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!

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.

International Data Corporation (IDC) video games analyst Billy Pidgeon has now predicted that the Wii shortages will continue until 2009. If this holds true, then Nintendo stands to lose a lot of potential revenue considering that hardware sales for the Wii and Nintendo DS doubled from US$ 659 million (Q1 2006) to US$ 1.3 billion (Q1 2007).

Pidgeon, while speaking about the current market conditions, stated that "Q1 is looking like the beginning of an up-cycle year, there's good software movement, but hardware is stalled a bit by short Wii supply and stagnant demand for 360 and PS3."

He also added that Nintendo's Wii will still benefit from its strong growth but supply issues may still haunt it. If the supply problem isn't solved, Pidgeon presumed that the mass market consumers might lose interest in the product.

Now regarding its main competitors, the Xbox 360 (Microsoft) and PlayStation 3 (Sony), he pointed out that both need system-selling games. While Halo 3, Lair, and Heavenly Sword are coming, there is still a gap in the second sales quarter where the Wii, DS and PSP hardware and software can dominate. Another thing we should pay attention to is the role of PC and PS2 software. He believes that software for both systems are "picking up the slack" so to speak. This filler could actually make or break the market in terms of sales considering that a lot of people haven't made the transition to next-generation consoles.

The guys at Nintendo will really have to get more Wiis into the market to stem the popular demand for it. If you want to read more about this and the rest of Pidgeon's market analysis, click on the via link.

IDC, the premier global provider of consumer technology market information and subsidiary of research leader IDG, analyzed that  Sony, Microsoft and Nintendo won't be able to dominate the market in the next five years just as Sony's PS2 had before, but stresses that the Nintendo Wii will outship and outsell the competition in 2007 and 2008.

We all know of the Nintendo "Revolution" because it keeps to its namesake, and for a game console that does revolutionize the game market, it doesn't focus on one specific demographic at all. The IDC points out that this is the Wii's edge, and because not only do hardcore and enthusiast gamers have all the money out there, the Wii will likely still be in constant demand until late 2008.

IDC recognizes the actual growth of the Wii's accessible market, allowing even non-gamers to dive into the world of gaming without intimidating them. There is much support for the Wii for its health benefits and the fun factor it delivers to the family home. And to this effect, if Nintendo can keep up its current hardware shipments, the Wii will be capturing slightly over a third of the worldwide market by 2008, ahead of the competition.

Billy Pidgeon, program manager of IDC's Consumer Markets: Gaming Program says, "We believe concerted efforts to broaden the appeal of videogames beyond the traditional enthusiast/hardcore base will deepen the industry's penetration. This is good news for an industry that seemed to be receding last year due to over-saturation of the core base." The Wii is opening up a whole new market for the game industry, which the industry will be able to tap into through the appeal of Nintendo's console.