Console Sales on the Decline

by Daniel Bloodworth - November 30, 2004, 8:02 pm PST
Total comments: 8 Source: Press Release

Stats show that gamers are preparing for the next generation.

In-Stat/MDR Reports Declining Shipments and Prices Continue as Game Console Market Awaits the Next Generation

SCOTTSDALE, Ariz.--(BUSINESS WIRE)--Nov. 30, 2004--The video game console market remains in the back end of its current cycle, with declining shipments expected to continue until the next generation of consoles come to market, reports In-Stat/MDR (http://www.instat.com). The high-tech market research firm finds that Sony is still dominating the market with its PlayStation 2 (PS2) console, which shipped its 70 millionth unit in January 2004.

"As is typical with the back end of a market, this one is characterized by companies cutting prices on both hardware and software to entice more casual, value-oriented consumers," said Brian O'Rourke, a senior analyst with In-Stat/MDR. "However, as can be expected, year-over-year shipment declines will continue until all next-generation consoles are on the market in 2006."

The first next-generation console should hit the market in the fourth quarter of 2005 with the introduction of Microsoft's Xbox 2. Sony, however, is not likely to give Microsoft too much lead time before launching its PS3 console, which should occur by mid-2006. Nintendo will try to launch its next-generation GameCube 2 console either before, or simultaneously with Sony, which Nintendo considers to be its primary competition.

In-Stat/MDR has also found that:

-- Nintendo's GameCube has performed solidly over the past year, with a worldwide price cut in the fourth quarter of 2003 significantly increasing sales.

-- Microsoft's Xbox is in a struggle with the GameCube for second place in the market. It has performed well in North America, and is doing increasingly well in Europe.

-- Sony will ship the most next-generation consoles through 2008. It has a proven track record built over the last 10 years, and has shown itself to be a marketing powerhouse. However, Microsoft and Nintendo are expected to narrow Sony's lead in the next generation.

The report, "Game Consoles 2004: Waiting for the Next Generation" (#IN0401260ME), includes a five-year shipment and revenue forecast for each current generation console: the PS2, Xbox, and GameCube, broken down by region. Shipment and revenue forecasts for the next generation of consoles are also provided through 2008. There is also an annual forecast for online console gaming subscribers through 2008. The three participants in this market, Sony, Nintendo and Microsoft, are profiled in depth in four areas: console business, marketing strategies, online plans and shipment analysis. In addition, four responses on consumers' console ownership and buying plans from In-Stat/MDR's annual Residential Technology Survey are included. To purchase this report, or for more information, please visit: http://www.instat.com/catalog/Ccatalogue.asp?id=162 or contact Erin McKeighan at 480-609-4551; emckeighan@reedbusiness.com. The report price is $2,995.

About In-Stat/MDR

In-Stat/MDR (http://www.instat.com) offers a broad range of information resources and analytical assets to technology vendors, service providers, technology professionals and market specialists worldwide. The company stands alone in its ability to integrate both supply-side and demand-side research methodologies into a single comprehensive view of technology markets and products. This capability relies on a unique ability to cover the entire value chain from engineering-level technology, through equipment, infrastructure, services and end users.

In-Stat/MDR is part of the Reed Electronics Group, a division of Reed Elsevier (www.reedelsevier.com), a world-leading publisher and information provider. With over 38,000 employees worldwide, Reed Elsevier operates in the science & medical, legal, education and business-to-business industry sectors, providing high value and flexible information solutions to professional end users, with increasing emphasis on the Internet.

Talkback

MarioDecember 01, 2004

In other news, handheld sales are up, WAY UP.

JonLeungDecember 01, 2004

Do we need a fancy, official report to tell us that console sales are slowing down? When Nintendo's system releases in North America are always five years apart, and others' consoles about the same, after three years, of course sales are down. I'm guessing that a good deal of consoles that are still actually being sold are for people who want a second or third console or a replacement.

I've always heard that the GameCube and Xbox are really close in sales, or with the GameCube slightly leading, but the reason why you always hear about the Xbox is because of all those people who ask "PlayStation or Xbox?" I believe there was another thread about that. I think that several of my friends (we're in our mid-twenties) appeared to be casual gamers and never even considered the GameCube when it first came out, but I know for a fact that a few of them do have one now but never talk about it, as if they shamefully don't want to admit more often than necessary that they have what they once considered childish. But if you hear a lot about the Xbox, and the GameCube is able to compete, then SOMEbody's got to be buying them up.

I think it's stupid that they think they can just tack on sequential numbers to things...Xbox 2, GameCube 2...

D-Mac DoubleDecember 01, 2004

Quote

Originally posted by: JonLeung
But if you hear a lot about the Xbox, and the GameCube is able to compete, then SOMEbody's got to be buying them up.
I'm not sure if GameCube is in 2nd place anymore, but the reason it's competing so closely with the Xbox in worldwide sales, is because of Xbox's simply abysmal sales in Japan.

To my knowledge, Xbox has been outselling GC in most every other region for quite some time.



couchmonkeyDecember 01, 2004

Agreed with D-Mac. Nintendo is keeping up with Microsoft because each is dominating different parts of the world. We hear about Xbox winning because we're in a territory where it is winning (though not by a huge margin). I think this article is interesting because it's surprisingly positive about the GameCube's sales. That's a refreshing change.

DjunknownDecember 01, 2004

Quote

The report price is $2,995.


Can somebody tell me why the bloody hell a collection of charts, estimates and analysis costs so much? Are they paying the piper to get such info?

Other than that, this snippet bucks the trend of smashing Nintendo to bits. Nice to know that the conspiracy isn't an all-reaching tentacle that strangles most forms of media.

KDR_11kDecember 02, 2004

The report is meant for corporations who will pay that much. Anything aimed at corporations is that expensive (well, software only, hardware costs even more). After all, there are less buyers.

SgtShiversBenDecember 02, 2004

Jon, you hit the nail right on the head with your last comment. Ever since the PlayStation 2 came out that's all we hear now, "X-Box 2, PlayStation 3, GameCube 2" What the hell happened to being smart and making up new names?! It's like Shrek 2, no new slogan or name at the bottom, just Shrek 2...boring. I don't know what it is but it's bugged me ever since '99 when they said it was going to be called the PS2. I remember reading an article from that time that at least came up with a better name (it was called something like the XES for Extreme Entertainment System) and it got me all exited, but NO!! GOW!!

Sorry, ranting.

S. ThompsonDecember 02, 2004

I really, really, really, really, really don't like when they hype up consoles a year and a half advance. I think I heard about the Super Nintendo about a month before it was released. And the Genesis? I didn't know anything about that 'til it was out.

Is it really time for a new generation yet anyway? Maybe for the PS2 since it's got such craptastic graphics, but X-Box and Gamecube should still have three or four years left in them, I think. Is that pushing it??

- Fuzmeister

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