Slow Uptake Predicted for Next-Gen

Analysts offer their view on how things will unfold over the next year, possibly pointing to snags for Microsoft's campaign.

After a good showing for all three companies at May's E3, all eyes are on Sony, Microsoft and Nintendo and their next-generation videogame machines. But one analyst group says game makers shouldn't forget about the massive installed base of consoles already in homes across the world.

Xbox 360 ushers in the next-generation this Christmas...

The high cost of upgrading and the potentially disappointing jump in quality between current and the first next-gen games means that gamers will likely stick with what they have for now, according to research by US analyst firm Wedbush Morgan Securities, as reported by GameSpot.

The analysts also predict that, because next-gen consoles provide such complicated technology, we won't start seeing the true potential of the new machines until the second wave of games arrives.

And with nearly 85 million current-gen consoles already out there, Wedbush Morgan Securities thinks that publishers and developers would be foolish to drop everything to concentrate on PlayStation 3, Xbox 360 and Revolution.

...but will gamers stick with their PlayStation 2s instead?

These predictions echo statements by Sony's David Reeves, who recently told a gathering of video game bosses that the money for the next two years would be in PlayStation 2 and PSP.

Microsoft has taken a different approach. The company has already wrapped up development on its last Xbox games and has turned all its attention to Xbox 360, although third parties still have about 300 games set for release by the end of 2006.

The situation is complicated further by the revelation in May that Xbox 360 would be relying on software-based emulation to play Xbox games. The goal for the company is to eventually allow all games to be played, but current Xbox owners might not want to retire their monolithic black consoles just yet.

Also worrying for Microsoft is the prediction by Wedbush Morgan Securities that online gaming would remain a niche part of games until at least 2008.

Microsoft is the clear leader in online gaming this generation, with more than 2 million subscribers to its Xbox Live service. But that represents only about 10 per cent of Xbox owners.

The company is putting its faith in Xbox Live as a vehicle for driving console sales and it hopes to see half of all Xbox 360s online.

Alex Wollenschlaeger
Editor, Kikizo Games