Will Microsoft and Sony both make a next generation system?

[neogamer]

In another post, I stated that there is some doubt in the financial world as to whether or not Microsoft will in fact release another home video game system. The reason behind this is because, as many other companies have found out, it is very hard to compete in a Japanese dominated industry when you are an American company. Regardless, of Microsoft's deep financial pockets, I wanted to hear your comments on this issue.

Please refrain from any Sony, Nintendo, or Microsoft bashing! You may post whatever you like, but I will say this. I am stock holder of all three companies, and I own all three systems as well, so I could care less! I do not have a favorite! I can play Gears of War, then play Wii Sports, while getting ready to do some serious damage in Resistance Fall of Man!

The purpose of this post is to have an intellectual conversation about where you personally think the industry is headed within 5-10 years! Will there be a Sony Playstation 4? Most analysts would say yes! Will there be another Nintendo home game system. Almost all the analysts in our industry would agree!

Ready to start? Okay, off to the comments.....this should get interesting!

[walrusmonger]

There is no way that MS or Nintendo wouldnt release another console. I'm sure Sony will pick up sooner or later with their PS3 sales and release a PS4.

To think MS would just throw in the towel after the massive success of the 360 is crazy.

[bangtango]

Sony still thinks they are on top or will be on top, so there is no reason for them to pass on releasing another Playstation system.

Nintendo is on top in the next-generation race, at least according to a couple of threads here and there (I don't keep tabs on sales figures, I just follow new releases). No reason for them to stop releasing systems.

I don't expect Microsoft to admit any type of defeat either.

Unless one of the three companies starts working together with one of the other two, then I'm sure we will see all three "show up" when the time comes for new hardware.

[Family Computer]

PS3 will dominate in Japan once the games start coming. Not sure how it will end up doing in the US, but certainly a lot better than it is at the moment.

Nintendo is only a gaming company, so of course they will make another system. Even when they lose console races, they are still profitable. They develop most of the popular games for their systems themselves, and are always profitable on hardware sales.

Microsoft will never do well in Japan, but they will continue to do well in the US.

[studvicious]

Without a doubt. The gaming industry brings in more money than Hollywood - it's not going anywhere, no matter which company "wins".

[AMG]

I have no doubt that Sony, MS and Nintendo will release future home consoles.

Let's just hope that Sony (and to a lesser extent Microsoft) have learned that console pricing is very important. It's doesn't matter how many bells and whistles a console has, the price will determine how fast it gets into homes, not fancy extras.

[Anthony1]

MS is actually in a good position to release another console in November 2010. It will be too early for Sony to release another system, considering the PS3 will just be hitting it's stride in 2010, but the follow up to the 360 will be considerably more powerful than the PS3. It will have ridiculous amounts of ram, along with the latest in processing and graphics technology. I would guess it will also have physics type hardware built into the system as well. The 360 will be the dominating system in terms of software sales in 2007, 2008, 2009 and 2010. Those are going to be the 4 big years for Microsoft. However, as 2010 fades away it will be obvious that the Playstation 3 is starting to really make a move into 360 software sales. The true power of the PS3 will surely have been tapped by then, and 360 titles could look a bit weak in comparison. This is when the whole Blu Ray media strategy will actually start to pay off for Sony. This will give MS the perfect reason to release a new system, while continuing to support the 360 well into 2011 and 2012. I don't think they will euthanize the 360, like they did the Xbox. They will follow Sony's lead, in how they handled the PS1 and PS2 at the end of their life span. Release a newer, more powerful system for much more money, lower the price on the existing hardware to the $99 range, and continue to bring out some big games for the old hardware, squeezing even more profits out of it, while it's on it's death bed.

Also, it's very possible that MS waits till November 2011 to release their next console. As for Sony, I'm sure they will have a follow up to the PS3, but I don't see them releasing a follow up till November 2012 or even possibly 2013, as crazy as that may sound.

The real question, is what is Nintendo's hardware future? Some people out there, like Michael Pachter, have predicited that Nintendo will release a "HD" version of the Wii in a couple of years. Like possibly as early as Xmas 09. Basically, the theory with that, is that Nintendo makes a boatload of money off the Wii in 2006, 2007 and 2008, but in 2009, Wii sales start to really tapper off, and consumers get bored with the 2001 graphics. So, right as the Wii fad dies off, Nintendo is ready with a High Def version of their Wii, that is still extremely low cost, and has graphics comparable to the Xbox 360. I think that's an interesting thought process, but I think Nintendo is way too arrogant and stubborn to think their Wii fad is going to die that quick a death. I'm sure they are pondering a "HD" Wii, but I can't see them releasing anything until they are absolutey positive that the Wii craze is history. Therefore, I don't see them releasing a follow up to the Wii, until November 2010.

That's my personal take.

[Juganawt]

Microsoft are already working on the successor to Xbox 360, and will probably start working on the successor to the successor of the Xbox 360 as soon as the successor is launched. They have deep pockets, and a determination to dominate the industry. They'll pretty much do whatever it takes to get the number one spot.

