Among the many fascinating (and not so fascinating) takeaways from Wedbush Morgan analyst Michael Pachter's recent and massive industry report are revelations about the current console adoption rate. As much as the Wii has seemingly penetrated previously untapped demographics (see grandma's now defunct bridge club) and ostensibly raised console adoption rates to new highs, the current generation is practically dead even with the last one when comparing the two generation's first four calendar years on the market. That is, from 2005 (when Xbox 360 launched in late November) through 2008, the current generation of consoles (Wii, PS3 and 360) combined for approximately 78 million unit sales, according to Wedbush Morgan estimates. Comparatively, from 2000 (the year PS2 launched) through 2003, the previous generation (GameCube, PS2 and Xbox) combined for 78–79 million unit sales. However, in this pivotal fifth year, Wedbush Morgan predicts the current adoption rate will begin to pull ahead of the previous rate.

Normally when Wedbush Morgan analyst Michael Pachter whips out his crystal ball and starts getting the vapors, he doesn't have time to turn on his minirecorder and take down the futurespeak channeled through his body. Luckily for us (and you!), he not only recorded it this time, but also wrote it down in the form of the 2009 Interactive Industry Report! We delved through the beast of a document this afternoon and found an interesting segment regarding the Nintendo Wii relying on "slower adoption rates of current generation technology" (read as: high-def displays) to help boost sales.

Pachter writes on page nine of the report, "The global recession served to benefit Nintendo at its competitors' expense," referencing Microsoft and Sony as having slower console sales this generation due to HDTV functionality built into the systems. He argues that consumers who might purchase the Xbox 360 or PlayStation 3 are more likely to buy the Wii not only because of the lower price point, but because of the subsequent HDTV purchase price. "Expect most consumers to defer purchasing a PS3 or an Xbox 360 until they have purchased an HD monitor," Pachter explains. Though we're not convinced that the same folks who would be purchasing an Xbox 360 or a PS3 would be running out to buy a Nintendo Wii in every case, we digress. What say you, Joystiq Biomass?

According to Gamestop's Sterne Agee analyst, Arvind Bhatia, retailers have nothing to fear from digital distribution -- not for the next five years, anyhow. Speaking to Industrygamers, Bhatia disclosed that Gamestop management has been conducting thorough studies on the capabilities of digital downloads and its potential adoption for several years now and that the findings are still in favor of brick-and-mortar establishments. Bhatia predicts that a market for downloadable titles won't put serious pressure on retailers until 2014, which he proclaims will be a time when "25% of the population" will have easy access to download technology and when price and storage capacity won't be such a concern.

Although Gamestop's study might sound like it's trying to combat digital distribution, Bhatia states it's not about competition but more on adaptation and learning how to profit from the changing distribution channels. We can already see retailers taking a slice, stocking network prepaid cards in stores and offering DLC and full game codes stuffed inside retail boxes. If this is how digital distribution is already affecting retailers, how much moreso in 2014?

Global Industry Analysts, Inc. predicts that the video game software market will reach $91.96 billion by 2015. The company's "comprehensive global report" notes industry sales did recently "plummet slightly," but that the "effervescent product" of video games will continue to keep consumer interests "sufficiently kindled." Hold up! "Plummet slightly," "effervescent product," and "sufficiently kindled"? Who let the English major (with a fondness for a well-placed oxymoron) near the press release?

GIA's 1174-page report, which guesses what the future will hold until 2015, is available for purchase at the low price of $3950. The price of the report could have likely been cut in half if clients weren't paying for GIA's licensing of $10 words.

Meaningful -- as in it'll mean Sony would finally bow to ubiquitous suggestions, predictions and occasional threats that see the PlayStation 3 being lowered in price please please oh please. Sterne Agee analyst Arvind Bhatia is the latest to join the frugal chorus, telling Industry Gamers, "We continue to believe a $100 price cut on PS3 will occur around the launch of EA's Madden NFL 2010, which is scheduled for release on 8/18."

Agee claims to have encountered similar sentiment at a recent GameStop executive meeting, overhearing talk of a "highly likely" and "meaningful" near-term price drop even over the clinking of diamond-encrusted chalices and relentless pre-order thrusting.

