Microsoft still holds a commanding lead in the HD console sales war, but Sony is catching up slowly. With over 40 million units sold around the world, DFC intelligence believes that the Xbox 360 has peaked, and that sales will continue to cool down while Sony continues to see an increase in PS3 sales.
DFC also believes that Microsoft’s attempt to boost sales by appealing to a more casual market with Kinect will not meet expectations. “In terms of changing the overall video game hardware platform market share we see [Kinect] having a negligible impact,” said DFC in a monthly brief.”The Xbox 360 has some good years left, but the platform is clearly on the downside of its lifecycle.”
DFC believes that Microsoft’s background in business software is the reason for their lack of a true understanding of the entertainment industry at mass market level. One of the points made, is that Microsoft has demonstrated a lack of creativity, by taking already established features of casual-friendly gaming, and put them on Kinect. I saw this firsthand at E3, where I could not help but notice blatant similarities between Kinect’s demo games and already available Wii games.
“In its business software, Microsoft has been successful in analyzing what works for users of other products and incrementally incorporating those features into Microsoft products,” DFC said. “The problem is developing hit entertainment products simply does not follow that model.”
DFC then notes that every attempt by Microsoft to capture market share in the entertainment industry (before the 360, and excluding PC) has been a failure. The original Xbox came nowhere near the success of the PS2, and the Zune failed dismally trying to compete with Apple’s iPod.
I’m not sure I agree, and I think there is a pretty good chance that Kinect will live up to Microsoft’s expectations. On the other hand, Microsoft is blatantly trying to cash in on the same audience and basic concept that Nintendo did when it launched the Wii almost 4 years ago, and it remains to be seen if they can even come close to emulating that success.
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