Future of Videogame Industry Revealed

[fitbabits]

According to the following news story (http://www.next-gen.biz/index.php?option=com_content&task=view&id=1456&Itemid=2) over at Next Generation (http://www.next-gen.biz), the future of videogames is looking...interesting.

Kagan Research have published the ‘Future of Videogames 2005’ which reveals some important insights into the growth of the industry.
Xbox 360 will overtake Nintendo’s Revolution, selling almost twice as many next-gen consoles by 2010.
Perhaps I'm not reading this right, but saying that the 360 will overtake the Revolution is nuts. Doesn't that imply the Revolution will release first?

[fushi]

No, it doesn't imply that. But such results are possible if Nintendo mismanages it's best effort since the NES.

[Heretic Machine]

I believe that the 360 will outsell the Revolution, easily. Most people just don't have taste when it comes to gaming :p The PS3 will probably be second place to 360 if it carries the outrageous price that most people think it will. Nintendo will lag behind in third, but still have many interesting games to make their console worth owning as long as you're not a douche bag who needs to see T&A for the game to be good.

[MrMeatshake]

if it carries the outrageous price that most people think it will.

I'm pretty convinced that whole 'it's gonna be dead expensive' thing was just to get *** to release the 360 at a higher price-point. sony KNOW about consumer electronics and pricing.

[Odwalla]

Xbox 360 will overtake Nintendo’s Revolution, selling almost twice as many next-gen consoles by 2010.

Perhaps I'm not reading this right, but saying that the 360 will overtake the Revolution is nuts. Doesn't that imply the Revolution will release first?

You're not reading it right. 2010 is over four years away. What the report is implying is that in the time frame between summer 2006 (estimated Revolution ship timeframe) and some time in 2010 the Revolution, even though it came out after the 360, will sell more units worldwide. It's only in 2010 that the article author(s) think the 360 will finally sell enough units to have a larger installed base than the Revolution.

Fear my deductive reasoning 5ki11z.

[Tronikx]

The same thing will happen after all the hype is over and the prices drop. The xbox will balance out with it's base of title's, playstation will dominate due to it's overall better game base.. and nintendo will simply do what they ALWAYS do..... rehash the same games over and over and over and over agian...

I have read the specs of the new xbox and personally im not that impressed...

[MSUStud911]

Maybe the article assumes that initial 360 sales will be slow, but will pickup down the road. Maybe its talking about Japan. Maybe its just full of shit.

[fitbabits]

Fear my deductive reasoning 5ki11z.
Consider them f34r3d! :)

[NoName]

The title of the article makes it sounds like they have some magic looking glass. So they looked into the future and now are blessing us with their magically obtained information.

I have one too, it told me I was going to become rich by 2010. It's on the internet now, it must be true!

[fitbabits]

The title of the article makes it sounds like they have some magic looking glass. So they looked into the future and now are blessing us with their magically obtained information.

I have one too, it told me I was going to become rich by 2010. It's on the internet now, it must be true!
Perhaps a little misleading, but that is the idea behind the book!

And I think you misread your looking glass - the year is 2070. Must have been the smudge that made the 7 look like a 1. :)

[MSUStud911]

The same thing will happen after all the hype is over and the prices drop. The xbox will balance out with it's base of title's, playstation will dominate due to it's overall better game base.. and nintendo will simply do what they ALWAYS do..... rehash the same games over and over and over and over agian...

I have read the specs of the new xbox and personally im not that impressed...

I don't know how you can say the PS3 will dominate at this point. It may very well dominate, but right now that doesn't appear to be the likely outcome. To me it looks like Microsoft's headstart combined with the expected expense of the PS3 and Sony's complete lack of any online strategy are all pointing to the Xbox winning this generation. Is it WAY too early to speculate? Yeah, but speculate I will!

