Microsoft was the first company to launch a next-gen video game console and by doing so it hoped to build up a foundation of consoles and users before Nintendo and Sony would release its equivalents. Some were speculating that this was because Microsoft was afraid of what the other two would come up with. What Sony would do was pretty much a given; performance all the way, Sony is that simple in its design, and if PlayStation 3 would turn out to be faster than Xbox 360 the race is pretty much lost before it started. No on knew what Nintendo had up its sleeve, except Nintendo, which certainly worried Microsoft. In retrospect we can conclude that the performance of Xbox 360 is enough and that it was more or less just a matter of establishing a foundation
The video game market as a whole did not gain that much from the launch of Xbox 360. Many chose to wait and stay cool, waiting for the remaining two. Microsoft also had some teething problems which caused a lot of bad publicity, which certainly affected the sales. One year later the reports have started to gather and it seems people have decided to open up their wallets once again.
The market has doubled in size since last year and the hardware sales has reached a value of $1.3 billion USD during the first quarter. The total sales of games, hardware and accessories went up by 54%, up to $3.3 billion. The fact is that these figures could have been even higher if there had been more Wiis to sell. There are some speculations as to how much more, but they are just speculations.
Analysts at IDC have also uttered some concerns regarding Nintendo’s ability to supply enough volumes of Wii and says that there will be a shortage up until 2009, which in turn means that there will be a very strong demand all through 2008. Does this mean that Nintendo should revaluate its estimate of 14 million consoles up until April next year? Probably not. Nintendo has promised to raise production rates and ship larger volumes after that the report went public.
Xbox 360 and PlayStation 3 is expected to gain on Wii through a couple of strong game launches; Halo 3, Heavenly Sword, Lair, etc., but these are suppose to be temporary, an assumption which we question a bit. So far the “limited” sales of Wii have been due to a single factor and that is the limited supply, and that Wii sold less in March than February was also because of this. This is something that worries other analysts as they mean that the big success of Wii can hurt the market in the long run.
Neither Sony nor Microsoft is sad about the shortage of Wiis and even if Xbox 360 is in a very important period right now there is no doubt that PlayStation 3 will gain, the question is if it will be back to the old glory days the PS2 or something in between, right below or above Wii, which is gaining fast on Xbox 360 and will surpass it.
In the end we can conclude that the video game market has never been healthier and if the music industry comes up with something revolutionary soon it will be surpassed as the largest entertainment industry. Video games companies have been accepted as a legitimate form of entertainment and have a much better reputation, which to us can only lead to one thing; dethroning.
