NEWS - Wednesday, February 26, 2003

Market Predictions For Nintendo

The number of users of advanced games consoles soared by 128 percent in 2002, reaching 56.3 million worldwide, according to the latest research from Strategy Analytics’ Broadband Entertainment Strategies service. 75 percent of users own Sony’s PlayStation 2, compared to 13 percent with Nintendo’s GameCube, and 12 percent with Microsoft’s XBox. Forecasts suggest GameCube will lose ground during 2003. According to the analysts, Nintendo could build a leading position in the $12 billion software market, but it must first abandon its present console strategy. Global sales of advanced 128-bit consoles reached 32.9 million units in 2002, according to the research. PS2 was the choice of nearly 70 percent of buyers, while the remainder was split evenly between GameCube and XBox. Total sales of all platforms in 2003 are predicted to reach 36.2 million units, but GameCube’s sales are expected to fall by 4 percent in 2003, while XBox sales will rise by 12 percent. Key drivers of this trend are XBox’s growing software library, its clearly defined online gaming strategy, and Microsoft’s substantial investments in the platform. By contrast, the GameCube’s online strategy is unclear, and its support from publishers appears to waning. Strategy Analytics recommends that Nintendo abandon its traditional console-exclusive software publishing strategy and publishes its games across multiple platforms. The company stands to lose relatively little, while gaining access to an additional 77 million console owners during 2003. "Nintendo is missing out on the current generation of games players," says David Mercer, VP of the Strategy Analytics Global Broadband Practice. "Culturally it will be difficult for the company to change course, but it must do so in order to secure its long-term position as a leading games publisher."


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