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Online Gaming 'Reduces Likelihood Of 9th Console Generation'

Online Gaming 'Reduces Likelihood Of 9th Console Generation'

June 16, 2011 | By Mike Rose

The rise of digital download content and online and mobile gaming reduces the likelihood of a ninth generation console cycle, according to a Digi-Capital investment review.

Digi-Capital's Global Video Games Investment Review 2011 notes that game delivery services such as OnLive create "potentially significant long term issues" for Sony, Microsoft, Nintendo and GameStop.

The analysis explains that the iPad and other such tablets may also impact the console market, but that the effects will take "take much longer to occur than [first] anticipated."

The eighth generation console cycle, estimated to run between 2014-2016, will also be affected, according to the report, as casual, social and online gaming, including MMOs and mobile games, will constrain the growth of console gaming.

The report also notes, "Many major console publishers are struggling to adapt to online/mobile, and are not driving online/mobile games investment."

Digi-Capital estimates that online and mobile games "should grow total video games market size to $87 billion", while taking around 50 percent of the revenue share at $44 billion. In comparison, the console sector will see its share flat to down.

The report also discusses the current console generation, noting that the Nintendo Wii is currently dominating with 46 percent of overall console unit sales, following by Xbox 360's 28 percent and PlayStation 3's 26 percent.

2010 sales of Xbox 360 were 42 percent higher than in 2009, with sales driven by eight million Kinects sold in its first 60 days.

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