Microsoft's Xbox 360 is poised to take an early lead in the market of next-generation console-based video game systems, and the flood of titles for all three Web-based systems--Xbox 360, Sony's PS3,
and Nintendo Revolution--will drive the U.S. market for console software to more than $8.1 billion by 2008, according to preliminary projections of a study scheduled to be released next week by Kagan
Research. By 2010, Kagan estimates that 54 million U.S. households will own at least one console system, and most will own both a fixed and portable system. Irina Mulvey, an analyst with Kagan,
predicted that the higher prices of the next-generation titles will drive the increase in software sales, from over $6.5 billion by the end of 2005 to $8.1 billion in 2008. Although the higher prices
could lead each consumer to purchase fewer games, Mulvey said, higher adoption rates and the increase of the number of households that own game consoles will overwhelm any depressed demand.
-- Shankar Gupta
