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Yankee Group, a U.S.-based research firm, said that while Microsoft Corp. has a significant lead over Sony Computer Entertainment Inc. in terms of launching its next-generation game console one year ahead of Sony, eventually the latter will get larger piece of the game console market pie in the United States. But this will happen only in 2011 and the Japanese company will have only 4% market share lead.

According to the Yankee Group DecisionNote, “Can Sony Hold Off Microsoft as Video Game Consoles Emerge as a Platform for Digital Distribution?”, by 2011 the PlaySation 3 (PS3) will have sold about 30 million units and account for 44% of cumulative third-generation console sales in North America. Comparatively, Microsoft will have sold nearly 27 million units by 2011, accounting for 40% of the market and Nintendo will have sold just over 11 million units, accounting for 16% of the market.

Yankee group also believes that overall, fewer consoles will be sold this generation. Yankee Group anticipates that as a result of higher console prices, overall unit sales will lag the previous generation of consoles (GameCube, PlayStation 2, Xbox).

But given that the prices on consoles from Microsoft and Sony are fairly high due to increased costs of hardware used, Microsoft will put significant price pressure on Sony during the PS3’s lifecycle, believes the research firm. “In addition to starting at a lower price than the PS3, Microsoft is well positioned to make a large price cut in the spring of 2007 and each year thereafter putting significant price pressure on Sony,” believes the firm.

“With a growing installed base of connected consoles, content owners are beginning to recognize the potential video game consoles offer as a distribution channel. Additionally, these platforms will serve as a strong medium for advertising, validating the growing market for in-game and around game advertising,” added Michael Goodman, Yankee Group media and entertainment strategies senior analyst.

Discussion

Comments currently: 7
Discussion started: 08/18/06 04:36:52 AM
Latest comment: 08/22/06 07:13:26 PM

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1. 
What a bunch of BS. It's one thing to project market trends over the next year or so but 2011? Why they are at, who's gonna win the Superbowl that year? Thought so.. Dumba$$es
0 0 [Posted by:  | Date: 08/18/06 07:27:16 PM]
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2. 
my comments are to supply microsoft with a new wave other ideas that may benefiet them in the longrun I my self do agree in the unified shader operations and the tech used in your xbox360 which is remarkable core archatecture my complaints are very small and maybe useless to your knowledge but it may ring a bell in the noggin for future support I believe that microsoft should not waste there time with the japanese market imagine all the systems you guys shipped at launch over there were sold over here in the states your hardware is collecting dust on japanese shores when all those systems can get numerous playtime in our native country japanese gamers are hard to please there gaming machines are already imprinted in stone sony and nintendo there currency will never be waisted on american technology they feel they would be giving in to the disorderly conduct of creating a monster willing to eat the noodles out of there bowls
0 0 [Posted by:  | Date: 08/20/06 05:19:51 PM]
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3. 
New Market research by me says that no one will care about the PS3 in 2011.
0 0 [Posted by:  | Date: 08/21/06 07:02:12 PM]
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