Down Year Predicted for Gaming Consoles

Despite the launch of Microsoft’s Xbox and the start of a new era for gaming consoles, shipments are expected to decline in 2001 according to a report from Cahners In-Stat Group.

The report, “Ready to Rumble: The Video Game Console Market“, found that worldwide video game console shipments totaled more than $4.5 billion in revenue, and despite this year’s decline, unit shipments should increase substantially between 2000 and 2005.

It’s a big transition year for the console gaming market. Gamers are anxiously awaiting the release of Nintendo’s GameCube and Microsoft’s Xbox, and consoles are also evolving with the addition of DVDs, Ethernet adapters and hard drives.

“The video game console market is seeing a period of unprecedented change,” said Brian O’Rourke, a senior analyst with In-Stat. “This change has been marked by the exit of legacy player Sega from the market, and the arrival of Microsoft.”

Sony is the dominant player in the video game console market. Its PlayStation 2 and PlayStation were the two best-selling consoles worldwide in 2000, and are expected to remain at the top in 2001. The Nintendo GameCube, however, should have a significant advantage in the console wars, specifically because of its $100 price advantage. According to In-Stat, a $199 console may prove to be more appealing to cost-conscious parents and gamers than a $299 console, particularly in current economic conditions.

Gaming consoles are attracting attention online, especially Xbox. According to Nielsen//NetRatings, Xbox.com attracted 589,000 unique at-home visitors during the week ending Oct. 28. One week earlier, the site attracted 344,000 visitors. Surfers accessed more than 5 million pages on the site, a 108 percent increase from 2.4 million page views the previous week. Not surprisingly, males comprised 65 percent of the site’s audience while females accounted for 35 percent. Surfers spent more than five minutes at the site, and 74 percent of the visitors clicked on the page featuring the Taco Bell-Xbox Instant Win Sweepstakes.

PlayStation.com attracted 113,000 unique visitors, rising 64 percent from 69,000 visitors the week prior, Nielsen//NetRatings found.

“The number, variety and type of games offered by the various video game systems are critical to the success of the systems themselves. With the holiday season right around the corner, game console Web sites are playing a critical role in marketing new game titles and releases to consumers,” said Jarvis Mak, senior Internet analyst, NetRatings. “For example, Microsoft is getting a jump-start on the holiday season with their November Xbox Odyssey Tour, offering consumers the opportunity to preview new game programs and play with Xbox consoles before they are sold in public.”

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