Sony again??

Let me just point out one rediculous thing...

Why is the Wii the "second" console, as if somehow inferior?

If you get two consoles, then the Wii is 1 of 2.

How about the PS3 is the second console, with Wii the first, if these are the two you get. Since the Wii will be out first, then the person doing the PSWii thing will get the Wii first and the PS3 next. PS3 is the second console in this case.

With the 360, then, using the same logic (of course, assuming people get these near launch) you have the 360 being the first and the Wii being the second.

Yes, maybe just semantics, but I wanted to point this out.

Wii ftw.

MS is having a hard time selling xboxen360n because it costs a lot. 400 bucks. The people who were going to get it at this price by and large have done so. They will have a hard time getting to 10 million SOLD.

As for the PS3, same problem. You raise the price, you cut down on your potential market.

I see both of these getting descent initial numbers but then tailing off quite a bit. Maybe PS3 will sell out like 360 did due to limited supply. Makes it look like it's selling like gangbusters, but in reality, it's just the surge of those who will buy it at this price.

Ultimately, the Wii's price and unique features as well as the game support it is getting will siphon off sales from both MS and Sony.

My prediction for the next gen sales (worldwide): Wii 120 million, PS3 40 million, 360 22 million. Not having Japan like your box really sux for you MS.

boots said: "What Boots was saying, Analysts actually make a real researches and calculation to conclude their findings."

And what several of us who actually work with analysts, traders, brokers and others are telling you is that many of them are working off of their own opinions or NO DATA. Goodman has provided plenty of soundbites and quotes, but never provides any real data or the hint of how he comes to his conclusions other than his gut.

I've already shown you about 10 predictions this particular analyst made in the last five years that were WRONG. Why would you assume he got it right this time?

Thank you jojo29 & Brad Lee for your feedback on my little analysis. I appreciate it very much.

Let me address what you discussed in your replies.

@First to jojo29 on Msg74:
[[Also the reasons you stated how Microsoft plans to win " by outlasting Sony because they have the money(Bill Gates) to do it" is the very reason i despise the Xbox brand. They have forced their way into our game industry and convinced 'mainstream' gamers that they are ok, that they 'care'. NO MS does not care about you MS fanboy. If they did care they wouldnt have abandoned their xbox1 boat so quickly. Thats just wrong of them.]]

You know I didn't express it outright in my analysis but I agree with what you concluded from that.

I NEVER trusted Microsoft & I know one day if they get entrenched they will try to take over gaming from the old-school companies like Nintendo who are still true out & out gamemakers first, foremost, & solely.
I STILL feel sad that Sega's not a hardware maker anymore. We lost a great company when Sega dropped out of hardware 5 years ago in the days of the Dreamcast.
I don't even trust Sony in this regard.

I don't mind them (Microsoft OR Sony) being in the business but I NEVER want them to run gaming. People don't think so but Nintendo has left the leadership position in the industry. All that has happened is that they've lost some of their dominance with new competitors entering the field. Truth is (hard as it is to believe for some) Nintendo is STILL the man to beat in the game industry. They are still the leaders. The Wii controller showed who led & who followed.
(Gamecube's Wavebird allowed XBox 360's wireless controller)

There's a reason why Nintendo can buck a trend or not follow a crowd (cartridge/online). Because overall everyone is really more or less following THEM. Why do you think thse other companies spend so much time "loss-leading"? A loss-leader is REALLY just a loser. You're supposed to make money in a business. Loss-leading is a strategy to hang on so your brand can potentially one day become profitable. It takes deep pockets to pull this off. This is why Sony & Microsoft employ this strategy. ESPECIALLY Microsoft.

Although Sony is the console marketshare champ their profits don't reflect this dominance. They've eked out a decent profit but not NEARLY what it should be when you see how dominate their brand was to the other competitors.
Original XBox lost 4 BILLION!! Who can lose 4 Billion & still stay in business? Microsoft can.

Both of these companies are standing up to the airtight business model of Nintendo. The complimentary handheld/console branches & the ability to profit on everything even in reduced marketshare.
What you're seeing in the PS3 is the same old story from every company who challenged Nintendo. Trying to get a big flash-in-the-pan one up on the true industry leader. Sega got cocky after giving the N a run for its money with the Genesis & put up a pricier Saturn which was after very recent flashpans of Sega CD's & 32X's. It cost them.

