E3 06: Analysts offer E3 preview

Michael Wallace and Stephen Tam with UBS Securities give investors a heads-up on what they expect from next week's big show.


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UBS Securities analysts Michael Wallace and Stephen Tam have released an investor preview for next week's Electronic Entertainment Expo, and the pair is making some interesting calls on the industry's near- and long-term future.

Heading into the next-generation of console wars, Wallace and Tam caution that the coming battle won't be waged like the last one. With the PlayStation 3 and the Xbox 360 priced higher than consoles in years past, the pair expects fewer gamers to own both platforms, while Nintendo's Wii is a unique enough piece of hardware that companies won't be able to blindly port titles to it from other platforms.

"How the software companies fare over the next several years will not be simply a matter of mass-producing games across all platforms," the report states. "They have to make the right choices and support the right platforms, since there is no clear-cut winner in the hardware market like there was in 2000 when Sony launched the [PlayStation 2]. Guessing the installed bases for each platform is harder than it's been in the past."

As for what is expected at the show, they break it down by console. Despite Sony's assertion at the Game Developers Conference 2006 that Warhawk will be playable at the event, they don't expect the PS3 to be playable, and they don't expect Sony to put a price tag on the console yet.

"More importantly, what we will be looking for is what kind of software there is for the PS3 and how far along it is," they write. "There is still a lot of frustration from third parties regarding Sony development kits and their ability to get quality software done in time for the launch."

On the PlayStation Portable front, Wallace and Tam are expecting a hard drive-equipped version of the system to debut. And while they're also projecting a price cut in the works, they say Sony might put it off until closer to Thanksgiving.

Moving to Microsoft, Wallace and Tam are focusing on how it can take the best advantage of its year-long head start in the console wars. The note says the keys for getting people to jump on the 360 instead of waiting for a PS3 are "momentum and more software, pure and simple."

As for countering the PS3 launch this fall, they suggest the software giant might lower the price of the Xbox 360 by somewhere between $50 and $100. They also expect Microsoft to show its HD-DVD add-on at the show, although they don't expect the add-on to have an impact on the format's struggle with Blu-ray for market supremacy.

Turning to Nintendo, the company's redubbing of the Revolution as the "Wii" hasn't gone over too well with Wallace and Tam, though, ultimately, they don't believe it matters. "Seems like a kiddie name to us, but if people like the games, who cares what it is called," they remark.

They project a fall release at a $199 price point for the Wii, with Nintendo's other existing hardware making some news as well. Wallace and Tam peg June as a possible release date for the Nintendo DS Lite, and they expect a GameCube price cut to $79, possibly to take effect during the show itself.

While they don't venture a guess as to the ultimate winners and losers in this round of console wars, Wallace and Tam are positive on the Wii and favor it to gain some market share for Nintendo this time around.

"All the signs are pointing to a Nintendo revival with what they are doing in the console market," they suggest. "The company has a great chance to expand out of its kids-only market and gain a bigger piece of the cross-ownership pie among platforms."

As for specific reasons why, they expect much better third-party support than the GameCube received because of cheaper, simpler development compared to the Xbox 360 and PS3. And given the Wii's unique controller, they expect more Wii-exclusive titles from the third parties. However, they insist Nintendo needs to do a better job supporting the console with its own games than it did for the GameCube launch.

"In order to succeed, we need to see real first-party support early in the system launch window. This means that we need more games like the groundbreaking Mario 64 for the N64. At the show, we will be looking for Mario, Zelda, Metroid, Donkey Kong, and other staples of the Nintendo lineup."

The pair also offers their take on what some publishers will be showing at the expo, and while most of the games they expect are a given to appear (Gears of War, Killzone for PS3), there are some notable exceptions. For one, they expect the next Halo to be featured at the show (not a big stretch, but still not something Microsoft has confirmed). They also mention a Tony Hawk Downhill Jam in Activision's roster, noting that it will be a brand extension intended to target younger consumers.

Despite all the excitement about next-gen systems, the pair still expects the current industry-wide, transition-year slump to continue for 12 more months. They also expect it will be that long before Sony has enough supply to meet demand for the PS3.

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Avatar image for assassinX01

hahaha wow i love hindsight; wrong, wrong, and WRONG.

Avatar image for DevJin

PS3 kill 360 rubbish.

Avatar image for LordGamer0001

i would love to see and xbox360 price cut soon.

Avatar image for henry4th

quot "As for what is expected at the show, they break it down by console. Despite Sony's assertion at the Game Developers Conference 2006 that Warhawk will be playable at the event, they don't expect the PS3 to be playable, and they don't expect Sony to put a price tag on the console yet. " Now that E3 is already happening, you can tell how wrong these stupid analysts really are.

Avatar image for princeofgames90

man man man i cant wait for E3

Avatar image for shibiovski

its all about the wii

Avatar image for cynikal7

i cant wait for E3...I hope they have the new Zelda game demo for the Wii so we can try it out...that'd be so sick...

Avatar image for Fritzhunter


Avatar image for daghoul

yay e3 is gonna get good

Avatar image for furyofgod

In my opinion, i still think Wii will have its own fan because its games. I specially love its controller, so innovation and seem to be fun. Somehow, PS3 and Xbox 360 games are too heavy to relax, and Wii's games are different. Just wait for the fall of this year.

Avatar image for fedzilla

"TO BE, OR NOT TO BE" It's all about the PS3 !

Avatar image for fedzilla

[This message was deleted at the request of the original poster]

Avatar image for Lost2017

I can probably say that half of what they say will happen.

Avatar image for Imavnas

Koei's Fatal Inertia has actually already been confirmed to be playable at the show so that throws these analysts theories that the PS3 wont be playable out the window.

