Movie studios will decide next-gen console winner - Pachter
Matt Martin 10:45 (BST) 08/05/2007

Predicts Sony to win, but all console manufacturers to enjoy success

Hollywood movie studios and the ongoing battle between the Blu-ray and HD-DVD formats will ultimately decide which next-generation home console becomes the most successful, according to Wedbush Morgan's Michael Pachter.

While Pachter believes that the PlayStation 3's success will just peak above Microsoft's Xbox 360, it will be the choice of technical formats that will win the battle for home entertainment in the living room.

"Notwithstanding the efforts of the three console manufacturers to deliver compelling, exclusive content, we expect the ultimate outcome of the console wars to be decided by the motion picture studios," said Pachter.

"We expect the dominant console at the end of the next cycle to be the PlayStation 3, primarily due to our assessment that Sony will win the high-definition DVD format wars."

However, Pachter's definition of 'winning' a war is loose, with the analyst admitting that all three console manufacturers are likely to enjoy considerable success in the market.

"Ultimately, we see Sony 'winning' the console war with 36 per cent of the market, with Nintendo capturing second place at 34 per cent and Microsoft finishing third at 30 per cent."

"We believe that this is essentially a dead heat, and each manufacturer will have sufficient market share to generate significant profits."

Pachter points out that Sony has traditionally been well supported by exclusive titles from third-party developers (citing the 40 million unit-selling GTA franchise which launched on the PS2), but this generation he expects the company to focus more on its internal studios to develop its blockbuster hits.

If there's one factor that's difficult to assess for Wedbush Morgan, it's software exclusivity for home consoles. As the company notes, all three format holders have a good history of exclusive brands, but it does see Nintendo having the ultimate advantage.

"We believe that a wildcard for next-generation console sales will be the hardware manufacturers' ability either to develop content internally or to secure third-party commitment for software designed exclusively for a single platform," said the company.

"In the upcoming cycle, we expect the playing field between Sony and Microsoft to be more level, and think that Nintendo will have the largest library of exclusives," said Pachter.

http://www.gamesindustry.biz/content_page.php?aid=24799

*scrathces head*

It's going to have to. GTA has jumped ship. Capcom are going to be going cross-platform for Devil May Cry 4. I'm sure Square-Enix will with the next Final Fantasy; FF11 for XBox eluded to that. I think Metal Gear is the only thing still hanging on.

And think about it... with the multi-million dollar budgets producers have for these games, they have to be FREAKIN stupid to not try to sell tons to make up for all the money spent. Hence, needing to market to multiple platforms to gain more profit.

So, expect some "steller" Crash Bandicoot, Ratchet & Clank and Spyro titles! *cough*

/PS2 gamer (for the RPGs)
//Haven't bought a next-gen yet.

Yeah... how about no... the movie industry does not control the game industry. In fact the game industry has been more profitable than the movie industry for the past couple years now. The format war will not be that big of a factor for the winning game console. Sure it's an added bonus but movie watchers that don't play video games aren't going to buy a PS3 as a BluRay player or a 360 as their HD-DVD player.

You can't take these predictions too seriously. Hell who thought the Wii would be slaughtering every other console in sales since its launch, especially when it only has one decent game? No one predicted that.

I know when you see an article about the PS3 winning the console war you get gitty in the pants, but calm down and just watch what happens.

Deviant_Tech, I think we will be hearing about MGS4 jumping ship before we hear FF doing so, though FF won't be too long after (most likely in the form of another MMO). MGS4 is already running on the 360 and Konami has said they can't make money on the title if they just release it for the PS3 because of development costs.

Square-Enix did just announce a new cross platform RPG today called "The Last Remnant". They said they want to break the trend of making exclusive rpgs. They also said FFXIII will not be exclusive to the PS3 but that could be any version of it. There are already numerous FFXIIIs in the works including two PS3 games and a cell phone game. We'll probably see one on the DS and PSP as well though 360 still sounds shaky.

