News Article

Data Analyst Firm Expects Discs to Remain as Console Mainstays

Posted by Thomas Whitehead

Predicts that Wii U will exceed 50 million sales by year-end 2016

With the continually evolving gaming industry, and a dizzying range of devices and platforms beyond the conventional big three of Nintendo, Sony and Microsoft, there are plenty of people who wonder whether the era of the dedicated game console is coming to a gradual end. Time will tell, but analyst firm International Data Corporation has now released a report that reiterates a continuing role and level of success not just for games consoles, but for game discs and physical media.

The report's focus is on home consoles — the predicted fates of 3DS and Vita against smartphones and tablets perhaps saved for another day — with the Nintendo headline being an estimate that the company will successfully "find an audience" and ship 50 million consoles by the end of 2016. We're sure that Satoru Iwata and colleagues would be happy enough with that figure if it comes to pass.

In terms of the fate of game discs and physical retail titles, while the impact of download options is expected to cause a 3% overall drop in sales year on year until 2016, it's predicted that physical products will still be the main revenue earner in the industry for years to come. Lewis Ward, research manager of IDC's Gaming service, said the following:

The console ecosystem is in a state of flux since these platforms need to support an ever-growing array of non-gaming features and services at the same time that game distribution and monetization is moving in a digital direction. At the same time, it doesn't appear that alternative platforms - set-top boxes from cable companies, Web-connected smart TVs, and so on - are positioned to materially disrupt the trajectory of the 'big 3' console OEMs in 2013 or 2014. Discs will remain the console game revenue mainstay for years to come.

2011 and 2012 were tough for many console game disc developers and publishers. With the advent of eighth-generation consoles, starting with the Wii U, historical norms strongly imply that game disc revenue will stop bleeding in 2013 and rise substantively in 2014.

Such is the proliferation of new system ideas such as mini-PCs specifically ready to run Steam on TVs, or consoles set to do the same with the Android market's games, those "historical norms" will certainly be tested. Still, they're positive words for Nintendo and its console rivals to digest; IDC must know what it's talking about, as the 67 page report has a price tag of $4500.

So, what do you think about these comments on potential Wii U sales and the continuing prominence of physical retail games?

[via gamesindustry.biz]

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User Comments (33)

MAB

#1

MAB said:

Well I think these guys seem alot more professional then that imbecile who's name I need not mention ;)

ajcismo

#2

ajcismo said:

Not the usual doom and gloom that usually follows these reports. Although speculating can't possibly be accurate without more knowledge of what Sony and MS plan on doing with price point and software medium.
Consoles will never die, old farts like me won't let that happen.

soracloud28

#3

soracloud28 said:

Thomas I'd just like to say that you become a better writer with each article you produce. And it's also good to know tht consoles and discs will still have a place in the world of gaming. I know I personally enjoy those experiences far more than any steam-type service

Spoony_Tech

#4

Spoony_Tech said:

I think Nintendo would be ecstatic about those numbers. I don't think it will happen but I hope they're right!

Dogpigfish

#5

Dogpigfish said:

Ninty will be fine, but steam will kill the other two. Steam box is inevitable and already has 40 million subscribers. The other two will need to go subscription multi platform to survive because of their limited franchises. That's my guess, hope I'm wrong.

Sean_Aaron

#6

Sean_Aaron said:

Im sure physical media will dominate as long as it's produced. I fully expect that we'll start seeing a decline in the number of units produced and eventually more download-only music and films (at least in territories with robust online infrastructure) in the near future.

I recently went to a couple of used media shops in town (not many of those left) and was floored by how worthless DVDs are now. The majority of films more than a year or two old could be had for less than £3 with very few exceptions. I bought a dozen DVDs - all originally shown in big cinemas - for less than the price of three rentals. That's why I never bother with Blockbuster any more.

I can't see why masses of DVDs and CDs would continue to be printed only to end up in a charity shop or worse, a landfill.

Games will take longer to follow suit only because of the prohibitive file size in larger releases.

cornishlee

#7

cornishlee said:

Steam (depending on price) does present a major challenge to the MS/Sony strategy of the last generation (MORE POWER!!! to ape a Clarksonism)n and it will be interesting to see what they announce at E3 this year. That's a big event for Nintendo to convince us with their software and for the other two to show their hardware and how far they're rising to the challenge.

