In-Stat/MDR Reports Declining Shipments and Prices Continue as Game Console Market Awaits the Next Generation

Business Wire, Nov 30, 2004

SCOTTSDALE, Ariz. -- The video game console market remains in the back end of its current cycle, with declining shipments expected to continue until the next generation of consoles come to market, reports In-Stat/MDR (http://www.instat.com). The high-tech market research firm finds that Sony is still dominating the market with its PlayStation 2 (PS2) console, which shipped its 70 millionth unit in January 2004.

"As is typical with the back end of a market, this one is characterized by companies cutting prices on both hardware and software to entice more casual, value-oriented consumers," said Brian O'Rourke, a senior analyst with In-Stat/MDR. "However, as can be expected, year-over-year shipment declines will continue until all next-generation consoles are on the market in 2006."

The first next-generation console should hit the market in the fourth quarter of 2005 with the introduction of Microsoft's Xbox 2. Sony, however, is not likely to give Microsoft too much lead time before launching its PS3 console, which should occur by mid-2006. Nintendo will try to launch its next-generation GameCube 2 console either before, or simultaneously with Sony, which Nintendo considers to be its primary competition.

In-Stat/MDR has also found that:

--Nintendo's GameCube has performed solidly over the past year, with a worldwide price cut in the fourth quarter of 2003 significantly increasing sales.

--Microsoft's Xbox is in a struggle with the GameCube for second place in the market. It has performed well in North America, and is doing increasingly well in Europe.

--Sony will ship the most next-generation consoles through 2008. It has a proven track record built over the last 10 years, and has shown itself to be a marketing powerhouse. However, Microsoft and Nintendo are expected to narrow Sony's lead in the next generation.

The report, "Game Consoles 2004: Waiting for the Next Generation" (#IN0401260ME), includes a five-year shipment and revenue forecast for each current generation console: the PS2, Xbox, and GameCube, broken down by region. Shipment and revenue forecasts for the next generation of consoles are also provided through 2008. There is also an annual forecast for online console gaming subscribers through 2008. The three participants in this market, Sony, Nintendo and Microsoft, are profiled in depth in four areas: console business, marketing strategies, online plans and shipment analysis. In addition, four responses on consumers' console ownership and buying plans from In-Stat/MDR's annual Residential Technology Survey are included. To purchase this report, or for more information, please visit: http://www.instat.com/catalog/Ccatalogue.asp?id=162 or contact Erin McKeighan at 480-609-4551; emckeighan@reedbusiness.com. The report price is $2,995.

About In-Stat/MDR

In-Stat/MDR (http://www.instat.com) offers a broad range of information resources and analytical assets to technology vendors, service providers, technology professionals and market specialists worldwide. The company stands alone in its ability to integrate both supply-side and demand-side research methodologies into a single comprehensive view of technology markets and products. This capability relies on a unique ability to cover the entire value chain from engineering-level technology, through equipment, infrastructure, services and end users.

In-Stat/MDR is part of the Reed Electronics Group, a division of Reed Elsevier (www.reedelsevier.com), a world-leading publisher and information provider. With over 38,000 employees worldwide, Reed Elsevier operates in the science & medical, legal, education and business-to-business industry sectors, providing high value and flexible information solutions to professional end users, with increasing emphasis on the Internet.