Console sales predictions (+PSP), 2003 - 2005

[Michael Bluth]

The greatest change in our forecast was due to Sony’s announcement that it intends to introduce a handheld video game device in late 2004. The Sony PSP will require owners to purchase dedicated software. Although many observers expect this device to cannibalize software sales for Nintendo’s Game Boy Advance, we expect the Sony device to appeal to older and more affluent consumers, and expect sales of PSP software to expand the category. Our forecast assumes that Sony will sell 10 million PSPs worldwide in 2004, and another 20 million of the devices in 2005. We expect PSP sales to be split between the U.S. (45%), Europe (30%) and Japan (25%), with a software tie ratio of 2.5 units in 2004. We expect the average retail price of PSP software to be approximately $30 in the U.S. and $33 in Europe. These expectations lead to total 2004 PSP software sales of an estimated $586 million in the U.S. and Europe combined, or approximately 3% of total industry sales. In 2005, we forecast total PSP software sales of $1.69 billion, or approximately 7% of total industry sales in the U.S. and Europe.

It is clear that we are optimistic about the prospects for the Sony PSP. Offsetting our optimism about this device is our growing pessimism about Microsoft’s and Nintendo’s ability to compete with Sony in sales of hardware. We have lowered our forecasts for hardware unit sales for Microsoft from 20.3 million Xboxes between 2003 and 2005 to 18.7 million units, and for Nintendo from 20.3 million GameCubes over the same period to 15 million units. The associated software growth lost due to our expectation of lower hardware sales is substantially offset by software sales gains from the Sony PSP. We have not changed our assumption that Sony will sell 46.3 million PS2s in the U.S. and Europe between 2003 and 2005.

www.wedbush.com

30 million PSPs before 2006? Christ.

[smellslikenintendospirit]

So basically PS2 will continue mudering Xbox and GameCube. And PSP will expand the industry and eat GBA alive, while facing no competition from Microsoft since they pretty much threw in the towel before the battle started.

[firefly]

7 systems out on the market could mean the distruction of the industry

[TheGreenElf]

Originally posted by firefly
7 systems out on the market could mean the distruction of the industry
Yep.

[Hunk The 4th Survivor]

Enough with all these stupid systems and exclusives. im sick of wasting my money on exclusive games on other stupid consoles. they should have 2 comeptetors. SONY and NINTENDO. man more and more keep coming...........errrrrr

[aerofan113]

Originally posted by firefly
7 systems out on the market could mean the distruction of the industry

I think that maybee have that many systems will be good for the industry. As far as Nintendo is concerned, the GBA needs a rival. Im very pleased with the quality of graphics that the GBA produces. PSP may give Nintendo a reason to try hard. None of this will affect Xbox. Why you may ask? Because Xbox is made by Microsoft who have an unlimited amount of money and are targeting a different audience than PS2 and Nintendo. This industry would already be destroyed if there werent any systems to challange Nintendo, Sony, or Xbox.

[smellslikenintendospirit]

In a number of years, you'll walk into The Wiz and you'll have a huge selection of consoles, just like you choose TVs, and pretty much all games will be multiplatform, with some exclusives here and there. High end machines cost more, low end machines cost less, and there will be a white tag on each model telling you what features each one has.

[aerofan113]

I just dont understand how somebody could think that it means the end of the industry.

[Colin™]

now how can you guys say that 7 systems would destroy the industry?

7 come out swinging, maybe 3 or 4 prosper. Thats how capitalism works. Back in the day, there were quite a few automotive companies. Now, you have GM, Ford, Chrysler-Daimler. The industry didn't get destroyed. The strongest survived. Thats how its always been, and thats how it forever will be.

Give me one example of an industry destroyed by too much competition.

[Michael Bluth]

Originally posted by smellslikenintendospirit
In a number of years, you'll walk into The Wiz and you'll have a huge selection of consoles, just like you choose TVs, and pretty much all games will be multiplatform, with some exclusives here and there. High end machines cost more, low end machines cost less, and there will be a white tag on each model telling you what features each one has.

I beg to differ. In the future smaller company will go under, causing larger companies (EA, Microsoft, Sony, Activision, THQ, and even Sega) to scoop them up. When Microsoft or Sony scoops these companies up, they will obviously become exclusive to their respected platform.

Why did I not mention Nintendo? Because they do not, for the most part, buy already established development companies - they like to create their own for a fraction of the cost, where as companies like Microsoft and Sony like to buy established companies with established brands.