It's Sony's decision, ultimately, but if it's alright with you, we'd rather just get this price drop over with. A lower price means more people get in on the fun ... especially when they also get to stop reading these things.

In-Stat, a market analysis group, published a report this week which takes a look at how online video-to-television streaming is putting pressure on traditional cable providers and will eventually restructure "today's video distribution ecosystem." As noted by In-Stat, gaming consoles are at the forefront of this new direction, leading in web-based video streaming and beating other devices like digital media adapters, set top boxes (Apple TV), Blu-ray players, web-connected HDTVs and even PC media-centers.

Indeed, current gen consoles hold many advantages over the competition, seeing as they're relatively inexpensive and serve multiple purposes. The Xbox 360 has supported Netflix streaming since late last year, and both PS3 and Wii feature internet browsers (additionally, the PS3 allows for YouTube uploads on some software). In-Stat claims 29% of US console owners between the ages of 25 and 34 currently use their consoles to stream video to their televisions.

In-Stat expects consoles to stay as the top device for at least the next five years. As long as people know they can still stream pr0n on their consoles, we're sure it will.

[Via Gamespot]

Wedbush Morgan analyst Michael Pachter hates the PSP Go. Alright, alright, he doesn't quite hate it, but he does despise its price point. On a recent episode of Bonus Round, Pachter matter of factly states, "$249 is too much. Period." He goes on to say that while the handheld is priced to compete with Apple's $229 8GB iPod Touch, it doesn't deliver the iTunes App Store or downloadable music from iTunes (as conveniently, at least, as the iPod Touch).

Furthermore, he posits the $250 price of the PSP Go is vastly overinflated considering its contents, claiming it costs Sony less to build and ship the PSP Go than the PSP-3000 model, "The $169 PSP-3000 is a profitable device -- the disc assembly, for a UMD, costs more than 16 gigs of flash does. So this new device doesn't cost them as much as the PSP-3000 and they jack the price up $80?" When Keighley presses Pachter as to whether Sony is "ripping off" the consumer or not, he answers, "They're rippin' off the consumer ... they're making a lot more money on the PSP Go than the PSP-3000."

With E3 officially set to start Tuesday (although you wouldn't know it from today), MCV spoke with several industry heavies about what the show must do this year to make the past two years of min-E3s nothing but a distant memory. Sega of America head Simon Jeffrey believes the show needs to have a "controlled level of noise and spectacle" and "can't get back to the days of the E3 circus/carnival" that got in the way of the business. His sentiments are echoed by other industry heads.

ESA CEO Mike Gallagher recognizes that the current economic climate is a challenge and beleives the new E3 is the "best value event that European business will see all year." Well the real madness -- which is a massive departure from the eerie quiet from last year -- is set to start Tuesday morning. Feel free to join us.

The go-to game industry analysts see the downward sales in March as a trend that could continue over the next several months. Wedbush Morgan's Michael Pachter notes that hardware sales were down 19 percent year-over-year and he doesn't see a reversal of software sales in the "near term." Lazard Capital's Colin Sebastian is concerned that the industry continues to see sales "concentrated among a small group of top-tier software publishers and first-party platform holders." He believes this leaves little room for ... well, anyone else in the near future.

Both gurus see the second half of the year working out better for the industry. Edge notes that US industry sales have hit $4.25 billion during the first quarter, the same place they were during 2008's record-breaking year.

Since the Wii released in November of 2006, it's progressively become a more profitable venture for Nintendo. Not just because it has been constantly flying off retail shelves, but because Nintendo has managed to drastically cut down manufacturing costs during its life, Koya Tabata of Credit Suisse suspects. In fact, Tabata says costs are down a whopping 45%, which could mean Nintendo is banking much more than the previously reported $6.

Of course, any talk of reduced manufacturing costs is inevitably going to lead to talk of a price cut, which Tabata says is a real possibility. Emerging markets could be the first to see a price cut, Tabata commented. With Sony hoping to take market share away from Wii with its $99 PS2, it might be the right time for Nintendo to trim some fat.

