Strategy Analytics, the global research and consulting company, today released
its latest global forecasts for advanced games consoles. The report, released
to subscribers to the Strategy Analytics Broadband Device Strategies service,
predicts global shipments of 41.9 million units in 2002, an increase of 84 percent
over the 2001 level. Sony’s PlayStation 2 (PS2) console is expected to account
for 63 percent of sales, followed by Nintendo’s GameCube with 21 percent and
Microsoft’s XBox with 16 percent.

The research highlights the domination of the Sony system. By the end of this
year, 72 percent of global cumulative shipments will be PS2 systems, compared
to 16 percent GameCube and 12 percent XBox. . .

This report determines that the games console market is entering a critical
three-month period which could determine success or failure for both GameCube
and XBox. Several factors lead to the conclusion that Nintendo will probably
exit the console market since the survival threshold for any game platform is
now in the region of 15-20 million systems deployed. This continues to rise
as games development costs increase. Furthermore, in spite of Xbox’s slow start,
Microsoft will continue to commit the funds necessary to evolve their Xbox platform
into a full-fledged broadband home entertainment system.

“This is a race for second place,” says David Mercer, Vice
President, Broadband Practice at Strategy Analytics. “The question
now is whether the market can sustain three players in the longer term.”

Global Games Console Market Forecast
(Millions Units) 2002 Shipment Forecast Cumulative Shipments
Sony PS2 26.3 50.0
Nintendo GameCube 8.8 10.8
Microsoft XBox 6.8 8.2
TOTAL 41.9 69.0

Source: Strategy Analytics Broadband Device Strategies service

XboxSolution Staff Note: While many analysts and consumers
feel that the console market cannot thrive with three major contenders, our
stance is a bit different. Each console has a specific user base, and qualities
and feature which make it more appealing than the next console. It’s a fact
that the console history has not had three major players for an extended period
of time. Microsoft will continue to fund the Xbox console, and whether Nintendo
stays in the market or not, it’s not unrealistic to see all three console being
successful in the future. The online plans of the Microsoft Xbox coupled with
it’s increasingly appealing list of upcoming titles and developers, such as
Rare, means the Xbox isn’t going anywhere anytime soon!

About Strategy Analytics
Strategy Analytics, Inc., a global research and consulting firm, provides timely
insights and strategic business solutions to companies operating at the convergence
of information, communications and entertainment technologies. With worldwide
headquarters in Newton, MA and principal offices in England, France and Germany,
Strategy Analytics focuses on market opportunities and challenges in the areas
of Automotive Electronics, Broadband, Telematics, Wireless Strategies and Enabling
Technologies. For more information, see www.strategyanalytics.com.

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