In a recent industry newsletter, Michael Pachter, gaming research analyst for Wedbush Morgan Securities has stated that the next generation of consoles will not arrive before 2013, if at all.

"We do not expect a ‘new' console in 2010. We do not expect the ‘next' generation to begin before 2013, if at all."

The only console that is expected to be released before 2013 is the long-rumored high definition Wii which will likely upgrade the Wii's hardware to current console technology.

Pachter continued to say that it is unlikely that publishers will release any new consoles before 2013 because there is still profit to be made from the current hardware. "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."

"We therefore think it is likely that the ‘next' generation will begin after 2013, meaning that software sales are likely to grow by a compounded annual rate of 6–10 percent for another five years."

"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."

Posted: May 04, 2009 10:58 am