Sony now cocky after holding Nintendo at bay console wise with 3rd party backing with the PS & PS2 is now doing the same with the PS3. Pricey & sort of desperate. They did the same with the PSP & although the system is not a failure like many say it is it did not kill Nintendo's FIRST branch (They started with Game & Watch remember?) like they thought they would & DS is slaughtering them worldwide in comparison.

I trust Microsoft EVEN LESS than Sony because like Sony they will eventually make gaming economically class-based, pricey, & innovationally lacking. I see their worth as healthy competition (which is necessary) but I NEVER want to see EITHER of these companies at the top.

And for those who think Nintendo is merely a cold-blooded company only after dollars, I disagree. All businesses are here to make money, sure, but there is something to be said about pride in your product & obligation to your consumer base.
Nintendo came off of the runaway industry-saving success of the NES & when the SNES came out they priced it at what? The same $200 as before. They didn't cut corners on the product quality & they continued to make their products worth the value. No one needs to go into the historical sturdiness & reliability of Nintendo gear, do we?

If all corporations are evil monsters then in gaming I would rather have the Nintendo monster on top than any other.

As for your comment about the graphics. I think the Wii will do just fine & all this graphics worry is much ado about nothing. Nintendo has ALWAYS delivered on graphics & this time will be no different.

@Now for Brad Lee from Msg75:
[[I agree with you on most of the things you said. I believe Wii will take off like crazy in Japan, and when the Wiimote proves itself, it will set a fire across the world. However, I don't believe 360 is the console with the most to lose. I think PS3 is by far. The PS2 is number one, so all the PS3 can do is either match that or take a fall.]]

Nintendo understands Japan being more in tune with Japanese tastes than even Westernized Sony. The Wii is absolutely cut out for stealing the show in Japan much like the DS. One thing I've always liked about Japanese gaming culture is the need to make something new & unique. It is why Japanese gaming took over the world in the 1980's in the arcades. Japanese are an artistic stylish people & the Wii is perfect for these sensibilities. The design & concept couldn't BE more in tune.
I'm sure the Wii was conceived with the Japanese gamer in mind first. There's no doubt it will be gangbusters there (and then everywhere else in the world). I'm just waiting on the confirmation.

I like how you said WHEN. "WHEN the Wiimote proves itself". You, like I, understand the full ramifications of that device. Nintendo has always directed the path of controller interface since the Famicom & this time it will be no different.

You don't think the 360 is the one with most to lose but the PS3 is. I understand what you mean in a certain context. Going from marketchamp to also-ran IS a lot to lose. King of the Hill syndrome. I made that observation in an old post from before XBox 360's launch called "Future of Next-Generation of Gaming" from Nov 5, 2005. (didn't factor in Sony's self-sabotage but I think my predictions were on track)
http://tinyurl.com/nqdcp

I was looking at it from a "can we stay in the biz" perspective. XBox 360 MUST make it or Microsoft can hang it up in the gamebiz. Bill & the Microsoft stockholders can't (won't) lose money (billions) forever. The XBox was designed to fail only to get its foot in the door brandwise. They didn't want to fail victim to other upstart systems that couldn't last past their generation. It TAKES big money to do something like this as an outsider. But the XBox 360 was designed to continue the name-building momentum of the original XBox AND to start making some money.
This is why you started seeing some buzz over XBox against PS2 toward 2004/2005. It was the beginning of the next step: to siphon away Sony's power.
And you see/saw it with the siphoning of "EXCLUSIVES" from Playstation. The two systems really ain't that different in what they offer. XBox's mission is to make themselves distinct & continue vampiring Sony until they suck them dry. The whole XBox Live thing was the distinguishing factor. They continue to buy "1st party" companies to make games for them (isn't that really 2nd party?).

