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January 17, 2006

The Predictability of the Future of Gaming

According to a few (hardly) pregnant paragraphs, the future of gaming is bleak.

Pachter expressed doubts that the Xbox 360 could make up for a deficit in the six-month sales total equivalent to 2005's. "We think that it is important to note that total U.S. console and handheld software sales over the first six months of 2005 were approximately $2.36 billion; the current rate of next generation software sales implies that Xbox 360 software will total less than 20% of this level over the next six months, indicating the potential for year-over-year sales declines for the foreseeable future."

I'm really trying to understand what this guy is comparing gaming sales to. Perhaps the best comparison is to microwave ovens. My original XBox lasted about 3 years before it came apart. So I think that qualifies, at an initial price of about 200 bucks, as durable goods. The 360 is double that price, so it makes a lot of sense, in terms of cannibalization, that they're not going to duplicate the sales figures.

As it stands, you can't go buy a 360 right yet. So this lack of availability is a real skew to what the market ought to be like. But here's where I really have difficulty with the basis of this prediction. This industry is capable of doing some remarkable things in terms of generating excitement in the market. Recall the scandals around San Andreas. You also, in some parallel to the movie industry, have fans who wait years for the content to come out. This is not like iPods, it's a very different dynamic. So if this guy sees year over year declines in the offing, I think he has no clue what he's talking about. There's a huge future out there for MMPORGs and PC crossover with the USB XBox Controller. It only gets bigger from here.

Posted by mbowen at January 17, 2006 08:13 PM

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