The PS3 is supposed to be more powerful than the 360. Though nothing I've seen makes me think that's going to translate into substantially better games, let's just take it as a given. Third party developers produce games to the lowest common denominator. Assuming the 360 is less powerful than PS3 (which I'm not convinced of YET) third party games are still going to be substantially the same between the two. Thus, having a PS3 isn't going to make your copy of the latest Madden or Rainbow Six look or play much differently, if at all, from its 360 counterpart. If the PS3 ends up costing more than the 360 it is going to be hard for people to justify the expenditure to themselves when most PS3 games will be available, basically uncompromised, on 360.

I think 360 launching first imparts a significant advantage to Microsoft as well. For those people that plan on buying a single console this generation the 360 is going to be hard to resist. The choice for these people will be to either buy a 360 and play next-gen games now or wait 5 months and get a PS3. I think this could cut into Sony's sales significantly.

This argument always dredges up the Dreamcast and its failure to topple the PS2. I submit that the 360 v. PS3 situation is not analogous for one main reason: third party support. The Dreamcast, while a great machine, suffered from awful third party support. The 360 does not have this problem. All major third parties are on board, thus no one has to wait for PS2 to get the latest from EA or Midway or whoever else.

This logically leads to a discussion of console exclusive titles. It is here that the PS3 will either be made or broken. If Sony can convince those single console buyers to hold off 360 because it won't have the latest GTA or MGS, then it has a chance. While the 360 is set up with some awesome exclusives, (Mass Effect, Too Human, Oblivion, Kameo) only Halo has the mass market draw of Sony's big exclusives (Final Fantasy, GTA, MGS). This, to me is the great unknown and honestly the only substantial advantage I see for PS3. That's not to say I don't respect the quality of Microsoft's exclusives, because I sure as hell do. I'm not sure that the average single console buyer will though. I think its well within the realm of possibility that such people will wait to get PS3 in order to be able to play the latest Sony exclusive title. I don't think that's what will happen, but it wouldn't surprise me either.

[Xerxes]

playstation will dominate due to it's overall better game base..



Oh hell yeah so far we know about MGS 4, and then there's ummm oh and cant' forget, you know the game with the guns.... :rolleyes:

[fitbabits]

Oh hell yeah so far we know about MGS 4, and then there's ummm oh and cant' forget, you know the game with the guns.... :rolleyes:
Ooh, game with guns - it has to be Halo 3! :rolleyes: You read it here first, folks - Halo 3 is coming to PS3...

[Heretic Machine]

Psh, fita don't you know anything? Halo 3 won't have guns. It'll have swords! Master Chief will be going medieval on their Covenant asses!

[Royal Fool]

Are they kidding me?

It's so obvious that the Phantom will overtake and outsell them all combined.

Heathens!

[fitbabits]

Psh, fita don't you know anything? Halo 3 won't have guns. It'll have swords! Master Chief will be going medieval on their Covenant asses!
Actually, I heard it will have knives, forks, spoons, pots and pans. And the main character will be Master Chef. BAM!

[JupiterV2]

Absolutely, the 360 will sell better than the revolution...but if I was Nintendo, I wouldn't give a rats ass. Here's why:

1,000 units sold x $50 profit ($400 price at $350cost to manufacture (12.5% margin) = 50,000 profit.

500 units sold x $100 profit ($250 price at $150cost (40% margin)) = 50,000

Granted these numbers are completely ficticious but they're not far off the mark. As a salesperson, I'd rather sell less for more. Less work, more money in returns. Less units you have to manufacture in more time means less factory defects, which lends to the consumer's belief that you make a solid, quality product.

To put this into perspective, consider that the 360 may sell 1,000,000 units to the Revolution's 500,000 units. Both companies would still make $50,000,000 dollars profit. With 50mil in their pocket for selling HALF of what the 360 did, you think Nintendo won't be laughing? I would be!

Jupiter Ver. 2

[fitbabits]

Absolutely, the 360 will sell better than the revolution...but if I was Nintendo, I wouldn't give a rats ass. Here's why:

1,000 units sold x $50 profit ($400 price at $350cost to manufacture (12.5% margin) = 50,000 profit.

