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Pachter: Current console cycle to go on and on, expect lots of SKUs


Wedbush Morgan's Michael Pachter already told us about the inevitable WiiHD (inevitable to him, anyway), and that he thinks this cycle will be the last, and in his massive 201-page report Wedbush Morgan sent out recently, he reiterates both, but pointed out that this console cycle will outlast any other in history's past due to two things: HD displays and console SKUs.

Pointing to the small adoption rates for HD displays, Pachter says that unless consumers start coming out in droves to pick up HD displays, these consumers aren't going to feel compelled to pick up a HD-compatible console (or upgrade from their Wii). This, he feels, adds longevity to the current cycle, stating that current-generation console sales will go long tail, and says that the lower-than-expected adoption rates for consoles suggests a longevity not seen in the past. He also suggests that the increased developmental costs of this generation will cause developers and publishers to milk this generation for all its worth, extending its life that much more. And, due to this, Pachter believes that console sales won't reach their peak until early next decade, when HD adoption rates will also supposedly hit their peak.

And speaking of higher costs, manufacturers are looking to cut costs, and that's where the value of optional SKUs comes in. Pachter points out that as console manufacturers come up with new ways to cut corners, they will offer SKUs taking advantage of this. Pachter points to the PS3 Slim as an obvious release for later this year, and the numerous different packages we've seen offered for the Xbox 360 as examples of this new mentality.

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