The Australia gaming market is in for a shakeup this week with Sony set to announce a new slimline version of their PS3 gaming console and Microsoft, further price cuts for the Xbox 360.
The new Sony console is being launched as the Japanese Company loses billions, competing against both the Xbox 360 and the Nintendo Wii who are suffering from a massive fall in global sales of gaming consoles and games.
In Australia Sony Computer Entertainment is gearing for a massive fight in the gaming market with the Company tipped to mount a major retail promotion running into Xmas while also slashing some prices.
Sony will announce the new PS3 slimline games console in Cologne, Germany at the Gamescom conference on Tuesday, but has dismissed talk of an imminent reduction in the price of its PlayStation 3 console as mere rumour and speculation.
The launch of a new console is not necessarily going to help Sony as Microsoft is planning to slash the price of their Xbox 360 after US technology sites revealed a shake-up of the company’s pricing structure.
Rumours suggest that the software giant is preparing to cut the price of its Xbox 360 Elite console, which includes a 120GB hard drive, by $100 to under $300. That is likely to spell the end of the more basic Xbox 360 Pro model that was previously sold in that price bracket.
The problem for all manufacturers is that globally video game sales are falling. In July sales fell 29% for the fifth consecutive quarter according to the NPD Group.
Sales were $848.9 million, which is down from $1.1 billion in July 2008.
Hardware sales dropped 37 percent ($280.94 million from $447.71 million) a year earlier, while software sales fell 26 percent.
According to NPD, year-to-date sales are down 14 percent to $8.16 billion from last year. Sales were down 31 percent in June 2009, but the numbers still reached $1.17 billion.
NPD analyst Anita Frazier, however, expects a strong second half of the year because of some popular games that are coming out. “While year-to-date results are weak, there are some big titles set to be released over the next several months, including Madden (10, from Electronic Arts) this month, which should help spur sales. The worst … should be behind us …”
Nintendo’s Wii again was the top-selling console at 252,000 units. Microsoft’s Xbox 360 (202,900) and Sony’s PlayStation 3 (121,800) were second and third, respectively.
According to NPD, Wii sales dipped 54 percent and PS3 sales dropped 45 percent. Xbox 360 sales actually grew 10 percent.
In the UK at the weekend a stark warning about the finances of the games industry was delivered by several speakers at an Interactive gaing conference.
The sector had suffered “significant disruption” to its business model, Edward Williams, from BMO Capital Markets told the industry gathering reported the BBC.
By contrast, he said, Chinese firms were still seeing improved profits. Western publishers, said Mr Williams, still relied on the traditional develop methods of putting a game on a DVD and then selling that through retail channels.
Chinese developers focussed primarily on the PC market and used direct download, rather than retail stores, to get games to consumers.
Those Chinese developers were also helped by the low number of console users in South East Asia (other than Japan) which meant developers there did not have to pay royalties to console makers.
The conference heard that the PlayStation no longer dominates in the industry and that decelopment for the Playstation platform pushing up costs for game makers.
Speaking to the BBC, Peter Moore – president of EA Sports – said that while the Chinese and Western markets were still very different, he expected to see some significant changes in the way Westerners buy games in the future.
“In China, PC and mobile platforms will continue to dominate,” he said. “There isn’t the necessity to buy other pieces of hardware and it is our job to service that.”
“In Europe we are going to see more content that’s delivered electronically, be that through Steam, Xbox Live or whatever.”
Mr Moore added that while this may have some impact on retailers, the future of the high street shop was still bright, especially if you factor in sales of hardware, peripherals and game-time cards.
“The release of Tiger Woods online as a free to play experience will be the real test of the Western consumer’s appetite for digital downloading,” he said.
The game, scheduled for release in late 2009, has a segment which gamers can play for free online but can also pay for additional content as required.
For more see www.bbc.co.uk/technology