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© morgenstjerne dreamstime.com Electronics Production | July 17, 2013

New consoles coming, but forecasts fall short of previous highs

Microsoft and Sony’s new game consoles will both ship in selected markets during the 2013 holiday season.
The XBOX One and Sony PS4 appear evenly matched with content remaining as the primary means of differentiation. A number of new entrants to the fixed console market, such as Ouya, are ratcheting up the competitive field with pricing and gaming experiences intended to capture non-core gamers. ABI Research expects cumulative shipments of 8th generation consoles from the big three to pass 133 million during the first 5 years on market, compared to nearly 140 million 7th generation consoles over the same length of time.

Senior analyst Michael Inouye comments: “With many of the casual gaming segment embracing mobile devices for gaming, without a shift in strategy and pricing the Wii U will likely fail to match the success of the Wii which will impact future console shipments. If China decides to lift its ban on consoles, however, in the short term this could boost future shipments of 7th generation game consoles while minimally altering the 8th generation.”

New Android-based consoles are finding a niche but still lack differentiated gaming libraries from mobile devices and faced some early stage technical difficulties. One area of growth, currently unaccounted for in the forecast, is a low-cost smart STB/console ($99 or less) based on current 7th generation console technology.

Practice director Sam Rosen added: “The future prospects of gaming platforms depends in equal measure on compelling games and pricing falling within household reach for discretionary/gift spending. Without solid titles and first party franchises platforms will have a difficult time finding traction - streaming media is not enough when low-cost smart STBs are readily available. While we don’t anticipate a drop-off in game console households, barring significant changes to less developed console markets in Asia and Latin America there isn’t a great deal of growth opportunity beyond the current installed base.”

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