500 units sold x $100 profit ($250 price at $150cost (40% margin)) = 50,000

Granted these numbers are completely ficticious but they're not far off the mark. As a salesperson, I'd rather sell less for more. Less work, more money in returns. Less units you have to manufacture in more time means less factory defects, which lends to the consumer's belief that you make a solid, quality product.

To put this into perspective, consider that the 360 may sell 1,000,000 units to the Revolution's 500,000 units. Both companies would still make $50,000,000 dollars profit. With 50mil in their pocket for selling HALF of what the 360 did, you think Nintendo won't be laughing? I would be!

Jupiter Ver. 2
You're missing the point, though. Ask anyone at Nintendo, Sony or Microsoft which they'd rather have - 1,000,000 consoles in homes or 500,000 consoles in homes? Plus, with the greater installed user base, you stand a far greater chance of selling more games, which is where the REAL money/profit is to be made.

[MSUStud911]

I think Nintendo is forced to take that strategy. They clearly can't compete money wise with Sony or Microsoft. Thus, their consoles have to make money. They can't sell at a loss in order to get units in homes and then seek to recoup on software sales and licensing fees. Nintendo will remain profitable, even if it remainsmore of a niche product.

[bjornbarspingvinen]

the real money is in license fees, a larger installed base=more software customers=more money :D

Anyhow, I don´t think nintendo will even come close to PS3 and Xbox 360 outside japan. I think MS will get a better 2nd place than last time, and sony will be nr1, but with a much lesser marketshare.

[Eon]

I don't know how you can say the PS3 will dominate at this point. It may very well dominate, but right now that doesn't appear to be the likely outcome. To me it looks like Microsoft's headstart combined with the expected expense of the PS3 and Sony's complete lack of any online strategy are all pointing to the Xbox winning this generation. Is it WAY too early to speculate? Yeah, but speculate I will! [snipped for length]


Would the real J Allard please stand up?!

Anyone counting Sony out of this generation has their head wedged tightly up the MS orifice. But then you ARE calling yourself MS U Stud 911, so what more can we expect?

[Dabombpizza]

I don't think nintendo cares about competition anymore. They're obviously very good at maintaining their budget since they have never reported a fiscal loss. Contrast that with *** who lost tons of money on the sexbox and Sony (which I'm not sure, but didn't they report a recent loss?). Of course, I don't think MS and Sony care since collectively they control the entire electronic world.

And as far as Sony knowing consumer electronics, have you ever heard of the minidisc player? Yea, software support was horrible, didn't play MP3s until recently, and although it is an amazing media format, it cannot be used by anything but sony software because of the proprietary technologies that sony refuses to share. Overall crappy item.

[Dabombpizza]

Would the real J Allard please stand up?!

Anyone counting Sony out of this generation has their head wedged tightly up the MS orifice. But then you ARE calling yourself MS U Stud 911, so what more can we expect?
I am J. Allard.
I was going to point out what MSU stood for...but then I realized your biting sarcasm and refrained from doing so. You have to do what Abendigo does and use smiley faces :eek:

[IndependentGMR]

Half of all forecasting is wrong.

[fitbabits]

Half of all forecasting is wrong.
And the other half is what? Right?

[MSUStud911]

Would the real J Allard please stand up?!

Anyone counting Sony out of this generation has their head wedged tightly up the MS orifice. But then you ARE calling yourself MS U Stud 911, so what more can we expect?

If you'd actually read what I wrote instead of insulting me you'd realize not once did I count Sony out of anything. I simply stated as it stands RIGHT NOW, with basically no info on PS3 pricing or even much on software, it appears that 360 is poised to be on top this generation. A lot can change and I'm sure a lot will change.

[Stormwatcher]

I think this kind of forecast, made BEFORE any new gen consoles were delivered and worth of 4 years is pure bullshit.

