Jeetil Patel: problems and issues with the next-gen consoles

To Deutsche Bank securities analyst Jeetil Patel, the sales of the Xbox 360 and PS3 are just flat out disappointing, and that in Sony‘s case a price cut is “critical” in order to stimulate the market. The analyst put all three consoles on the block in a recent interview and had surprising things to say about the “next-gen” consoles.

Jeetil Patel talked about the Xbox 360 and PS3 and their problem with lack of demand:

Next-gen hardware sell-through of 700K units in Feb-07 brought its total HW installed base to 8.0mn in the US, still 30% less than the prior cycle at 11.2mn units at equivalent stages. Xbox 360 (230K) and PS3 (130K) unit sales were below expectations of 250K-300K and 200K respectively. Retail checks reveal that ample supply exists, suggesting a demand problem for next-gen consoles.

Patel also spoke about the PS3: “PS3 consoles are available at retail but sales are lackluster. Its 130K units sold in February was less than Xbox 360 sales last year (160K) and even less than the original Xbox sales of 140K in Feb-2002.”

Deutsche Bank was equally unimpressed with the Xbox 360, with Patel stating: “Particularly disappointing is Xbox 360 HW sales of 230K in February, which puts its installed base at 5mn or in-line to the original Xbox which was an unproven console and faced substantial competition from the PS2.”

The Wii however, has a different problem. It seems that Nintendo is having a problem keeping up with demand: “With Wii shortages likely in the next 1-2 quarters (and potential PS3 re-allocations to Europe), we are concerned that next-gen sales could further disappoint.”

Nintendo has taken the lion’s share of the market recently. In fact, combining the sales of the DS with the sales of the Wii shows that Nintendo grabbed 54% of the market in February. Nintendo of America President Reggie Fils-Aime has reiterated that Nintendo is doing the best it can to alleviate shortages; “… there are hundreds of thousands of consumers still waiting to get their hands on the system so we continue to both ship more units to retail every week and work non-stop to build capacity,” he said.

All told, it seems that the Wii could be dominating the market now, but a market leader has yet to emerge for this generation of consoles.

To Deutsche Bank securities analyst Jeetil Patel, the sales of the Xbox 360 and PS3 are just flat out disappointing, and that in Sony‘s case a price cut is “critical” in order to stimulate the market. The analyst put all three consoles on the block in a recent interview and had surprising things to say about the “next-gen” consoles.

Jeetil Patel talked about the Xbox 360 and PS3 and their problem with lack of demand:

Next-gen hardware sell-through of 700K units in Feb-07 brought its total HW installed base to 8.0mn in the US, still 30% less than the prior cycle at 11.2mn units at equivalent stages. Xbox 360 (230K) and PS3 (130K) unit sales were below expectations of 250K-300K and 200K respectively. Retail checks reveal that ample supply exists, suggesting a demand problem for next-gen consoles.

Patel also spoke about the PS3: “PS3 consoles are available at retail but sales are lackluster. Its 130K units sold in February was less than Xbox 360 sales last year (160K) and even less than the original Xbox sales of 140K in Feb-2002.”

Deutsche Bank was equally unimpressed with the Xbox 360, with Patel stating: “Particularly disappointing is Xbox 360 HW sales of 230K in February, which puts its installed base at 5mn or in-line to the original Xbox which was an unproven console and faced substantial competition from the PS2.”

The Wii however, has a different problem. It seems that Nintendo is having a problem keeping up with demand: “With Wii shortages likely in the next 1-2 quarters (and potential PS3 re-allocations to Europe), we are concerned that next-gen sales could further disappoint.”

Nintendo has taken the lion’s share of the market recently. In fact, combining the sales of the DS with the sales of the Wii shows that Nintendo grabbed 54% of the market in February. Nintendo of America President Reggie Fils-Aime has reiterated that Nintendo is doing the best it can to alleviate shortages; “… there are hundreds of thousands of consumers still waiting to get their hands on the system so we continue to both ship more units to retail every week and work non-stop to build capacity,” he said.

All told, it seems that the Wii could be dominating the market now, but a market leader has yet to emerge for this generation of consoles.