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Forums - Sales Discussion - DFC: Game Industry to Reach $47 Billion in 2009; Xbox 360 to Finish Last?

elnino334 on 18 September 2007

http://biz.gamedaily.com/industry/feature/?id=17459

 
DFC: Game Industry to Reach $47 Billion in 2009; Xbox 360 to Finish Last?

With a year's head start and Halo 3 about to launch, you wouldn't think the Xbox 360 would end up in third place, but DFC analyst David Cole is concerned that could happen. Even so, Microsoft's place in the race won't affect the tremendous growth DFC is predicting for the industry over the next few years.

According to a series of reports from interactive entertainment research firm DFC Intelligence, the video game industry is primed for some explosive growth over the next couple years. DFC forecasts that the global market will increase from about $33 billion in 2006 to as much as $47 billion in 2009.The forecast includes revenue generated by console hardware and software, portable hardware and software, PC games, and online PC and console games.

 

 

While DFC's forecast shows strong growth in all major categories, the firm highlighted two areas in particular. DFC believes the PC game market will grow to over $13 billion by 2012, thanks largely to online game revenue tied to subscriptions, advertising and digital distribution.

 

Another area highlighted was portable gaming. "Revenue from portable game software has more than doubled in recent years and we think that the Nintendo DS could eventually become the best selling game system ever in five years," said DFC analyst David Cole.

 

Perhaps the most interesting aspect of DFC's report, however, was the firm's take on the console battle. DFC forecasts the market using three different scenarios and estimates that combined cumulative worldwide sales for the three systems will reach between 180 to 210 million units by 2012. What's surprising, though, is that in all of DFC's scenarios, the firm raised its forecast for the Wii and the PlayStation 3 but lowered its forecast for the Xbox 360. In fact, Cole is concerned that despite Microsoft's one-year head start on the competition, the Xbox 360 could wind up a "fairly distant third."

 

"The Xbox 360 will need to build a strong base outside North America to avoid being in a fairly distant third," he said. Overall, DFC forecasts that the Wii will prevail through at least 2008, but the firm still is bullish on Sony. DFC thinks the PS3 "could start coming on strong" in 2009. "We could have a situation where the Wii sells more hardware units, but by 2012 the PlayStation 3 is generating more software revenue," Cole added.



by James Brightman

Comments or questions? Send them to editor@gamedaily.com

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Will be interesting to see what happens though it seems to me by global they mean they need to do better in Japan which I disagree with.  Will be fun to see how things turn out.

 



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dallas on 18 September 2007

Well, one of the consoles has to come last. Sorry f-boys.



FishyJoe on 18 September 2007

Does the five years for the DS to take the lead means five years from now or five years from the DS launch?



Hus on 18 September 2007

xbox is destined to be last.



johnsobas on 18 September 2007

analysts are always right guys, don't even bother to argue. I mean, look at Pachter.



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rocketpig on 18 September 2007

This makes me laugh:

""The Xbox 360 will need to build a strong base outside North America to avoid being in a fairly distant third," he said. Overall, DFC forecasts that the Wii will prevail through at least 2008, but the firm still is bullish on Sony. DFC thinks the PS3 "could start coming on strong" in 2009. "We could have a situation where the Wii sells more hardware units, but by 2012 the PlayStation 3 is generating more software revenue," Cole added."

Okay, Reality 101 here:

1. The 360 is only doing poorly in one major region: Japan. It's extremely strong in NA and the PAL regions seem to be warming to the console. In any case, the PS3 needs to outsell the 360 in PAL regions before I'll even consider it stronger than the 360 there.

2. I'm tired of hearing how the Wii will lose momentum. I don't see it happening, period. It's becoming a tired (and downright false) stance more and more every day.

3. The Wii may not be king of software sales? SHOCKING. Absolutely-freakin-shocking. Duh. It's a casual console. While software sales might not be through the roof, that doesn't matter when you're making a boatload of cash on each hardware sale you make. Sure, Sony and MS may be kings of software but that becomes a pyrrhic victory when you're bleeding money out your ass on hardware sales.

These guys need to just shut up about this stuff. They never get anything right. I feel sorry for their investors if they're staying bullish on Sony right now. Some poor bastard might actually listen to their advice.




