Sony to win the next-gen battle, says Yankee Group

August 16, 2006

The Yankee Group has released a report that claims that in the next-generation gaming console wars that Sony will beat Microsoft and Nintendo when it is all said and done with, but only by a hair.

Sony Corp. should win the latest battle in its war with Microsoft Corp. and Nintendo of America Inc. for dominance in the video game console business, but that victory will come with plenty of bruises.

That’s the word from a study on the sector released today by the Yankee Group, a Boston technology research firm. The report predicts that Sony’s PlayStation 3 console will ultimately control a larger market share than Microsoft’s Xbox 360 and Nintendo’s planned Wii, but that Sony will likely be forced to slash prices for the expensive system and will be faced with a slimmer lead over Microsoft than with previous game consoles.

PlayStation 3 is due on retail shelves later this year after a delay disappointed many customers who expected it in stores in the spring. Microsoft, whose current Xbox lags the PlayStation 2 in sales by a wide margin, put the Xbox360 on sale last November, giving it a year’s head-start on sales. By 2011, though, the Yankee Group report predicts that Sony will have sold 30 million PlayStation 3s, controlling 44 percent of the market, compared with an estimated 27 million Xbox 360 units, which would account for 40 percent of the market.

Nintendo is expected to stay in third place with 11 million Wiis sold, claiming 16 percent of the console buying market.

The report also says that Microsoft, which launched the Xbox 360 at $399, is poised to deeply cut the retail price of the machine next year, putting price pressures on Sony, which plans to launch the PlayStation 3 at roughly $600, the highest price ever for a video game console.
(Keith Reed, Globe staff)

Source: The Boston Globe

Their prediction is that Sony will sell 30 million PS3 units accounting for 44% of the total market-share, Microsoft will be just barely behind with 27 million and 40% market-share, and Nintendo will sell just over 11 million units totaling for 16% of the left over market-share.

If they are correct then this would mean that Sony would be just barely able to claim a victory, and with Microsoft closing the gap that it currently has then this to me means that Microsoft is the real winner regardless of sales. I’m not completely sure that the PS3 will do as well as they predict giving its $600 selling price, Microsoft’s $300-$400 Xbox 360, and Nintendo’s speculated sub-$200 Wii. I know I’m not ready to go out and spend $600 on a gaming console and a DVD player on steroids.

I think when the PS3 does come out I’ll be sticking with my Xbox 360, and I might buy a Wii while I’m at it.

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