IGN makes predictions on consoles for 2007*

[borowki]

My new theory is 360 will price cut after Xenon goes to 65nm, possibly in July or so. This makes all kinds of sense.

THey're probably getting close to breaking even on hardware now. In six months they'll probably be slightly in the black. But yet, they're not about losing money this gen. So the price drop will not come until the cost of goods drops as well, which will happen most drastically at 65nm..

They have target fiscal 08 for profitibility, which actually starts after June 30 07. So the price drop very early in fiscal 08 will drop the 360 hardware back into the red initially (even with 65nm), but give them a full year to overcome this.

That can certainly happen. A lot obviously depends on the competitive environment. As it is though, the 360 already enjoys a huge price advantage over the PS3. If someone is willing to spend an extra $200, I don't think you can convince him otherwise with fifty bucks. The aim of a cut is to broaden the install base. It make more sense to have it coincide with the holiday marketing push. In the mean time money could be better spent in other ways, like stealing exclusives from Sony.

I could see Microsoft making a small cut in Europe prior to the PS3 launch. With the euro at ~1.3 usd, there's plenty of room for one.

 

[borowki]

Have you read any financial papers over the last year? '06 was the year of private equity because borrowing has been so cheap i.e. leveraged buy outs. Go look: Dubai ports, 'that American hospital company', approaches for the LSE etc. all financed by cheap debt. They are a big yes-yes in todays market, especially Japan with an interest rate of just 0.25%.

The hunter can also become the hunted. It's not out of the realm of possibility that a private equity group would make a bid for Sony itself. The parts of the company are probably worth far more than its currect market cap. Dismembering it could be a very profitable exercise.

 

[Laa-Yosh]

By E3 in May... Sony will announce a $100 price drop on both Cores.

At Xmas, Sony increases the HD size of both cores

FFXIII, MGS4, GT:HD, KZ and other exclusives propel PS3 sales

The above three are just not going to happen IMHO.
They just can't reduce the price on the current process without drastically increasing their losses. And 65nm is going to take a while - MS has a headstart and they probably won't make it before autumn.

Bundling a larger HDD would increase losses even more, to drastic levels. At this time it's completely unneccessary anyway - they don't have movie downloads, and everything else will do fine with the 60GB one.

And sorry, but the chances for completing those games this year are very, very slim. Content creation takes a LOT of time. The way things seem to go, we'll be happy to just get Heavenly Sword before Christmas...

 

[Shifty Geezer]

They just can't reduce the price on the current process without drastically increasing their losses. And 65nm is going to take a while - MS has a headstart.

Why's that? Sony were targetting 65nm Cell from Day 1 and should have had the past year working on that for Cell at least. Given RnD from Sony, Toshiba and IBM, I'd have thought it more likely Cell would hit 65nm ahead of Xenon if either is first. Dunno about the GPU parts though

Bundling a larger HDD would increase losses even more, to drastic levels. At this time it's completely unneccessary anyway - they don't have movie downloads, and everything else will do fine with the 60GB one.

I generally concur, but it's quite possible movie downloads will be provided within the year. Sony may be apprehensive on that move because of BRD though, but given a unified content portal between PSP and PS3, where they want download movies on PSP, it's an option.

And sorry, but the chances for completing those games this year are very, very slim. Content creation takes a LOT of time. The way things seem to go, we'll be happy to just get Heavenly Sword before Christmas...

Again I generally agree, but we also don't know how far along they are in some aspects. Without knowing how much more they need to do, we can't really give an ETA. Historically though, these games have been a long time coming. eg GT3 was 2 years in the making. FFX took an age to appear and from MGS1 to MGS2 was 3 years. Still, for all we know some (one?!) of these games was started early generating content. All four out this year though...I think not.

 

[avaya]

Have you read any financial papers over the last year? '06 was the year of private equity because borrowing has been so cheap i.e. leveraged buy outs. Go look: Dubai ports, 'that American hospital company', approaches for the LSE etc. all financed by cheap debt. They are a big yes-yes in todays market, especially Japan with an interest rate of just 0.25%.

