Faced with declining shipments, the console market will be depending on the upcoming release of the Nintendo Wii U and its tablet-like GamePad, according to analyst firm ABI Research.
Overall game console shipments declined over 30 percent year-over-year through the first half of 2012, said ABI Research. The current generation of consoles is in the twilight years of the usual lifecycle and penetration rates are mature, leaving less room for growth.
Nintendo's next-generation console, the Wii U, will launch in November in Europe and North America and December in Japan. Pricing varies by region, but the Wii U will be Nintendo's most expensive platform to date. Nintendo is expected to target core gamers with stronger third party developer support.
However, the Wii U's hardware may not improve on gaming performance levels compared to Microsoft's Xbox 360 and Sony's PS3, both current generation consoles.
And the long term success of the Wii U will depend mostly on Nintendo establishing a unique and desirable user experience with the tablet-inspired Wii U GamePad.
"Launch titles are expected to be relatively strong, but Nintendo has extended its launch window from release through to March 2013 in order to include more games," said Sam Rosen, practice director.
The games for Wii U will play a huge part in helping Nintendo's console unique from the competing sets from Sony and Microsoft.
"If games are available across all three platforms, with equitable experiences, then the Wii U will likely fail to generate much interest from the core segment," said Michael Inouye, senior analyst, ABI Research.
"We expect the Wii U launch to bring 2012 shipments close to the 2011 totals with early 2013 returning to early 2011 levels. Sustaining this level will depend heavily on continued Wii U demand as well as offerings from Microsoft and Sony," Inouye added.
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