2 weeks Ago By David Richards
The retail gaming industry surged during COVID, premium priced PC gaming machines along with Nintendo Sony and Microsoft Xbox gaming consoles took off in Australia, now some of the biggest gaming Companies are struggling due in part to a lack of hardware innovation especially in the console market claim analysts. Nintendo and Sony are heading into this year’s peak period with little to offer mass-market consumers, while Microsoft is expecting video software to drive sales. Nintendo is still relying on a seven-year-old console that desperately needs new faster processors, while Sony is trying to generate sales with a tarted up Sony PlayStation Pro console which has been labelled “expensive” and not worth the money.
Looking for a lift to their ageing console Sony released their $1,199 PlayStation 5 Pro last week to mixed reviews as we recently reported while Nintendo has told investors that they have lowered their sales expectations for the ageing Nintendo Switch from 13.5mn to 12.5mn units.
Traditionally, Nintendo roughly doubles its revenues in the December quarter compared with its September one. the Nintendo Switch that in the past has delivered category growth for retailers is now in its eighth year having sold i146mn units since its launch in March 2017. More than 65mn PS5 units have been shipped since it went on sale in November 2020 but with both key console providers sales have started to “significantly slow down” claim CE retailers.
Talking to the Financial Times in the UK recently Gareth Sutcliffe, head of gaming at Enders Analysis said, “It’s fairly grim this year,”. “It would be difficult to imagine a holiday season that is less exciting than this one when it comes to gaming hardware.” PlayStation 5 Digital Edition – 30th Anniversary Limited Edition Bundle The picture is also stark for video game releases, with no new blockbusters expected this year and many developers holding fire for a next-generation console from Nintendo, with details expected to be announced in the new year.
Another problem for CE retailers and the likes of EB Games in Australia is the lack of new games claims analysts. Bernstein analyst Robin Zhu said “The new-game launch slate looks set to remain light into year-end. The holiday heavy hitters for PlayStation will mainly include games launched in the last six months, like Black Myth: Wukong.
” Microsoft who splashed out billions buying Activision Blizzard has reported a 43% increase in its gaming revenue for Q1 of 2024, impacting the tech giant’s position in the competitive gaming industry. The acquisition of Activision Blizzard in 2023 marks a key milestone for Microsoft. XBox Sky Cipher.
Image: Supplied. Activision franchises like Call of Duty, World of Warcraft, Diablo, and Overwatch have been able to broaden their gaming portfolios and attract more players. The long-awaited Call of Duty: Black Ops 6 debuted on Microsoft’s Game Pass, making it the first game in the popular series to be available on the platform at launch.
Analysts predict that this release may lead to 4 million new Game Pass subscriptions, which aligns with Microsoft’s goal of expanding its audience through its gaming-as-a-service approach. The business that is raking in billions selling B2B and enterprise subscriptions to their corporate software, is looking to sell more of its own games on rival consoles and promote its subscription service, Game Pass, which gives access to hundreds of games that can be played on its own Xbox, a PC or streamed over the internet to other devices for a monthly fee. The move is stripping game sales away from traditional game retailers.
At the same time Companies such as Nintendo are trying to work out their next move. The success of the Switch, be it handheld or dock version is forcing other gaming companies to rethink their attitude to portable machines, even if there is some concern that it is waiting too long to release a new console claims the FT. Serkan Toto, head of consultancy Kantan Games claims “Nintendo is in an awkward transitional period where it needs to still support the current console but needs to keep back the real blockbusters to successfully launch the next one,” said.
“It seems they are content with a few very silent quarters before the next device comes out.” The problem for console makers is that traditional gaming machines are becoming increasingly expensive to produce, and the overall installed base has been flat for years. “Consoles seem to have hit this very, very hard ceiling of demand and they cannot get past it,” said Sutcliffe at Enders Analysis.
“The only model that has exceeded that is in the mobile space, and that is where Switch comes in.” Sony’s latest results on Friday were buoyed by strong games software sales — including from third-party developers — but the PS5 hardware has never outperformed its PS4 predecessor in sales when the cycles are compared. The PlayStation 5 Pro is unlikely to change that dynamic, with Sony still targeting 18mn units to be sold this year, including the Pro.
Microsoft is betting on its latest ‘Call of Duty’ to power up their video games strategy. Nintendo shares received a boost last week when its president Shuntaro Furukawa said the new console, due to be unveiled before the end of March, would be backwards-compatible, making it capable of playing existing Switch games. The hope in the industry is that if Nintendo gets its pricing and concept right for the Switch’s successor, it could provide a blueprint for the rest to follow, with next year’s peak buying period set to better than these years.
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