XBox 360 seems calm now but wait until that PS3 launch. That's when you're gonna see the fangs. That's because Sony DOES have momentum from PS2 which may not win the day but will keep them alive for a possible PS4 if PS3 fails. It is why N64 continued on to Gamecube & Gamecube on to Wii. Being entrenched has its advantages. XBox is trying to entrench and to do that they will seek to uproot Playstation & trench in to their spot. If they are not able to do this then an XBox 720 12th Dimension may not come about. If Sony keeps XBox 360 at bay with the PS3 Microsoft will STILL be the outsider looking in to an industry they can't penetrate. And they will leave the gaming biz as they stand now.

That is why I think they have most to lose. But also much to gain.

Hope nobody fell asleep reading this.
Later everybody!
John Lucas

typo from earlier post: People don't think so but Nintendo has ^NEVER^left the leadership position in the industry.

Personally I have doubts that you can predict these kind of market developments for more than 6 to 12 months. Who would have guessed NDS destroying PSP on a 5 to 1 basis?

I'd like to see on what grounds they make these assumptions...

"PS3 has the most power, and 3 years from now when wii games are pushed graphically to the max, and 360 is, the PS3 will still be pushing on. At the end of its life we will see some insane games."

I would rather not lay down big money today on processing power which I will not be able to fully appreciate until the year 2010. I'd rather hold off until 2010 to buy it, for it will be much cheaper then.

Perhaps Sony's sales strategy takes "long tail" late adopters like me into consideration. If so, it's quite a gamble for them to be banking on sales which will not be taking place for another 3 or 4 years. Who knows what new hotness Microsoft and/or Nintendo might have developed by then.

@105

PSP and DS have roughly shipped the same number of units to date.

Scooby Doos, Everybody entitled with their own opinions. It doesn't mean everybody is an expert. For some reason, It seems to me that in here, everybody claims to be one. Well most of us just are comparing some simple and easy to comprehend history cases, for example if this and this happened, therefore that and that will happen, so the analyst dont know what they talking about. Don't worry, I did that myself too.

@WizardDru, I'm not saying they are right this time. I actually disagree with them. They have their numbers and we have ours. But strangely even proven wrong, they have more credibility than us. Why??? Because they are paid to do so. Their proof cannot be just a few short paragraphs comment in Joystiq. Like I said before, they have their numbers, I have my crystal ball and It just that my crystal ball is not enough to discredit or disprove those proffesional.

Nintendo has SOLD 22.03 million as of June
Sony has SHIPPED 20.02 million as of July

PlayStation Portable: 20.02 million shipped as of July 24, 2006 (Japan: 5.20, USA: 8.17, Europe: 6.65)

Nintendo DS: 22.03 million sold as of June 30, 2006 (Japan: 10, The Americas: 5.9, Other: 6.13)

@ John Lucas

Jesus, great post! Even if it is a *bit* long.

I guess I have more confidence in the 360 than you do, and less confidence in the PS2 brand loyalty than you do.

I think MS has a great strategy this time around. Sony has a penchant for defective products early on, and for supply shortages (*see PS2). When PS3s start breaking and Sony gives them the usual response (mostly, "go f- urself"), then those customers will likely flock to the 360, because if I bought a $600 console and it broke, I certainly as hell wouldn't buy a new one. Also, many people looking for a PS3 who can't find one might buy a 360 instead. And finally, those PS2 owners who think $600 is outrageous will look to 360 or Wii for their gaming fix.

Of course that just assumes that Sony will not be able to produce enough PS3s to satisfy their fans, and that the PS3s that are produced will be rather faulty. I base my predictions entirely on Sony's track record, mostly with PS2, and the fact that BluRay and Cell are new and unproven technologies, which will likely be more prone to fault than the 360 was. Again, just my prediction.

And I think the Wii will gain some crazy ground for Nintendo because I think it will be /the/ console to have for casual gamers AND that the Wii will attract new gamers. Given how the DS has been attracting new gamers, I think the trend will continue even more with the Wii. But again, only speculation on my part.

I wish I could go into more detail, but I don't have the time right now!

Doesn't it seem a tiny bit ridiculous to base your predictions for this market based on numbers for the PS2? The PS2 was released under completely different circumstances, at a much more affordable price tag. It's like forecasting the Wii's sales based off of how the NES did, it simply makes no sense.

About the lines to see the Wii comment.

