It seems that EEDAR has predicted that the DS2 will be announced within 8 months as part of their year in review report.
For those curious about everything they said, here's the full press statement. They have some interesting numbers and statements about the entire year.
So what do we think. Is their prediction reasonable given their reasoning?
Source: I used the press e-mail version, but here's a source with the exact same text along with the author throwing in their opinion: http://www.gamedaily.com/articles/news/nintendo-to-announce-ds2-within-8-months-says-analyst/Press e-mail version said:DS2?
Even though the Nintendo DS posted a record year in 2009, EEDAR expects Nintendo to make an official announcement on the DS2 within the next eight months.
Nintendo has always had a controlling stake in the handheld market, despite facing numerous competitors, and EEDAR believes one of the biggest reasons for Nintendos success in the handheld market is their ability to remove opportunity gaps for competitors to enter. Nintendos transition from the GBA to the DS, a year earlier than anticipated, was a brilliant strategy to remove any upper hand the Sony PSP could have by being first to market.
Piracy continues to be an issue, not just for Nintendo, but for its third-party publishers as well. Whilst the release of the DSi has slowed down piracy, that slow down will only be temporary as hackers have already managed to bypass the new security systems built into the hardware.
Additionally, many publishers including Sega, Capcom, and now UbiSoft have all expressed that they may be reducing their exposure to Nintendos consoles, which will likely lead to heavy declines in both hardware and software sales for the Nintendo DS.
We believe that due to the aging technology, the possibility of new competitors in 2011, a decline in publisher support and piracy, Nintendo will launch a successor to the DS within the next 15 months, and likely announce such in the next eight months.
Of course, this should not discourage anyone from buying new DS software, as any DS successor will most likely be backwards compatible.
For those curious about everything they said, here's the full press statement. They have some interesting numbers and statements about the entire year.
EEDAR said:2009 A Bumpy Road
With industry software sales down 10% compared to 2008, many are under the wrong impression that the industry equally across all categories in 2009. Whilst certainly many areas did see a decline in 2009, there were categories which actually grew over the last 12 months.
Mature Rated Games Outperform
Sales of Mature rated (or 16+ and 18+ PEGI) games remained flat in 2009, which outperformed all other ESRB (and PEGI) ratings which all had sales decline in the double digits. In fact, over the last five years, Mature games have had one of the most stable economies and reinforces a theory that whether a recession or economic boom, the core of our industry has and will continue to remain healthy.
The biggest decline among the ESRB/PEGI ratings was in the Teen rated (or +12 PEGI) games. Although EEDAR does not believe the decline is directly due to the Teen rating, but rather the fact that most Music based games (see below) held a Teen rating (or +12 PEGI).
Music Continues to Decline
The genre with the largest decline in 2009, and likely the biggest factor into lackluster software sales for the year was the Music and Rhythm category, whose worldwide sales declined by over 40% vs. 2008. Whilst it is clear the troubles our industry faced in 2009 were not solely due to the performance of the Music and Rhythm category, this genre failed to achieve publisher and retailer expectations even with such large title as DJ Hero, Band Hero, Guitar Hero 5, and Beatles: Rock Band.
Of course, EEDAR is not placing sole blame on the Music and Rhythm genre for the industrys woes, but it is clear the troubles our industry faced in 2009 were not equally shared across all genres in our sector.
On the opposite end, the largest revenue gains produced year over year were in the Shooter genre, which came on the backs of titles such as Call of Duty Modern Warfare 2, Borderlands, Halo: ODST, Resident Evil 5, Killzone 2, Left 4 Dead 2, and catalog sales from Call of Duty 4 and World at War, which reinforces EEDARs position that the core of the industry continues to remain healthy and grow every year.
Music in 2010
Currently, EEDAR expects the Music category to decline by 30% in 2010; however, when you include rhythm based games, the genre could end up in the -5 to -15% range. With the release of the Natal and Sonys Motion Controller, EEDAR believes there is a large potential market for dance-based games. Specifically, games that take the current Dance Dance Revolution standard and evolve it into the new motion technologies that remove the need for a physical peripheral, such as a dance pad. The industry was already beginning to see the rhythm category take off in late 2009 with the release of Just Dance by UbiSoft, which will likely sell over 1 million units, worldwide, by the end of UbiSofts fiscal year.
