Videogame Hardware Sales Down in 2004

New research suggests current-gen decline.

The videogame hardware business is notoriously cyclical, hitting highs and lows at consistent times during the life of a console.

According to new research out in the US, the current generation of PlayStation 2, Xbox and GameCube has peaked and sales have now started to decline ahead of the next generation of machines from Sony, Microsoft and Nintendo.

After a year of good global console sales in 2003 where 35 million people picked up new hardware, shipments have dropped by nearly half to 19.3 million in 2004, according to market research company In-Stat/MDR.

This news comes in spite of aggressive price-cuts from all three hardware companies and Sony's recent redesign of the PlayStation 2.

And, for one analyst at least, the strength of current hardware might be good enough for a lot of people, leading to fears that uptake of the next generation of consoles, due for release in 2005 and 2006, might be slower than that of the current three home consoles.

"I think the shipments for the new consoles will be less than current generation, at least initially," said Brian O'Rourke, an analyst with In-Stat/MDR.

"This generation has been so incredibly successful...and a lot of the people who have bought consoles in this cycle are casual gamers who are quite satisfied with what they have now."

"It's going to be a real challenge to try to convince those people to trade up to the new technology."

Time will tell if O'Rourke is right, as the industry teeters on the brink of the next console generation.

Microsoft is expected to beat both its competitors to the market by releasing the successor to Xbox in 2005, with Sony and Nintendo following suit in 2006.

All three companies are expected to clarify their release plans at the industry's premier trade show, the Electronic Entertainment Expo, which will take place in Los Angeles in May.

Alex Wollenschlaeger
Editor, Kikizo Games