This is true for other sectors as you indicate but not for any CE or telecoms company, which is what I was talking about, sorry about the mis-communication there. Japanese rates have been low for years; they are not a big factor in this due to that. However LBO's are a big no-no on the debt rating front for CE/telecoms. They simply are not interested in having as much debt as before because of the rising risks in their business (product commoditisation and falling margins).

 

[superNoid]

Personally I giggle at predictions by the Sony Defense Force. Sony is completely stumbling on its own feet right now, and yet people are still holding out for a miracle that some magical event is going to come in and save face.

The fact is, the hurt has already been done. The average joe gamer already knows the PS3 isn't any more powerful then the 360 (which came out a year earlier), and its $200 more. The 360 game library is already stacked with great games. A year ago, the average response I heard from gamers about the 360 was something like, "Well I might buy one after Halo 3 comes out, and if there is a good price drop." Now-a-days I hear, "I want to buy a 360 so bad, I'm just saving my cash." or, "I already own a 360 and have no intentions of buying a PS3 unless there is a major price drop."

Most if not all of my friends were all longtime Playstation owners. Some own both PS1/2 and a few PSPs. None of these guys own PS3s, and none of them plan on owning PS3s. Price, and principle alone has already convinced these guys they don't want one. Now thats not to say the PS3 isn't going to sell because a few of my friends don't want one. My point is.. average joe gamers (the ones who bought PS2s) are no longer falling for Sonys marketing bs. The truth is out there, the prices are out there and all its going to take is a $100 price drop on the 360 and Halo 3 and you can hammer that last nail in the PS3 coffin.

Europe sales will help Sony, and they'll use these sales to show magnificent they are, and they'll do this immediately after the EU PS3 launch. You can bet your ass that sales will dwindle following launch as they did here in the US (money talks), and by year end Sony will be lucky to have sold 10 million. 2008 could change things if there is a $200 price drop on the PS3, what with games like MSG4, etc.. coming.

However by then the already $200 cheaper (if not $300 by 2008) 360 will have Gears, Blue Dragon, Lost Odyssey, Mass Effect, Too Human, Halo 3, GTA4, Assassin's Creed, Banjo-Kazooie 3, Bioshock on store shelves.

I think we could sit here and guess all we want, but I certainly don't know anyone excited to buy a PS3, even in 2008. I think people are holding out hope that somehow, something will happen that will magically turn around PS3 sales and boost them even at best to what the 360 is. If even then, we say the PS3 sales match the 360s... coming from last gen's PS2s sales.. Sony fails miserablely.

 

[Fu3lFr3nzy]

The truth is out there, the prices are out there and all its going to take is a $100 price drop on the 360 and Halo 3 and you can hammer that last nail in the PS3 coffin.

Thats ridiculous to say that just because of a price drop and Halo 3, that all of a sudden PS3 is dead. Yes, Halo 3 is popular, but do you think everyone will but that? no. Just look at past total Halo+Halo 2 sales for proof. Of course thats not to say that Halo 3 wont sell more than the previous two, but im trying to say that not everyone is interested in that game.

However by then the already $200 cheaper (if not $300 by 2008) 360 will have Gears, Blue Dragon, Lost Odyssey, Mass Effect, Too Human, Halo 3, GTA4, Assassin's Creed, Banjo-Kazooie 3, Bioshock on store shelves.

Again, not everyone is interested in the titles you've mentioned, so theres still going to be alot of people that will hold off buying a next gen console (with the exception of Wii perhaps).

I think we could sit here and guess all we want, but I certainly don't know anyone excited to buy a PS3, even in 2008. I think people are holding out hope that somehow, something will happen that will magically turn around PS3 sales and boost them even at best to what the 360 is. If even then, we say the PS3 sales match the 360s... coming from last gen's PS2s sales.. Sony fails miserablely.

And why wouldnt you get excited on 2008? thats the year when their AAA titles are coming out. Its the year that people will say "eh, whatever, $500/$600 will be well worth it".

PS3 has only been out for the market for 2 months!!!. Yes, sales arent going as well as Sony wishes it was, but its pretty stupid to to predict PS3's future by the way things are going atm. Yes, nothing magical will happen to boost sales, but once the console drops price and games people want arrive, then interest and not magic will drive better sales.

