I think the sports phrase "That's why they play the game" is appropriate here. We really can't tell exactly what will happen. A few educated guesses, however:
1) PS3 will be the hot item this holiday season, selling out because demand will outstrip supply due to the simulataneous worldwide launch.
2) Bundles are seriously going to be even more expensive than the 360 bundles a year ago. Sony has been mum on the actual cost of games themselves, and that's not a good sign. You can bet that the games themselves will at least match Xbox 360 titles at around $60...more likely being $70 since Blu-Ray discs are more pricey to manufacture.
3) Overall, the market for video games may slow down. Higher prices, greater choices and the weakening purchasing power of consumers in the U.S. market will lead to fewer retail sales going into next year until real wages can catch up or price drops become announced.
4) The PS2 will remain pretty popular since it is inexpensive and will have a number of choice titles still coming to the system even during PS3 launch. This could moderately cannibalize PS3 sales going into 2007, but the PS3 should remain hot well into the new year.
5) Nintendo will remain a comfortable, profitable 3rd place.
6) Europe will be the battleground Microsoft may have the best shot in competing with Sony as luxury electronics adoption is slower there than in the North American markets. Regardless of the heavy investment in wired and wireless technology throughout Europe, in a recent Businessweek article: "...only about 800,000 European households now receive HD programming, and only about 2 million homes own HD-ready TVs, compared with 11 million in Japan and 19 million in the U.S., according to German researcher GfK." Now, this may change this Christmas as a big marketing push in Europe has been leading up to a plethora of offerings in HD tech, but then that leads to a holiday conundrum for consumers. I don't think many Europeans (or many people for that matter) can purchase both a PS3 and an HD set.
What could all this mean for Sony? My expectation is that Sony will likely remain on top with a somewhat smaller market share as long as they remain patient. Things will be take longer for the PS3 to take off financially compared to PS2 with a number of third party developers themselves being careful fearing possible losses from a slower retail market. This would also mean that a 5 year console cycle is unlikely this time around as Sony is banking on future-proofing the PS3 to such an extent.
1) PS3 will be the hot item this holiday season, selling out because demand will outstrip supply due to the simulataneous worldwide launch.
2) Bundles are seriously going to be even more expensive than the 360 bundles a year ago. Sony has been mum on the actual cost of games themselves, and that's not a good sign. You can bet that the games themselves will at least match Xbox 360 titles at around $60...more likely being $70 since Blu-Ray discs are more pricey to manufacture.
3) Overall, the market for video games may slow down. Higher prices, greater choices and the weakening purchasing power of consumers in the U.S. market will lead to fewer retail sales going into next year until real wages can catch up or price drops become announced.
4) The PS2 will remain pretty popular since it is inexpensive and will have a number of choice titles still coming to the system even during PS3 launch. This could moderately cannibalize PS3 sales going into 2007, but the PS3 should remain hot well into the new year.
5) Nintendo will remain a comfortable, profitable 3rd place.
6) Europe will be the battleground Microsoft may have the best shot in competing with Sony as luxury electronics adoption is slower there than in the North American markets. Regardless of the heavy investment in wired and wireless technology throughout Europe, in a recent Businessweek article: "...only about 800,000 European households now receive HD programming, and only about 2 million homes own HD-ready TVs, compared with 11 million in Japan and 19 million in the U.S., according to German researcher GfK." Now, this may change this Christmas as a big marketing push in Europe has been leading up to a plethora of offerings in HD tech, but then that leads to a holiday conundrum for consumers. I don't think many Europeans (or many people for that matter) can purchase both a PS3 and an HD set.
What could all this mean for Sony? My expectation is that Sony will likely remain on top with a somewhat smaller market share as long as they remain patient. Things will be take longer for the PS3 to take off financially compared to PS2 with a number of third party developers themselves being careful fearing possible losses from a slower retail market. This would also mean that a 5 year console cycle is unlikely this time around as Sony is banking on future-proofing the PS3 to such an extent.