Activision’s CEO, Bobby Kotick, warned that the next generation Xbox and PlayStation consoles may suffer slow sales at their launch – much like the Wii U has been experiencing since its launch in November last year. Kotick believes that new competition from Smartphones and Tablets is to blame.
We continue to face the uncertainties of the console transition. There are still many unknown factors, such as pricing, launch dates and quantities, the level of first-party support and, importantly, consumer purchase intent in a world where consoles are no longer just competing with each other, but also with new platforms, such as smartphones and tablets.
In addition, the newest console, the Wii U, has had a very slow start. All of these factors further heighten our concerns heading into the back half of the year, particularly during the very competitive fourth quarter.
He most likely has a very valid point. While smartphones and tablets may only be able to provide a very basic gaming experience, they are still very expensive and eat into consumers’ disposable income. Once you have spent $400 on a new smartphone and $500 on a new tablet there is probably very little left over to then want to go and buy a next generation PlayStation or Xbox as well.
Despite this both Sony and Microsoft remain relatively buoyant and Sony set their targets high by ramping production straight up to 16 million units.
The success of the next generation consoles isn’t something you can easily predict as it is dependent on a number of factors such as the quality of the games, the quality of the consoles, the “attractive-ness” of the pricing for both the console and games and the general economic climate in its main launch markets (the EU, Asia and North America).
What are your thoughts on how well the next generation of consoles will sell?