Wii wins this year’s media battle, but not the war

17 Dec 2007

The global media landscape is battle-scarred and singed as the fight for dominance between the Wii, the PlayStation 3 and the Xbox 360 continues in one theatre of war, while in another the bitter skirmishing between HD DVD and Blu-ray is transformed from stalemate to checkmate.

Brands are battling for dominance across a variety of markets that at the same time are converging and coalescing across an array of high-quality video, broadband and entertainment services, according to leading analysts from Screen Digest.

Struggles for the hearts – and wallets – of consumers that began early in 2007 will reach a crescendo in stores this Christmas and fighting is set to escalate further in 2008.

Christmas 2007 will be the first time that Sony’s Playstation 3, Microsoft’s Xbox 360 and Nintendo’s Wii have competed on retailers’ shelves side-by-side in all major territories.

Screen Digest’s senior games analyst Piers Harding-Rolls predicts Nintendo will win the battle this year convincingly, but during 2008 the market climate may change significantly. Whereas, in 2007, Nintendo has succeeded in expanding the appeal of the Wii to different consumers — including more females and older consumers — to drive adoption, Sony’s pipeline of exclusive content and the launch of multimedia services may result in a significant uplift for the PlayStation 3 in 2008.

“One of the market shifts to watch out for in 2008 will be the continued evolution of Xbox 360 and PlayStation 3 from games consoles to multimedia hubs. Now that these multimedia services – online video, IPTV, digital-terrestrial TV and PVR functionality — are available or poised to come on line in different markets, this ‘hub’ strategy is emerging as a key-console battleground for Microsoft and Sony.”

Arguably, one of the most analysed and discussed media skirmishes, 2007 saw serious stalemate in the battle of the two high-definition formats. The challenge for both HD DVD and Blu-ray in 2008 is to engage consumers, who are beset with confusion and apathy around high definition.

Screen Digest analyst Richard Cooper believes all that will change in the coming year. “Next year we expect to see shifting alliances and, with such a delicate stalemate, it’s only going to take one major player to swap sides and the market will shift seismically.

“We believe this will happen over the course of 2008, with major players moving to format-agnostic or format-exclusive positions. Both formats must start to make an impact on the HDTV viewer next year if high definition is to become more than just a niche market – we have seen hardware prices drop in 2007, but the battle over content in 2008 will be the year this storm breaks.”

Mobile TV has been talked up by its supporters and widely derided by its critics. 2008 will see significant launches of broadcast mobile TV in some major markets, including China, France and Germany.

However, Screen Digest’s senior mobile-media analyst David MacQueen predicts that key dates will be missed.

“Although services may launch, coverage will be far from nationwide when key sporting events kick off, namely the Olympics and the UEFA Euro 2008 Championship. A key opportunity to measure European consumer desire for mobile TV services is likely to be lost.

“The 3G TV services, provided by operators such as Orange and Vodafone, will benefit most from any boost in viewing numbers these events provide.

“However, where broadcast services have already been launched, such as Italy and the US, these events could provide a significant surge in subscribers. Sports programming from the likes of Sky (in Italy) and ESPN (in the US) has already proved popular and could drive uptake of mobile TV in those countries.”

The November 2007 release of Paramount Pictures’ Beowulf in the 3D format was proof, if it were needed, that 3D has the potential to rejuvenate the cinema-going experience.

With a five-fold increase in digital 3D screens worldwide to the current total of 1,300 (up from just 258 in 2006) and more films being released on the format, Screen Digest film and cinema analyst Charlotte Jones believes it will only continue to increase in popularity next year.

“Our research has shown that 3D films can earn up to three times more revenue per screen, as film goers continue to demonstrate a strong preference for the 3D screenings and are happy to pay more for the superior, immersive experience.

She continues: “2008 will be the year that 3D movies really enter the mainstream multiplex environment, as the 3D screen count more than doubles again to hit our forecasts of 3,000 by the close of 2008 on track to 6,000 by 2009.

“We’ll see the highest number of 3D films released to date, including U2’s concert film U23D, scheduled for a January release, plus New Line’s Journey 3-D and the Disney animation Bolt,” Jones said.

By John Kennedy