Avatar image for minarge68

This E3 should be good, unlike last year it won't be just about the hardware, I'm looking forward to the games

Avatar image for OsiriasGuy

[This message was deleted at the request of the original poster]

Avatar image for OsiriasGuy

Wii is great, not like PS1, PS2, PS3....zzzzzzz OMG, dont they realize that name is boring?

Avatar image for GaaraZanta

I actually sort of like the Wii name now, anyway I hope the Wii really helps nintendo break out of its appeared slump, though bussiness wise they are doing fine, long live the DS.

Avatar image for Eliteslaya

sweet cant wait for the ds lite ^_^

Avatar image for nurik_strife

Interesting, but I don't get why Sony would not have Warhawk or the PS3 playable, and I heard that Resistance:The Fall of Man would be a definite playable on the PS3! Anyways I can't wait to see the Revolution, I won't call it 'Wii' and the games on it look gorgeous. Less than a week till E3!!!!

Avatar image for NintendoWarrior

hopefully, the wii WILL bring Nintendo's revival

Avatar image for mcsteve61

Yeah, re-treds and sequels! I love new hardware pumping out old games with amazing graphics. Wii might prove to be the exception, but Nintendo's recent console record sucks so I have little faith. Maybe Sony and microsoft could make better games if they weren't stuck on retarded extraneous hardware and games that want to be movies. I just hope there are good games at E3.

Avatar image for g-master999

Pretty good, except for the slump part. I'm particularly interested how the.. Wii will fare with third-party games and against the PS3.

Avatar image for Shikigaminamasu

This E3 will be the exposition of what will take place on the game market for the next 5 years. Get ready guys, in 6 days, we will have a glimpse of the future.

Avatar image for faridmon

how are u guys agree with the analysys about wii, they are saying more negative things to the system more than positives, people, learn how to read. and who the hell thinks that sony will allow to thier enemy to steal the show with empty handed ps3, the analysys are dumb as always. go wii and ps3

Avatar image for Blue

I think the market share for all 3 consoles will be closer this next-gen,predicting sony will still lead,followed by x360 & wii

Avatar image for drangel_jam

Will anybody pay me if I say that too? I only learnt one thing, developing for the Wii is cheaper than for the XBox 360. Interesting! In terms of cost: Wii

Avatar image for alia999

this all leads to 1 thing, ninty will come first, and the second place will be a tie between sony and microsoft

Avatar image for Gerudodude

I had no idea names could be kiddie. How does that even work? Nonetheless when did the cube only have kid only market. Oh yeah all the kids play RE4 and Killer 7, and the ESBR rating of E means only kids can play it.

Avatar image for siddarth0605

HALO 3!!!!!!!! if they show it at the show its game over

Avatar image for Konfusion

Might as well be the first time EVER that I agree with an analyst report.

Avatar image for Ro-shambo

Nintendo Wii for the win :)

Avatar image for danmp18

Good read. It's interesting that they don't expect the PS3 to be playable on the show floor. If this is the case I expect Sony is making a big mistake, and I can't see the PS3 launching this year. Also, not announcing a price for the PS3 would be a bad move as well because it will lead people to believe Sony has something to hide. The longer they wait, the more gamers will jump to the 360 and not look back.

Avatar image for scwounch

All I want to hear about is Spore! Give us Spore already!!

Avatar image for Thanos_of_MW

Interesting, but E3 is almost here so their opinions are just that, opinions. Facts will be happening soon and I can't wait for Gamespot's coverage.

Avatar image for icewindy

Sounds great.

Avatar image for chrisdojo

forget TEh analysts..... e3 is only a few days away.

Avatar image for jasjul

Thank you Capt. Obvious and his side kick Yah Me Too.

Avatar image for j00n_

No playable PS3 games??:(

Avatar image for mics07

This is probably the biggest, the most anticipated E3 ever...just hope security handles the place well...it might be a target of riots or any criminal activity... My analysis: Sony -will give a highest possible price tag -will have a redesign in an aspect of the console and/or controller -sony will garner a 40% share of the E3 audience Microsoft -will introduce the HD-DVD for the X360 -will show Halo 3 and a probable price cut for the basic bundle -microsoft will garner a 24% share of the E3 audience Nintendo -will reveal the official price tag of the Wii and a probable launch date (still wishing that Wii is its codename) and a price cut on the Gamecube (poor cube...) -will demo the capability of the Wii and its controller -nintendo will garner a 37% share of the E3 audience I'm an unbiased casual yet critical gamer, BTW...i am only stating a hypothesis...not unlike fakeboy death calls to the rival systems...

Avatar image for NFunspoiler

I'm sexy

Avatar image for KiLLer_ba

1 more week till the E3 show gets started

Avatar image for Goze

We've heard all kinds of analysts on all kinds of things, and we've seen them always be right some of the times... Heh, in other words, it's always just a crapshoot.

Avatar image for zombyloco

The revolution is on and wii are the champions, hahahahahahaha cool year for teh video games, i hope to see zelda in this show.

Avatar image for juanfraino

Nintendo has 90.99 % of beeing the best at E3 (the rest 9.01 goes to a posible halo 3 video)

Avatar image for NeoJedi

I could've made those predictions myself... but still very informative.

Avatar image for mickel_darmawan

PS3 will dominate this console war once again, no matter what.

Avatar image for loki8903

cant wait to see the wii in action >_>....that sounds so werid... **SHOW US THE Wii!!**

Avatar image for JACKJIMBO

interesting iedas, i do however think the PS3 will be playable

Avatar image for _Merc_

Sounds great. Can't wait for E3 '06!