PS4: Next Gen Console Sales will Underperform Current Generation

Talk about a bummer. According to an analyst with investment bank Piper Jaffray, the sales of the successor consoles for the Wii, Playstation 3 and Xbox 360 will fall short of the sales levels of the current crop of consoles. Analysts Andrew D. Connor and Michael J. Olson believe that the three new consoles, of which only the Wii U has been confirmed, will rack up sales that fall short of current figures. By how much? The analysts predict that the software sales for the Wii U, Playstation 4 and Xbox 720 will fall short by a whopping 53 percent. The under performance is expected to last throughout the first 14 months of the consoles’ release.

Both analysts say that the Wii U will enter the market priced at around $299. That’s the good news-remember, consoles have to remain within that range to remain competitive. The bad news is that the analysts predict that the Wii U’s initial sales will only rack up around 35 percent of the total units moved by the previous version of the console, the Wii, during a comparable period. As for the PS4, the analysts predict a 2013 summer launch and a 50 percent sales performance. For the Xbox 720, they see a 2014 launch and a 55 percent initial sales performance for the first 14 months.

Sony Playstation 3 (Credit: flickr.com/PseudoGil)

What explains such erosion? Social and mobile gaming. The analysts believe that the time spent on consoles will continue to give way to time spent on more mobile devices. That is why they favor companies that focus on or have divisions focused on these platforms. This brings to mind EA and Zynga.

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