And I can't really see why the X360 is so much more marketable than the PS3. I'd guess that the PS3 has all the possibility of trouncing the Xbox again.
The ps2 humiliated the xbox1 while offering far inferior hardware and not being the first to launch (in relation to the DC).

And the "it doesn't matter if the hardware is sold at loss, they make money with software" point may be valid for the PS2, but the xbox was a total loss, even including the software royalties. There is another xbox only because MS is REALLY rich and stubborn. Any other company would have ran away from that business really fast. A few billion dollars of loss is really bad.

Regarding the Revolution: Anything said about its market performance is just guessing.

[JediSanf]

And as far as Sony knowing consumer electronics, have you ever heard of the minidisc player? Yea, software support was horrible, didn't play MP3s until recently, and although it is an amazing media format, it cannot be used by anything but sony software because of the proprietary technologies that sony refuses to share. Overall crappy item.

Dab, I agree with you completely but here's the weird thing. Many of my Europeans friends own minidisc players and tell me they are pretty common back home. And when I lived in Japan (a year ago admittedly) a vast majority of students who had portable players were using minidisc. Even if we discount that as fuzzy statistics (which it kinda is), I can tell you for certain that minidisc players were the hot shit marketed item in Den Den Town. Maybe we don't like the proprietary format from some old Wild West mentality (I certaintly don't) but Sony must've done something right.

[Karmakin]

I'm kinda surprised by the analysis/predictions here. It seems like fanboyism. As someone who's favorite console this generation is a PS2, and doesn't have an X-Box, here's my prediction.

Sony is going to lose this generation. Period.

The 360 launch is going to be decent, sell-outs, but it's not going to be madness. Which is fine. Next X-Mas however, They're going to be launching their second generation of games. Which, if previous generations have taught us, will be heads and tails above the first. And the first arn't too shabby at that. The Final Fantasy series? Try Mistwalker. FFXIII probably won't be released until something like 2007 anyway:p.

The PS2 does good this generation because it got the early marketshare. The main reason for that I think, was that for a lot of people, it was their first DVD player. Need to get one of those, might as well get a PS2. Because it got that marketshare, it gets the games. Because it gets the games, the marketshare grows. It's a circular loop. I really don't think Sony could compete without that feedback loop.

And regarding Nintendo, that's really up in the air, isn't it? Nobody knows. The Revolution could maintain Nintendo's # of units sold, it could completly bomb if the technology sucks (but frankly, I don't think that's going to happen. The early reviews of the controls were nothing but estatic.), or it could become the next IT thing. Seriously. It could gain noise in the mainstream of iPod propotions. Of course, it always comes down to the games. The funny thing is, most game companies right now do have creative needs that need to be scratched every now and then. I'm expecting to see quite a few titles for the Revolution in between it's release and X-Mas. And chances are that there's going to be a few killer apps in there.

So I wouldn't count Nintendo out. not by a long-shot.

[Xerxes]

Psh, fita don't you know anything? Halo 3 won't have guns. It'll have swords! Master Chief will be going medieval on their Covenant asses!

I heard Team Ninja is getting a 1 billion dollar deal to make a Halo Gaiden game from Microsoft. Master Cheif is gonna have sword and nunchucks.

[DaXIthR]

A bunch of you people with f34rsum deductive skillz can't deduce.

The article didn't say the 360 will pass the Revolution by 2010. It said the 360 will have doubled up on the Rev by that time.

To reiterate the smartest post in this thread...'half of all forecasting is wrong'.

[TheKeck]

And the other half is what? Right?

Sure. If over half of forecasting were wrong, then you could always just assume that forecasts are wrong, and be right most of the time. :)

Edit: I guess that only works if you are talking about forecasts that can only swing one way or the other.

[mister_slim]

Why does the Next-Gen summary seem to differ from the Gamasutra summary?

Gama has the 360 and Rev at 24% and 22% respectively, at 2008, and the numbers at Next-Gen aren't feasible given that.