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The Almighty Buck Entertainment Games

Analysts Predict Consoles Sales Peak Reached 100

Posted by simoniker from the all-downhill-from-here dept.
Thanks to Yahoo News for reprinting the press release regarding financial analysts' predictions that the current videogame console cycle has peaked. According to a spokesman for U.S. Bancorp Piper Jaffray, "We believe spring 2003 marked the midpoint of the current video game cycle", suggesting 2003 "will be the peak year for unit sales of current generation hardware." This may mean leaner times before the next generation of console hardware debuts, predicted by Piper Jaffray for "autumn 2006", and meanwhile, the company is forecasting "...that 22.3 million hardware units will be sold in North America in 2003, a modest increase from 21.1 million units in 2002 and will subsequently decline in 2004 to sales of 20.3 million units as the installed base of video game hardware becomes saturated."
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Analysts Predict Consoles Sales Peak Reached More

Analysts Predict Consoles Sales Peak Reached

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  • Leaner times? (Score:4, Insightful)

    by Ondo ( 187980 ) on Monday November 17, 2003 @03:40PM (#7495278)
    This may mean leaner times before the next generation of console hardware debuts

    Not really. Even the companies that don't lose money on their console sales aren't making a whole lot. Game sales are what is important, and the larger installed base should help those.

    • Re:Leaner times? (Score:4, Funny)

      by kisrael ( 134664 ) * on Monday November 17, 2003 @03:42PM (#7495295) Homepage
      Yeah, and frankly, the decline doesn't sound like that big a deal...I mean, from like 21 million to 20 million? Aw, shucks.
      • I mean, from like 21 million to 20 million?

        And with those kinds of numbers, there's still plenty of room for movement in the market share of the three consoles. If Sony's sales drop by 2-3 million and the other 2 consoles pick up a portion of the 2 million left then there could be plenty of room for the Cube to take #2 in total sales, for instance. 4th quarter sales of PS2s are expected to be down 2 million anyway, and their shipments have been down ~40%, so it's very likely that PS2 sales could slip by a

    • Re:Leaner times? (Score:5, Insightful)

      by simoniker ( 40 ) * <simoniker@s l a s h d o t . org> on Monday November 17, 2003 @03:59PM (#7495436) Homepage Journal
      But then again, if the amount of console software out there are still rising at a certain rate, but the hardware no longer increases at that rate, it still may be a problem - although I agree, not a cosmically bad situation.

      Actually, I think more a problem toward the end of a console's life cycle is the amount of good quality older games available at budget prices, and the quick pricing-down of new titles because there's such a glut on the market. But this is probably separate of install-base.
      • But then again, if the amount of console software out there are still rising at a certain rate, but the hardware no longer increases at that rate, it still may be a problem - although I agree, not a cosmically bad situation.

        I don't think that's a problem at all. A game released in 2004 will have a larger potential audience than a game released in 2002 would. It doesn't have to only sell to someone who bought a console the same year.

        Perhaps it's a problem because people with older consoles tend to buy

      • Re:Leaner times? (Score:4, Interesting)

        by WaKall ( 461142 ) on Monday November 17, 2003 @05:06PM (#7496090) Homepage
        There are so many good games out right now that by the time I can _get_ to the next great game I'm going to play, it's in the budget bin. There are also tons of BAD games, which compete for the low-price sales.

        Maybe it's because we have THREE top-notch consoles now, instead of two? The console companies are splitting three ways right now, moreso now that Xbox sales have tapered off and GCN sales have jumped a lot recently. Compare to three years ago, when it was just Nintendo and Sony with Sega as a failing and distant third.

        And finally, emulation andn classic games are really good now. I play a lot of classic games on PSX that I pick up in bargain bins, as well as emulated SNES/NES games. They're cheap, they're good, and I can play some of them on my GBA, others on my PS2. Contrast this to SNES/early PSX era, when emulation was still young and most people didn't have broadband.

