Video Game Console Sales Expected to be Lower This Generation

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The announcements this year of Sony's PlayStation 4 and Microsoft's Xbox One have kicked off a new generation of console wars. While the excitement surrounding these new consoles is palpable, continued slow sales for Nintendo's new Wii U console could be a warning that expectations for the 8th generation of video game consoles are a bit too high.

Today ABI Research, a technology analyst firm, released predictions for console shipments over the next few years. It predicts PlayStation 4, Xbox One, and Wii U console sales to reach only 133 million units over the next five years - 7 million units less than were sold during the first five years of the previous generation.

The reason for the lowered prediction is similar to those brought up often in discussions about the uncertain future of console gaming itself. ABI cites the rise of mobile gaming, and even casual gaming devices such as the Ouya as inexpensive competitors to the higher-priced dedicated consoles. Even a possible end to the Chinese ban on consoles isn't predicted to raise shipments of the new consoles very much.

“With many of the casual gaming segment embracing mobile devices for gaming, without a shift in strategy and pricing the Wii U will likely fail to match the success of the Wii which will impact future console shipments," said Michael Inouye, senior analyst at ABI. "If China decides to lift its ban on consoles, however, in the short term this could boost future shipments of 7th generation game consoles while minimally altering the 8th generation.”

ABI also isn't too impressed with Microsoft's positioning of the Xbox One as an all-in-one media device for the living room. The analyst firm pointed out that many set-top boxes under $99 offer much of the same functionality.

“The future prospects of gaming platforms depends in equal measure on compelling games and pricing falling within household reach for discretionary/gift spending," said Sam Rosen, practice director at ABI. "Without solid titles and first party franchises platforms will have a difficult time finding traction - streaming media is not enough when low-cost smart STBs are readily available. While we don’t anticipate a drop-off in game console households, barring significant changes to less developed console markets in Asia and Latin America there isn’t a great deal of growth opportunity beyond the current installed base.”

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