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iSuppli: Strong PS3 Performance To Lift Global Console Business

12/08/2009 02:28:50 PM Eastern

El Segundo, Calif. - According to a video game system market
forecast by iSuppli Tuesday, Sony's
strong U.S. PlayStation3 sales performance during Black Friday week should help
the global
video game console market
return to growth during the fourth quarter.

If accurate, the feat would mark the first time this year
that the market has expanded on a year-over-year basis, iSuppli said.

Global video game console shipments are set to rise to 24.6
million units in the fourth quarter of 2009, up 5.2 percent from 23.4 million
during the same period in 2008, iSuppli said. This follows declines of 2.1
percent in the first quarter, 35.7 percent in the second quarter and 10.9
percent in the third quarter.

"Sony's PlayStation3
sales reached an all-time high during the week of Black Friday as consumers
were attracted by its new low pricing and alluring bundle deals," stated Pamela
Tufegdzic, iSuppli consumer electronics analyst. "According to Sony, 440,000 PlayStation3
consoles were sold in the United States during the week of Nov. 29, a record
for the product and nearly double from a year earlier. In comparison, Nintendo
Wii sales were down year over year during the same period."

Since its introduction in November 2006 the PlayStation3's
sales performance has lagged that of Nintendo's Wii
and Microsoft's Xbox 360, due primarily
to its higher comparative price.

Sony now appears to have somewhat leveled the advantages
enjoyed by its rivals and has found ways to attract consumers back to the
popular PlayStation line, iSuppli said.

"Sony has finally gotten it right with the PlayStation3,"
Tufegdzic said. "The company has made a number of moves that now are paying off
in terms of increased sales. These include a new product design that has
allowed a price reduction to $299, down from $399, making it more affordable
for consumers. Sony also is selling the PlayStation3 in bundles with popular
game titles that cater to all ages. Furthermore, the PlayStation3 is being sold
in bundles with Sony high-definition LCD TVs, pushing the game console's
Blu-ray player capabilities. These deals are perceived as good value by
consumers. Finally, Sony increased its level of advertising on television,
newspapers and the Internet, further boosting its sales during Black Friday and
likely throughout the Christmas season."

On the other hand, the Wii system has slowed down from its
blockbuster pace during Black Friday 2008.

"Wii sales during the week of Nov. 29 likely amounted to
550,000, compared to nearly 800,000 during the same period in 2008, according
to Nintendo," said Tufegdzic.

Despite the decline from a year ago, the Wii outsold both the
Xbox 360 and the PS3 over the recent Black Friday period, iSuppli said.

The big driver for Wii sales was gaming titles, particularly
the new Super Mario Bros Wii, which is estimated to have sold more than half a
million units in the second week of release.

Other popular titles for Wii include Wii Sports Resort, Wii
Fit Plus and Mario Kart Wii. In addition, the $50 price reduction from $249 to
$199 has helped to prolong the Wii's popularity among consumers.

Microsoft did not report actual sales during the Black Friday
week, but the company offered bundle deals to promote sales.

However, the strong performance for the global game console
market in the fourth quarter won't be sufficient to make up for weak conditions
through the first three quarters of the year, according to iSuppli.

Worldwide video game console shipments will amount to 51.6
million units in 2009, down 6.7 percent from 55.3 million in 2008.











iSuppli Figure: Global Quarterly Video Game Console Shipment Estimate and Forecast (Millions of Units)


Source: iSuppli Corp. December 2009

  Q1 08 Q2 08  Q3 08  Q4 08 Q1 09 Q2 09 Q3 09 Q4 09

Console Unit Shipments

 10.3  9.5  12  23.4  10.1  6.1  10.7  24.6


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