Posted July 25, 2011 by James Brightman
Xbox 360 shipped nearly 14 million units over the last fiscal year for Microsoft as the business grew 45%. The console and the Kinect camera have clearly propelled Microsoft forward in 2011, but in the end, a number of analysts still see Sony's PS3 edging out Xbox 360 on a global scale (despite a year's head start for Microsoft in the console wars).
IndustryGamers surveyed several leading games business analysts to get their respective takes on the evolving console battle and who will end up in second place behind Nintendo's Wii. Here's what they had to say.
Jesse Divnich, EEDAR
The Xbox 360 does have a 5% lead over the PlayStation 3 worldwide, a minimal difference. We do know based on our consumer surveys that the replacement rate among Xbox 360s are slightly higher than the PlayStation 3 (The Nintendo DS is the highest, as it is expected for portable electronics). The PlayStation 3 was a tad bit more technologically "future proof" from the start compared to the Xbox 360.
I think if you weigh in those factors, the race is neck and neck.
Additionally, if one looks at the total amount of sales through the first 6 months of 2011, the PlayStation 3 has sold about 10% more than the Xbox 360, worldwide, so the PlayStation 3 is definitely gaining ground.
The PlayStation 3 is still incredibly successful and outselling its rivals overseas. In terms of the PlayStation 3's performance in North America, it is selling quite well and outperforming last year's sales. The problem is the Xbox 360, which has increased its velocity without the aid of any price cuts or redesigns over the last year. The Xbox 360's success is simply incredible. I won't lie, it has consistently beaten my models over the last few months--the folks at Microsoft remind me every month. The only reasoning that seems plausible is the Kinect or the strength of its software library has reached some sort of tipping point making the Xbox 360 an incredible value to consumers at its current price points.
With the crucial holiday season ahead, I can only suggest that we wait until 2012 before I throw in the towel on my previous prediction.
Billy Pidgeon, M2 Research
Xbox 360 has had tremendous success and the hardware continues to sell into the hardcore and mainstream markets. While I had anticipated a high Kinect sales performance and Kinect had some effect on selling in new consoles, the continued strength of Xbox 360 console hardware sell through has been surprisingly high even when factoring in a high replacement rate. On the other hand, Xbox 360s that haven't been replaced due to failure are for the most part very active, and many replaced Xbox 360s have cycled back in to active use as hand-me-downs and through the secondary market.
I still think PS3 has potential to ramp up hardware sales performance based on a stronger first party software library and more affordable hardware, but PS3 got off to a very slow start due to high price and fewer first party software hits than the competition. Hardware price was the bigger problem in the recent economic downturn when Xbox had a lead on production cost reduction and the launch price on Wii was extremely disruptive.
Should Microsoft release a successor to Xbox 360 and shift the pipeline for hardcore games over to the new consoles, that would be a possible scenario by which PS3 could bypass Xbox 360's active installed base. This scenario would give PS3 the opportunity to soak up the hardcore sector.
As for second place, as far as the hardcore market is concerned, I'd say PS3 is a strong contender for that position. While most PS3s sold in are active, Wii's active installed base is far lower than cumulative sales. Nintendo's first party software largely targets Wii's hardcore sector, while third party software performance on Wii remains soft and the mainstream sector has largely abandoned Wii.
David Cole, DFC Intelligence
In terms of our forecasts, we have the PS3 sales matching Xbox 360 in 2011 but that still leaves them behind in cumulative sales. However, when we measure what we call active installed base or number of systems in use we forecast that the PS3 will reach the Xbox 360 this year. This is because the failure rate on many older Xbox 360 systems was high. I know personally I have gone through 3 Xbox 360 systems and still have my original PS3.
Obviously the U.S. is a totally different story. We think when all is said and done the Xbox 360 will sell more than the PS3 in the U.S. However, it is a different story in Europe and very different in Japan.
In the U.S. the Xbox 360 has been amazing as it had its best year in its fifth full year of release (2010) and we expect its sixth year (2011) to be its second best.
Colin Sebastian, RW Baird
As it stands today, Xbox is still enjoying the positive tailwinds from Kinect and Xbox Live, which are still considered a step above the equivalent Sony offerings. However, as quickly as the tide changes in the video game industry, you would never want to count the PS3 out - for instance, if Sony combined a strong first party lineup (e.g. Uncharted/Resistance) with another hardware price reduction, I believe we would see a nice pick-up in unit sales this fall.