NEWS - Monday, November 20, 2006

Strategy Analytics: The Pressure Is On Microsoft

With only 500,000 PS3 units at launch, a delayed launch for Europe, a shortage of blue laser diodes, and a recent quarter in which profits plummeted 94 percent, one might think that Sony is facing an enormous amount of pressure this holiday season and beyond. Interestingly, that's not how global research and consulting firm Strategy Analytics views it. According to the firm, although Sony is obviously facing some pressure, the real pressure is actually on Microsoft. A new report PS3/Xbox360: Pressure On Microsoft As Well As Sony In Q4 Console Shootout (published by Strategy Analytics' Connected Home Devices service) suggests that "Microsoft has it all to prove" and that the company's Xbox 360 is "facing even greater pressure to produce a strong holiday season." Microsoft has remained consistent in saying that they'll reach 10 million consoles sold worldwide by the end of 2006, but with 6 million sold confirmed, can they sell another 4 million during the all-important holiday season? "Sony will sell everything it can make of its new system," commented David Mercer, Principal Analyst. "But Microsoft has already had a year in the market to cream off early adopters, so the next few weeks will demonstrate how much pent-up demand there really is for the Xbox 360, and how many disappointed PS3 buyers are willing to switch camps." Strategy Analytics' report is forecasting sales of 9 million next generation game consoles during the holiday period (last quarter of 2006), and the firm believes Microsoft will retain its lead through 2007, but then they expect Sony to really leap ahead. In fact, unlike most other forecasts, they are predicting a real lopsided battle in which Sony truly dominates, just as it did with PS1 and PS2. Ultimately, through 2012, Strategy Analytics sees Sony's PS3 towering over the competition with 121.8 million units sold. The Xbox 360 comes in at less than half that, with 59.7 million units sold, and finally Nintendo's Wii is predicted to sell just 23.3 million units. North America will have accounted for 50 percent of global console sales during that period, the firm said.

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