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Hydrolex

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#1 Hydrolex

Member since 2007 • 1648 Posts

DFC Forecast. Xbox 360 could finish last in 2009.

Quote: DFC: Xbox 360 Could Finish Last in 2009's $47B Market
By: César A. Berardini - "Cesar"
Sep. 18th, 2007 7:35 pm

Market research and consulting firm DFC Intelligence has released a series of new reports that forecasts a growth in the video game industry from about $33 billion in 2006 to as much as $47 billion in 2009. In the reports, DFC forecasts the the battle for the console market using three different scenarios and estimates that that combined cumulative worldwide sales for the three systems will reach between 180 to 210 million units by 2012.

There's an scenario in which the Xbox 360 ends up in a distant third place and the firm warns that Microsoft needs to build a strong base outside North America to avoid finish last in the three-way race.

DFC Intelligence Forecasts Video Game Market to Reach $47 Billion by 2009

SAN DIEGO --(Business Wire)-- Sep. 18, 2007 According to a series of new reports from DFC Intelligence the worldwide video game and interactive entertainment industry is expected to grow from about $33 billion in 2006 to as much as $47 billion in 2009. This forecast includes revenue from video game hardware and software, dedicated portable system hardware and software, PC games, and online PC and console games. The report forecasts strong growth in all major categories, including PC games. DFC Intelligence forecasts that the PC game market will grow to over $13 billion by 2012. Much of this growth will come from online game revenue, including subscriptions, advertising and digital distribution.

DFC also is looking at continued strong performance for the portable game market. "Revenue from portable game software has more than doubled in recent years and we think that the Nintendo DS could eventually become the best selling game system ever in five years," says DFC analyst David Cole.

The biggest area of uncertainty remains the performance of the three video game console systems: the Sony PlayStation 3, the Nintendo Wii and the Microsoft Xbox 360. DFC forecasts the market using three different scenarios and estimates that combined cumulative worldwide sales for the three systems will reach between 180 to 210 million units by 2012. The biggest issue is the performance for the individual systems.

In all scenarios, DFC has raised its forecast for the Wii and the PlayStation 3 and lowered its forecast for the Xbox 360. According to Cole, "The Xbox 360 will need to build a strong base outside North America to avoid being in a fairly distant third." DFC forecasts that the Wii will be the strongest system through at least 2008. However, the PlayStation 3 could start coming on strong in 2009. "We could have a situation where the Wii sells more hardware units, but by 2012 the PlayStation 3 is generating more software revenue," says Cole.

Once MS shoots its load with Halo 3 and ME, well, what do they have left? They have next to nothing in terms of first party development and developers will come to grips with ps3 hardware and by next year if not sooner, multiplat superiority for the 360 will be a distant memory. Epic which saved the 360's butt last holiday with Gears is making UT3 for the ps3, and Bioware could very easily be off on some other game, they're just a gun for hire. FASA is dead. Real Time Worlds is NOT doing a sequel to Crackdown. Fable 2? Meh, who cares. Too Human may never even come out. Alan Wake is still shrouded in mystery. Halo Wars, console rts, once again, who cares about an RTS for a console. After this holiday season, the first party oferrings get mighty thin from MS. Or are peole still thinking that Rare will deliver anything major.

More from DFC.

Quote: DFC Intelligence often releases forecasts in multiple scenarios that account for different factors such as price decreases, new products and form factors, and other determinants that can cause a significant change in the marketplace. So far in 2007 it is safe to say that the market has followed what we called the Nintendo Best Case Scenario. More specifically:

The Nintendo Wii is on track to meet our Nintendo Best Case Scenario forecasts for 2007.
The Nintendo DS looks like it may exceed our 2007 forecasts by 10%.
The Sony PlayStation 3 is on track to match our sales forecasts for 2007 under the Nintendo Best Case Scenario. In terms of installed base it looks like the PS3 will be in third place until at least mid-2008. To move more PS3 units in 2008 we think Sony will have to be more aggressive on pricing.
The Microsoft Xbox 360 is running behind where they should be to maintain a strong market position.

However, the Xbox 360 lineup is heavily weighted towards the second half of 2007. If the Xbox 360 can have a strong holiday 2007 they may be able to maintain at least a second place position for another year.

Conclusion: The pressure is on Microsoft to really drive sales of the Xbox 360 this holiday season. If Halo 3 and other products fail to drive Xbox 360 sales, the system will soon flirt with numerous unsavory scenarios, the worst of which is the danger of becoming a distant third in the video game market share battle.

