Older Consoles
Challenges: Aging Consoles
Electronic gaming is a highly cyclical industry. With new growth heavily dependent on the success of its three main types of living-room video game consoles, the industry
’s fortunes largely rise and fall on the performance of Sony PlayStation 2, Microsoft Xbox and Nintendo GameCube. So, as all three platforms have aged and console prices have dropped from a height of $299 to $149 and less, hardware sales have plunged. They are likely to dip further until the three big players introduce the next generations of their console boxes later this year and in 2006.
“The new consoles won’t be here in 2005,” CEA analyst Steve Koenig said. “The late arrival of the new Xbox won’t do much to lift sales.” He predicts that “the big lift” probably won’t come until 2006 unless Microsoft introduces Xbox 2 much earlier than expected.
Yet gaming software sales have remained surprisingly strong. Console game sales climbed to 160.7 million units and $5.2 billion in 2004 from 149 million units and $4.9 billion in sales the previous year. “Most of the activity is on the software side,” Koenig said.
Whether that will remain true throughout 2005 is unclear. Software sales usually dip this late in the console cycle as both game makers and consumers wait for the new machines to arrive. But it may be different this time around, especially with Walt Disney Co. now assuming a greater role in the industry through a new joint venture with former Electronic Arts Inc. gaming executive Josh Holmes and Disney’s purchase of Avalanche Software.
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TopSelling Games of 2004 |
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Rank |
Platform/Title |
Publisher |
Release Date |
|
1 |
PS2/Grand Theft Auto: San Andreas |
Take II Interactive |
October 2004 |
|
2 |
XBX/Halo 2 |
Microsoft |
November 2004 |
|
3 |
PS2/Madden NFL 2005 |
Electronic Arts |
August 2004 |
|
4 |
PS2/ESPN NFL 2K5 |
Take II Interactive |
July 2004 |
|
5 |
PS2/Need for Speed: Underground 2 |
Electronic Arts |
November |
|
6 |
GBA/Pokemon FireRed |
Nintendo |
September 2004 |
|
7 |
PS2/NBA Live 2005 |
Electronic Arts |
September 2004 |
|
8 |
PS2/SpiderMan: The Movie 2 |
Activision |
June 2004 |
|
9 |
XBX/Halo |
Microsoft |
November 2001 |
|
10 |
XBX/ESPN NFL 2K5 |
Take II Interactive |
July 2004 |
Source: The NPD Group, 1/05
