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Analyst: 'Battle Royale' To See 150-200k PS3s For Launch?

Analyst: 'Battle Royale' To See 150-200k PS3s For Launch?

November 14, 2006 | By Brandon Boyer

November 14, 2006 | By Brandon Boyer
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More: Console/PC

In his latest interactive entertainment notes, Lazard Capital Markets' Colin Sebastian has made his predictions on the 'battle royale' set to take place this week as the Wii and PS3 see their official US lanches.

Says Sebastian, "This week represents a significant milestone in the interactive entertainment universe," though, he hastens to add, "the significance of the launches for the software publishers is largely symbolic, as the new consoles will not likely be meaningful drivers of software sales until later next year when we expect the installed bases of the PS3 and Wii to reach more critical mass."

Still, "excitement surrounding the hardware launches backed by significant marketing budgets from Microsoft (Xbox 360), Sony (PS3 and PSP) and Nintendo (Wii and DS) ‚Ä" should benefit overall industry trends through the holiday."

On retailers' struggles to secure and supply a continuous flow of hardware, Sebastian adds that Lazard continues to expect shortages for most stores: "Our channel checks with retailers indicate that there is strong interest in both the PS3 and Wii; most stores sold out of pre-orders quickly."

"We expect Sony to deliver 150-200k units to stores in the United States for the launch; consumers without pre-orders may find it difficult to locate an available system. We estimate sales of approximately 750k PS3s domestically by year-end. We expect a more robust launch from Nintendo, with at least 1.2 million units sold in the U.S. and up to four million units shipped worldwide by year-end."

"Due to the limited initial installed base of the platforms, we believe the financial impact over the holiday period will be more significant for hardware manufacturers and video game retailers (such as GameStop) than for software publishers."

In addition to predicting a strong push for Xbox 360 products due to a shortage in PS3 supply, Sebastian also says the newly launched consoles may not have as significant an impact on holiday sales.

He adds: "We expect less than 15% of software sales to come from the PS3 and Wii this holiday; the more numerous Xbox 360, PS2 and handheld platforms (DS and PSP) remain key drivers of growth," though, he predicts, "this fifth major platform transition is likely to be the largest product launch in the industry’s history."

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