European analyst Screen Digest takes on future console sales

Wednesday 20th June 2007, 10:10:00 PM, written by Stefan Salzl

The London based market research firm Screen Digest took a closer look at the prospects and future developments of the console market. The report highlights the different challenges all three manufacturers face:

Screen Digest raises concerns whether Microsoft can expand its appeal beyond the US market and the UK, both of which are dominated by the traditional FPS crowd, i.e. the male hardcore gamer audience. However, analysis is quick to point out that the potential sales of so called arcade games via Microsoft Xbox Live network provides a viable business model for developers and publishers alike for much lower costs, until an expanded line-up in Q4 2007 could broaden the appeal of the platform.

Meanwhile Nintendo’s Wii faces different problems. Since the product is allegedly the first console to tap into the casual market, there is no prior data about the long term stability of its target market and its long-term appeal to its audience, especially due to its lower performance. Publishers are split into to camps according to the report. Part of the publishers decided to focus their flag-ship titles on the competing platforms and to garner a steady flow of revenue by releasing cheaper mediocre titles for Wii. Other publishers like EA, Disney or Ubisoft see potential economic benefits from lower development costs and fast sales due to an expanding target audience.

Sony PlayStation3 currently finds itself in the third place worldwide. Unnamed sources within SCEE, cited by Screen Digest, have raised concerns that the marketing efforts of the sales leader during the last console cycle have focused too much on the brand itself while it neglected to inform consumers about the wide range of features included in the console. Still European publishers are confident in the strength of the PlayStation appeal and its sales prospects. Screen Digest also assumes that a price drop in autumn, in line with pricing strategy of its predecessors, and the introduction of the virtual online world Home, which carries the hopes of stronger consumer loyalty, could invigorate PlayStation3 sales.

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