Analyst: 200 million next-gen consoles sold by 2012

Strategy Analytics says Microsoft will make major inroads, while Sony retains lead; Nintendo's console market share slips further.


As the launch of the Xbox 360 nears, yet another research firm has publicized its predictions for the life cycle of the next generation of consoles. This time around, the company in question is Strategy Analytics, a multinational consulting firm headquartered in Newton, Massachusetts.

Today, the company released a study titled "Games Consoles for the Digital Home: Assessing the Prospects for PS3, Xbox 360 and Revolution." The company summarized the findings of the study in a heavily circulated press release that contained a few key statistics and some interesting predictions.

According to Strategy Analytics, the Xbox 360 will be the top console in the US and European markets...until 2007, provided Sony exploits its console's online potential and technical muscle. "Microsoft's Xbox 360 will present a serious challenge to Sony's dominance of the games console market," read the report. "But the PlayStation 3 (PS3) will eventually pull ahead if Sony ensures that its online experience matches that of the Xbox 360, and that its Cell processor technology meets its full potential to transform gaming into a near-video quality experience."

Strategy Analytics also offered some projected numbers to back up its assertions. It predicts that both Sony and Microsoft will increase their share of the console market at Nintendo's expense. The report predicts that over the next seven years, around 200 million next-generation consoles will be sold. Of those, 121.8 million (60.9 percent) will be PS3s, 58.8 (29.4 percent) will be Xbox 360s, and just 18 million (9 percent) will be Nintendo Revolutions. "Cumulative retail revenues for all consoles over this period will exceed $47 billion," said the report.

Although it doesn't address the fact both Sony and Microsoft are expected to lose money on every PS3 and Xbox 360 they sell, Strategy Analytics' report does touch on their wider next-gen plans. "Both the PS3 and the Xbox 360 will become cornerstones of each company's digital home strategy," said the company. "Sony will use the PS3 to help establish Blu-ray Disc and the Cell processor as mass market technologies. For Microsoft the Xbox 360 could secure a leading position for the home PC as a broadband digital media server."

"The Xbox 360 represents one of Microsoft's best hopes of controlling the digital home," said David Mercer, principal analyst at Strategy Analytics, in a statement. Mercer also made a rather obvious prediction, saying "The 2005 holiday season will be a make-or-break time not only for the Xbox 360, but also for Microsoft's wider digital home strategy."

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