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Next-Gen Consoles Will Boost Software Sales By 30%

by Rainier on June 29, 2005 @ 8:49 a.m. PDT

According to the latest forecasts from DFC Intelligence, the new video game console systems from Microsoft, Nintendo and Sony are expected to increase worldwide interactive entertainment software sales from about $18 billion in 2004 to about $26 billion in 2010. The forecasts have three independent scenarios for industry growth, a best case scenario for the PS3, Revolution and Xbox 360. Under each scenario, sales for interactive entertainment software surpass the $25 billion level in 2008.

"The video game industry continues to exceed our expectations," said DFC president David Cole. "The next generation of console systems will connect to broadband networks right out of the box and this should significantly expand revenue possibilities." Cole also claimed that there is room in the marketplace for all three major systems. "With a true worldwide marketplace and increasing ownership of multiple systems, this is not a winner take all situation. Instead it is about how profits can be maximized across the unique installed base of different console, portable, PC and location-based platforms."

Nevertheless, the report does pick favorites, and under all scenarios, the Sony PlayStation 3 has very strong sales. "With the PlayStation 2, Sony raised the bar on what a game system can do in terms of sales," said Cole. "Until Sony makes a major mistake we have no reason to believe they will not continue that success with the PlayStation 3." On the other hand, from a pure market share basis, DFC forecasts that Microsoft and Nintendo will increase market share in the next generation.

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