'Consoles have hit their peak' - analyst

The glory days of consoles are behind us, according to a new report from research firm DFC Intelligence.

"We feel the consoles have hit their peak," analyst David Cole said, according to VentureBeat.

He expects next year's Wii U release to drive strong sales, but not Wii-level ones, and says Sony and Microsoft are hesitant to introduce new hardware as they're currently enjoying rising profits from PS3 and Xbox 360 respectively.

But the longer they wait, the more opportunity console makers give platforms like mobiles, tablets and other devices that can play games as a secondary feature a chance to steal market share, Cole believes.

"Systems like the Xbox 360 and PlayStation 3 are having their best sales ever five or six years into their lifecycle," he said. "Unfortunately this means Microsoft and Sony are in no hurry to launch new systems that would generate substantial consumer excitement and spending.

"Games on Facebook and products like the iPad help expand the audience and the way products are delivered. The console business is firmly established and suffers mainly from the reluctance of hardware manufacturers to commit to expensive new products.

"The dedicated console business is still the major driver of industry growth, but we feel overall it has peaked with the current console systems."

THQ CEO Brian Farrell said this week he expects future consoles to drop support for physical discs in favour of cloud gaming, resulting in lower hardware manufacturing costs, lower console prices driving mass market adoption, and no physical goods cost for game makers.

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