Sign in Subscribe
Microsoft Corp.

Console Wars Heat Up: Price Becomes Key Factor in Competition Between Sony, Microsoft, and Nintendo

Strategic Insights

— 2 min read

Japan's largest gaming event, the Tokyo Game Show, was packed this weekend, showcasing the intense competition among Sony, Microsoft, and Nintendo for market share in the gaming console market. With PlayStation 3, Xbox 360, and Wii set to launch later this year, analysts predict a five-year battle for dominance. Hiroshi Kamide, director of research at KBC Securities Japan, noted that at least 18 months are needed before a market leader emerges.

Key Takeaways:

  • Sony's PlayStation 3 will launch in Japan on November 11, with a price cut of 20% to around C$460 for the 20-gigabyte model.
  • Microsoft's Xbox 360 will retail for around C$285 in Japan, while Nintendo's Wii will be priced at 249 euros in Europe and US$250 in the United States.
  • The price of consoles may be the deciding factor, with analysts predicting that sales may initially be slow due to high prices.
  • Nintendo's Wii may emerge as a surprise winner due to its affordability and innovative remote control.
  • Initial shipments of next-generation consoles are expected to sell out due to insufficient supply, with Sony planning to ship six million PlayStation 3 machines by March 2007 and Nintendo targeting six million Wii consoles by the same date.
  • Software manufacturers are also waiting for the market to shake down, with major players such as Electronics Arts Inc. reporting slumping earnings.

Statistics:

  • 18 months: predicted time needed before a market leader emerges in the gaming console market (Hiroshi Kamide, KBC Securities Japan)
  • 20%: price cut announced by Sony for the 20-gigabyte PlayStation 3 model
  • C$460: new price of the 20-gigabyte PlayStation 3 model after price cut
  • C$285: retail price of Microsoft's Xbox 360 in Japan
  • 249 euros: price of Nintendo's Wii in Europe
  • US$250: price of Nintendo's Wii in the United States
  • Six million: number of PlayStation 3 machines planned for shipment by Sony by March 2007
  • Four hundred thousand: number of PS3 machines planned for shipment in the United States
  • One hundred thousand: number of PS3 machines planned for shipment in Japan
  • Six million: number of Wii consoles planned for shipment by Nintendo by March 2007

Sources:

  • "Tokyo Game Show: Nintendo's Wii Catches Attention" by Associated Press
  • "Sony's PS3 Gets Price Cut as Nintendo Wins Over Fans" by Bloomberg
  • "Nintendo Wii Looks Set to Outsell PS3 and Xbox 360" by The Times of London
  • "Gaming Industry Faces Slumping Earnings, Mergers, and Acquisitions" by Forbes

Read more