Many experts expect that PS3 "wins" the next-gen console war but similiar to this article they do not expect it to win it by a big margin. The market is huge enough to successfully carry several different consoles.

What comes to High-definition video well.. I don't believe a lot of people will be buying Xbox 360 to watch movies because the Xbox HD-DVD player must be bought seperate. On the other hand a lot of people will undoubtedly be buying a PS3 to get a relatively cheap Blu-Ray player and in addition to that a next-gen console. Games aren't everything.

In all honesty....

Who gives a fuck who wins. I just want good games, I couldn't give a flying fuck about the hardware sales. None of the companies sales are so low that it will effect the amount or types of games they get.

Just let it flow I say. As far as predictions go here's mine:

I'm gunna play my games, I'm slobbering at the new shit on horizion for the consoles I have (360 and wii). I'm always gunna hate this media bullshit. Half the companies probably pay them to say that kind of shit anyway. WHo the fuck can we believe in our modern society? Certainly not money grabbing bastards who will bend over backwards to get a bit of good poblicity. In the words of a man I admire:

"Just victims of the in-house drive by, they say jump you say how high"

All those experts mean nothing. Like I said, not a single one of these so called experts could have dreamed of the Wii having the success that is did. Experts can say all the shit they want, they aren't the ones buying the consoles and setting the trends, gamers are. Like Fifer said, it really doesn't matter which one wins because as long as people are having fun with their games it doesn't matter which brings me to my next point.

Actually games are everything in the GAME industry. If you don't agree with that you aren't a gamer and shouldn't even be talking. If you don't have the games it's no longer a game console. If you have crappy games there's no reason to own a console either. Might as well just go buy a BluRay or HD-DVD player if the games don't matter.

Btw, you do realize the more consoles that Sony sells the worse off they are especially with the lack luster line up they have so far. They loose roughly $300 (taking into account both versions) on each console they sell. Last I heard it costs them right around $850 to produce one PS3. Now if people are buying a PS3 as a BluRay player and not for games that's raping Sony in the ass. Sony makes all their money off the games and accessories. So if you and these experts were right, Sony winning the console war would seal their fate as a doomed company because the losses would kill them.

Even now with the games they have sold the attach rate of games and accessories to consoles sold is pretty low and Sony is way in the hole right now. This is something these experts over look. Sony is already in serious financial trouble and have been in a crazy position shuffle with all their execs. I mean hell, Kutaragi just got canned and he was the lead Playstation guy. Sony is not in good shape at all.

You know, I'm trying to figure out why you are so empowered to promote Sony and the PS3. Is it the feeling of a heated competition? I mean, I'm a die hard Sega fan but you don't see me putting posts about every time hey do something cool or something says they are making money. It's not like a sport, it's companies fighting over market share which isn't all that exciting. Is is that you have been a Sony fan for so long and you are terribly insecure with how this generation is turning out for Sony? Does their current predicament scare you so much that you are compensating by trying to push them as being the dominant force they were last generation? I just don't get it.

Play the games and just enjoy them.

Honestly, the way I look at it from what I've read, is the porn industry will actually decide the high-def format war. Think about it... 75% of the business pressing plants get is from the massive amounts of material porn production companies push out every year. If most of them decide to record and master with Blue-Ray, those pressing plants will retrofit their stuff to Blue-Ray and vice versa with HD to get their business. It's simple supply and demand.

The porn industry is already a supporter of HD-DVD after having some problems with BluRay companies.

I think you're taking my posts about next-gen consoles the wrong way.

I agree about the point that it really doesn't matter which one wins however I'm interested in seeing how the tech competition develops. Wii has been a great success for sure but I would not exactly call it a next-gen console regardless how innovative it's control system is. It does affect the sales of Xbox 360 and PS3.