It is very easy to create queues for a product. When Sony showcased the PS3 in China last month or was it the month before? There were huge lines there just to see video footage, there was no playable games, and to top it off, the Chinese don't even know if the PS3 wil be released there yet. At E3 you create a more open space with entry points every where, then you will expect less queues. Take a football stadium for instance, if there is only one entry to get into the ground then you will be in the queue all day. If you have dozens of entry points like they do, it takes less time to get in. For what I saw there was one entry point to get into the Wii booth. I bet there was just as many in the DS booths but there was no queues, because the DS boths was open space. There was a huge interest to try out the Wii-mote from all fanboys but there were mixed reactions when people came out. The negative ones probably from Sony and Microsoft fans. Hardcore fans will stick to their favorite company its down to what casuals want. If I remember the Nintendo lot hated casual gamers because they were on the PS2 and playing crappy EA games and dance, singing and other interactive games. Now the Wii is more interactive you want these casual gamers to jump aboard so the Wii is popular, bloody hypocrites.

Analyst haven't a clue anyway but when analysts predict the future and its Nintendo in front, analysts are great. When its not Nintendo up front, analysts are full of shit.

-Z- said: "
@WizardDru, I'm not saying they are right this time. I actually disagree with them. They have their numbers and we have ours. But strangely even proven wrong, they have more credibility than us. Why??? Because they are paid to do so. Their proof cannot be just a few short paragraphs comment in Joystiq. Like I said before, they have their numbers, I have my crystal ball and It just that my crystal ball is not enough to discredit or disprove those proffesional."

Lose that extra 'd', my son. :)

And what I'm telling you is that you're making the classic mistake that just because he's dressed in a suit and works for a consulting group, you assume he's done the homework. The Yankee Group is a well-known consulting agency, and I'm sure some of their analsyes are correct, but in this particular market, they are fairly hit-or-miss and regarded as such by brokers, fund managers and the like.

The fact of the matter is, he could care less what we think...we're not his target audience. He's selling his advice to the financial industry. The Yankee Group's primary form of research is SURVEYS. They do studies to create bite-size analysis chunks for decision makers to use. That's all they're doing here: advising the uninformed with data about how they THINK the market will go.

Note that they always set their predictions several years out...it tends to reduce the effect of their success or failure, since few people seem to look back at their track record. All of the stuff I've listed above came from some quick googling.

Stuff like their 2001 report on Webcasting, and how it was on the verge of becoming profitable and the Next Big Thing. They didn't see podcasting coming or the rise of something like YouTube or Google Video. And they're not limited to just the video game/computer market, I'm just listing their failures that most geeks would spot. Their failed analyses of the energy market (such as predicitions that we would all use alternate power suppliers or completely missing the whole Enron thing) are just as hit-or-miss.

Oh, and let's not forget the Yankee Groups most SPECTACULAR FAILURE, circa 1982: they concluded that IBM WAS INVULNERABLE, and that fledgling companies Compaq and Microsoft posed no threat to their market. Many of you may be too young to remember the 'Nobody ever got fired for buying IBM' phase of IT history, or when IBM WAS computing.

So again, I'm not questioning his prognostication...just that he and his firm have such a spectacularly BAD record of predictions that I don't put much faith in them. Nor, in fact, do the traders at my firm or the brokers, custodians or vendors with which they deal.

I'm confused, how can they "lead by 44%" if MS has a 40% share and niny with a 16% share? Isn't that 140%? (yes i know i'm a smart ass for correcting a typo)

The industry needs more analysist because this is just stupid to report on. This company wants its name out there so someone will by the research in the future. How better to do it than to make stupid statments for the industry to talk about.

Traditionally, outside estimates of hardware sales like this fail miserably to predict the gaming market (Google some PSP/DS sales predictions for more data on that). Simply put, these figures will always assume that the previous industry leader will continue to lead, but with a lower total market share, because that's what ususally happens in any contained, competitive market.

However, the gaming market is a bit more unique than, say, the automobile market because while the produts all compete with each other, they are largely incompatable with each other as well. I mean, using the auto market as an example, whether you buy a Ford or a Honda or an Audi, all three perform the same basic function. They work on the same roads, they run on the same fuel, they require the same basic maintenance. So while they compete with each other, and consumers get different options (for example, the Audi will probably have more comfort features, the Honda will last a really long time and the Ford. . . uh. . . comes in blue?)

