Merrill Lynch predicts X360 as next-gen market victor
by Blake Snow 
{ Nov 15th 2006 at 3:55PM }
Investment bank Merrill Lynch predicts the Xbox 360 will secure the largest percentage of market share for next-gen consoles by 2011. The firm believes that Microsoft will take 40% of the global market with Sony and Nintendo following closely behind, and that 50% of the North American market will go to the 360 as compared to 27% and 23% by the PS3 and Wii respectively. In contrast, the bank pins Sony as the Japanese market leader with 59% followed by Nintendo's 39%.GameDaily reports: "Most people assume that Microsoft's Xbox 360 and Nintendo's Wii will eat away at Sony's market share, but a number of analysts still believe that in the long run Sony will come out on top. Not Merrill Lynch. The combination of Microsoft's head start and Sony's initial PS3 production issues should be just enough to give the 360 the edge."
Lynch dubs the forecasted North American lead the kicker for Microsoft as it's the world's largest video game market. So what does it all mean? Pick one, pick 'em all 'cause it's gonna be a tight three-way race. "We see the end of any common global dominant platform," said one Merrill Lynch analyst.
[Thanks, James]
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Reader Comments (Page 1 of 2)
rrenna @ Nov 15th 2006 3:58PM
Screw the article someone point me to how I get my 360 chromed like that!
JodyAnthony @ Nov 15th 2006 3:58PM
I'm shocked with myself for thinking this, but the all-silver 360 looks really awesome.
wish I could buy one that way.
Spore @ Nov 15th 2006 3:58PM
it's the Shiny 360! MS's answer to the PS3
John Lucas @ Nov 15th 2006 4:02PM
Dana Carvey's John McLaughlin says:
"WRONG!"
John Lucas
jc @ Nov 15th 2006 4:03PM
I saw that chrome kit on Lik-S... damn you Sony.
on-topic: Honestly, it doesn't matter who makes what percentage of our money. With the good games coming out, isn't it 'us gamers' who are going this round?
Flit @ Nov 15th 2006 4:03PM
I want them all, and I want all of them to succeed, they all have their place (like the last gen had). Xbox was your goto man for more mature, hardcore game fans, gamecube was great for their first party titles and simplicity, and ps2 took care of what the other two didn't.
The only reason I would want ps3 or x360 to win is so that i only need to buy one, since 360 is cheaper, i'm hoping 360, but i highly doubt ps3 will lose all of it's support anytime soon from the 3rd parties. It would have to be a disaster (and sony is trying their hardest to make it a disaster).
jc @ Nov 15th 2006 4:05PM
uuugh, long day... 'going to win this round'
Snaileb @ Nov 15th 2006 4:04PM
Someone please hook it up with a way to pimp-my-360. I want chrome.. now.
josh @ Nov 15th 2006 4:09PM
It would be really interesting if the 360 became the #1 console worldwide without having any significant Japanese marketshare... it would be the first console to do that, right?
I have yet to play the PS3, but if it really isn't that much better-looking at launch than the 360 (as many seem to say), momentum could certainly swing towards MS. Once there are demo stations of both right next to each other, if a consumer sees one for a lot less than the other, they might just go for the cheaper choice if they look like the same quality... hard to say.
Personally, I doun't plan to buy either until I get an HDTV, so not until next year.
qbix @ Nov 15th 2006 4:12PM
Most analysts are predicting the same thing: Sony's dominance will be no more. Whether they come out 1st or 3rd doesn't matter because they are going to lose a huge part of their market share to MS and Nintendo. The next three years will be interesting.
LunarDuality @ Nov 15th 2006 4:13PM
Why don't these analyst talk about what could be the biggest reason the 360 wins the global marketshare battle: Europe!
With Sony behind MS by a full 18 months or so and behind Nintendo by 6 months, that could be where this battle is actually decided.