Games are everything in the games industry you say and I do not disagree with you, never have. My point about games not being everything referred to the so-called next-gen console war. That is not decided by games alone because next-gen consoles are to a rising degree about more than just games.

You're kidding yourself if you think that people only buy consoles because of games these days. You're a purist and I respect that but not all people think like you do. There are people who buy PS3 as a Blu-Ray player first and as a games console second. Nothing wrong with that. It does not mean that those people won't be buying games as well. Many buy PS3 equally as both, like they already did when they bought PS2.

For sure Sony have been losing money but it's not an uncommon situation. It's common for game consoles to be sold at a loss at first. Economies of scale will progressively lower those costs. Sony are also constantly developing the PS3 to lower it's manufacturing costs and have already progressed in that area. It took a year for Xbox 360 to start making profit for Microsoft and according to the analysts it's a small profit still.

You say it's just companies fighting over market share and that it's not interesting. I disagree. I do admit though that there was a time when I felt exactly like you. That doesn't mean that I don't play games nor enjoy them.

The Wii is considered Next-Gen whether or not its specs are on par with the PS3 and 360 (though all three consoles are now considered current gen since they are all out). Specs don't matter, it's the time frame that it's out.

You are right, game consoles are becoming entertainment systems and they do encompass more than games... but games are still everything. If people buy a game console, for whatever the reason, it's still a game console for playing games and that will almost certainly be for games. The people that buy a PS3 primarily as a BluRay player make up a fraction of a percent of the total user base. People know the PS3 as a game console and that's why they buy it.

Most people didn't buy a PS2 for gaming and DVD playback equally. They bought a PS2 for the games and the DVD player was a nice addition that helped boost DVD sales. The PS2 DVD player wasn't very good quality so that was never a primary reason to own the console. This generation is much the same. People are buying the PS3 as a game console and BluRay is just a nice addition. Most people are ignorant too thinking that the BluRay drive is some innovative crazy next gen feature which it isn't.

Sony's loss on there consoles are far different than the loss that MS takes with the Xbox. Microsoft has always been profitable and is one of the wealthiest companies in the world. Sony is far from that. They have been in money problems for years. They are heavily in debt and their sales in all areas of media have been steadily declining. Their movie division had a huge (multi million) loss last year, as did their music division, portable media, computer, etc... In fact the video game division was the only profitable part of the company. Now that they spent $8 billion on the cell processor plus whatever on R&D for the rest of the PS3 (taking out numerous loans to do so) they are in serious financial trouble.

Microsoft went in to making consoles ready to loose money. Their original plan even said that they wouldn't make any money until their third console. The fact that they are actually going to be making money in 2008 (they haven't yet, not sure where you get your info) off console sales shows they are doing better than even they expected. They aren't worried about losses and don't have to be.

I'm not saying the console war isn't interesting, I'm just saying it's not exciting enough for you to be waving your pom-poms like a Sony cheerleader in every game thread you post in or make. It's a little irritating. If you look at any of the other console threads talking about 360 or Wii stuff you don't see everyone preaching about how well the console is doing in the console war and how analysts say this an that. Try to keep the fanboyish bias to yourself.

I'm not the only one thinking that Wii isn't exactly next-gen (and that the real fight is fought between Xbox 360 and PS3) and I think I'm entitled to my opinion just as you are to yours'. I'm not saying nor thinking that Wii is crap.

Yes, it's for games but not only for games. Having an integrated Blu-Ray player is an advantage for PS3 over other consoles in that it's an feature, like DVD was on PS2, that will attract a lot of buyers. It's a disadvantage when taking into account the price sensitive buyers but the battle won't be won shorterm and eventually the price will come down, little by little, making the price less of an issue for those that it bothers.

I have not said that most people bought PS2 equally for games and DVD playback but DVD playback attracted a lot of buyers to buy a PS2. It was a very benefial feature for the console to have. Same goes for the inclusion of Blu-Ray in PS3.

