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Microsoft: New console generation can grow market by 30%

Microsoft: New console generation can grow market by 30%

Thu 23 May 2013 9:25am GMT / 5:25am EDT / 2:25am PDT
BusinessPublishing

Support for Xbox 360 will continue for "multiple years" says Lewis

Microsoft is predicting that the new round of home hardware - the Xbox One, PlayStation 4 and Wii U - will help the overall console market grow by 30 per cent.

The current generation of Xbox 360, PlayStation 3 and Wii have sold over 253m units combined, with the Wii leading the pack at close to 100 million and the Xbox 360 and PlayStation 3 almost neck and neck.

"We've already got meaningful marketing plans for the next 12 months for Xbox 360 and beyond"

Chris Lewis, Microsoft

"This generation 7 that we're in right now, it's 50 per cent bigger than generation 6 and I think double the size of generation 5. Our anticipation is that generation 8 will be at least 30 per cent bigger still," Chris Lewis, Microsoft Europe's VP of Interactive Entertainment told GamesIndustry International.

The current generation has played out much longer than the previous. The Xbox 360 originally launched in 2005 and the PlayStation 3 a year later, with Sony continuing to bang the drum for a ten year lifecycle. Lewis added that it was right to support the hardware, updating the systems, adding new services and software as formats matured.

"There is a strong trajectory there," he said. "I think people liked the length of the generation. Our partners certainly did. Retail loved the length of the generation, at least in terms of the attach and the additional services and content they can attach. Our developers like the longevity of the platform because they get better at bringing and optimising content for that platform."

When the Xbox 360 was introduced to the market, Microsoft and its partners quickly dropped support for the original Xbox. That was in contrast to Sony's shift from PlayStation 2 to PlayStation 3, which still saw continued support for the PS2, from best-selling and critically acclaimed first-party titles, as well as big franchise hits from EA, Activision and THQ.

Now Lewis has suggested that Microsoft hopes to take a similar approach and will continue to support the Xbox 360 despite the release of the Xbox One later this year.

"Xbox 360 will continue for another multiple-year time frame," he told GamesIndustry International. "We've already got meaningful marketing plans for the next 12 months for Xbox 360 and beyond.

"Our third-party publishers will bring more content to it, because the installed base is so high," he added.

The Xbox One was unveiled this week during an event that focused largely on TV and other entertainment services, with the company gearing up for a full reveal of new video games at E3 next month.

Interview conducted by Jeremy Parish, Games Editor at USgamer. USgamer is an upcoming consumer website published by Gamer Network and launching in early June, and will be located at http://www.usgamer.net.

17 Comments

"We've already got meaningful marketing plans for the next 12 months for Xbox 360 and beyond"
This is not game, this is control of the living room - and I wonder how long it will be before the media works out that this change in approach will sideline many of use that support the interactive game content aspect of the market and are not here for the live sports, television and online subscription model?

Edited 1 times. Last edit by kevin williams on 23rd May 2013 4:14pm

Posted:10 months ago

#1

Jack Pochop
Studying Telecommunications

27 16 0.6
It's important for both Microsoft and Sony to support Generation 7 through at least the next year. Sony has more than demonstrated their ability to do so with continued PlayStation 2 support strongly through half the PS3's lifecycle. Microsoft has a lot more to prove, given [as the article reads] their insta-drop of the original Xbox. As a consumer, I'm all for cross-generation ports through the first year. But I'm not a developer, and have no grasp of how difficult porting games between systems actually is.

Posted:10 months ago

#2
E3 - can it survive if the leading console machines revert to a connected "living room" approach - as CES would then seem the more relevant location for their launches and support?

Posted:10 months ago

#3
and who is going to expand this market? the incredibly large demographic of unemployed young people between 15-24 the world over?

I always find it curious that so many in this industry are so oblivious to the incredible economic turmoil that is our world economy right now.

Edited 2 times. Last edit by Todd Weidner on 23rd May 2013 6:08pm

Posted:10 months ago

#4

Jim Webb
Executive Editor/Community Director

2,210 2,049 0.9
Popular Comment
I'll tell you who isn't going to expand it.

Wheel of Fortune watchers who have little interest in a $400 - $500 TV guide.

Posted:10 months ago

#5
Not sure with you Jim - that Xbone Betamax unit will stir some memories! :)

Posted:10 months ago

#6

Rick Lopez
Illustrator, Graphic Designer

1,203 816 0.7
Seriously it looks like a VHS tape recorder. It screams TV not video games.

Posted:10 months ago

#7

David Serrano
Freelancer

279 243 0.9
According to Wikipedia, a video game console is: "an interactive entertainment computer or customized computer system that produces a video display signal which can be used with a display device (a television, monitor, etc.) to display a video game. The term "video game console" is used to distinguish a machine designed for people to buy and use primarily for playing video games on a TV in contrast to arcade machines, handheld game consoles, or home computers."

