Movie Studios Will Dictate PS3 Console War Win

So says Wedbush Morgan analyst

Posted by Staff
Movie Studios Will Dictate PS3 Console War Win
Gaming analyst Michael Pachter has been running his mouth off again, this time telling us that movie studios will dictate the winner of the next-gen console war. Not only that, but he can tell us exactly the percentage of the market that each console will own.

In his annual industry report Pachter said:

"...we expect the ultimate outcome of the console wars to be decided by the motion picture studios. Should the studios embrace Sony’s Blu-ray standard for high definition DVDs, we think Sony will gain an insurmountable advantage over Microsoft; should the studios embrace Sony rival Toshiba’s HD-DVD format, we think that Microsoft can maintain its first mover advantage and will dominate software sales for years to come."


If he's right, Sony ought to start worrying, what with the Porn industry already being onside with HD-DVD.

Pachter obviously doesn't see the porn as the giant it once was - and it has to be said that people who are still buying it on disc are doing it purely out of nostalgia. It's the PS3 that will win, according to him, although not by a landslide. "Ultimately, we see Sony 'winning' the console war with 36 per cent of the market, with Nintendo capturing second place at 34 per cent and Microsoft finishing third at 30 per cent,” he said. "We believe that this is essentially a dead heat, and each manufacturer will have sufficient market share to generate significant profits."

Pachter also notes that he expects the console life-span to extend this generation, stating, "In our view, the economics of game development and the tremendous capital required to produce the consoles will virtually compel all constituents to milk the next generation for all that it's worth."

There's one x-factor that could come and scupper Pachter's premonitions,"We believe that a wildcard for next-generation console sales will be the hardware manufacturers' ability either to develop content internally or to secure third-party commitment for software designed exclusively for a single platform,"

That said, third-party exclusives will be a bit elusive thanks to “the economics of game development,” according to Pachter. "We believe that the Xbox 360 and the PS3 are far more similar than their predecessors were," he opines, "and believe that the economics of game development will serve as a disincentive to third-party publishers to offer exclusive content for either console."

He certainly has a point there. Phil Harrison has already spoken out about the PS3's inability to hold GTA IV as an exclusive, and few next-gen exclusives are on the horizon.

Pachter is hands-down SPOnG's favourite analyst. If he's not stating the bloody obvious he's making wild proclamations that the PS3 will shed £125 from its price tag within a year.

Does gaming hang by the movie industry's whim? Answers in the Forum please.
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Comments

YenRug 8 May 2007 15:29
1/12
The problem with this analysis: standalone Blu-ray players are starting to drop in price, already. Sony's claim that the PS3 is a cheap Blu-ray player will not last for much longer, probably a year at best. You can argue that the price of the PS3 will come down, alongside the reduced component costs of the Blu-ray drive, but the PS3 will always have the extra components raising the price above that of a standalone player.
Joe Bloggs 8 May 2007 15:38
2/12
I agree!

Does that mean that BluRay will then win this war as the price of BluRay players are dropping - hence more and more people will buy the product?

Maybe. You just never know.
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YenRug 8 May 2007 15:48
3/12
Well, HD-DVD players are dropping in price, too, but this analysis is based on Blu-ray winning the format war and then boosting demand for the PS3; with Blu-ray players quickly dropping below the PS3 price, the analysis conclusion is potentially flawed as adopters of Blu-ray will not necessarily want a games console too, no matter how much Sony call it an "entertainment hub".
Raginbird 8 May 2007 18:20
4/12
The analyst does make it sound as though the PS3 is the only device that can play Blu-Ray. I agree with the other comments that Blu-Ray will play less of a role in the console battle as the stand alone players keep dropping in price. I'm no market research analyst, but even I can cook up random percentages of what each console's market share will be in a few years...(Wii first at 39%, , xbox 360 second at 32%, PS3 third at 29%...bet I'm closer than the "analyst" is.)
Moschops 8 May 2007 19:14
5/12
why buys porn software when you can download it?