The only real question is, Will Microsoft continue attempting to break the Japanese market? Or will they cut their losses and release Xbox 720 (or whatever it'll be called) in Western countries, similar to how Atari worked.

It must be coming clear that the amount of money Microsoft have plowed into getting some sort of sales in Japan is money wasted. We all know that Japanese people are elitist and would never, EVER let a non-Japanese system become number one over there. No matter how hard they try, even if they got every single high profile developer to work exclusively to Xbox, the machine would still be a flop.

Sony are working on a new system also, although it's uncertain whether it's a phone with PSP compatibility, or the follow up to the PS3.

With Sony, it's slightly different. This is the first time their pride (and pockets) have been dented on an extreme scale. Not only does it merely have an absolutely pathetic 9% marketshare in it's native Japan, nobody in the US is buying it, and Europeans are pissed off at Sony for releasing late in this territory at double the price, with half the software..so it's flopping hard here in Europe too. If Blu Ray hadn't started becoming successful, there wouldn't be a PS4... and there wouldn't be a Sony either. They would have gone bankrupt.

I think if PS3 stagnates like it has been till the end of it's life, we will see a PS4, but if that didn't succeed better then PS3 did, I doubt we'd see a PS5.

So to get to the point, yes there will be next generation systems from all 3 of the big players, and probably new entries into the handheld market by Sony and Nintendo, which will spark Microsoft's interest to finally release a portable system also.

[neogamer]

I will state this:

Microsoft and Sony (to a lesser extend, thanks in part to incredible sales in Japan) are both losing money in their game divisions.

Microsoft is currently close to two billion dollars in the hole.

Sony is anywhere between 1 to 2 billion dollars in the hole right now.

Nintendo is the only console company that actually continues to make money on their hardware. They make roughly fifty dollars on every Wii console sold.

It is interesting to see how this will play out.

I personally believe that Microsoft will eventually give up on hardware and focus on software only. Many analysts feel the same way. One of the reasons behind this is because Microsoft is primarily a software company. Sony on the other hand, is primarily a hardware company in the software business.

I have a friend who happens to be an analyst at Bank of America who claims that Microsoft will eventually, like Sega, be forced to go mulit-platform. This is due to their lackluster success in Japan. I somewhat agree, after all, how can an American company succeed in a Japanese dominated world of video games? The 360 is barely selling in Japan, and the Japanese market is roughly three to four times larger than the US video game market. Yes, it is bigger than Hollywood, but there are a lot of other business that are bigger than Hollywood as well!

Anyway, I still am buying a Halo Xbox 360 system (even though I already own a premium 360 system) on launch day and of course, Halo 3, when it ships a few days later!

[s1lence]

Well considering that Bill Gates stated that the Xbox franchise will succeed regardless of cost, they will have another system. Last time I checked they aren't short on cash flow. Also before the recall on the 360 MS was starting to turn the corner to being in the black.

Sony is in the same boat, money doesn't seem to be a problem for them either and the PS3 will start making money. Its just taking a bit longer. The PS2 is still a system that is selling systems and games, and you know the cost to the company on both is minimal compared to the PS3 and 360.

No I see that both will be around for some time to come.

[Icarus Moonsight]

The 360 is barely selling in Japan, and the Japanese market is roughly three to four times larger than the US video game market.

Last I knew, the US market accounts for nearly 50% of the global gaming market. If true, there's not enough pie left for Japan to account for 3-4 times over the US.

Microsoft's biggest assets, namely Live and Halo, could easily be exported to other platforms and already has made the migration to PCs. I could see MS operating as a third party in the console market. They already do third party releases in the handheld market, for example, Mechwarrior on DS.

Sony is in a bit of a pickle IMO. Though I have no doubt we'll be seeing the PS4 in the future. Afterall, if Sony doesn't release hardware they got nothing. Well, maybe God of War. Still not enough to keep them viable in the case of going software only. Anyone remember the Sony Imagesoft brand? Yuck!

[udisi]

They'll all make a new system.

Microsoft would be fine if it were not for the Japanese market. I could see Microsoft deciding to say the hell with the Japanese market and making more money in the US ad Europe, but I don't see MS admitting defeat anywhere and they'll continue to throw money in a hole in Japan.

Sony is in real trouble, the PS3 is munching money at an alarming rate. I say they're in worse shape than MS because they're failing on all fronts...Japan, US, and Europe share are all ridiculously terrible. I don't even know if the system will survive when some software finally hits the market. I don't think Sony will give up the fight easy too though, and will probably have a PS4 out sooner than later and they will make it cheaper and more cost effective. The PS3 may end up dying young just because the mainstream public won't risk buying it will all the bad press and high price tag.

