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Tuesday, May 1, 2012

Nintendo, Sony to Suffer in 2012 as Console Market Plunges

Wii U

Global console sales should fall about 19 percent this year as gamers wait for the industry's next-generation consoles to arrive, an analyst firm predicted Monday.

But if analyst firm Strategy Analytics is correct, Nintendo will fare the worst, by far. Nintendo's Wii will sell just 5 million units this year, analyst Jia Wu predicted, or about half the console sales it sold in 2011.

"Most people have bought a console already, while core gamers are awaiting the next generation," Wu said.

In an interview, Wu predicted that Microsoft would continue to outpace its competition, with sales of the Xbox 360 estimated to fall just 4.8 percent to 13.8 million units. In 2011, Microsoft sold 14.5 million consoles, he said.

"Xbox still sells a ton of consoles," Wu said. "It still has broad appeal."

Microsoft's rival, the Sony PlayStation 3, will sell 13 million units this year, down 7.8 percent from 14.1 million last year, Wu said.

Sony may take heart in Strategy Analytics' findings that Sony's fanboys are indeed fans: 44 percent of PS3 owners said that they use their console on at least a weekly basis, versus 40 percent of weekly Xbox 360 users and 30 percent of Wii users.

But Nintendo - hoping that the Nintendo Wii U will improve its fortunes, will see a catastrophic 51.5 percent drop in sales of the Nintendo Wii, Wu predicted. Nintendo has said that it next-generation Wii U will arrive by the 2012 holiday season, meaning that the sun has set on the first Nintendo Wii.

Nintendo, of course, helped launch the current generation of games consoles with its budget-priced Wii, which was seemingly constantly sold out at holiday time. The Wii's success prompted gushing praise from the media.

In June 2011, Nintendo allowed journalists hands-on time with the Nintendo Wii U in a series of tech demos that highlighted the touch-screen controller. Nintendo still hasn't released the full technical specs of the console; for more, see the slideshow below. Wu said that it was virtually impossible to predict the Wii U's impact on its overall sales, due to the lack of information.

Nintendo said Monday that a midnight-purple Nintendo DS handheld console would arrive this May.

According to Wu, the console market in general has transcended gaming, with companies like Microsoft noting that more consumers chose to use the box for non-gaming functions than actual game play. "A lot of people buy it for paid-TV applications, or for Netflix," Wu said.

"Sales figures alone do not determine winners in this generation's console competition," added Kantideep Thota, an analyst at Strategy Analytics, in a statement. "Wii has sold the highest number of games consoles cumulatively; but Sony's and Microsoft's advancement in online game distribution and cross-platform integration grants them higher user engagement and a solid foundation for the next generation console war."

For more from Mark, follow him on Twitter @MarkHachman.


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