Analysts predict next-gen victory for Sony

Market analyst firm The Yankee Group has forecast a victory for Sony in the next-gen console race, predicting a four per cent lead over Microsoft - with Nintendo's Wii trailing far behind.

The report suggests that Microsoft will have sold approximately 27 million Xbox 360 consoles by 2011, capturing 40 per cent of the US market and narrowly missing the lead. Sony is expected to shift 30 million units of its considerably higher priced PlayStation 3, gaining a marginal victory with 44 per cent of the overall console market in the US.

Analysts at the firm have noticeably less faith in the success of the Nintendo Wii, which is expected to retail for less than US$250 and is taking a markedly different approach to the next-gen race - favouring innovation and gameplay over high processing power and cinematic visuals.

It's predicted that Nintendo will sell just 11 million units over the next five years, securing a rather less impressive 16 per cent of the US market. It should be noted however, that The Yankee Group's analysis contradicts widespread industry opinion on Nintendo's success in the market, as developers, publishers and rival platform holders continue to praise the Japanese firm's market strategy.

According to the report, sales of console hardware is expected to be significantly lower than in the current generation of consoles, primarily due to higher retail pricing and the uncertainty regarding the dominant storage format as the HD DVD versus Blu-ray debate continues.

In addition to its speculative analysis on market dominance, the report suggests that digital distribution and in-game advertising will continue to show rapid growth and much more widespread adoption, thanks to broadband ready, connected gameplay consoles entering the market.

Michael Goodman, senior analyst at the Yankee Group, commented: "With a growing installed base of connected consoles, content owners are beginning to recognize the potential video game consoles offer as a distribution channel. Additionally, these platforms will serve as a strong medium for advertising, validating the growing market for in-game and around game advertising."