The current generation of video game consoles has achieved staggering market penetration, according to Nielsen’s annual survey of U.S. gamers.41% of U.S. households claim to have a console from the current generation — a Nintendo (NTDOY) Wii, Sony (SNE) PlayStation 3, or Microsoft (MSFT) Xbox 360. That accounts for the overwhelming majority of the 54% of households that own consoles at all.
While this says great things about the size and health of the gaming market, it raises the question: does everyone who wants a console already have one?
If the answer is yes, that wouldn’t be the end of the world for console makers.
Nintendo, Sony, and Microsoft make their money off of software sales and royalties. Many consoles are sold at a loss at launch, and only become profitable after years of production drive costs down. Selling consoles is important only insofar as it drives software sales.
What’s more, all two of console-makers are preparing to launch hardware add-ons that should make their systems more attractive. Microsoft plans to make a huge splash with Natal, its controller-free gaming add-on to the Xbox 360. Sony has motion-based gaming of its own on the way. As for the Wii, is still the king.
So these companies are unlikely to rush out xBox 720s, PS4s, or Wii HDs any time soon, even if they are running out of buyers for their existing machines.
But just in case we’re wrong, we ask: What Will The Xbox 720 And PS4 Look Like?