And please, someone correct me aswell, coz my post has many loopholes

 

[liolio]

The truth is out there, the prices are out there and all its going to take is a $100 price drop on the 360 and Halo 3 and you can hammer that last nail in the PS3 coffin.

Thats ridiculous to say that just because of a price drop and Halo 3, that all of a sudden PS3 is dead. Yes, Halo 3 is popular, but do you think everyone will but that? no. Just look at past total Halo+Halo 2 sales for proof. Of course thats not to say that Halo 3 wont sell more than the previous two, but im trying to say that not everyone is interested in that game.

I think he's speaking of US only sceanrio, and I give a lot of credit to this scenario if I take in account gta4 and the fact that the wii drain a lot of market on his own.
And you miss the point, the point is that in US for average joe, the 360 is just as good as the ps3.
But it has bigger library and bigger software to come this year.
In europe it's quiet different a lot of people still think that the ps3 beat the shit out of the 360, really a lot.

However by then the already $200 cheaper (if not $300 by 2008) 360 will have Gears, Blue Dragon, Lost Odyssey, Mass Effect, Too Human, Halo 3, GTA4, Assassin's Creed, Banjo-Kazooie 3, Bioshock on store shelves.

Again, not everyone is interested in the titles you've mentioned, so theres still going to be alot of people that will hold off buying a next gen console (with the exception of Wii perhaps).

New franchises have been very succesfull on 360, more this list fill a lot of different tastes,
next chrismass the 360 will almost be cheap, and will have huge games that are multi (gta4, various sport games,etc...).
How long are you expecting people to hold off, MS did quiet a nice chrismass in US at hight price, people were not about holding off, next chrismass taking in account price, huge multi games, huge exclusives, what are you expecting?
For sure the only real big game we are sure Sony will have is HS and it's a new franchise (like a lot of 360 games you've quoted).

I think we could sit here and guess all we want, but I certainly don't know anyone excited to buy a PS3, even in 2008. I think people are holding out hope that somehow, something will happen that will magically turn around PS3 sales and boost them even at best to what the 360 is. If even then, we say the PS3 sales match the 360s... coming from last gen's PS2s sales.. Sony fails miserablely.

And why wouldnt you get excited on 2008? thats the year when their AAA titles are coming out. Its the year that people will say "eh, whatever, $500/$600 will be well worth it".

I don't agree, Sony still doesn't have failed miserably, but things look alreaqy quiet bad.
For 2008, obviously sony will have huge AAA game, but how much of the hype surrounding the product will have been killed, how long Sony will have to run to match Wii and 360 installed base?
What dev will chose?
In don't know, the sign are bad from my point of view, and if Sony didn't have huge game for 2008, they would have already failed miserably.
It doesn't change nothing, at least a third of the shipped unit are waiting on the shelves, a third of the almighty ps3, people are now expecting Sony to really shine in 2008?
If so Sony will use its huge AAA title to keep a healthy share of market, but anywhere close to a lead.

Sony is not dead, but I think a lot of people in Sony side are playing their head on euro launch, if hype goes down as quick in Eu as in US and Japan, Sony is very likely to fight against a market of 30/40 millions wii+360 in 2008, with few units on its side (even if it's sure that sales will improve close to chrismass) and probably a very bad hype going on.
Editors will almost give up on ps3.

Sorry i'm nor from ms defense force, nor from the wii defense force, nor from the sony offenser force. But I find tought not to be worried about Sony position right now, ok the ps3 is only out for two or three months, but on the other side who would have expect the ps3 to go so low in only two or three months?

 

[TheChefO]

I think he's speaking of US only sceanrio, and I give a lot of credit to this scenario if I take in account gta4 and the fact that the wii drain a lot of market on his own.
And you miss the point, the point is that in US for average joe, the 360 is just as good as the ps3.
But it has bigger library and bigger software to come this year.
In europe it's quiet different a lot of people still think that the ps3 beat the shit out of the 360, really a lot.


New franchises have been very succesfull on 360, more this list fill a lot of different tastes,
next chrismass the 360 will almost be cheap, and will have huge games that are multi (gta4, various sport games,etc...).
How long are you expecting people to hold off, MS did quiet a nice chrismass in US at hight price, people were not about holding off, next chrismass taking in account price, huge multi games, huge exclusives, what are you expecting?
For sure the only real big game we are sure Sony will have is HS and it's a new franchise (like a lot of 360 games you've quoted).