There has been a great deal of focus put on Sony's PlayStation3 launch woes. However, so far in 2007, the news from the Xbox 360 front has not been encouraging. In the first six months of calendar 2007, Microsoft shipped slightly over 1 million units of the Xbox 360 compared with Nintendo shipments of over 6 million Wii systems and Sony shipments of over 4 million PS3 systems. The Xbox 360 had a one year lead, but the competition is catching up fast.

Of course, the bulk of sales for the video game industry come in the second half of the year and it can be a mistake to extrapolate performance in the first six months to the full year. For the Xbox 360, Microsoft is putting the focus almost entirely on the second half of 2007. Microsoft has humbly called the upcoming Xbox 360 titles the "Greatest Holiday Lineup in Video Game History." Whether it is the greatest lineup in video game history is of course subjective. However, the fall 2007 Xbox 360 release schedule is clearly a strong group of products with a wide variety of games. We would say that this will probably be the last holiday season that the Xbox 360 will have such a clear software advantage over the competition. If consumers are not lining up to buy an Xbox 360 this holiday, Microsoft clearly has problems.

The competition is breathing down the neck of the Xbox 360. The Nintendo Wii has almost caught up with the Xbox 360 in sales and the PlayStation 3 is looking to have a much stronger lineup in 2008. If Sony can keep its PlayStation 2 core base happy for another year or so, they will be in a good position to migrate them to a PS3. This means for Microsoft it is imperative they get consumers into the store NOW.

One concern is that Microsoft seems to be in danger of losing its position as the online game leader. Microsoft has pushed the Xbox Live online game service as the key distinguishing factor for its systems. However, the PlayStation Network does a good job and offers many of the same features as Xbox Live. Upcoming offerings like PlayStation Home and some fairly high-end downloadable games, start to push the PS3 toward the cutting edge when it comes to online offerings.

Even the Wii seems to have enough online features to keep the average consumer happy. The Virtual Channel let users download ****c titles. We have been having fun playing YouTube videos on the Wii and battling people online with the recently released Pokemon Battle Revolution works just fine.

There is nothing about Xbox Live that would really standout for the average consumer. The ability to download high-definition video is nifty, but that is not why consumers buy video game systems. The competition actually stands out in several key areas such as Wi-Fi connectivity and, most importantly, being free to use. Xbox Live is the only service that requires a paid subscription to play others online. This is a key limiting factor for not only consumers, but also game developers. When Microsoft talks about Xbox Live having over seven million users, they include free Silver members with no online game play capability, old Xbox owners that have not upgraded to the Xbox 360 and Gold members. Only the Gold members can play Xbox Live games online.

In the grand scheme of things we don't think online games will be a major determining factor in the purchase of this generation of game console systems. As always it comes down to the games. This holiday season, the Xbox 360 clearly has solid product offerings. We won't be the judge of whether this is the greatest holiday lineup ever. What we will say is that if this lineup of titles can't move boxes off the store shelves, come January, we will have to seriously revaluate Microsoft's long-term position in the marketplace.

MS could very well lose the online space. More and more, game editors are commenting on what a terrible time they have on xbox live which should be renamed xbox vile, because of the all foulmouthed retards that populate the system. You're being asked to pay $50per account to be abused by cretins. On the other hand, I listened to a 1up podcast and they talked about playing on PSN as being infinitely more enjoyable, not nearrly as many had headsets equipped, but those that they did were looking to communicate not hurl foul mouthed obscenities at others.

17 years ago

Hitamaru-homia

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#2 Hitamaru-homia

Member since 2006 • 2046 Posts

They can't develope a base in territorys outside of US. Japan is doing a con smith "'eff you!". They can try Europe... but they need two PS titles Final Fantasy and Metal Gear Solid. Until then they fresh out of bait.

17 years ago

Ryuhayabuza

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#3 Ryuhayabuza

Member since 2004 • 398 Posts

remember back when analysis said that this generation would be a 2 way race between Xbox 360 and the PS3 and the Nintendo Wii would be in a distant third place ?

what are ye to say now ?

17 years ago

Why_Me-

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#4 Why_Me-

Member since 2007 • 131 Posts

Analyists don't know what they're talking about. Period, end of story. Your opinion or my opinion is just as valid (or invalid) as the opinions of these so-called analyists. Just because they are paid to make things up, doesn't mean that what they make up is true.

17 years ago

kevy619

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#5 kevy619

Member since 2004 • 5617 Posts

I already saw that, i dont think they really know what they are talking about.

17 years ago

SemiMaster

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#6 SemiMaster

Member since 2006 • 19011 Posts

Little bit of info friend.

Developer =/= Analyst.

Change your title.

17 years ago

throwsomeDDs

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#7 throwsomeDDs

Member since 2007 • 154 Posts

what a weak thread.

its talking about how ps3 online will exceed xbl.

xbox live has a 60% attach rate which is much more than sonys online which is pathetic because ps3 online is free

17 years ago

akuma303x

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#8 akuma303x

Member since 2004 • 3703 Posts

this falls within the should of could of would of and almost catagory. Just a bunch of what if.

