Analyst slashes PS3 sales expectations following disappointing 2008

Both Wii and 360 estimates up, but "Sony has failed to establish the PS3 as the console of choice"

Analyst firm Cowen and Company has reduced its sales expectations for the PlayStation 3 after disappointing sales of the console in 2008.

The company now expects Sony will sell 4 million units in the US during 2009, down 2.25 million from previous estimates of 6.25 million units.

Cowen does expect sales will pick up marginally in 2010, with 4.5 million units sold in the region. According to data from NPD, the PlayStation 3 sold 3.6 million units in the US during 2008.

"Following another year in which PS3 unit sales lagged behind the Wii and Xbox 360, it is now clear that Sony has failed to establish the PS3 as the console of choice among hardcore gamers this cycle," wrote Doug Creutz in a note to investors.

"Although there appears to be a reasonably robust slate of games for the PlayStation 3 this year, Sony continues to lack a clear 'must-own' title that will drive sales, while its platform continues to be the most expensive in the market in the midst of a consumer slowdown.

"Meanwhile, highly publicised platform initiatives such as Home have failed to get off the ground," he added.

In contrast, Cowen has upped its sales expectations for Nintendo's Wii, expecting the console to sell another two million units in 2009 and 2010, to 8 million and 6 million units, respectively.

"Nintendo's software line-up for the platform continues to provide gamers with a more compelling value proposition with new first party hits such as Wii Fit and Wii Music and older titles such as Wii Play continuing to sell extremely well.

"Nintendo also seems to have ironed out supply constraint kinks that held back sales in previous years," noted Creutz.

Cowan also expects Microsoft's Xbox 360 will widen its lead over the PlayStation 3 this year, with 4.25 million units sold, although expectations for 2010 remain the same at 4 million units.

"Microsoft's Xbox 360 seems to have entrenched itself as the best value proposition for hardcore gamers," said Creutz.

"Additionally, with exclusive episodic content for Take-Two's massive hit game GTA IV coming in 2009, as well as additional Halo franchise releases this year, we believe that the Xbox 360 is likely to widen its sales lead over the PS3 in 2009."

Expectations for DS sales in the US have been adjusted upwards, to 7.5 million this year, and 6.5 million in 2010, while PSP sales have been dropped slightly to 3.5 million units in 2009, and 3.25 million in 2010.

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