Nintendo...continues to somehow succeed in the eyes of defeat. Nintendo always decides to go with a more affordable less powerful platform, and turns a profit on hardware sales. I really thought the Wii would have been too quirky to even be as successful as it is now. It doesn't have a lot of quality software, but is does have a handful of must play titles, and as in the past Nintendo has shown that it can survive on it's first party titles alone. The HD Wii idea is interesting and I was thinking sortof along the same lines. I think Nintendo will take a page from the Handheld side of things and release updated versions of hardware that are backwards compatible. Think of the evolution of the GBA through the DS. You have your basic GBA, then they make the SP, make a brighter scrren, make the Micro, Bring out the DS, the DS lite....Nintendo has made a mint on Hardware by just making small improvements and updates. Why not do this with the Wii?

[Mayhem]

The 360 is barely selling in Japan, and the Japanese market is roughly three to four times larger than the US video game market.

Actually in terms of revenue, Europe is the biggest games market in the world, followed by the US and then Japan.

[Gentlegamer]

We all know that Japanese people are elitist and would never, EVER let a non-Japanese system become number one over there.

What operating system do the Japanese use on their home computers? What home computer type (PC, Mac, other) do the Japanese use?

[Moo Cow]

The problem with US games not selling in Japan isn't elitism. Look at how well Cracsh Bandicoot did over there. It sold well because of the great advertising job that was done to make it appeal over there. Most American games don't sell well in Japan because they don't try hard enough to make it appeal to the Japanese.

[diskoboy]

Ummm - who invented the video game? A German AMERICAN (All praise Ralph Baer)

Japan just stole the industry from us in the late 80's, when the MBA's took over the industry here, and fucked everything up.

[cyberfluxor]

Well, from looking back on the gaming markets I think it's possible that Sony will fade away within a few more generations unless they do have some huge plans for the PS3 and it can last in the market for those plans to be released. It's possible they'll go the way of Atari and just continue with software from busting on such an expensive game system.

As for Microsoft, I see them sticking around for awhile longer. I have no doubt they'll be around for awhile longer in at least North America because they're our footprint in the game market at this time. They feed off of the American game market that Sony and Nintendo haven't tapped into due to who their games target.

Nintendo will stick around for a good while longer. They will continue making kids and "everyone" friendly games. They may slow down eventually but they aren't going away anytime soon.

My main hope is that a new player will enter the market in a few years. We're due for yet another company to spit out a big console and hit the demands of next-gen everyone is asking for and the current big three haven't quite done yet. I believe that this company will have an inovative method that will wow everyone and take the game world by storm.

Of course those are what I think from my perspective. Maybe I'm not attuned to the new generation of consoles as some others are here but I do expect some changes to occure soonre than later.

[neogamer]

Ummm - who invented the video game? A German AMERICAN (All praise Ralph Baer)

Japan just stole the industry from us in the late 80's, when the MBA's took over the industry here, and fucked everything up.

What's your point? As of right now, the Japanese market is huge! That is all that matters now. Numbers don't lie!

I won't even comment on your reply about MBA's, as in about ten months, I'll have one as well.....

[neogamer]

Actually in terms of revenue, Europe is the biggest games market in the world, followed by the US and then Japan.

Your getting your info from Morgan Stanley! That comment was later retracted by them. Actually the Japanese have a bigger market than Europe according to Bank of America. Generally, they seem to have some the best analysts in the business.

Unfortunately, most video game websites and magazines, use whatever analysts they want to prove the facts they want to prove. This is why I normally don't like gamespot.com, they do this all the time!

EGM does the same thing. You can find information to prove the numbers either way. Just take your pick on what analysts you want to use. Sad, but true!

Right now, Target is supposed to be a good stock to buy, however, I can show you other analysts who claim that Target is a horrible stock to buy. Analysts that study the video game industry are no different.

[Trebuken]

My opinions (no research involved).

Nintendo is succeeding because of the DS not the Wii. The Wii does not have a rosey future after this holiday because of the weak hardware. I'm hoping Mario Galaxy can change turn things around and show us that the Wii can push a few more pixels. Innovation ain't going to be enough for them, since MS and Sony can copy it all.

The 360 is selling boatloads of software and Halo 3 is expected to singlehandedly turn the 360's profits around; and eliminate the red ring expenses. The 360 has thre years left and Microsoft would have done a great job managing their hardware costs had they not released defective hardware. The limited disc space may come into play.

Sony needs to get a move on. Warhawk and Lair were delayed a year and still sucked. Heavenly Sword is one week away and will either signal a new beginning for Sony or the end. If Unreal Tournament 3 makes it to the PS3 first they will sell more systems; Blu-ray is going to sell systems as people migrate to HD -- the next couple of years are a big deal for HD because everyone needs to convert and no more analog sets will be sold. Almost all TV's sold from here on will be HD.

I expect another Xbox, then a new PS3 a year or two later, but Nintendo is going to have to make a deal with someone to get some more power in their next system. Rumor has it that they are working on this. Can the DS continue to trounce the PSP? Nintendo needs it to or they are toast....their next handheld might be announced at the next E3 (my guess).

PC Gaming will still be around when all these systems have faded to the classic gaming section though, so no worries.