        I'd really like for the market to bear 3 console vendors, but I'm afraid someone will get driven out or be forced into a niche (hello, Nintendo!). I'd be happy to buy into that niche if it were Nintendo.
      • ...if the amount of console software out there are still rising at a certain rate, but the hardware no longer increases at that rate, it still may be a problem

        Why? Do you mean in the Atari 2600-E.T. sense of too many games for the userbase? If so, remember there's over 60 million PS2's out there. Even given a 50% failure rate that leaves a worldwide userbase of over 30 million consoles.

        And since others keep mentioning it, Sony should be making money on each PS2 by now. Last informed report had them p

  • Is there any particular reason to listen to this? (Score:3, Insightful)

    by Snowmit ( 704081 ) on Monday November 17, 2003 @03:46PM (#7495339) Homepage
    Who are these guys? Do they speak with any authority on this subject? I read the article and as far as I can tell they're a bunch of financial analysts. Do they have a history of predicting this kind of thing accurately? Is there any reason to listen to these predictions?

  • 10% decline? (Score:3, Interesting)

    by (trb001) ( 224998 ) on Monday November 17, 2003 @03:49PM (#7495354) Homepage
    I suppose a 10% decline is quite steep, but considering the console itself isn't the money maker for the companies, aren't they still expecting huge profits? Consider...if each console owner purchases 1 game per year, with sales as they are you're talking about an increase of ~20 million games per year. This compounds each year of the consoles' "life" such that after 5 years worth of sales like this, you'd be expecting 100 million games sold per year, with a yearly increase in the number of sales. That seems like a decent profit margin.

    --trb

  • Afterglow (Score:4, Funny)

    by BeProf ( 597697 ) on Monday November 17, 2003 @03:57PM (#7495421)
    In other news...

    The major console companies all had a post-peak cigarette today. Nintendo was quoted as saying, "Hold me."

    Unfortunatly, the lovefest came to a quick end when Sony and Microsoft got into a fight over who would have to sleep in the wet spot.
  • It was announced [gamesindustry.biz] today that IBM will be making processors for Nintendo's next generation console. So that means IBM will be involved in developing the processors for all 3 next-gen consoles. Sony obviously has its own thing with the Cell processor, but what about Nintendo and Microsoft. Is it possible that they have basically decided to team up (against Sony)? It is possible that they will both use a PowerPC-type processor on their next console, as well as an ATI graphics core. Could it be that a) they
    • What does everybody else think?

      MS buying out Nintendo of America, dropping the X-box, and selling a Nintendo-branded (or Nintendo-variant) console?

      Yeah, I could see that. And I would probably pick one up, too.
      • Didn't ms already try that? Nintendo basically told them to pound sand and ms went head-bowed on to build the xbox. I don't think they'll risk embaressing themselves again by trying again.
      • That's about the only damn way I'd buy a MS console. I bought and returned an xbox in a day, because the games were just REALLY lackluster.

        I own the nintendo because nintendo makes games.

        When microsoft figures out that when you make games, and make them good, you sell to a dedicated fanbase, who unquestioningly buys them for the 1st party content.

        Xbox is having to fight it out with Sony over 3rd party stuff, and thinks themselves content with it's sales. I find the sales to be really poor. When you co

    • The only way consolidated hardware would work for the console industry would be if there was more than one hardware provider. There should be serveral more or less identicle systems that all run the same game software. Otherwise who ever controls the hardware will control prices and we'll end up with 80 dollar games like back when Nintendo was in power. (Although that involved other factors as well.) If two of the big three team up that won't change much in the industy. It would just make the market for gam

  • One thing to keep in mind is that software (In this case games) sells hardware. So you could see a spike in hardware sales if a killer game comes out for one system and not on the others. Say the "best game ever" comes out on x-box next year. Sure, there are some die hard ps2/gamecube fanboys, but plenty of them would buy a ps2 just to play the "best game ever".

