Skip to main content

Will the Game Console Market Recover in 2013?

Last year was very troublesome for the video gaming console vendors. After shipping over 3 million Wii U units during the 2012 holiday season, Nintendo’s next generation console is now facing a challenging market.

2012 saw just under 30 million game consoles shipped from Microsoft, Nintendo, and Sony (excluding PS2) -- that's roughly 10 million fewer than the previous year.

Despite these results ABI Research looks at 2013 and beyond with cautious optimism, but the company expects Microsoft and Sony to determine the future prospects for the game console, not Nintendo.

"The Nintendo Wii U’s troubles are not indicative of the expected market reception for the remaining 8th generation of consoles," said Michael Inouye, Senior analyst at ABI Research.

In fact, the Wii U will likely prove a closer fit with the current generation than the next.

The software released to date also bears out this assessment with many cross-platform games that were previously available from Microsoft and Sony. While the Wii U Gamepad offers some novel gaming elements it has not yet resonated with core gamers.

ABI believes that 2013 is expected to start a chain of positive growth years for the game console market, ending the previous annual declines. This optimism, however, is predicated on several factors.

First, that the Wii U receives a price reduction in 2013. Second, that next gen consoles from Microsoft and Sony launch with adequate time and production to meet holiday demand, with pricing below $450 and ideally at $350.

Finally, that the next generation consoles don’t adopt significant consumer unfriendly practices that will cause consumers to rethink their purchases -- such as steps to inhibit the used game market or requiring an always on DRM/Internet connection to prevent other forms of piracy.

"Mobile gaming has certainly diminished the opportunities for console manufacturers in the casual gaming market and this has impacted Nintendo the hardest, added Sam Rosen, TV & Video practice director.

The evolving business models and added competition have also created additional pricing pressures that encourage price cuts sooner than manufacturers would like.

New entrants into the console market will add an additional layer of complexity, which should make things interesting, but ABI still anticipates the market will prove a difficult one for the upstarts. We'll have to wait and see.

Popular posts from this blog

How to Drive Value Creation from Digital Business

Across the globe, many forward-thinking CEOs and CFOs continue to fund business technology investments that enable meaningful and substantive digital transformations, ahead of their industry peer group. That's why CIOs and other IT leaders must now accelerate the quest for value creation and drive digital growth from those ongoing investments, according to the latest market study by Gartner. "The pressure on CIOs to deliver digital dividends is higher than ever," said Daniel Sanchez-Reina, VP Analyst at Gartner . "CEOs and boards anticipated that investments in digital assets, channels, and digital business capabilities would accelerate growth beyond what was previously possible." Digital Business Market Development   CIOs expect IT budgets to increase 5.1 percent on average in 2023 -- that's lower than the projected 6.5 percent global economy inflation rate. A Gartner survey analysis revealed several ways in which CIOs can deliver "digital dividends&qu

Digital Transformation Investment at $3.4 Trillion

Business technology leadership matters. Across the globe, more leaders have been pursuing bold Digital Transformation (DX) initiatives with the goal of creating new sources of business value through digital products, services, and experiences. As an additional benefit, the COVID-19 pandemic revealed that digital transformation efforts improve an organization's resilience against global market disruptions. Global DX investment is forecast to reach $3.4 trillion in 2026 with a five-year compound annual growth rate (CAGR) of 16.3 percent, according to the latest worldwide market study by International Data Corporation (IDC). Digital Transformation Market Development "Despite strong headwinds from global supply chain constraints, soaring inflation, political uncertainty, and an impending recession, investment in digital transformation is expected to remain robust," said Craig Simpson, senior research manager at IDC . The benefits of investing in DX technology -- including aut

Artificial Intelligence for National Border Security

National border protection agencies are under pressure to provide the highest level of security in the face of growing threats, such as increasing illegal migration and international terrorism. Now, government agencies are embracing advanced border security technologies to aid in effectively and reliably securing national borders. These solutions look to detect and identify potential threats and prevent them from escalating to a point that may jeopardize security. Security Surveillance Market Development Traditional border security patrols and Closed-circuit Television (CCTV) surveillance systems aren't adequate protection, and agencies must increasingly deploy new solutions to stay ahead of criminals and other potential threats to ensure the safety of a country’s borders. According to the latest market study by Juniper Research, the value of the border security technology market will exceed $70 billion globally in 2027 -- that's rising from $48 billion in 2022. Growing by 47 p