Analysis determines publisher strengths in console war

Kyle Orland
K. Orland|04.11.07

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Analysis determines publisher strengths in console war
While analyst predictions for the current round of the system wars vary greatly, most analysts agree that Sony will no longer enjoy the same level of market dominance it had in previous generations. If you'll grant that premise, what third party developers are in the best position to benefit from this shift in console fortunes?

A pair of analysts at 2K Advisors (no relation to the developer) decided to try and figure out the answer to that question with a new metric called the Revenue Attach Rate (RAR). Basically, the RAR measures how much money a publisher makes on system software for each unit of that system currently in the marketplace. All other things being equal, publishers benefit most when systems that give them a high RAR do well, because those system sales translate to more revenue than other system sales.

Based on previous generation RARs for the major publishers, the 2K analysts determined that EA and Take Two have the most to lose from increased market share for Nintendo in this generation. Both companies showed relatively weak RARs for the GameCube, which might explain why they have each been falling all over themselves to play nice with the big N in light of strong Wii sales. Activision would benefit most from a strong Microsoft performance, given their high Xbox RAR, while THQ's relatively balanced console portfolio makes them well suited to succeed no matter who wins the battle.

The full report is a little technical, but it's full of lots of good data and analysis for anyone following the business side of the game industry.

[Source: 2K Advisors]
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