[Via Eurogamer]

Roughly two months ago, Signal Hill analyst Todd Greenwald said publishers would ease up on the standard $60 pricing for Triple-A games, but now he's changing his tune. According to Greenwald (via GamesIndustry.biz), the $60 price tag won't change anytime soon, as consumers are satisfied with the current pricing and enjoy spending more on premium-priced special edition software. So it's all your fault.

Although, with a growing market for cheap, used games (Toys R' Us and Amazon joining the fray) and a trend towards cost-cutting digital distribution, you'd think there would be even more pressure put on the relatively high retail pricing. Greenwald takes this into account, too; he states that although "near-term fundamentals are holding up well," a long-term projection is "cloudy." In short, as long as games continue to fly off the shelves like they are now, $59.99 is here to stay.

Micheal Pachter foresees a world without console wars, calling the current crop of hardware "the last generation of consoles." The ballsy claim was made during GamesBeat 2009, a conference going on in parallel to GDC, where the Wedbush Morgan analyst reportedly declared that the future belonged to a "standard delivery platform" instead.

According to 1UP, Pachter based his claims on the rising cost of console game development, stating that third-party publishers "are not going to support a PS4 or Xbox 720." His opinion, however, was not shared by fellow analysts David Cole and Colin Sebastian, who instead believe we can expect new hardware in 2012, though all three soothsayers agree that should this come to pass, Sony will drag its feet in getting something new onto store shelves. But how long will Sony loyalists have to wait for a new fix? According to the "Church of Pachter," don't expect Sony's fourth-coming until sometime around 2015, coincidentally the same year the aliens attack.

Oh Michael Pachter, you're just like my mother, she's never satisfied. Wedbush Morgan's resident palm reader feels that despite the industry's pocketing of nearly $734 million last month, he expects "limited market reaction" to February's seemingly triumphant sales data. Pachter calls the sales growth "quite respectable" overall, but finds little to celebrate with giants like Electronic Arts and THQ suffering a financial beating at the cash register.

Looking for the silver lining, the analyst told investors in a note that "concerns about the economy are likely to limit share price appreciation," but that steady hardware sales demonstrate strong game sales "well into 2009." Interestingly, Pachter also called the software industry "highly recession-resistant," though we imagine some on the unemployment line might have something to say about that.

Citing an Electronic Entertainment Design and Research (EEDAR) report released in the past week, GamesIndustry.biz is reporting today that, while the announcement of Amazon.com entering the used game trade triggered a 13% drop in GameStop stock, "Amazon is of little threat to GameStop's core business." According to EEDAR, this doesn't mean Amazon is doomed to fail, but that "Amazon and GameStop can co-exist peacefully," which sounds awfully nice to us on the consumer side of things.

How did they arrive at these rather broad conclusions, you ask? "EEDAR conducted a survey and recorded the trade-in value, used price, and new price of 79 game SKUs (57 that applied to the survey) at Amazon and GameStop." After doing so, they arrived at this, possibly shocking, revelation: "On average, GameStop offers a better value on trade-ins by over 3%." Seriously?

To round out the EEDAR report, we'll leave you with this one, astonishing truth: "Amazon's entry into the used gaming market will expand the used market into new territories and make available to new consumers rather than steal share away from GameStop's core business." So, what's the lesson here? Competition: good for consumers, (apparently) okay for retailers.

Though Nintendo is currently making money faster than a brothel in shore leave season, Deutsche Bank analyst Satoru Kikuchi has given the company's stock a "sell" rating, usually reserved for companies who are facing an economic decline. Kikuchi foresees a slow trailing off for Nintendo's stock value -- he predicts an 18 percent decline over the next year, and an additional 19 percent drop sometime in 2011.

The analyst referenced declining DS and Wii sales in Japan as evidence for his claims, adding that Nintendo's dependence on its few ridiculously successful titles (we assume he's talking about Wii Fit and Wii Play) will ultimately bring it down unless it introduces additional power sellers. Don't fret, Mr. Kikuchi -- we're sure Nintendo's got a Wii Fit 2 or Wii Play Again hidden somewhere up its gilded sleeves.