As part of an absolutely massive 210-page report from Wedbush Morgan Securities on the future of the video game industry, analyst Michael Pachter has predicted that Japan will be the Achilles heel for Microsoft, enabling Sony's PS3 to overtake Xbox 360 on the global market.
Wii, however, will maintain its leadership role until the end (with a little help from a new "Wii HD").
To quote: "We expect the dominant console at the end of the this cycle to be the Wii, as we think that the console's low price point, innovative control mechanism, and compatibility with standard definition televisions will provide it with a competitive advantage over the next two years.
We expect Nintendo to sustain this competitive advantage by introducing a high definition version of the Wii, perhaps as early as the end of 2010, in order to convert its large installed base into true 'next generation' households," Pachter said.
"We think that the PS3 will capture significant market share, primarily due to Sony's victory in the high definition DVD format war, and will end up in second place by 2015.
Although Microsoft's Xbox 360 enjoyed a first mover advantage, we think that its market position will fade to third place due to lack of penetration in Japan."
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