17 years ago

ffx2warrior

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#9 ffx2warrior

Member since 2003 • 332 Posts

Analyists don't know what they're talking about. Period, end of story. Your opinion or my opinion is just as valid (or invalid) as the opinions of these so-called analyists. Just because they are paid to make things up, doesn't mean that what they make up is true.Why_Me-

Well, they sure as hell know more than some kid on a gaming site.

17 years ago

SemiMaster

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#10 SemiMaster

Member since 2006 • 19011 Posts

[QUOTE="Why_Me-"]Analyists don't know what they're talking about. Period, end of story. Your opinion or my opinion is just as valid (or invalid) as the opinions of these so-called analyists. Just because they are paid to make things up, doesn't mean that what they make up is true.ffx2warrior

Well, they sure as hell know more than some kid on a gaming site.

Actually, I daresay I trust even blatant fanboys more than a "Video Game Analyst". Some stuffy dude in a suit trying to predict what game will sell a lot... right. They should stick to insider trading.

17 years ago

KillaHalo2o9

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#11 KillaHalo2o9

Member since 2006 • 5305 Posts

The Wii is the weakest link here from my point of view, and the thread blows.

17 years ago

ffx2warrior

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#12 ffx2warrior

Member since 2003 • 332 Posts

[QUOTE="ffx2warrior"]
[QUOTE="Why_Me-"]Analyists don't know what they're talking about. Period, end of story. Your opinion or my opinion is just as valid (or invalid) as the opinions of these so-called analyists. Just because they are paid to make things up, doesn't mean that what they make up is true.SemiMaster

Well, they sure as hell know more than some kid on a gaming site.

Mmmkay, whatever floats your boat.

17 years ago

Marka1700

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#13 Marka1700

Member since 2003 • 7500 Posts

Using best hardware as an excuse to claim winner = fail, Best hardware has rarely won in the past.

17 years ago

bobaban

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#14 bobaban

Member since 2005 • 10560 Posts

Finally a thread that speaks sense in SW. MS FTL!

17 years ago

Vyse_The_Daring

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#15 Vyse_The_Daring

Member since 2003 • 5318 Posts

I stopped reading when it said "there's an scenario", but mostly because this has been posted before, and nobody cares what these people think.

17 years ago

skektek

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#16 skektek

Member since 2004 • 6530 Posts

Oh dear, the Lemmings won't like this one bit...

17 years ago

robbv1122

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#17 robbv1122

Member since 2005 • 194 Posts

Too much reading for me, but idid read some.as far as the network goes for PSN and Live, PSN is just as enjoable. i never understood why people complain about PSN. Lemmings havesaid their network is solid, which it is, but then saying the PSN is inferior. WHY?

PSN: free and solid online play (play warhawk or resistance. you could have 50explosions going off at once and not have a bit of lag.

LIVE:$50, achievement pts, and solid online play.

Differences? you tell me

But this article also points out that Sony seems to be thinking more long-term with their console.Nintendo and Microsoft will probably have a different console by then, PS3 will still be around.

SONY might be off to a rough start, but they're thinking long-term. Not saying that they're not paying attention currently. Look at IGN's fall line-up for the PS3; they seem to know what they're doing.

17 years ago

RaveRabbid

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#18 RaveRabbid

Member since 2006 • 1587 Posts

Analysts also predicted (among many other things) that the PS3 will outsell the X360 in the U.S. followingthe $100price drop.................. well.... that didn't happen. Too bad analysts can't predict the future....... but they can offer opinions.

17 years ago

CwlHeddwyn

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#19 CwlHeddwyn

Member since 2005 • 5314 Posts

remember back when analysis said that this generation would be a 2 way race between Xbox 360 and the PS3 and the Nintendo Wii would be in a distant third place ?
what are ye to say now ?
Ryuhayabuza

lol good point!

also it reminds me when they said PSP would blow the DS outta the water!

17 years ago

hellfire9988

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#20 hellfire9988

Member since 2006 • 1136 Posts

UUUhhhh... Teh wall of TXT. Ok first off, just because dev's say predict something does not make it true. Second, instead of writing/copy pasting a wall of text and putting a "conclusion" after it, take out ur yellow highlight tool, and use it. PLEASE!

17 years ago

LibertySaint

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#21 LibertySaint

Member since 2007 • 6500 Posts

remember back when analysis said that this generation would be a 2 way race between Xbox 360 and the PS3 and the Nintendo Wii would be in a distant third place ?
what are ye to say now ?
Ryuhayabuza

exactly

17 years ago

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