Tuesday, August 01, 2006

Wii will outsell PS3, says Merrill Lynch analyst



An analyst with Merrill Lynch, one of the world's leading financial management and advisory companies, believes the Wii will outsell the PS3. Bloomberg has spoken to a number of analysts in the wake of Sony´s recent financial statement.
"The PS3 is key to the medium-term success of this company since so much has been invested in it. [Success may be] harder because of the pricing and the delays of the product so far."
Yoji Takeda
RBC Investment (Asia) Ltd., Hong Kong.

"PlayStation 3 will be a huge money loser in the beginning. I think Wii will sell better than the PS3."
Masafumi Oshiden
Merrill Lynch Investment Managers Co., Tokyo.

"If the PS3 doesn't sell well, Sony won't be able to recoup the investment in five years. That will hurt profitability for much of the group."
Kazuharu Miura
Daiwa Institute of Research Ltd., Tokyo
To give us some idea of how important these analysts are within their companies, Bloomberg notes that Yoji Takeda manages $600 million in stocks and Masafumi Oshiden helps looking after more than $1 billion. These are big guys, no doubt.


Now, I don´t think this is just a case of another analyst writing off the PS3 - although I find that interesting enough. This is a big analyst speaking on behalf of Merrill Lynch and that is one of the most reputable companies in the business. There are a lot of people who pay lip service to these analysts and will follow whatever buy or sell rating they churn out. Undoubtedly, this is good news for Nintendo.

Source: Bloomberg,
Thanks to: Codename Revolution

11 comments:

some guy said...

I think in sheer unit sales it is going to be difficult to decide who will win in the short run. Both consoles will more then likely sell out of there initial shipment of 6 million units. But there is a huge difference between 6 million and the 100 million units that Sony aims to sell. As long has Nintendo can keep third party support I think they will do very well this time around.

Just my opinion

Anonymous said...

the launch is where nintendo's strategy becomes all-the-more effective when you think about it. with the hardware they're using, they're probably seeing 98%-99% manufacturing yields, and they won't have *ANY* of the reliability problems that plagued xbox360s launch. on the other hand we have the ps3 which, from what i remember hearing, is seeing ridiculously low yields (sub-15%-20%) because the technology fueling the ps3 is not "cutting-edge" like the xbox360, but "BLEEDING-edge". bleeding-edge technology is not at all mass-market-friendly.

these analysts can say what they like about "the launch", but what they seem to be forgetting is that the launch is almost all that matters. when ps3 sells out at launch (which will be closer to 2 million units - not the 6 million which they've promised) and half of the units are returned to sony because of malfunctions and defects, most publishers are going to start feeling a little differently about the ps3. i don't think hideo kojima, for example, is going to be very happy about having a maximum potential customer base of only 1 million gamers for mgs4 6 months after launch. my bet is that publishers who've spent so much time and money developing for the ps3 will start to wonder how the hell they're going to turn a profit with so few consoles in the hands of the consumers, and will begin weighing the costs and benefits of porting to the xbox360. this will be the beginning of the end for the ps3.

unlike nintendo, almost all of sony's big-name exclusives are third party offerings: ff/dw, mgs, gta, and re are just a few examples. when these games are released mid-'07, and the publishers of these games see that only 2-3 million ps3s are in the hands of the consumers, they too will assess the benefits of porting to the (now in 7mil homes) xbox360, and sony's ps3 will start looking less and less attractive to the consumer.

all the while, wii will be enjoying a huge install base, and a wide range of quality custom-tailored games, and will be in the homes of many different types of people. in-game advertisement will become the second biggest stream of revenue for third party companies, as wiiconnect24 will allow for relevant-to-the-player (they are identified by their custom-configured controller) advertisements 24 hours a day.
i sure wouldn't mind in-game advertisement nearly as much if it changed periodically, and was always relevant to me personally. i don't drink mountain dew, i don't read maxim, and i don't give a shit about american wrestling. however, i do play guitar, love to draw and paint, and am interested in nintendo-related clothing/memorabilia! why can't i fill out a form to let wiiconnect24 know this, so that in-game advertisers know what types of ads i don't mind looking at? i believe that i will be able to.

sony is in trouble. nothing about the ps3 is dynamic. it's rigid, untested, and expensive. these analysts can walk on eggshells with what they say all day long, but it doesn't change the fact that sony has built a *losing* formula, and both nintendo and even microsoft have built *winning* formulas. almost *no* amount of brand recognition can save you from that - especially when your brand recognition depends on 3rd party support - who depend on nothing other than REVENUE. ask nintendo: they'll tell you first hand that it's true.

-"superfan" tactics.

sorry for such a long post.

Blizz419 said...

GTA & RE are not PS3 exclusives tactics

Anonymous said...

gta isn't... anymore. used to be. re5 is still at this point a ps3 exclusive. either way, this was my whole point. when sony loses their 3rd party exclusives, they've lost the #1 reason for someone to buy their console.

-"superfan" tactics.

Anonymous said...

also: they lost the devil may cry exclusive, the assassins creed exclusive, and the final fantasy 12 exclusive - all to xbox. what's next? mgs4, re5, and dw9. after that, it's over.

-"superfan" tactics.

Anonymous said...

sorry but RE5 isn't exclusive to the PS3, it'll also be available on the 360.

Anonymous said...

THAT IS MY POINT.

-"superfan" tactics.

some guy said...


Mortal Kombat on Wii

Anonymous said...

I wish I could be an analyst. They have the best job ever - they get to just make shit up, get quoted like it's TEH GOSPEL, and then if they're wrong it makes no difference and no-one remembers anyway.

Grandmaster B said...

-"superfan" tactics.

sorry for such a long post.


heh I was just about to drill you for it too. Apology accepted. Long posts I usually skip.

Blizz419 said...

thank you anonymous i knew i was right about RE5