Saneless @ Nov 15th 2006 4:24PM
This has been the most down to earth and likely accurate analysis of the next-gen market I've seen yet.
kudos @ Nov 15th 2006 4:16PM
These are the same folks who said the Playstation 3 will cost $800.
http://www.engadget.com/2006/02/18/playstation-3-costs-900-sez-merrill-lynch-mob/
32_Footsteps @ Nov 15th 2006 4:16PM
I'm expecting a special high-end 360 chrome package with Halo 3 when that comes out, going for around $600 (but it'll come with a year of Xbox Live Gold, component cables, and two controllers). I wouldn't buy it, but I know some who would.
For the report itself... I'm more than a little curious as to why they say the United States is the largest market. I thought Japan still managed better sales than the United States, and Europe isn't exactly short on gamers (depsite what Sony might believe). Does anyone have numbers on how many people own consoles in Japan versus the US and Europe?
32_Footsteps @ Nov 15th 2006 4:18PM
Kudos, actually read that report. That report doesn't say that the PS3 would retail for $800. That report says that the cost for Sony to actually build a Playstation 3 is $800 per unit.
Mr. Khan @ Nov 15th 2006 4:28PM
Personally i see a high chance of the 360 Dreamcasting, just falling off the map quickly (due mostly to Microsoft losing a lot of money on Hardware and LIVE)
Microsoft says: "The one who reaches 10 million first is the one who wins in the long run" This is not true, the Dreamcast sold 11 million, and obviously sold them long before the PS2 sold 10 million
But the big key is that, with a 1-year head start and such great games, the 360 cannot compete with the PS2, not only in terms of software sales, but also Hardware sales. This all mirrors SEGA's position during the year 2000 (where it could not compete with the PSX, and the PS2 destroyed it)
And even an ape could tell you, there is NO WAY the PS3 will outsell the Wii in Japan, even in the long run. The snowball effect will work in the Wii's favor there (More sales early one=more dev support=more sales)
The final key is that only once, in all Video Game History, has the First Console released in its Generation actually "won", and that was the NES
Genesis: got only 39% vs. SNES 54%
3D0: got only 3% marketshare
DC: got only 7%
Those who do not learn from history are doomed to repeat it; and all 3 companies seem to be ignoring that in certain ways
Kayzai @ Nov 15th 2006 4:22PM
Got NEWS!!!
GUESS HOW MANY PS3 will be launched in Taiwan!
500
not 500k but 500.
Hahahahahaha
This is just too embarrassing.
Kayzai @ Nov 15th 2006 4:37PM
CHECK THIS LINK!!!
http://www.digitimes.com/systems/a20061115A7035.html
I CAN NOT BELIEVE THIS!!!
Intentless @ Nov 15th 2006 4:26PM
not sony ftw
Doomstalk @ Nov 15th 2006 4:28PM
I love my 360 as much as the next, but when was the last time analysts called anything in the video game industry correctly?
Zach L @ Nov 15th 2006 4:33PM
I don't think that any company will capture more than 35% of the market. It's going to be a very heated race, and I think that saying that the 360 will have half of the American market share is absurd.
J @ Nov 15th 2006 4:33PM
Is he on crack? I can't Microsoft being the victor at all. I really don't think there's going to be a clear victor. Plus, if there were to be a victor - it'd be between Wii and PS3 because they can potentially have strong market holds in the US, the UK and Japan. Microsoft would have to rely solely on the UK and US markets.
Most of these analyst blow their reports out of their bum holes anyway! *lol*
soccergm17 @ Nov 15th 2006 4:36PM
Not sure of total game sales...but speaking population wise....
Japan: 127 million
USA: 300 million
Europe: (47 countries in 2003) 726 million
So if the 360 were to win in USA and Europe and Sony in Japan....you would see why the analysts would think 360 could win.