Steambox is not only about as powerful as can be, but launches with an existing back catalogue of games which stretches back decades and is hardware upgradeable. Nintendo, with the Wiimote and the Gamepad has differentiated itself from that. I expect MS and Sony to fully integrate Kinnect/Smartglass and Play/something else with their next systems in order to try and differentiate their products from that (Blueray playback is, of course, something else they offer over Steam but that probably isn't enough any more).

So, as I say, a big E3: Nintendo has to convince everyone that they've got developers back on board and are here for the long haul and MS/Sony have to convince everyone that they can offer something beyond graphics processing power.

As for the question of physical media - it'll hang around for at least as long as retailers have the ability to offer the products cheaper than the download version, which will be for quite a while yet.

Sun

#8

Sun said:

I think I'm going to make predictions based on what it has always happened and sell them for 4500€. :D

About discs, I'm still not sure if buying digital or physical games for Wii U. I feel that digital are more convenient but also ridiculously expensive.

Mahe

#9

Mahe said:

These numbers would be atrocious. By the end of 2010, in four years, the Wii had sold over 80 million consoles. Wii U should seek to surpass the Wii, not to fall down from it.

cornishlee

#10

cornishlee said:

@Mahe
I'd be surprised if any console sold as well as the Wii for a very long time. Simply stating that each console should outsell its predecessor is overly simplistic.

FarukoSH

#13

FarukoSH said:

Lol 50m in 3 years its great, its far more than the GC/N64 and that alone should keep Nintendo in a happy position... i mean, some were expecting WiiU to be the new GC

And no, the Wii sold 100m in just 5 years, im pretty sure no console would top that soon, PS3 and 360 just hit the 75-77m wich are great numbers, the Wii was just a dream come true for nintendo (just like the DS) and was the beast of the beasts

McGruber

#14

McGruber said:

I think it is true, but only when killer apps start showing up on WiiU. Games like Smash Bros and perhaps an HD Metroid. They need to be really good, though, to appeal to people who buy PS4s and 720s as well. So no more last gen games with HD tacked on (New Super 'U)!

rjejr

#16

rjejr said:

i think the PSPgo shows that the world isn't yet ready for DL only.

And as my wife likes to say - "they still sell records". FYI - she means those little round black pieces of vinyl with the whole in the middle. And yes you really can buy them. Don't know what you'ld play them on though ;-)

And as for the oft repeated but incorrect - "dedicated game console" - I present to you Netflix. And the blu-ray drive on the PS3. And WiiTVii. Any device that plays Netflix and Youtube isn't "dedicated" to gaming. Even the PS2 and Xbox could play DVDs. And I suspect every Xbox720 will come with Kinect and the Xbox720 will start to replace cable boxes. And really, besides Halo, the Xbox is more media hub than game system already. Kinectbox720 w/ HD Skype will probably get a lot more use than Wii U video chat - whatever Nintendo calls it.

Also, Vita would probably sell better if Sony sold it as a multipurpose tablet competitor that plays games rather than a 3DS competitor portable gaming console. The Vita does more than most people probably realize.

cornishlee

#17

cornishlee said:

I am getting so tired of people referring to big name game franchises as "killer apps".

SCAR392

#19

SCAR392 said:

I'd say this is KINDA realistic as far as predictions go. I see disc media falling down eventually too, seeing as dugital can bring alot more advantages than a physical copy. They could go above the GB limit easier if they go digital, and spend more time worrying about the actual content rather than advertising past their own 1st party control. I think Wii U could sell this much, if tons of games and content worth buying the system to any type of consumer come out throughout those years. The flagship games are pretty much 100% gonna grab other console owners attention, and non gamers alike. PS4/Xbox 1080 are no doubt gonna up the tech bar again as far console gaming goes, but I'm sure those games are gonna get into the 75GB amount by at least their mid-life. Not only do we expect games to look as good as they do now, but we expect a tiny bit more on top of that, and even a little bit can take a major amount of time to become standard...

