Analyst: Xbox 360 is on downside of lifecycle

Microsoft's Xbox 360 is on the downside of its lifecycle according to the latest report from market analysts DFC Intelligence. According to the report, despite Microsoft widen it's demographic to include more casual players through the use of Kinect, Microsoft will struggle for sales as the console moves into year five of its existence. "In terms of changing the overall video game hardware platform market share we see [Kinect] having a negligible impact," explained DFC Intelligence in a monthly brief. "The Xbox 360 has some good years left, but the platform is clearly on the downside of its lifecycle." DFC argues Microsoft's new strategy will see it compete with more popular casual games such as virtual pets, dancing games, fitness games. "There are numerous problems with this approach, but the biggest problem is Microsoft, at its core, is simply not an entertainment company," DFC said. "Almost every time Microsoft has tried to emulate successful entertainment products they have failed. ... [with the exception of] PC gaming prior to the Xbox and then the Xbox platform itself." DFC pointed to Zune failing to overtake the iPod and the purchase of Rare who formerly developed Nintendo games, failing to make any significant impact. "In its business software, Microsoft has been successful in analyzing what works for users of other products and incrementally incorporating those features into Microsoft products," DFC said. "The problem is developing hit entertainment products simply does not follow that model." "...Microsoft is putting almost all its eggs into the Kinect as a way to appeal to the 'casual' consumer and expand its user base," explained DFC. "... Unfortunately, based on what we have seen, DFC continues to feel that Microsoft is going to struggle to expand beyond its core audience." While it all seems to be a bit of a downer for Microsoft, DFC says that PS3 will actually  "pickup in sales" this year and in 2011, though it expects Wii to have the best luck when it comes to sales. Could the analysts be correct? Will Kinect fail? Will Sony march on triumphant? Only time will tell. PlayStation Move is launch this September, followed by Kinect is launched this November. Thanks, Gamasutra.

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