DoomPlague @ Nov 15th 2006 4:42PM
I've seen some analysts say Sony will continue to dominate and others say Microsoft but why should we care what these firms predict? You'll notice that these are firms that are used to covering industries where the products aren't all that different and really just look at things like trends and finances (yet they still often get things wrong). I don't see how traditional methods can predict the game industry when each subsequent generation of consoles is so different from the last.
soccergm17 @ Nov 15th 2006 4:42PM
Last article I read...was that due to a strong last quarter, Microsofts cash reserves have grown to $49 Billion dollars. They can afford to lose alot of money on hardward and Live for many years before it starts to hurt them. Sega could not do that. Microsoft can afford to wait.
soccergm17 @ Nov 15th 2006 4:52PM
#19....just to followup as to the other companies...
The $49 billion was an old number. Microsoft has somewhere around $30-35 billion in cash reserves.
Nintendo has around $6.8 billion in cash reserves
Sony has around $6 billion in cash reserves.
Orangecoke @ Nov 15th 2006 4:52PM
Thing is, the only thing keeping Microsoft from dominance is blind brand-loyalty by the Sony buyers. The 360 is in stores, it's cheaper, it has a library full of awesome games and a brand new killer app...the controller has RUMBLE (I can't imagine Gears of War without rumble), optional HD-DVD support, Xbox Live is amazingly integrated into the gaming experience. It's just nuts that anyone would pass that up for what Sony is offering right now at a very high price point.
jojo29 @ Nov 15th 2006 4:55PM
"). Xbox was your goto man for more mature, hardcore game fans"
This is what bothers me. hardcore?? what games did the xbox bring out that were 'hardcore'? does 'hardcore' entail racing games and fps??
I can tell which games on the gamecube are 'hardcore' for gamers:
Metroid Prime
Starfox
Mario Sunshine
Zelda Windwaker
Donkey Konga
Mario Kart
Heres the 'hardcore' games for PS2
Kingdom Hearts 1 and 2
Final Fantasy 10-12
Gran Turismo 3-4
Tekken Series
Xenosaga series
Valkryie Profile series
Virtua Fighter Series
Dragon Quest series
God of War
Ico
Shadow of Colosus
Xbox
Halo
Panzer Dragoon
PGR
Forza
hmmm thats it, Kotor is also out on pc and so is fable but what in the xbox library earns it the title "hardcore game system?" o wait your a brainwashed microsoft fanboy, you can me what you want, but i listed titles in all THREE platforms.
Also as far as 'gamers win' in the end. yes in the short term we win. If Microsoft starts to be number one in this industry i think i will probably stop gaming as i know what microsoft has in mind for my favorite past time. Oh yes i can see it now: Xbox 720 and their ONLY FOR XBOX slogan, then in 2 years XBOX 900, just look at their 'Games for Windows' slogan and the fact that you can ONLY play halo2 on a pc running Vista, thus FORCING you (hmm sounds very familiar) to upgrade to play that game and more will probably join)
It will be a VERY sad day in the industry when microsoft wins out in ANY console generation. That will be when 1) the market crash will happen, 2) gaming will no longer be fun, 3) MS will have ruined the gaming industry
Yes i HATE microsoft, BUT i do like the xbox console, i just dont like the company behind it.
But Sony is worse you say?? Well at LEAST they show support for their platforms WAY WAY after the console is 'deemed' obsolete yet its during that period where Sony shines the brightest, because if Sony had abandoned their platform at the same length Microsoft did, then we would have missed out on God of War, Shadow of Colossus, Final Fantasy 12, Final Fantasy Dirge of Cerebus and countless other gems.
But xbox was losing money, you say? yet your the same fanboy that says microsoft 'cares' for its gamers? how by ending a system too early in its life cycle? yeah
My support is for my WiiStation 3 and i ll just play my bro's 360, heck i might even buy one, i would buy it USED and every game USED just to be able to play the games that ARE good for the 360, but not giving MS a penny of my money. Gotta love the used bin sections:)
killr0y @ Nov 15th 2006 4:57PM
Sony is just going to implode on itself. The latest 3 games that are multiplatform (Available on PS3 & Xbox 360) which are: Call of Duty 3, Marvel Ultimate Alliance, & Tony Hawk Project 8, are all running more smoothly and have more robust online options on the Xbox 360 versions according to ALL major gaming review publications and websites. This is astounding when one considers that these games have had longer gestation periods on the PS3, and the marketing hype that the PS3 is supposedly the more powerful (not to mention way more expensive) of the two consoles.
