Industry
Executives Predict a Major Battle Among Video
Game Hardware Manufacturers, Reports DFC
Intelligence
According to a
new report from DFC Intelligence, executives in
the interactive entertainment industry are
gearing up for the most competitive video game
hardware battle ever. The report, Executive
Interview Series: The State of the Game Market
2001, is based on interviews DFC conducted with
some of the leading executives in the video game
industry. Combined, the executives interviewed
for the report, represented companies that
accounted for nearly 75% of U.S. interactive
entertainment software revenue in 2000.
A
primary topic of the interviews was the market
potential for the leading new game systems, the
PlayStation 2, the X-Box, the GameCube and the
Game Boy Advance. Unlike what DFC has found in
past industry surveys, many executives felt that
the game industry could be split among 3 or more
hardware systems. There was significant
disagreement on how well each hardware platform
will do over the next several years.
The
PlayStation 2, from Sony (NYSE:SNE), was the
favorite among industry insiders to be the market
share leader. This was the despite the fact that
many executives are extremely disappointed with
Sony's handling of the PlayStation 2.
Nevertheless, the main difference seems to be
between those that think the PlayStation 2 will
win the hardware race by a "country
mile," and the executives that think the
market could be fairly evenly split among three
game systems.
The
interviewees were less certain about the
GameCube, from Nintendo (OTC:NTDOY). The less
than unanimous consensus was that the GameCube
would be the number two system behind the
PlayStation 2. Most respondents felt that
Nintendo would focus almost exclusively on the
6-14 year old audience and let the PlayStation 2
and X-Box fight it out for the over 14
demographic.
The
greatest area of disagreement was over the
outlook for the X-Box, from Microsoft
(Nasdaq:MSFT). Many respondents hope that a large
new entrant like Microsoft will take the game
industry to the next level. Other executives came
outright and said they thought that the X-Box
would be a failure. There was some significant
concern about Microsoft's lack of marketing
ability for this type of consumer product. Other
respondents were worried about Microsoft's track
record of not getting products right the first
time around.
There
was also some substantial concern about whether
the X-Box and GameCube would actually be released
in 2001. Many respondents thought the launch date
of one, or both, of these systems may slip to
2002. Even if these products ship in 2001, they
may ship in very limited quantities due to
manufacturing shortages.
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