I don't agree, Sony still doesn't have failed miserably, but things look alreaqy quiet bad.
For 2008, obviously sony will have huge AAA game, but how much of the hype surrounding the product will have been killed, how long Sony will have to run to match Wii and 360 installed base?
What dev will chose?
In don't know, the sign are bad from my point of view, and if Sony didn't have huge game for 2008, they would have already failed miserably.
It doesn't change nothing, at least a third of the shipped unit are waiting on the shelves, a third of the almighty ps3, people are now expecting Sony to really shine in 2008?
If so Sony will use its huge AAA title to keep a healthy share of market, but anywhere close to a lead.

Sony is not dead, but I think a lot of people in Sony side are playing their head on euro launch, if hype goes down as quick in Eu as in US and Japan, Sony is very likely to fight against a market of 30/40 millions wii+360 in 2008, with few units on its side (even if it's sure that sales will improve close to chrismass) and probably a very bad hype going on.
Editors will almost give up on ps3.

Sorry i'm nor from ms defense force, nor from the wii defense force, nor from the sony offenser force. But I find tought not to be worried about Sony position right now, ok the ps3 is only out for two or three months, but on the other side who would have expect the ps3 to go so low in only two or three months?

Great post - As for who thought ps3 hype would be this low at this point, not many here. I did though. I questioned how many people would be willing to pay $500-600 for a games console w/extras w/o killer apps. Many predicted 6 million would fly off the shelves with no software. Even Sony.

I still think the playstation brand is strong and ps3 will sell well based on 1st party software alone once the price gets to <$300. I don't think they will be able to dig themselves fully out of this hole though. Momentum is not on their side and nothing on the horizon is looking to change this.

PS3 will be a successful console, but not by Playstation standards.

 

[dobwal]

I predict gamers will be the big winners in 2007! No seriously, the market will remain the same in 2007. Wii will sell a lot however sales will slow down due to somewhat a lack of 3rd party games. 360 will own 2007 in terms of software sales and may own with hardware sales as well. PS3 will slowly make up more ground esp in Europe where it seems like Sony's strongest territory, however still due to pricepoints and more games available on 360 it will still be in #3.

By end of 07:

Wii - 14.5m units shipped WW
360 - 19.5m units shipped WW
PS3 - 12m units shipped WW

- Biggest sellers: Halo 3, Madden 08, Mario Galaxies, Heavenly Sword, MGS4 (if it makes it), Mass Effect, Forza 2, New Smash Bros, GTA4.

You expect MS, Nintendo and Sony to move 46 million consoles (close to 1/3 of last generation market of 150 million) in what is roughly the 1st year of the current generation of consoles? Your prediction basically requires both Sony and Nintendo to have record first year sales with Nintendo having the best first year ever for any manufacturer.

You're expecting Wii to move the equivalent of 72.5% of what the GC sold in its lifetime, 44% of what the N64 sold in its lifetime and 29% the SNES sold in its lifetime all within its first year.

Your prediction basically has everybody having a great year. Seems alittle too optimistic to me.

 

[TheChefO]

You expect MS, Nintendo and Sony to move 46 million consoles (close to 1/3 of last generation market of 150 million) in what is roughly the 1st year of the current generation of consoles? Your prediction basically requires both Sony and Nintendo to have record first year sales with Nintendo having the best first year ever for any manufacturer.

You're expecting Wii to move the equivalent of 72.5% of what the GC sold in its lifetime, 44% of what the N64 sold in its lifetime and 29% the SNES sold in its lifetime all within its first year.

Your prediction basically has everybody having a great year. Seems alittle too optimistic to me.

Agreed his numbers are optimistic. But I don't think they are out of the realm of possibility.

Consider that Wii has "sold" 4million so far.

This leaves 10 million to go for the rest of the year including Christmas sales. Consider also that Wii is still supply limited and already selling worldwide.

PS3 if given a pricecut and a AAA title or two could move 10million Worldwide this year depending on how the EU market accepts the console.

xb360 shipping 9.1 million this year is also in the realm of possibility if they allow a pricedrop.