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TheSource on 18 September 2007

I don't have too much trouble with this report... It is still possible for Xbox 360 to sell as low as 30 million units I think in the worst (realistic) scenario, but I can't see PS3 reaching fewer than 40 million units. 360 should be able to reach numbers like 25/20/1 worldwide (Americas/Others/Japan) if it sees price drops and continued software support. To me the best case scenario is 65 million 360s sold, and the worst case scenario is 35 million 360s sold. Either way, Microsoft will make inroads this generation, and I think they'll end up close to 45,000,000. PS3 is going to sell better in the West when it drops under $400 for all skus. Japan is going to account for 4-8 million consoles, essentially by default. I basically see PS3's worst (realistic) case scenario as 20/15/5 (Others/Americas/Japan) - 40 million worldwide. It could yet be as high as 36/36/8 (Americas/Others/Japan) realistically. But I'm expecting something more like 28/18/6 (Others/Americas/Japan) - about 50-55 million worldwide - which should be enough to beat Microsoft later in the generation (09'-11') - in the same way Gamecube gained (some) ground on Xbox in 2005-2007 because sales kept trickling in. Wii's year end totals are going to dwarf the others though, at least through holiday 2009, and I think it will keep selling steadily through 2012, before declining to a complete standstill in 2015... DFC's scenario seems to be something like this (they say 180 mill to 210 mill consoles by 2012: 180 million scenario, with 360 slowing down, and Wii selling the most hardware 05' 06' 07' 08' 09' 10' 11' 12' (Cumulative Life Time Sales are beneath the year) 360 1.5 7.8 14 20 25 29 32 34 PS3 0 1.2 7.5 16 24 31 36 40 Wii 0 3.0 20 40 65 85 99 108 210 million scenario, with 360 slowing down, and Wii selling the most hardware 360 1.5 7.8 15 21 26 31 34.5 37 (Cumulative lifetime sales are beneath the year) PS3 0 1.2 8.5 19 28 36 42 46 Wii 0 3.0 20 45 70 95 115 127



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BenKenobi88 on 18 September 2007

At least they changed their stance to "PS3 selling more software down the road" instead of it being the hardware king like many thought.

I can see that being a possibility, but even then, I think it's going to take a very long time for the PS3 does any passing of the Wii. By then I don't think anybody will care.



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HappySqurriel on 18 September 2007
TheSource said:
 don't have too much trouble with this report...

It is still possible for Xbox 360 to sell as low as 30 million units I think in the worst (realistic) scenario, but I can't see PS3 reaching fewer than 40 million units.

360 should be able to reach numbers like 25/20/1 worldwide (Americas/Others/Japan) if it sees price drops and continued software support. To me the best case scenario is 65 million 360s sold, and the worst case scenario is 35 million 360s sold. Either way, Microsoft will make inroads this generation, and I think they'll end up close to 45,000,000.

PS3 is going to sell better in the West when it drops under $400 for all skus. Japan is going to account for 4-8 million consoles, essentially by default. I basically see PS3's worst (realistic) case scenario as 20/15/5 (Others/Americas/Japan) - 40 million worldwide. It could yet be as high as 36/36/8 (Americas/Others/Japan) realistically. But I'm expecting something more like 28/18/6 (Others/Americas/Japan) - about 50-55 million worldwide - which should be enough to beat Microsoft later in the generation (09'-11') - in the same way Gamecube gained (some) ground on Xbox in 2005-2007 because sales kept trickling in.

Wii's year end totals are going to dwarf the others though, at least through holiday 2009, and I think it will keep selling steadily through 2012, before declining to a complete standstill in 2015...

DFC's scenario seems to be something like this (they say 180 mill to 210 mill consoles by 2012:

180 million scenario, with 360 slowing down, and Wii selling the most hardware

05' 06' 07' 08' 09' 10' 11' 12' (Cumulative Life Time Sales are beneath the year)
360 1.5 7.8 14 20 25 29 32 34

PS3 0 1.2 7.5 16 24 31 36 40

Wii 0 3.0 20 40 65 85 99 108


210 million scenario, with 360 slowing down, and Wii selling the most hardware

360 1.5 7.8 15 21 26 31 34.5 37 (Cumulative lifetime sales are beneath the year)

PS3 0 1.2 8.5 19 28 36 42 46

Wii 0 3.0 20 45 70 95 115 127

I'm not really sure I agree with you ...

Right now you can see in the quantity of games being released that the lower cost of development and higher sales of the Wii is having an impact on third party developers; I honestly don't expect that in 12 to 18 months third party developers will see much value in producing XBox 360 or PS3 games.

Essentially, from 2009 and on the PS3 and XBox 360 will (potentially) have similar support to the XBox/Gamecube in 2004/2005 but will have much higher price tags.



Parokki on 18 September 2007

Genghis-khan, I'm honestly not sure why you think the PS3 will suddenly start selling better with time. Developers are going multi-plat or abandoning it all the time, and the other consoles are getting stronger by the day.

The Gamecube did only 22M with Nintendo first-party games, and an initial price tag of $200. You seem convinced the PS3 will do at least twice as good with Sony first-party games, and a price tag more than twice as big.

I'm doubly curious about this, because everything you say normally makes total sense to me. ^^