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Analyze This: Wrapping Up the Year in Gaming
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Analyze This: Wrapping Up the Year in Gaming

December 19, 2006 Article Start Page 1 of 2 Next

They are the professional analysts whose job it is to research, keep track of, advise their clients, and opine to the media about the gaming business. Analyze This cuts right to the chase: Rather than reporting on a subject, and throwing in quotes by analysts to support or refute a point, Gamasutra offers up a timely question pertaining to the business side of the video game industry and simply lets the analysts offer their thoughts directly to you. Each person's opinion is his or her own and will (probably) not necessarily agree with their fellow colleagues'.

As the year 2006 winds down, the analysts take time to reflect and look back at how the industry fared this year...

Ben Bajarin, Creative Strategies

2006 overall was a great year; [game] sales of Xbox 360, PS2, DS and even PC platforms showed that the industry is still growing strong. It was interesting that the PS2 competed monthly with the Xbox 360 on a regular basis. I also found it very interesting that Nintendo seems to now target an older demographic on the back of the success of Brain Age. I think you will continue to see Nintendo explore what the DS can mean to a bigger demographic.

Nintendo's Brain Age: Train Your Brain in Minutes a Day

I am looking forward to next year with continued innovation to the platforms, both in hardware and software and exciting, new immersive game experiences as developers expand their knowledge of developing for the next-gen consoles. The industry is learning what really matters to gamers in next-gen consoles and next-gen games. I am hoping that some real solid game titles start to evolve and that developers begin to really focus on new innovations in game play and game design. I hope we do not oversaturate any particular genre, thus making choosing a game like an FPS difficult for consumers.

Michael Pachter, Wedbush Morgan Securities

The biggest surprise was the complete reversal of PS2 software sales. Sales were down 23% for the first three months of the year, then averaged up 3% for the last six months. Interestingly, they turned negative in October (by 15%), so we'll see what happens in November and December. The point is that early in the year, we thought that the PS2 was dead, and it suddenly jumped back to life in April. For the full year, sales on the platform are down only 7%, which is far better than anyone had forecast.

I'm pretty disappointed in the Xbox 360. I think Microsoft is doing everything right: Games are good; Xbox Live is amazing; and the console is not prohibitively expensive. Yet people are just not buying. The console is lagging behind my initial expectations by at least 200,000 units per month in the U.S., and I don't know why. It could be that publishers continue to support the PS2, so most consumers don't perceive a need to switch yet.

I think Microsoft over-promised on the 360, led a lot of consumers to believe that there would be millions at launch, and these consumers stopped buying anything (through March) while waiting for their Xbox 360s to arrive. Sony promised nothing (yes, they screwed up the quantities, but did not suggest that retailers advertise or take [PS3] pre-orders); consumers expected nothing, and [PS2] software sales were fine all year. It appears that as long as consumers have current generation titles to choose from, they will buy that software. I think that future declines in current generation software sales will continue to be more gradual than in past transitions.

Article Start Page 1 of 2 Next

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