Optimistic numbers for sure but within the realm of possibility depending on the actions of Sony, MS, and Nintendo (and EU gamers).

 

[superNoid]

Thats ridiculous to say that just because of a price drop and Halo 3, that all of a sudden PS3 is dead. Yes, Halo 3 is popular, but do you think everyone will but that? no. Just look at past total Halo+Halo 2 sales for proof. Of course thats not to say that Halo 3 wont sell more than the previous two, but im trying to say that not everyone is interested in that game.

Ok, I'll admit that was a little overboard. Certainly the PS3 isn't going to be dead at any point but assuming sales continue as they are right now today and in 2007 leading up to the holiday season, Sony hasn't reduced price or released multiple must have titles, and say that MS drops the 360 $100 and Halo 3 is out. Holiday sales figures won't be difficult to guess.

Again, not everyone is interested in the titles you've mentioned, so theres still going to be alot of people that will hold off buying a next gen console (with the exception of Wii perhaps).

Fair enough, Sony does have an impressive amount of loyalty to a few select franchises. I feel though, that those few franchises are the saving grace for the PS3 at this point. That and a price drop.

And why wouldnt you get excited on 2008? thats the year when their AAA titles are coming out. Its the year that people will say "eh, whatever, $500/$600 will be well worth it".

Possibly, but by 2008 I'd imagine most casual gamers will have adopted their next gen console by years end 2007. Casual as in, own 1 console. I'm trying to be reasonable here when I say that I think those AAA titles will be great, but aside from more hardcore gamers most people will have a hard time justifying $500/600 to play a game or two.

PS3 has only been out for the market for 2 months!!!. Yes, sales arent going as well as Sony wishes it was, but its pretty stupid to to predict PS3's future by the way things are going atm. Yes, nothing magical will happen to boost sales, but once the console drops price and games people want arrive, then interest and not magic will drive better sales.

I agree, sales are definately going to improve once there is a price drop. Hell I will likely one day buy a PS3.. but thats a long way off. I'm basing a lot of my estimates on the casual gamer. Just based on what I'm seeing today, and the near 180 degree flip I've seen from gaming sites over the past year ... I see the casual gamer by and large adopting the 360 this gen. Once doing so, they'll likely never tap into the PS3. Some will, most won't (IMO of course).

PS3 isn't a bad console, problem is ... it doesn't live up to the Sony hype. It 'isn't' any better then the $200 cheaper 360, and that little tidbit of news is so widely available.. soccer moms know it now.

 

[TheChefO]

PS3 isn't a bad console, problem is ... it doesn't live up to the Sony hype. It 'isn't' any better then the $200 cheaper 360, and that little tidbit of news is so widely available.. soccer moms know it now.

I wondered about this. I questioned how many people would fall for the Sony hype on PS3 but I think two issues are more prevelent this launch than ps2 launch. Price and the Internet.

In 2000 when ps2 launched the price was $300. "Some" complained about this price but it was not enough to turn consumers into research hounds.

In 2006, ps3 launched at $500-600. A far cry from any other successful console including their previous two and enough to spark consumer investigation into what "experts" were saying about this "new ps3 thingy". At about that time (late 2006), the internet was a buzz with news of ps3 not living up to the hype. The spreading popularity of the internet has made this viewpoint available to anyone interested enough to look. At a sticker shocking price of half a grand it may have turned these potential consumers to snooping around the net to find out what the real deal was with ps3 minus all the hype.

Not to say ps3 is a bad console but when compared to other options available it is expensive and a questionable investment if your only interest is games.

This message may have actually spread to mainstream consumers/gamers thanks to the widespread popularity of the internet.

 

[dobwal]

Agreed his numbers are optimistic. But I don't think they are out of the realm of possibility.

Consider that Wii has "sold" 4million so far.

This leaves 10 million to go for the rest of the year including Christmas sales. Consider also that Wii is still supply limited and already selling worldwide.

PS3 if given a pricecut and a AAA title or two could move 10million Worldwide this year depending on how the EU market accepts the console.

xb360 shipping 9.1 million this year is also in the realm of possibility if they allow a pricedrop.

