Celebrating the PS3's second birthday, Sony caused quite a stir last Tuesday when it announced that the PlayStation Network has attained 14 million active users, matching the year-older Xbox Live's 14 million subscriber base. The mammoth electronic gaming franchise indicated that they owe this figure to their continuous improvement of PSN and its features. More in the full article.

According to IDC analyst Billy Pidgeon, the commercial success of the Wii may drive platform developers to develop cheaper, consoles in the future. If you want to find out more about this, head on over to the full article by clicking on the "read more" link below.

Not all the battles being waged in the current console wars rely on big, hard-selling game titles. In a recent survey conducted by IDC and IDG Entertainment, revenues from online console downloads are fast becoming the standard ammunition that Internet capable consoles are using to draw in gamers to the fold.

Billy Pidgeon, IDC's program manager for games research, put out some numbers analyzing the booming popularity of online capable video game consoles. He estimated that by 2008 over 37 million console units will be installed in North America with online capability.

Currently, the online gaming industry has jumped up from US$ 133 million in 2006 to a whopping US$ 583 million this year. Downloadable content from Xbox Live, the PlayStation Network, and the Virtual Console has boomed over the past year. While sales from software titles are still very positive, Pidgeon sees the potential of downloadable content as the "the industry’s most exciting growth opportunity in this hardware cycle".

Also, IDGE separated the gamers into five interesting categories based on their attitudes towards gaming, as well as their social characteristics, and purchasing habits:

• Core Gamers: Core Gamers choose gaming as their main form of entertainment and want to maximize their time gaming. They prefer gaming over going to the movies or out to dinner.
• Status Gamers: Status Gamers are proud of their gaming skills and enjoy being the first to try the newest and hottest titles. They also like to discuss their gaming experiences at school or work.
• Social Gamers: Social Gamers view gaming as a communal experience. They prefer to play games with people they care about, forming a social link, and coordinate social functions around gaming.
• Active Gamers: Active Gamers prefer games where movements are reflected in the game and allow gamers to get out of their chairs. They use gaming as a physical release.
• Casual Gamers: Casual Gamers use gaming as an emotional release and as a way to play different roles. Casual gamers view gaming as a secondary form of entertainment and don't feel the necessity to be the first to try a new game.

Which, poses another interesting question - which gamer are you?

In an interesting podcast, analysts Van Baker and Billy Pidgeon gave a different spin on the Wii shortage issue this holiday season: that there's a big possibility that Nintendo is playing up the shortage to keep their Wiis flying off the shelves. It's a surprising theory, but for these two analysts, it does make a lot of sense.

Those who are closely following the console sales trends know that Nintendo's Reggie Fils-Aime said that Nintendo wouldn't be able to keep up with the console demand this holiday season, that people will experience a sad Wii shortage on that time of the year when sales matter the most. Of course, if some people found out that a certain supply is about to run out, they will buy one for themselves out of instinct should they harbor any interest in that item.

Technology industry analyst Baker did say that a little push by hyping up the shortage issue really doesn't hurt, since people are "likely to go out and spend their money now".

It's going to be a risky venture, however. "In the console business, there's very low tolerance for hardware issues, for failure. So it's got to work," said Pidgeon, a program manager for IDC.

You've seen them in the first part of the Bonus Round: Analyze This! episode video, now see more of what they think of the videogame industry in Part Two. Yes, ol' Michael Pachter and Billy Pidgeon are back, and they've still got something to say about what Sony, Microsoft and Nintendo should be doing in preparation for the holiday leg of this generation's console war.

And just like in the previous video, you should get ready for quite a long (but informative) watch. In the second part of the interview, we find out just what Mike and Billy think are in store for the big three come the holiday season. Price cuts, the death of a cherished last-gen system, shortages for that console with the funny name - it's all here, and definitely worth a look.

Embed's below. You know what to do. Enjoy!

And on the other side of industry news, global industry analysts IDC foretell an optimistic future for the cycle of next generation consoles the world over. They believe that come 2011, the gaming industry could rake in US$ 10.5 billion in online revenue from markets worldwide, thanks to the Internet connectivity of the Nintendo Wii, the Microsoft Xbox 360 and the Sony PlayStation 3.

 

Their positive views for the online market have obviously been spurred by the growing success in content and service provision over online portals, such as the Wii Shop Channel and Xbox Live. "Gamers' use of connected consoles is expanding the business opportunities and cash flow this console cycle," said Billy Pidgeon, program manager of the Consumer Markets division on games.

It has become a solid belief that online services will become the primary rising revenue for the games industry, notwithstanding the potential market growth in the online sector for PC and Mac games. IDC's report, entitled "Worldwide Connected Console 2007-2011 Forecast: Downloads for Dollars," observed a possibility that online revenue could grow from being 2.5% of the industry's revenue source to 18.6% in four years. That's effectively US$ 981 million to US$ 10.5 billion in less than a regular cycle.

Downloadable content revenue will overtake even in-game advertising revenue, so goes the forecast, reaching only US$ 858 million by 2011 and sharing part of the income from online revenue. Other details that might interest market analysts and investors include:

• Subscription revenue for premium online services and games will grow from $476 million in 2007 to over $2.4 billion in 2011.
• The share of online console revenue will decline from 48.5% in 2007 (already down from a high of 86.5% in 2006) to 23.2% by 2011.
• Downloadable content (DLC) consisting of games and game-related items will become connected consoles' primary revenue source in 2007.
• Revenue from DLC will rise from $493 million in 2007 to $7.2 billion in 2011.
• In 2011, game-centric DLC will make up 68.6% of online revenue.
• Advertising revenue from sponsored services, in-game ads, and product placement in connected consoles will reach $12 million in 2007.
• Advertising revenue will grow to $858 million in 2011, with an 8.2% market share of online revenue.