Gaming hardware isn't like that. Sure, they have the same, basic functionality and share some titles. But there are an entire slew of issues like proprietary games, and now the varying implimentation of motion-sensor technology that could completely overshadow the "normal" indicators.

There is also a much longer product life for each revision of hardware as compared to the next. I mean, a car from 2001 isn't really THAT different from a car from 2006 (assuming they are both in new condition).

And even more common markets, such as other electronics, feature much more regular product rollouts. Televisions, cameras, mp3 players, even computers have much more gradual shifts from model to model. When it comes down to it, game systems, they aren't really true "sequels" or upgrades to each other. I mean, sure, the PS2 plays PS1 games. But the primary qualification isn't that the PS2 is a direct brainchild of PS1 development. It's more that the PS1 proved itself, and the next hardware revision is going to be a matter of brand loyalty (which is how Nintendo slipped from first to last place in one, ill fated 64-bit blunder).

Predictions like this are always haphazard and subject to revision. But the lack of understanding of the actual market, and the consistantly incorrect decision to treat the gaming market like any other industry, will always leave these sorts of predictions with an embarrassing level of laughable accuracy.

P.S. - Wikipedia Entry for Yankee Group:
http://en.wikipedia.org/wiki/Yankee_Group

"Major clients of Yankee Group such as Global Crossing, Enron Broadband. . . "

Global Crossing and Enron. That pretty much sums it up, eh?

right... PS3 just happens to be the lowest rated thing on every poll i see. Wii happens to be in the top spot. Want to know why? Wii is going to be cheap while PS3 is going to be so expensive only the rich people will be able to buy it. Also, HELLO PEOPLE! Wii is the future... nobody else has what the Wii has.

Marty, the PS2 when launched was no less affordable than a PS3 basic, do the maths (include inflation since 2000).

When all is said and done, mommy and daddy are the ones fronting the cash for games. Sony might have a comparatively large populace of gamers in their twenties, but overall, the vast majority of gamers are age 8 to 18, jobless, and rely on others to pay for their gaming.

There is, undoubtably, a threshold which completely snaps a majority of people into not buying a game console. For every set amount of dollars beyond this price, you'll tend to loose a gross amount more customers. At this point, Sony is trying really hard to test that line of no return.

To be perfectly blunt, the parents could give a shit which side of the console war little Jimmy takes or is forced to take. They have two factors that influence their decision entirely: what Jimmy wants and price.

Do the parents of little Jimmy care if the PS3 flouts itself as being as powerful as a high end PC? I'm pretty sure they don't. Afterall, most parents don't even care about a high-end PC at all. All they see in the PS3 is a game console with no computer functionality whatsoever. They are just looking for something to keep little Jimmy occupied and happy.

I'm going to be blunt. I loved the hell out of my PS1, adore GTA, and don't own an XBox, a 360, or any portable consoles. I still think Sony stands nary a cold chance in hell on this because they have forgotten their primary audience... the parents of children. Not gamers, people who pay for gamers.

Hmmm... this article more or less says nothing; this type of forcasting doesn't carry much wieght.. it would be interesting to see who contracted Yankee Group for this purpose (money well spent.. pfft). The truth is only time will tell who will win/lead the "next-gen console" war. Personally, I think Sony is in alot of trouble in regards to price point, technology and a few other trivial aspects of their new console. Case in point, even if people buy into the fact that it's a "good deal" for a blu-ray player at the nearly 600$ USD... Sony's track record for price cuts are at least 1 year, in case of PS2 nearly 2 years, for price reduction on their systems; assuming blu-ray takes off as the HD home video format of choice... dedicated players will drop significantly as new ones come out if/when the technology starts to become widely accepted. The 360 will be due for a price reduction soon... and Wii is at a price point that will interest a broader range of gamers; for these reason I think Sony may be in some trouble. I for one won't be shelling out my hard earned cash come Nov. 17th; Given Sony's track record for intial system problems... I'll wait for a new system revision and price drop... even then, I can't say for certain I would buy one.