    The Cross platform releases are what keep hardware sales down, (good) exclusive titles should make console sales go up.
    • I think a lot of it may have to do with PS2 market saturation. There are so many PS2s in living rooms around the world that even if the next must-have game comes out for PS2, there aren't that many people who want one and don't already have one.

      GC and XBox could see a spike, but it would probably get swallowed up by the overall decline in PS2 sales. This is talking about the market, after all. Nintendo and MS could easily have a banner year in 2004 while the total consoles sold goes down.
  • Funny thing is, I think that Half Life 2 will be a major selling point for the next gen game systems. No current game system can produce graphics as good as HL2 (or Doom3). Not saying that these titles will even be availble for the next gen systems, but they do both show how aged the current technology is. Take for instance Max Payne 2. Fucking Amazing looking game, the difference between MP1 and MP2 is striking and it even isn't a true "next gen" title. It will take a lot to dislodge people from their

  • An odd report (Score:5, Interesting)

    by edwdig ( 47888 ) on Monday November 17, 2003 @05:28PM (#7496342)
    Every mention of sales so far this year says that year-to-date sales of consoles are lower than they were last year. GameCube sales are up, but that's not enough to counter a large drop in PS2 sales combined with a small drop in Xbox sales.

    Check Nintendo's recent press releases. I think the PS2 year-to-date sales are down 17%, Xbox 5%, and the GameCube up a few percent or so.

    Looks like 2002 might've been the peak, unless something unexpected happens next year to drive up sales.
  • Hmmm... lets think what happened around the time of Spring of 2003?

    The Gamecube was unloading with Zelda, Metroid Prime, and Mario Sunshine (which wasn't that great, but the name alone sold it)
    The PS2 was going insane trying to counter the Xbox's online advantage and cranking out/announcing more games to the Greatest Hits list
    The Xbox was... well... being itself.

    I'm not surprised that Spring 2003 was a high point in the video game console market, but to say the market will suffer from a decline now is both

  • dammit (Score:3, Insightful)

    by deus_X_machina ( 413485 ) on Monday November 17, 2003 @08:14PM (#7497899)
    So, uhh, basically what they're saying is in about a year i'm going to have to purchase a Playstation 3, a Gamecircle, an XBox2, and upgrade my graphics card/processor to keep current with the video game market.

    Between owning 3 PCs, an Atari 2600/7800, NES, SNES, Genesis, SegaCD, Dreamcast, a PS, PS2, a Gamecube, and tons and tons of games over the last few years, I can honestly say this hobby is more expensive than a crack addiction...
    • I'd be very surprised if a new console is out before Christmas 2005, and more likely 2006. Microsoft may try to jump the gun a bit but otherwise, we've been mostly on a 5 year schedule. For one thing, in order for a new system to have launch titles they pretty much have to firm up the hardware specs a year and a half before launch, to give the devs time to get a game together. So no, you won't have to buy anything more for a while. Which means you have about an extra $1000 to spend on games, rather than
  • WHY would you rebuy a console you say? Why not fix it yourself? FOR INSTANCE, the PS2 issue with the LASER being a bit OFF after a few hundred uses. I have personally experienced this, twice. But since i have a library of about 50 games (PS1/PS2) that I enjoy, I'm not about to waste those purchases by waiting for a PS3 to come out, SINCE I purchased a refurb (as oft I do) and I hadn't discovered the issue with the Laser yet, I just boxed my old PS2 back in it's original box, put it in the attic and w
  • Is the console "dick swinging" going to end and the REALLY good console games come out?

    Some of the best console titles end up being mid - late gen games to the console.

    FFVII-IX, Syphon Filter, MGS; Shenmue, surely others I've missed, it seems that truly innovative titles hit a console late in it's development cycle.
  • The financial analysts behind these "revelations" have sold video game interests short. These prognosticators are no better at telling the future than Miss Cleo. Remember, analysts are the folks responsible for encouraging millions of Americans to invest and lose billions in tech stocks. Funny thing about the future ... it hasn't happened yet. Makes it hard to say what happens there!

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