Recently, Wedbush Morgan Securities released their annual report on the state of the gaming industry. Despite high expectations by many, the report suggests that the next generation of consoles will not bring the amount of growth that people expect to the gaming industry.
Michael Pachter and Edward Woo, the analysts on the report, predict a ten to twelve percent increase in sales until the year 2010.
The report suggests the gaming industry is not going yet at the end of a "console cycle". A console cycle is a period of slow or negative growth. They believe that people are still satisfied with the consoles they have and that the transition to new consoles will be a slow one.
With the rising prices of games and game consoles, people may stick to consoles they already have and games that are cheaper. Also, the time it will take to develop a good library of games exclusive to a new console is extensive. The average game is expected to take two years to develop.