To further Sony's woes, the online "scalping" of the PS3 in Japan seems to have hit a critical mass, where the systems are now being auctioned with games, at prices comparable and even LESS than the retail stores are charging. Could this be due to the underwhelming gaming experience it currently offers, especially with its price premium?
Pal @ Nov 15th 2006 4:59PM
Want a chrome Xbox 360?
Note that the picture that Joystiq used for this post is the actual product!
http://www.decalgirl.com/browse.cfm/4,4297.htm
Stop Bytching @ Nov 15th 2006 5:49PM
MS FTW simply because they seem to actually listen to what their customers want. In history how many consoles changed anything because their customers didnt like it Ill wait............NEVER!!!!!!360 will continue to progress because its progressive. People hated the old xbox controller which gave birth to the controller S. Can nintendo say that people hated the 64 and GC controller but you was stuck with it. And lets no mention the 360 software with every update you can tell that someone is listening, from the way it boots up to making menus easier to navigate. I personally think nintendo is nervous right now. Yea they have the HYPE right now but so does alot of things, but one thing nintendo needs to learn is that people are fickle when it comes to gaming which means as soon as people look at it through their own eyes and not someone else's telling them how great it is
fester @ Nov 15th 2006 5:23PM
requoted for emphasis (and agreement)
"Thing is, the only thing keeping Microsoft from dominance is blind brand-loyalty by the Sony buyers. The 360 is in stores, it's cheaper, it has a library full of awesome games and a brand new killer app...the controller has RUMBLE (I can't imagine Gears of War without rumble), optional HD-DVD support, Xbox Live is amazingly integrated into the gaming experience. It's just nuts that anyone would pass that up for what Sony is offering right now at a very high price point."
Saneless @ Nov 15th 2006 5:05PM
Japan isn't THAT big a deal. Japan is only 25% at best, of the market. I'm sure Europe is only going to grow compared to before since the companies are actually paying attention to it.
MS and Nintendo are going to run rampant in the US, leaving Sony to be 3rd. In Europe, same thing, especially with Sony ignoring it. In Japan, Nintendo is going to just dominate due to availability, price, and innovation, and MOST ESPECIALLY crazy japanese games. MS will be 3rd in the US, but that's what happens when you're a US company and the home town has comparable products.
glitched @ Nov 15th 2006 5:11PM
so its headstart and product availability that determins the winners huh? not the games? ok got it. I learned my lesson...
Joe SMith @ Nov 15th 2006 7:15PM
Man I wish I could make a 6 figure salary for making wild ass guesses about future hardware sales. In this case, I think they are probably right, but that would be more by luck than anything else if past performance is any guide.
Steven @ Nov 15th 2006 5:22PM
360 FTW!!
Gianni Gotti @ Nov 15th 2006 8:19PM
Haha, seen this happen 1,000 times. The Xcast will max out with the 2nd gen games and the PS3 will keep going & going & going as the programming gets more sophisticated and better able to exploit cell.
The lack of sophistication of some of these industry watchers is truly appauling...
BIGGEN @ Nov 15th 2006 5:34PM
jojo, i like how you actually believe what you say. that's cute. and annoying. but you even said yourself you like the xbox, but not the company behind it. so what? a company only makes a console a reality. the rest is up to game developers and the fans. Final Fantasy SUCKS! anything before or after FF7 SUCKS! GT3 and GT4 are the same game. look, all the games you mentioned with the exception of shadow, ico, god of war, and kingdom hearts are tired, played out, washed up franchises. the only reason any of the others sell is that people buy them in the hopes that ANYTHING has changed with them and are better than the ones before. it doesn't matter who is going to "win" the console "war" because this is a media hyped myth that is made up to get hits on their site or buy their publication. just buy your $600 ps3 so you can continue playing your ps2 games.
