Games console titans go head to head

Big three will sell 200 million next-gen games consoles by 2012

Sony, Microsoft and Nintendo will sell nearly 200 million next-generation games consoles by 2012 in a titanic battle for market dominance, industry analysts predicted today.

Strategy Analytics said that Microsoft's Xbox 360 will present a serious challenge to Sony's dominance of the games console market, and will lead the North American and European markets until 2007.

But there is still everything to play for. Strategy Analytics predicted that Sony's PlayStation 3 will eventually pull ahead if the company can ensure that its online experience matches that of the Xbox 360, and that its Cell processor technology meets its full potential to offer near-video quality.

Strategy Analytics expects that the PS3 and Xbox 360 will become cornerstones of their respective companies' digital home strategies.

Sony will use the PS3 to help establish Blu-ray discs and the Cell processor as mass market technologies. For Microsoft the Xbox 360 could secure a leading position for the home PC as a broadband digital media server.

"The Xbox 360 represents one of Microsoft's best hopes of controlling the digital home," said David Mercer, principal analyst at Strategy Analytics.

"The 2005 holiday season will be a make-or-break time not only for the Xbox 360, but for Microsoft's wider digital home strategy."

The analyst firm predicted that Sony will sell 121.8 million PS3s worldwide through to 2012. Sales of Xbox 360s are expected to reach 58.8 million and Nintendo's Revolution nearly 18 million.

Cumulative retail revenues for all consoles over this period will exceed $47bn, according to the analyst.