Understanding the New Consumer
All too often the economy is blamed for the recent industry contraction. In reality, decreased sales in 2009 had more to do with a lack of innovation than economic recession. The growth of our industry now rests more on innovation than it ever has before, especially since non-traditional and casual markets consist of a larger share than in previous years. No longer can developers update a few maps, design some new weapons, add a few new characters, then throw a roman numeral at the end of the box and call it a sequel. That may work for core targeted games (Action, Shooters, and RPGs), but this strategy is not ideal for non-traditional and casual gamers.
Case in point: most sequels targeted to the mainstream and casual markets actually underperform in comparison to the original, which is the opposite to what has traditionally been the case for core targeted games. If you examine the Nintendo Wii and DS platforms (the current primary platform for this audience) Boom Blox outsold Boom Blox 2 (Wii); Brain Age outsold Brain Age 2 (DS); Guitar Hero III bested World Tour (Wii); The Bigs crushed The Bigs 2 (Wii); Mario & Sonic at the Olympics (Wii) is on track to outperform its Winter counterpart; Rayman Raving Rabbids (Wii) (2006) outsold its 2007 release; and lastly the original Cooking Mama (Wii, DS) (2006) has out sold all sequel versions combined.
EEDAR believes Nintendo understands the mindset of its consumers the best, which is why Nintendo rarely releases sequels within the same generation and, if they do, they are years apart. A good example of this is Mario Kart. Instead of releasing an annual Mario Kart title, Nintendo opts to only release one Mario Kart per hardware generation. Traditional thinking would assume that after an initial sales bump Mario Kart would simply just fade away on retail shelvesas so many others do. However, Nintendo realizes that if you can get an initial attachment rate on Mario Kart of 25% in 2008, they should be able to get the same attachment for new Wii purchasers in 2009 without having to release a sequel. To no surprise, the attachment rate for Mario Kart in 2009 was identical to that of 2008. Another example is Wii Fit. Whilst Nintendo did release a sequel to Wii Fit, The Wii Fit Plus (2009), the overwhelming majority of sales did not come from the stand-alone software edition, but rather the hardware/software bundle of the Wii Fit Plus. In other words the release of the expansion, which likely had minimal development costs, spurred sales of a 20 month old game wrapped in new packaging.
Of course this rule is not absolute for all casual and mainstream titles, some sequels do outperform the original, but in the overwhelming majority of cases, sequels on the Wii just cannibalize the potential sales of its predecessor. For reference, if the above examples were not proof enough, Call of Duty: World at War (2008) only outsold Call of Duty 3 by the smallest of margins and the most recent Call of Duty Modern Warfare: Reflex (2009) is currently on track to under-perform against World at War.
With the Wii making up the majority of the current casual and mainstream audience this finding should be carefully observed as Sony and Microsoft attempt to become more competitive in this space in future years.
Hardware
Next-Generation hardware units were up 1% in 2009, the PlayStation 3, Nintendo DS, and Xbox 360 were the only hardware consoles that produced positive comps in 2009. For 2010, EEDAR expects the PlayStation 3 and Xbox 360 to be the only consoles to produce positive comps.
For 2010, EEDAR expects hardware units to decline by 17%, mostly due to the Nintendo DS, Nintendo Wii, and Sony PSP. The PlayStation 3 and Xbox 360 are likely to post modest unit gains in 2010.
DS2?
Even though the Nintendo DS posted a record year in 2009, EEDAR expects Nintendo to make an official announcement on the DS2 within the next eight months.
Nintendo has always had a controlling stake in the handheld market, despite facing numerous competitors, and EEDAR believes one of the biggest reasons for Nintendos success in the handheld market is their ability to remove opportunity gaps for competitors to enter. Nintendos transition from the GBA to the DS, a year earlier than anticipated, was a brilliant strategy to remove any upper hand the Sony PSP could have by being first to market.
Piracy continues to be an issue, not just for Nintendo, but for its third-party publishers as well. Whilst the release of the DSi has slowed down piracy, that slow down will only be temporary as hackers have already managed to bypass the new security systems built into the hardware.
Additionally, many publishers including Sega, Capcom, and now UbiSoft have all expressed that they may be reducing their exposure to Nintendos consoles, which will likely lead to heavy declines in both hardware and software sales for the Nintendo DS.
We believe that due to the aging technology, the possibility of new competitors in 2011, a decline in publisher support and piracy, Nintendo will launch a successor to the DS within the next 15 months, and likely announce such in the next eight months.
Of course, this should not discourage anyone from buying new DS software, as any DS successor will most likely be backwards compatible.
So what do we think. Is their prediction reasonable given their reasoning?
