Sony's PS3 long-term prospects look good, despite Xbox's Halo 3 win

Microsoft has a hit on its hands, and it looks like it will be a strong holiday season for the XBox 360

In the wake of last month's hyped-up launch of Halo 3 for the XBox 360, comes the news that the game earned more than US$300 million in sales in its first week. Microsoft has a hit on its hands, and it looks like it will be a strong holiday season for the XBox 360.

There's certainly a lot of soul-searching going on in the PlayStation 3 community about what's going wrong with the rival console from Sony, but don't dismiss the prospects for the PS3. DFC Intelligence has been charting the prospects of the PS3 against the XBox 360 and the Nintendo Wii, and sees a light at the end of the tunnel for the PS3. Consider this DFC blog post from the end of July:

"The competition is breathing down the neck of the Xbox 360. The Nintendo Wii has almost caught up with the Xbox 360 in sales and the PlayStation 3 is looking to have a much stronger lineup in 2008. If Sony can keep its PlayStation 2 core base happy for another year or so, they will be in a good position to migrate them to a PS3. This means for Microsoft it is imperative they get consumers into the store NOW."

Of course, Microsoft has been able to do that with Halo 3 (and other hot titles, such as Bioshock), but there are a couple nagging issues for Microsoft, says DFC, including expanding beyond the North American market, and keeping a solid line of software titles in the pipeline:

"The biggest area of uncertainty remains the performance of the three video game console systems: the Sony PlayStation 3, the Nintendo Wii and the Microsoft Xbox 360. DFC forecasts the market using three different scenarios and estimates that combined cumulative worldwide sales for the three systems will reach between 180 to 210 million units by 2012. The biggest issue is the performance for the individual systems.

In all scenarios, DFC has raised its forecast for the Wii and the PlayStation 3 and lowered its forecast for the Xbox 360. According to [DFC Analyst David] Cole, "the Xbox 360 will need to build a strong base outside North America to avoid being in a fairly distant third." DFC forecasts that the Wii will be the strongest system through at least 2008. However, the PlayStation 3 could start coming on strong in 2009. "We could have a situation where the Wii sells more hardware units, but by 2012 the PlayStation 3 is generating more software revenue," says Cole. "

Cole's opinion was published during the Halo 3 buildup, and he was certainly aware of the hype surrounding the XBox 360 and the negativity surrounding the PS3. Still, his long-term view is pretty clear: Sony's PS3 prospects look much better two or three years out, and Microsoft still has many tough battles to fight in the current-generation console wars.

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Ian Lamont

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