its not the 1970s - porn wont have any noticable effect on this format war
Mark 9 May 2007 08:03
6/12
I think this guy must have bought a ps3 for his kids and really really doesn't want it to fail. Thats two rather rubbish predictions he's written now IMO!
schnide 11 May 2007 11:03
7/12
YenRug wrote:
The problem with this analysis: standalone Blu-ray players are starting to drop in price, already. Sony's claim that the PS3 is a cheap Blu-ray player will not last for much longer, probably a year at best. You can argue that the price of the PS3 will come down, alongside the reduced component costs of the Blu-ray drive, but the PS3 will always have the extra components raising the price above that of a standalone player.


But Blu-Ray players becoming cheap isn't necessarily a problem. If lots of people start buying Blu-Ray players because of that, then Blu-Ray still becomes a popular format and it's another reason why the PS3 will be given more consideration when it comes to buying a console.

Get a games console (360/Wii), or a games console with a popular video format built it..
Anon Seven 11 May 2007 12:07
8/12
Moschops wrote:
why buys porn software when you can download it?

its not the 1970s - porn wont have any noticable effect on this format war


I totaly agree porn isn't important in format wars any more, why buy what you can get for free?
PreciousRoi 11 May 2007 12:22
9/12
Ultimately the only thing that you can say for sure is that movie studios adoping BluRay as the dominant standard would have a significant positive effect of unknown potency on their ultimate market share and software sales.

Will it figure into every potential console owners calculations? No. Just how many people would be swayed by this as the deciding factor is extremely hard to quantify. Though as more people invest in multiple HD-capable displays PS3 with BluRay might make an attractive complement to one of the other consoles (allowing it to achive market share one of its competitors has already 'conquered'), and serve as an additional BluRay player for the bedroom, basement, etc (even if a standalone is used in the living room for instance)...it'll be interesting to see what the ultimate shakeout is...
YenRug 11 May 2007 14:28
10/12
schnide wrote:
YenRug wrote:
The problem with this analysis: standalone Blu-ray players are starting to drop in price, already. Sony's claim that the PS3 is a cheap Blu-ray player will not last for much longer, probably a year at best. You can argue that the price of the PS3 will come down, alongside the reduced component costs of the Blu-ray drive, but the PS3 will always have the extra components raising the price above that of a standalone player.


But Blu-Ray players becoming cheap isn't necessarily a problem. If lots of people start buying Blu-Ray players because of that, then Blu-Ray still becomes a popular format and it's another reason why the PS3 will be given more consideration when it comes to buying a console.

Get a games console (360/Wii), or a games console with a popular video format built it..


I never said that people wouldn't give the PS3 extra-thought if Blu-ray comes out on top, in the format war, I'm just questioning the conclusion of this "analysis". It smacks of the guy hearing Sony's marketing spiel about it being a cheap Blu-ray player, from that he has then made the assumption it will be the easiest way to get a Blu-ray player and so it will drive PS3 sales based on that. I'm simply pointing out that, once the dust has settled, the PS3 is almost certainly not going to be the cheapest way to get a Blu-ray player, in fact it could be the more expensive option (though there will, obviously, still be those who buy the high-end/professional models) by a significant margin.

Then we get into the old "entertainment hub" argument; Sony have already tried this with their PS2-based PSX system, in Japan, which proved to be a financial failure. It actually raises the question: in light of that system's failure, is it really a good idea to promote the PS3 as an entertainment hub?
Sthembiso 29 May 2007 14:20
11/12
Love the website, it has great things to offer and id like to win a playstation3 id love to.
hollywooda 29 May 2007 15:18
12/12
I agree, I think that "entertainment hub" things a wash out, anyone who's really serious about there entertainment set up would never go 4 an all in one box system from Sony anyway. & trying to palm it off as a cheap PC or Blu-ray player always sounds abit desperate. I just wished sony would stop trying to make there products so multi faceted & concentrate on make a solid product, the PS3 has fallen into all the same pit holes as the PSP.
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