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Xbox 360 Will Not Make Microsoft Dominant – Analyst.

Category: Multimedia

by Anton Shilov

[ 05/03/2005 | 04:04 AM ]

Even though Microsoft will release its highly-anticipated Xbox 360 console a couple of quarters ahead of Sony’s PlayStation 3, some analysts do not think the software giant will really be able to change the market and Sony will continue to dominate in terms of worldwide install base throughout the year 2010.

Consumers Slow Purchases Anticipating Xbox 360

“I think when we have this talk in 2010, Sony is going to have 55%, Microsoft is going to have 35% and Nintendo 10%, with all three of those having +/- 5%,” Wedbush Morgan Securities’ interactive entertainment industry analyst Michael Pachter said in an interview with GameDAILY.biz web-site.

The analyst suggests that once Microsoft Xbox 360 is launched, people will continue to get software for the PlayStation 2 anticipating the PlayStation 3 release. He believes few PlayStation 2 owners will get the new Xbox save for hardcore gamers who own numerous consoles. Mr. Pachter thinks only about 30% or a bit more of consumer gamers will get the Xbox 360 in foreseeable future even with Microsoft’s advantage in terms of time-to-market over Sony and Nintendo.

“It’s just that I think the impact on current consumer behavior is limited to 30% of all consumers. Among pure PS2 owners (not those who own an Xbox and PS2), no one is sitting around saying, ‘Oooh I can’t wait for the Xbox 360!’ ... 35% of the existing consumer base is going to slow its purchases in anticipation of the Xbox 360 launch. Next year, 50% of the consumer base will slow its purchases in anticipation of the PS3,” Mr. Pachter said.

By February, 2005, Microsoft Corp. had shipped more than 22 million of Xbox consoles, according to the company. Sony supplied about 70 million of its PlayStation 2 consoled by January, 2004, and approximately 100 million of the original PlayStation consoles by May, 2004.

Microsoft Preps Xbox 360 Launch

In overall, the industry is rather optimistic about the future of the Xbox and the Xbox 360. In the U.S. Microsoft said it had outsold Sony PlayStation 2 with the Xbox console in late 2004.

“In the first generation, we had one simple goal, which was to establish credibility as a great video game platform. We’ve done that. Actually, the last few months in the United States, we outsold Sony with the PlayStation,” Microsoft’s Chairman Bill Gates told in an interview in early January, 2005.

In a research note released to clients in mid-April, 2005, Goldman Sachs projected that Microsoft’s next Xbox console will go on sale in October or November, 2005, and claimed that the software giant may ship 3 million units already this year. In the first two weeks of sales more than a million of Microsoft Xbox consoles were sold in 2001 and the company said it aimed to ship up to 1.5 million of the Xbox machines totally in 2001.

The next-generation console by Microsoft Corp. will be formally announced on the 12^th of May, 2005, during a special show at MTV channel. Viewers will get the first look at the Xbox vision for the next generation – one that ensures that the user experience is always connected, always personalized and always in high definition. The special will feature never-before-seen gameplay of future Xbox games, a peek into the future of the Xbox Live online gaming service, backstage celebrity interviews and exclusive insider footage on the making of the next-generation console.

Microsoft Xbox 360 console is based around microprocessor developed by IBM, high-definition visual processing unit designed by ATI Technologies, I/O controller engineered by SiS and some other key components. The gaming machine will feature wireless network connectivity and will provide a broad set of multimedia capabilities, it is projected.