Wedbush Morgan Securities analyst Michael Pachter talks about how the PS3's blu ray can help it win the console war and the format war. Talks about how microsoft will be in the lead for the first two years and for sony to jump back to the top and win both console and format wars.
Wedbush Morgan Securities has issued a report on the video game industry for 2007 and beyond. Huge growth is expected, and analyst Michael Pachter believes the PS3 will ultimately win (just barely) thanks to the Blu-ray format, which he expects to defeat HD DVD.
In a massive 207-page report on the interactive entertainment industry for 2007, Wedbush Morgan Securities analyst Michael Pachter notes that while "the main driver of console hardware sales is the quality and quantity of the underlying available content," the high definition format war between HD DVD and Blu-ray could be a key factor in determining the console war outcome.
"Notwithstanding the efforts of the three console manufacturers to deliver compelling exclusive content, we expect the ultimate outcome of the console wars to be decided by the motion picture studios. Should the studios embrace Sony's Blu-ray standard for high definition DVDs, we think Sony will gain an insurmountable advantage over Microsoft; should the studios embrace Sony rival Toshiba's HD-DVD format, we think that Microsoft can maintain its first mover advantage and will dominate software sales for years to come," Pachter explained.
The wildcard, he said, will be "hardware manufacturers' ability either to develop content internally or to secure third-party commitments for software designed exclusively for a single platform." The playing field in this area is likely to be even for Microsoft and Sony, he said, while Nintendo will probably have the largest portfolio of exclusives.
So how does Pachter see the console war ultimately playing out? Despite Sony's early struggles with the PS3, he still believes Sony will come out on top.
"We expect the dominant console at the end of the next cycle to be the Sony PlayStation 3 (PS3), primarily due to our assessment that Sony will win the high definition DVD format war," he said. "However, we expect Microsoft's Xbox 360 to enjoy a first mover advantage for the next two years, capturing approximately 44% of U.S. and European combined next generation hardware unit sales by the end of 2007. We forecast the PS3 and Nintendo's Wii to capture approximately 21% and 35%, respectively, of the next generation hardware market in this same period. We forecast the Wii to take the lead in 2008, with 39% market share, and expect the race to even out in 2009, with all three console makers capturing between 30 – 37% of the overall market.
"Ultimately, we see Sony 'winning' the console war with 36% of the market, with Nintendo 'capturing' second place at 34% and Microsoft finishing third at 30%. We believe that this is essentially a dead heat, and each manufacturer will have sufficient market share to generate significant profits. These estimates do not include market shares in Japan, which we expect to be dominated by Nintendo (51% through 2011) and Sony (44%)."
Looking at the overall health of the industry, Pachter is forecasting the combined U.S. and European software markets to grow at a 16.1 percent CAGR from 2007 to 2009. WMS estimates that the addressable market opportunity for U.S. software publishers is a whopping $17.7 billion in 2007.
In a separate report from Lazard Capital Markets, analyst Colin Sebastian said he expects at least 15 percent software sales growth in North America this year. "We believe video game sales remain generally healthy year-to-date despite tougher year-over-year comps for the remainder of 2007,"
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PS3, 40%
Xbox360, 37%
Nintendo wii, 23%.
Though wii loses badly, xbox and ps3 is pratically even. And i dislike xbox console. But im giving them a great percentage cause i know there good but not as good as ps3.
Wii wont be that great cause, first off there on top, sales on top way to fast, and thats a bad marketing, in the long run.
Ever heard the story of hair vs the tortoise. As fast as the hair is he gets careless and loses. ps3 is in this case is the tortoise. Slow and steady wins the race buddy.
And xbox well thats also the hair too, a more intellegent hair lol. Second reason for wii downfalls are graphics, And DVD capabilites. But again that part is still up for grabs for them.
The Wii does Open up new markets and seems to be selling of the shelves. As long as Nintendo can beat the drought of games and Developers start making some real games for the Wii there's not much of a reason why it should lose market share, but it seems like Developers are only making Wiimakes (sorry for the Wii pun) and mini games.
The X-box Is doing well so far. The only problem is the market place seems to love to rip people off. This could hurt Microsoft's Rep. I mean come on maps should not cost money, maps were always free on the PC. Why should they magically cost money on a console? Whats with buying Pictures? WHY THE HELL DO I NEED TO PAY FOR A 32 BY 32 PICTURE? They need some original arcade games not just ports 3 of the 4 weeks, and Stop with the whole defending the price when it's clearly overpriced. I mean 500 points for a video to show me how to unlock an achievement when I can go on you tube for a user created one that's free?
Other then the whole marketplace thing the X-box has some good exclusives and has a step up on the multi consoled games with the achievements, and with the console being cheaper then the PS3. So All and all The x-box is doing fine so far in less the marketplace goes to hell. Maybe Microsoft should let the marketplace get a laissez-faire of its own. As long as we don't have to pay for Pictures or maps. Just Games and Real Expansion Packs and I mean REAL ONES.
Now I must stop as this is too long and no one is going to read it anyway.
So basically, it's a genius move on their part.
Besides, I bought my PS3 to play games and High-Definition movies. I have at least 12 Blu-Ray movies and that's all I buy now, no more DVDs. I also have 4 Blu-Ray movies on pre-order.
I'll most definately get a PS3 by the end of this month.
I want some comfort cake.
I'm still waiting for a few good titles to arrive on the PS3 before I get one, though.
But I still don't think anyone can judge who will really win the console wars so early. The Wii and PS3 have been out for half a year now and 360 almost a year and a half. If the systems are going to go 5/6 years, it's way to early to determine anything.
I said it would help it later. Did I say it would help it majority? No. Only time will tell and a poor launch hurts a lot, but is Sony out? Nope. Do I think it will win the console war this round? Not now, but will I later? Who knows, its all up to Sony improving there PR, and getting some decent games. Sony needs to get going as it's looking grim right now.