A Look at 2008

[Steve 3.2]

2008 will be completely about momentum. 

To kick things off, there will be no new consoles or major redesigns next year.  Yes, the PS2 gets lighter and MS and Sony will continue to reduce the costs for their respective consoles.  And yes, we may see some new skus from all the major players, especially Nintendo with a DVD playing Wii.  But in the end there will be nothing from a design standpoint that will drive sales.  So what will?

First and foremost, the games.  There are some heavy hitters in 2008.  A few known and many unknowns.  It's a given that Nintendo will continue to milk their franchises (SSB, Mario Kart, etc.) and also their non-games (Wii Fit, Music, etc.).  And both the 360 and PS3 will get GTA IV.  Gears of War 2 should be ready by the end of the year and hopefully Konami can deliver MGS4.  If you thought 2007 was great, you ain't seen nothing yet!

And then we have the price cuts.  It's not an if, but a when and how much for all the players in 2008.  Nintendo cannot price its machine more than a base 360.  And while it may hurt the bottom line a bit, both MS and Sony need to continue to push the price of entry down on their respective machines.  This is especially important for the PS3 as it costs the most right now even though it may also provide the greatest value with the included Blu-ray player.

And the wild card is supply.  When will the Wii shortages stop in the US?  The public has put up with Nintendo's excuses for over a year now.  It's time for them to either shape up or the public will go elsewhere. 

I started working on replies to The Source's statements but ran out of steam.  Here are my thoughts on the Wii, DS, and 360:

Wii 

1) I'm not sure about Brawl's sales potential anymore.  Traditional software has not done as well as expected lately.

2) Wii Fit has potential but is it coming out too late in the year?  (Many resolve to work out at the start of the year.)  And the supplies of the game and systems could put a damper on sales.  So could price.

3) No need to worry about this.  Nintendo has plenty of games left.  They always do.

4) Nintendo can make 20M Wiis in a year.  But is that enough?  Or could there be a glut come the middle of the year?

5) Not as many as first party ones, that's for sure.

6) Yes, as noted above the Wii's price will move in tandem with MS.

7) S-E is not as important as the other third parties.  I'm more interested to see if Capcom and Konami take the system more seriously in 2008.

8) Demand has already slowed down a bit in all but the Americas.  Expect Nintendo to shift it's focus on where systems are needed.  And expect system to continue to flow at a rate of at least 1M a month.

9) Absolutely.  No question there.

10) No.  The DS phenomenon is unique especially since many households have more than one DS. 

DS

1) System sales have already started to slow down in Japan, but they're still strong.  The system should push at least 4M in 2008, and a redesign in 2009 will help prevent sales from falling further.

2) Like I said about Brawl, not as much as people expect.  But they should be solid.

3) Yes and No.  Sales are way up due to bundling this holiday season.  But they should be lower in 2008.

4) Same shipments, but the focus will shift to outside of Japan.  A price cut could help especially with the death of the GameBoy Advance.

5) No announcements about a DS2.  No major redesign of the current model.  New colors... of course.

6) Probable.  Especially if the PSP gets another one.

7) The PSP has always been a solid system.  I still don't understand why the huge spike in sales in Japan over the resign, however.

8) It's always been there, but the R4 and others have posed the greatest threat yet to Nintendo.  Expect more legal action and maybe a firmware upgrade for the Lite.

9) That really depends on what they bring out.  Some developers seem to get the system and others not to much.  With an ever expanding user base (maybe 80M by the end of 2008), there certainly should be a lot more.

10) The "download station" is only for demos at the moment.  Are you suggesting that Nintendo will bring out full games to the DS through online DLs?  I don't seeing such a service having much of an impact at this point in time.

Xbox 360

1) Sadly, yes.  Though 2008 should be a close second.

2) If the third parties continue to delver what the user base wants, then sure.

3) Profitability will remain challenging, but the services and downloads will help the revenue stream significantly.

4) Not how close, how much more than 1M by the end of the year.  Especially if the PS3 loses a key exclusive or two.

5) I don't see the 360 really changing its sales patterns too much next year.

6) Will of course sell better on the 360 than the PS3, but sales will be limited due to the user base.

7) If it comes out in 2008, Banjo will not have a major impact.

8) Gears 2, Guitar Hero IV, Alan Wake, and hey maybe even Too Human!

9) Only if MS doesn't respond back.  They may have lost Japan, and are losing ground in Europe, but Sony will probably never take the Americas back.


10) Yes, the Wii's LTS will surpass the Xbox 360's in the US by the end of 2008.