Games industry analyst Michael Pachter has boldly stated that the current crop of games consoles may represent the end of the generational cycle we have become accustomed to – with the exception of the long-rumoured hi-def Wii.
We do not expect a ‘new' console in 2010, other than the long-rumoured high definition Wii, which is likely to upgrade the Wii to current console technology,” Pachter stated.
We do not expect the ‘next' generation to begin before 2013, if at all. We remain convinced that the publishers will resist the introduction of any video game hardware technology that requires a refresh of software, as the publishers have as yet to capitalize on the immense investments made in being competitive in the current cycle.
Because R&D costs are likely to flatten out with the benefits of a learning curve, we expect earnings leverage as the publishers are able to exploit R&D investments. In brief, we think that investors have it wrong so far this cycle, and think that investment in video game publishers will bear fruit for many years.”