Emaan

#20

Emaan said:

Best of luck to the big 3 going into this new generation, not just Nintendo. More than ever, they really have to perform well. That's very positive predictions about Nintendo and the Wii U sales by the end of 2016. I can only hope the Wii U finds its market and really delivers.

Zombie_Barioth

#22

Zombie_Barioth said:

MadAussieBloke wrote:

Well I think these guys seem alot more professional then that imbecile who's name I need not mention ;)

Valdemort?B-)

I think as online infrastructures improve we'll slowly see more and more forms of media do digital, based on file size and storage sizes. The Steam box might help push things along with sales encouraging digital purchases and maybe more niche games going digital only.

psycoticdev1l

#23

psycoticdev1l said:

@Dogpigfish I highly doubt any of the 'big 3', will go anytime soon. The 'steam box' seems more marketed to a very specific niche audience. People saying it will kill consoles altogether are foolish. Sony and Microsoft will do fine the next generation and probably even after that. At least I would hope so anyway.

scrubbyscum999

#24

scrubbyscum999 said:

@rjejr I collect vinyl records. The revival is to the point where just about every major rock and jazz record has been reissued on 180-gram vinyl within the 5 or so years. The new vinyl is way better than the old, and analog will always have better sound quality than digital due to the fact that analog doesn't have to cut the music into bits.

@armoredghor CDs might die out because they lack the dedicated niche fanatics unlike vinyl. Every album released today, especially a lot of independent rock albums, have a vinyl version. Sadly, vinyl also has analog sound. CD is still digital so your not getting a lot of benefit sound wise over mp3. Once they have a higher quality digital format for music that's easy to download CD will have one less reason to be very relevant, even among the hardcore.

As for this disc thing, I love records not only because they sound better but the packaging as well. Same can be said with games. I think there will always be a niche market for discs, if that happens though they will probably be more extravagant and be more expensive than the downloadable versions. Physical games are big thing for me, but not to the point of my vinyl obsession because the quality of the game is exactly the same.

Gamesake

#25

Gamesake said:

So the Wii U won't sell as well as the Wii but it will sell better than the SNES, N64, and GameCube did. Sounds about right.

StarDust4Ever

#26

StarDust4Ever said:

LOL on the records. I bought my first record player earlier this fall. My first two pickups were the new 180 gram pressings of Pink Floyd's DSOTM and The Wall. Now I'm starting to accumulate a decent collection; it's currently about a 50/50 split between new / vintage vinyl.

Classic Rock, NES all the way, baby! Nintendo games are like a ledgendary rock band who keeps churning out solid albums and simply refuses to grow old. ;)

MAB

#27

MAB said:

Yep I also have a massive vinyl collection that I use to create beats and cuts on my Technics decks then record to the PC ;) the bass sounds so much better than a CD mate.

cornishlee

#28

cornishlee said:

I still have my vinyl, and a turntable. My vinyl's all in the garage though. The sound quality's much better for recordings that were intended to be pressed that way (I've never been convinced that music from the nineties on is though, it was mixed assuming digital distribution and optimised for it). So, why's it in the garage? Convenience I guess. I agree with those that say there's a big difference between that and the essentially digital programming of all video games ever but would expect there to always be a small market for collectors. As I said above though, if and when the price of download titles matches physical discs, that market will shrink rapidly and then it will be down to the publishers to decide whether or not it's worth catering for on a game-by-game basis. As few years away yet.

Araknie

#29

Araknie said:

WOW this looks actually like a math prediction. As of now, if you at math, yeah that's the number. For discs, i really hope so.

DarkEdi

#31

DarkEdi said:

If the retail downloads continue extremely expensive the physic media will be better. Here in México a download like Ninja Gaiden 3 is $1100 pesos (like $90 dlls) while in stores the same game is $800 (like $62 dlls)

DarkEdi

#32

DarkEdi said:

It could be interesting if NintendoLife does an article about this situation, i doubt this is the only country with more expensive costs in the downloads than the discs in stores. Ah, another thing, when we buy a download there are no taxes, so imagine how greedy Nintendo is seen making us to pay 30% more in a download.

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