Optimistic numbers for sure but within the realm of possibility depending on the actions of Sony, MS, and Nintendo (and EU gamers).

When looking at each console individually it doesn't seem all that improbable, but when looking at the the market as a whole, it would seem that all three optimistic outlooks occuring at the same time seems a little far fetched.

The chance of getting hit by a bus, winning the lottery or having Angelina Jolie fall in love with you is pretty remote. But the chance of having all three happening on the same day is astronomically small.

 

[TheChefO]

When looking at each console individual it doesn't seem that impossible, but when looking at the the market as a whole, it would seem that all three optimistic outlooks occuring at the same time seems a little far fetched.

The chance of getting hit by a bus, winning the lottery or having Angelina Jolie fall in love with you is pretty remote. But the chance of having all three happening on the same day is astronomically small.

Good point. I should look into how many consoles were sold cumulative and specific pricepoints to get an idea for how the market buys on a year by year basis.

I do know off the top of my head though that ps2 sold 24million in the year it dropped to $200.

Also don't forget wii seems to be doing a very good job of selling outside the traditional gamer demographic so their numbers might not be as impactful on this market of historical console sales/year.

 

[dobwal]

Good point. I should look into how many consoles were sold cumulative and specific pricepoints to get an idea for how the market buys on a year by year basis.

I do know off the top of my head though that ps2 sold 24million in the year it dropped to $200.

Also don't forget wii seems to be doing a very good job of selling outside the traditional gamer demographic so their numbers might not be as impactful on this market of historical console sales/year.

I don't think that the concept of "selling outside the traditional gamer demographic" is being felt this early in the competition. Its hard to believe that non traditional gamers becoming so hardcore as to stand in line to buy the first shipment, constantly call to determine where and when a new shipment has arrived for pickup or preorder months in advance. I think Nintendo may be able to depend on those types of gamers once a steady supply is the norm.

 

[TheChefO]

I don't think that the concept of "selling outside the traditional gamer demographic" is being felt this early in the competition. Its hard to believe that non traditional gamers becoming so hardcore as to stand in line to buy the first shipment, constantly call to determine where and when a new shipment has arrived for pickup or preorder months in advance. I think Nintendo may be able to depend on those types of gamers once a steady supply is the norm.

True - most sales are currently going to hardcore fans that will call around and find available stock.

As you said though I imagine demand amoung casual non-gamers will still be there when Nintendo addresses the manufacturing issues.

 

[thatdude90210]

Also don't forget wii seems to be doing a very good job of selling outside the traditional gamer demographic so their numbers might not be as impactful on this market of historical console sales/year.

There's another market that's very much untapped -- the exercise tape/dvd market. Wii boxing (and other Wiisports to a degree) shows that you can have a decent interactive workout. Some analyst made reference to "diet" games after the last Nintendo financial report. I've also seen people talk about Wii-fitness for later this year, supposedly.

 

[TheChefO]

There's another market that's very much untapped -- the exercise tape/dvd market. Wii boxing (and other Wiisports to a degree) shows that you can have a decent interactive workout. Some analyst made reference to "diet" games after the last Nintendo financial report. I've also seen people talk about Wii-fitness for later this year, supposedly.

It makes sense - I posted a similar idea to this a few months ago as a marketing tool that may be used by Nintendo to give them an edge in the US specifically where the media often speaks of games keeping kids inactive and causing/encouraging obesity along with the typical talk of it washing away morals and rotting brain cells etc.

Wii - The UNconsoletm

 

[swanlee]

I'm amazed that this board while being a technical high mark still holds onto Sony's coattails. Honestly 2007 does not look good for the PS3, no price drop in site and no must have EXCLUSIVE titles.
Their is no GEARS OF WAR for the PS3 in 2007 or any other type of game that is being hugely hyped that will sell tons of consoles and yet some here seem to think the 500-600$ PS3 is going to make up a 10 million console lead the 360 has while interest and sales have already dropped a lot since launch.

Europe will not save the PS3 it is even more expensive than it is in the states, also does not have any major exclusives, most games being 360 ports that have been out a long time, and the console is 6 months late and 1.5 years after the 360 launch.

2007 looks bad, 2008 is when the FF, MGS etc. are hitting the PS3 but by then will it be to late?