So can a product which Microsoft designed first and foremost to function as a set top device be legally marketed as a video game console? In the US, if a juice product isnít 100 percent juice, it must be marketed as a juice product or juice drink. So objectively, is the Xbox One a video game console or a video game console "drink?"

I'll reserve judgement on how Sony or Nintendo's new systems may impact the game console market until after E3. But I can say with absolute certainty today the Xbox One will not grow the game console market. Because Microsoft can't grow the market if they don't have a product in the market. And no amount of disingenuous marketing and PR will convince the average informed consumer that a device which relegates playing video games to a tertiary function is a "game console." If Microsoft dominates the set top market with the XB One, more power to them. But please don't try to pee on my leg and tell me it's raining.

Posted:10 months ago

#9

Andrew Goodchild
Studying development

1,199 317 0.3
@David. In the Xbox one reveal, they avoided calling it a games console even once.

Posted:10 months ago

#10

Paul Jace
Merchandiser

767 999 1.3
Thats good because I haven't decided if I want an Xbox 1 at launch. But I'll definitely be playing my 360 until the day I get one so continued support is welcomed and appreciated.

Posted:10 months ago

#11

Gareth Donaghey
Customer Support Agent

31 32 1.0
@Jim

"I'll tell you who isn't going to expand it.
Wheel of Fortune watchers who have little interest in a $400 - $500 TV guide. "

Now come on, they are going to be enthralled with seeing 'This content can not be viewed in your region' in full 1080p

Posted:10 months ago

#12

Adam Campbell
Associate Producer

1,116 888 0.8
and who is going to expand this market? the incredibly large demographic of unemployed young people between 15-24 the world over?

I always find it curious that so many in this industry are so oblivious to the incredible economic turmoil that is our world economy right now.
I don't think that's particularly fair.

Through a global financial crisis that hasn't ended since it came about, the 7th generation of consoles still managed to create a record and still expanding market.

With signs of recovery through many parts of the world, as well as an aim to bring down launch prices of hardware - thanks to modest, easy to produce architecture, why can't it increase even further?

There's an order of magnitude more people in the world than the installed base of consoles. So there are the numbers for more people to buy this time over the last generation and the generation before that. In my opinion, the only thing that can stop that is the attention of customers being drawn away to other technologies. Of course, we get plenty of arguments and debates when anyone mentions social or mobile in the same sentence as consoles...

Edited 1 times. Last edit by Adam Campbell on 24th May 2013 4:01pm

Posted:10 months ago

#13

Nick Parker
Consultant

264 124 0.5
I know where Chris Lewis is coming from (the Xbox One and PS4 are more than games consoles), but I wouldn't forecast a next gen cycle bigger than this one. The Wii was a one off phenomenon which in two significant years of sales (2008 & 2009) ensured that that lifecycle would surpass the previous one. Consequently, the next gen lifecycle will have to go a long way to beat that. On hardware unit sales, I estimate that for the first six years of the next gen, global sales will be 40 million down on the same period in the last cycle which would require the years thereafter to break all records which is highly unlikely. We're not half way through 2013 yet and by 2020 (7 years), who knows what will be the addressable market for games, and of that, what will be the share made up by consoles?

Posted:10 months ago

#14
With signs of recovery through many parts of the world,
and here is where we disagree. The Us middle class has been decimated, Europes in recession with record unemployment, Japan is a total mess, China's fake gdp via channel stuffing if finally being revealed, The entire global market is being propped by central banks and little more. Coming from a financial background and a former broker, I can honestly say, I have never imagined that world economics could get so out of whack, it is truly frightening. When you have 5 consecutive nights of rioting in sweden, you know you have problems.

Edited 2 times. Last edit by Todd Weidner on 25th May 2013 3:51am

Posted:10 months ago

#15

Stephan Schwabe
Multichannelmanagement

69 31 0.4
The X Box one as she is now, will not be a success in germany. Ther is to much big brother for germany. we have several article's wher the politicans say: privacy protection is not ok with this x-box one. I wonder how microsoft will grow the market up to 30% when europe is anti xbox one. Not to speak of, most feat's will not work outside the us..

Posted:10 months ago

#16

David Serrano
Freelancer

279 243 0.9
@Andrew Goodchild

But yet here we have a Microsoft exec. making predictions about how the Xbox One will impact the game console market by making comparison to how it's previous game consoles have performed. Microsoft seems to think it can have its cake and eat it too if it simply avoids referring to the cake as cake. "Oh... that's not cake, it is icing which contains a flour, egg and sugar based food product." So at what point does playing this word game cross the line and become an intentionally deceptive business practice? And at what point will consumers start to resent Microsoft for attempting to play them for fools?

Posted:10 months ago

#17

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