Matt @ Nov 15th 2006 5:47PM
"Sony has around $6 billion in cash reserves."
I'd like to know where you heard that from... Sony is broke-assed-broke - remember the stock debacle?
number40one @ Nov 15th 2006 5:43PM
John Lucas - Thanks alot... now everyone in my office who heard me laughing at your post knows I'm not working!!
"Three Sixty make terrible house pet!"
Justice @ Nov 15th 2006 5:58PM
I want my system pimped!
Pulse @ Nov 15th 2006 6:03PM
I'm buying PS3, not for brand loyalty, but because 1. I dont care wether the controller has rumble or not, I don't need a vibrator in my hands to feel happy, 2.
I have a nice selection of games for my PS2 I wish to continue playing, plus when there is no PS3 games I want, I can always go and pick up a pretty fun and decent game of PS2, half the price of 360 games and enjoy it on my PS3, yeah yeah, gfx, gfx, gfx, thats all I hear from this gen, but I happen to be one of the few remaining ppl who actually plays games for fun rather then because it has better gfx, not once have I ever jumped into a post and gone on about gfx of PS3 or 360, its because I couldn't care less, the 360 at the mo only has 2 games I would ever pick up, GOW and Halo 3 which isn't out yet, the rest of them are pretty much kinda boring, Blue Dragon looks kiddyish :P Theres too many FPS games, sports games I've played so far are dull, and some even got better marks on PS2, lol, DOA is just about girls and misses the whole fighting aspect I enjout about beat em ups, and driving games get boring after a while, I wasn't too happy with PGR either, I crashed at full bront speed into a wall and a tiny dent appeared on my car, thats cos the game is so realistic...
Yeah, I agree, FF games have been pretty dull recently, but 12 has just shown us otherwise, so I'd keep quiet about that, God of war isn't old, in fact its very new, we are simply waaiting for the 2nd version. Xbox games were always rather bland which is why the original flopped, the 360 is doing well, 1. because PS3 is overpriced, 2. Its taken a while to launch and 3. Its getting bad press, it would enevitably be dominating once again if these three things were not part of the package. You didn't really expect the launch games to be amazing did you? The 360's weren't the only thing there was to talk about was Project Dark Zero, and even thats not talked about anymore :S So in terms of PS3's game launch line-up being superb, think back to 360's.
BTW, buying a PS3 does not make us stupid or any less of gamers, we just want to buy what we want to buy, like you did your 360s, end of story..
jojo29 @ Nov 16th 2006 2:55PM
@ BIGGEN
hmmm, and Halo is innovative, new and fresh right?
Gears of War is also innovative and new and fresh correct? Its pretty cute how you believe that as well:) slap a coat of nice paint on two 'tired and played out genres" and call it innovative? only with the xbox there are NO exceptions. ALthough you yourself said there are some
"look, all the games you mentioned with the exception of shadow, ico, god of war, and kingdom hearts" on the SONY brand, those games you CANT get anywhere else.
PGR2 and Forza? GT for my fix
Halo and GoW? Resistance, Killzone, CoD Etc...for my fix
vasuba @ Nov 15th 2006 6:31PM
i find it hard to believe microsofts 1 year lead means anything. Sega launched their system 2 years before the SNES came out andd they still lost. The Wii will sell up to 2/3 of the 360s consoles in a 32 day period.
Orangecoke @ Nov 15th 2006 6:44PM
I have a PS2, I dont need to buy a PS3 to play PS2 games.
Rumble adds to the immersiveness of Gears of War. I think anyone who plays it would agree with that. And Gears of War is HELLA fun in co-op and competitive MP, in additional to being unbelievably gorgeous to look at.