You've read us reporting on their speculations, opinions and takes on anything and everything that's big, new and shiny in the videogames industry. Now, actually see them talk about what they do best - that's being videogame analysts - in this video clip of Bonus Round, featuring none other than Michael Pachter of Wedbush Morgan and Billy Pidgeon of IDC. Make a sandwich, probably make a drink - this is one long video, clocking about 17 minutes long.

In this Bonus Round, we get to hear Michael's and Billy's side of the story - what they actually do, what happens when their predictions turn out right or wrong, the stuff we have often wondered about these guys. And, of course, being videogame analysts, they give their two cents on everything.

Certainly a rare opportunity to get to know the minds behind all the speculative news in the industry. Enjoy the video!

Despite the fact that Sony's game unit lost some US$ 455 million during the last holidays on its PlayStation 3 game console, the Japanese firm remains undaunted, renewing vows that it'll stick to its flagship product for the next decade or so.

Jack Tretton gave the company's followers some assurance by saying "we didn't get into PS3 for the first six months of 2007 — we're into this for the next 10 years and beyond." When asked what his take was on the lead taken by Microsoft with its Xbox 360 and Nintendo with its Wii, Tretton replied "a million units one way or another at this point isn't going to worry us."

Analyst Billy Pidgeon agrees. He believes that the advanced design of the PS3 will be a key market factor in the long run. He says that the reason the Xbox 360 and the Wii are ahead at this point is because the two consoles were designed for sudden impact, while the PS3 is a more long-term platform. He expects Sony's console to really come on in 2008.

Sony executives say they're not worried about the slow start that the high-end PS3 is experiencing. Even if they spent a billion dollars developing it and lost US$455 million in the last holidays alone with market activities, they say they've been through this with the PlayStation 2 and are confident that eventually, things will all fall into place.

Evidently, the stakes are much higher now with the company's "Sony United" vision that seeks that the multimedia, internet and entertainment wings of the company all jell and interact. This means that the company's Blu-ray technology must beat rival HD-DVD to concretize the vision. Positive signs are flashing for the Blu-ray with a 700 percent increase in disc sales thanks in large part to the PS3's proliferation.

If Sony wants to start blooming late, convincing users to buy the machine is the first step. The company says that its target market are people who owned a PS2 and who can afford the steep cost of the PS3. So far, it hasn't exactly gone great as the projected audience asks for more quality games that will compel them to jump in.

Contrary to what Todd Mitchell of Kaufman Bros. Equity Research has said, IDC analyst Billy Pidgeon has stated that the commercial success of the Wii and the DS will be good for the market. However, he also noted that this comes with new problems in terms of publishing games.

According to Pidgeon Nintendo's Wii and the DS "raise the challenge with alternative interfaces, and publishers with titles that are optimised for those interfaces have the best opportunity to leverage the broader installed base for the DS and for the potentially broader base of the Wii."

It's always been a given that publishers of games have optimized their releases for the platform it was intended for. From his statement, it is more important now, more than ever, for publishers to stand up and take notice that people actually want their games to take advantage of the hardware they bought. Pidgeon even went so far as to say that "publishers that provide quick and careless original and licensed titles or shoehorned ports of games designed for other platforms are going to suffer, as they should."

Regarding the actual statement that Nintendo's success is bad for the market, it turns out this is not a new issue and began in the 8-bit days, Pidgeon revealed.

The idea that Nintendo is bad for third-party publishers is a myth with roots in the 8bit -16bit days when Nintendo and Sega manufactured cartridges and the third party publishers felt they got short shrift in the production line.With N64 and GameCube, Nintendo suffered from a lack of third-party support and most of the third party titles that were published on Nintendo's platforms were slapped together ports of games for other systems

While it may seem that Nintendo can do no wrong, it is important for their continued success to have third-party publishers producing games developed utilizing the Wii and DS' technologies. We can expect to hear more about this issue in the near future as more and more Wii games and DS titles invade the video games market. If you want to read more on what Billy Pidgeon said, click on the read link.

Next Generation reports that IDC analyst Billy Pidgeon recently criticized those who attribute Sony Computer Entertainment CEO Ken Kutaragi's retirement from his executive management position to the less-than-stellar launch performance of the company's next gen PS3 videogame console's.

"The popular press scenario [which] casts the PS3 as Sony's folly has journalists suggesting that Kutaragi's retirement is a dressing down for a failed PS3 launch," wrote Pidgeon in a new report. "IDC believes this is a facile, myopic perspective. The negative on the PS3 is that the console is a late bloomer."

In the report, Pidgeon also suggested that unlike the Xbox 360 and Wii which were "designed for immediate market impact", the PS3 will not really come into its own until a "steep uptake" occurs in 2008. Pidgeon pointed towards titles such as Lair and Heavenly Sword as well as the PlayStation Home service as factors that will help push the PS3 to new heights.

Pidgeon also wrote that ODC believes Kutaragi's talents are needed "behind the scenes developing next generation technology" rather than running a business unit. "Kaz Hirai is the best choice for executing the strategy and tactics to turn on PS3's afterburners."