The article that I posted was in my opinion interesting and good one. It wasn't about Sony and Sony alone in no way. It was about all consoles and about how equal the fight between them is expected to be and how all the consoles are expected to be very successful.

One again you use the argument "I'm not the only one thinking"... yeah well, at one time a lot of people thought the Earth was flat. When a child is born in a certain time frame he is considered part of that generation, if he's weird and takes on the clothing styles, music, and lifestyle of the previous generation that doesn't mean he's not still part of the generation he was born in. It's a time frame issue. Sure I think the Wii is just an over clocked Gamecube and technically is far under powered compared to the 360 and PS3, but that doesn't mean they aren't in the same generation.

Your BluRay integration argument isn't very good. It was a dumb move on Sony's part because that's what's driving up the prices of the consoles. It's not nearly enough of a selling factor that large amounts of people are going to buy it specifically for that reason. Further more, the vast majority of people that buy the PS3 don't even have an HDTV to utilize the BluRay drive. If they really wanted a cheap BluRay player they should just wait a few years for a BluRay standalone.

The PS3 production cost will eventually come down but it will be a long ass time before we see the PS3 price come down. With how far they are in debt they don't have a choice but to keep the price up. In fact if either BluRay or the PS3 fails to meet their long term expected numbers Sony as a whole will have to reshape the company and will probably sell off several of their divisions.

Sure DVD was an attractive addition for the PS2 but it wasn't a reason to buy it. People bought the PS2 for the games. Having the DVD player was a nice bonus. You put too much credit in a drive being the reason to own a console. This whole thing is NOT the same for the PS3. With the PS2 you didn't have to buy HD cables. You also did not have to own an HDTV to get the proper functionality out of it. The DVD vs. BluRay scenario is completely different.

The article you posted wasn't that interesting and in fact came off as a bunch of bull from a guy that doesn't know what he was talking about. I've already explained how the article was wrong. you say it wasn't completely about Sony, no duh, but it was obviously to push the point of Sony coming out on top just like every article you post. You're entitled to your opinion sure, but it get aggravating seeing you posting the same crap over and over... "Sony does this!", "Sony to win!", "BluRay saves infants life!"... Why not talk about the games when talking about the console. Hell, when God of War III is announced I'll be praising the PS3 like no tomorrow, but it will be for the right reasons and people will actually enjoy discussing it because it's what the console is really about, GAMES.

Seriously, if you want to keep posting these Sony biased articles that really lack any sort of value, be my guest. I'll be here to tear them apart and explain what's right and wrong about them. If these guys that are writing these articles are so called "experts" then so am I. I'm a game journalist and I work in the industry for a recruitment firm. I've met all the big name people. I've eaten with the owners and lead designers of these companies. I've gotten into face to face arguments with other so called "experts" and wiped the floor with them. I've been to E3 and GDC and have a personal invite to a Hollywood game convention in my inbox right now (though I don't feel like spending $800 on the admission ticket alone, and that's at the discounted price!). Have a little faith in what I'm saying, because while everyone is entitled to an opinion, and I can respect yours, people have to deal with facts and that's what I like to use.

For God's sake. We don't have agree on Wii being next-gen. It split opinions. I do agree with the experts who think like I think and nothing will change that. It's plain pointless to argue about it. Everyone entitled to an opinion. I think Wii is good fun and I do not have absolutely anything against Wii. It's brilliant but in my opinion not next-gen. Simple as that.

You're attacking everything I say with a very black or white attitude. Things aren't like that. Things are mostly grey. There's no fuckin absolute right or wrong here like you're claiming. It's speculation and opinions.

And about the Blu-Ray/DVD. I haven't said that majority of people are buying PlayStation because of them but I know for a fact that for many it has or has had significant meaning in their decision to buy PlayStation. And again with many I do not mean all people.

And Yes, I do know that the inclusion of Blu-Ray has it cons too but in the long run I believe it helps Sony in it's aim to win the High-definition format war.