Pulse @ Nov 15th 2006 7:34PM
With the amount of ppl buying Wii as a second console, Wii owners will most likly only use thier 360s afterwards in order to dry thier hands after washing them with the sheer heat of it.
I think Wii will do pretty damn well.
The Man @ Nov 15th 2006 6:56PM
What is going to kill sony is all the false promises and hype. Read the ps3 reviews. Read the ps3 and 360 game comparisons. If you don’t feel ripped off by sony you should. They don't have an edge this time around...
Tel @ Nov 15th 2006 7:00PM
I am constantly amused that most of the PS3 fans are barely literate. As much as I detest fan-boys pimping out any system, the PS3 fans are always the most entertaining.
Jojo in particular seems to have some deep-seated grvence against the English language.
I should probably exclude ‘Pulse’ from the above generalisation, because although I disagree with his logic (why would anyone buy a PS3 to play PS2 games – why do you hate money?) he was able to string together a few basic sentences – txt speak abbreviations not withstanding.
Jojo: If you think that Killzone or Resistance is any kind of replacement for Gears or Halo, you are far more deluded then I thought. On the bright side, I’m sure that when developers abandon the PS3 due to development costs Sony will use that “$6 billion in cash reserves” to keep the platform afloat.
I should also point out that you are assuming that all console owners have gaming PCs. In reality the XBox and Windows Gaming markets do not often overlap.
As such, the fact that a game is also on PC is less important then if that same game not available on the PS3 – it’s no disincentive to buying a 360.
Anyway, since you asked –
GAMES THE INDICATE THE 360 IS A HARDCORE GAMING PLATFORM:
Gears of War, Halo 3, Halo Wars, BioShock , Blue Dragon, Dead Rising, Condemned: Criminal Origins, Crackdown, Crossfire, Dead or Alive 4, Dead or Alive Xtreme 2, Dead or Alive: Code Cronus, Demons of Mercy, Eternal Sonata, Fable 2, Forza Motorsport 2, Hostile Intent – Planetfall, Huxley, Kane & Lynch: Dead Men, Kingdom Under Fire: Circle of Doom, KnightBlade -- Line Of Defense , Lost Odyssey, Lost Planet, Marvel Universe Online, Mass Effect, Saints Row, Shadowrun, Star Trek: Legacy, Too Human…… Honestly – just about everything on the 360 is aimed at an older audience.
I’ll be going Wii60, but if anyone else needs help deciding, there is a breakdown of exclusives by console available here: http://www.evilavatar.com/forums/showthread.php?t=18534
Robotic House Plant @ Nov 15th 2006 7:02PM
According to Yahoo Finance...
Sony has 3 billion in cash, but they're also 18 billion in debt. A couple of months ago, they were 9 billion in debt, so they must have added the laptop battery recall and perhaps the development and marketing costs for the PS3.
Microsoft has 28 billion in cash, and zero debt.
Source
http://finance.yahoo.com/q/ks?s=SNE
http://finance.yahoo.com/q/ks?s=MSFT
VampireHunter Z @ Nov 15th 2006 7:37PM
Pulse
Ok, I have to step in once you start dissing PGR. Let's take a look at what Sony has to offer. GT2 was the last good racing game they made and that was for PS1. Forza has done everything that Polyphony Studios should have done a long time ago.
1. Cars show damage and are affected by it.
2. Franchises like Porche and Ferrari. I can't believe you can have a big racing game like GT without these.
3. AN ACTUAL DRIVER in the car. Who the hell was driving the cars in GT?
4. Innovative ideas like Suggested Line and Drivatar.
5. And most importantly multiplayer online.
When ppl list the good games on Xbox1 for some reason Ninja Gaiden is always left out. It wasn't all about Halo. MSFT has alot more software support now than before. For every "must have" exclusive for the PS3 I can name an equivalent for the 360.