Analyst: Sony, PS3 To Edge Out Competition In Next-Gen

According to new predictions published by analysts the Yankee Group, the worldwide console hardware market will be narrowly won by Sony and its PlayStation 3 platform in the years ahead, though it admits that its predicted lead will be marginal. Though the report, titled 'Can Sony Hold Off Microsoft as Video Game Consoles Emerge as a Platform for Digital Distribution?', concedes Microsoft's early jump on the competition with its Xbox 360, it predicts that by 2011, the console will be overtaken by the PlayStation 3 in the market. The firm predicts that, by this time, the PlayStation 3 will own 44 percent of console sales in North America, having sold approximately 30 million units, and narrowly beating Microsoft's 40 percent and 27 million units sold. Interestingly, despite the fervor surrounding the impending launch of the Wii console from Nintendo, the analyst firm only anticipates Nintendo being able to sell slightly more than 11 million units between its launch in the fourth quarter this year and 2011, at which time it expects the Kyoto-based company to own just 16 percent of the North American console market. The firm also noted that it feels that overall, fewer consoles will be sold during this hardware generation than in the prior generation, a notion that it bases on higher prices. While the price of the Wii remains currently unknown, the PlayStation 3 will ship in November with two separate SKUs, the high-end of which will cost $599, a price $200 above the Xbox 360, and twice that of the initial cost of the PlayStation 2. Finally, the report noted that Microsoft will likely “put significant price pressure” on Sony following the PlayStation 3's launch, and could make a significant price cut in the spring of 2007, as well as during each following year. "With a growing installed base of connected consoles, content owners are beginning to recognize the potential video game consoles offer as a distribution channel," said Yankee Group senior analyst Michael Goodman. "Additionally, these platforms will serve as a strong medium for advertising, validating the growing market for in-game and around game advertising."