DFC: 360 Likely 'Biggest Loser' in Europe

David Cole with DFC Intelligence is betting that PlayStation-loving Europe will soon be switching its loyalty to Nintendo platforms, with the Xbox 360 being left in the wakes of both rivals.

What will Nintendo's success mean for the other platforms? It is important to note that DFC Intelligence is also forecasting strong sales for the PlayStation 3 and, to a lesser extent the Xbox 360. This generation is not expected to be a case of one platform dominating like the PS2 did in the last generation. One factor that will increasingly take hold in Europe is what DFC has labeled the "second car in the garage." In the U.S. over 40 percent of game households now buy two or more of the current console systems. By comparison, Europe has largely been a one car in the garage market. In recent years, that car has been the PlayStation 2. As the game market in Europe grows we expect to see more consumers buying two or more systems (although not to the extent of the U.S.) The Wii is forecasted to be the market leader, but with a market share less than 50 percent compared with the PlayStation 3 and Xbox 360. Consumers will still need to play World of Warcraft, Grand Theft Auto IV, games on the go and so on. No one system satisfies all the diverse tastes in today's market.

It appears inevitable that, for the PlayStation 3, Sony will lose a big chunk of its PS2 user base. However, in the long-term, DFC Intelligence believes the PlayStation 3 will be a fairly strong competitor. The biggest loser in Europe is likely to be the Xbox 360. Microsoft has seen its self-proclaimed fall 2007 "greatest holiday lineup in videogame history" come and go with very little impact on the Xbox 360's position in the European marketplace. To spur sales in 2008, Microsoft is being forced to lower the price of a system that is starting to look like a senior citizen as it approaches its third birthday.

The Xbox systems have enjoyed much greater success in the U.K. than in continental Europe. In large part this is because the U.K. does not have a strong PC game market like those found in other parts of Europe. However, as in the U.S. and Australia where intense violence is more popular with gamers, U.K. gamers enjoy first-person shooter (FPS) titles and the Xbox 360 is clearly the leader in that category. Unfortunately, outside of the U.K., DFC sees the Xbox 360 continuing to struggle in Europe.

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