I don't know why all the doom and gloom. Both XBO and PS4 have broken all console launch sales records, it seems that counts for nothing these days.

The suggestion that once the "core" have purchased, there are no more people to buy the consoles makes a mockery of the sales that previous consoles have done. PS3/X360 have done 160 million combined. PS2 before it did over 100 million etc etc. There are many people who want a console but will not buy it day 1, but 1 or 2 years in, or further.

I love how people are sayimg thing like "ontraction from 260m." Its statements like these that people said Sony lost half its fanbase. Never understood this. The user base of this generation will be closer to 280m when all is said and done. Just like last gen is now closer to 200m instead of 150m that it was at when the 3 consoles launched.

Anyway, on topic. There will be a decrease gen over gen but due to the Wiis false (for lack of a better word) increase. Wii didnt expand the market like the Ps2, ps1 snes or nes did. The people who bought those will stick around. As evident from the generations growing each time. My only question is, will it shrink from ps2 era? I really hope not but with Wii Us massive drop...

This i don't understand. Every generation has been successful because of so called casual gamers. Thats where the growth happens...

I personally agree. These new consoles have not shown the casual audience a reason to buy. Digital has all but remove d the format war from the equation and social connectivity is offered for free on smart devices that most people already own. Supplementing the television experience is already been claimed by smart tv's so the wii u and xbox one's approach to that market has been limited.

I don't know why anyone is in shock about this, I mean mainstream gaming media has cut off it's nose to spit it's face in regards to expanding the market. Now that has rippled into the industry itself in the form of lack of investment in diverse experiences.

Your 280 million theory I can only see if this generation last longer than the 7th generation which was due to the ps3's massive drop. The wii's false increase was due to Nintendo's inability to support the influx of new gamers with only ubisoft and microsoft's token help. They lost interest because the industry was not provideing them with experiences outside of cash grabs and now that is biting the industry in the ass.

The so-called hardcore gamers have to be dangled free games themselves to bite on the vision that these companies have lined up for the next 6 or so years (ps+, ddp, and xbla). That's not a good sign of growth in a business, that's a blowout sale.

PS4 Lifetime: 60 million
Wii U Lifetime: 45 million
XB1 Lifetime: 50 million

The problem with the casual gamers: they are not brand loyal. And why should they? Gaming is not a big part of their life, it is only a small part of their entertainment.

There aren't 50+ million Wii casuals who impatiently waited for the Wii successor.

Some of them liked the dance, fitness or sport minigames, but wanted better graphics or better tracking of their movements... a big part of them moved on to Kinect.

Some of them liked the dance, fitness or sport minigames and are perfectly fine with the Wii graphics... a big part of them will use the Wii until it breaks and don't care for new hardware.

Some of them liked casual games and found thousands of them dirt cheap or free on tablets and smartphones and are happy with their new device.

That's exactly why you keep creating new experiences to grab their attention instead pf chasing it. That's what expression ahead of the curve is talking about. This is also the one of the things the industry has had a lack of for the last few years in regards to those who maintain a lions' share of it's resources.

Also, there is no problem with so called casual gamers. They have been the life blood of the industry, it's just now mainstream gaming media has skewed that narrative. 

Why hasn't the Wii U failed yet? It's an epic fail from a gamers stand point, BUT if one knows Corporate Finance one understands that it probably isn't a failure. These companies don't see their products as we do. To place it as easily as possible, first it all depends on the console manufacture and secondly how they see their business.

If Nintendo for example sees the gaming business as two businesses, the first is the hardware business and the second is the software business, Wii U is just another product that happens to be in their hardware business. If the hardware business starts going up, does it matter if Wii U isn't selling as well as its predecessor especially since 3DS is very successful though one could argue it's not as much as the DS from a "console sales" perspective. Console sales isn't the end all, but we the gamers make it the end all.

I just can't see how the market is going to contract by 100% this generation. According to the following article, the video game industry is the fastest growing entertainment sector by 7% per year in 2013, therefore after the Wii fad. I can only see this continuing as video games become more mainstream in developing countries such as India, Brazil etc.

http://www.vgchartz.com/article/250966/65b-spent-on-gaming-fastest-growing-entertainment-sector/