Wedbush Morgan senior analyst Michael Pachter has predicted the Wii to be the "dominant console" by this cycles end, with the PS3 to gain huge ground thanks to Blu-ray.
That leaves poor Xbox 360 sinking to third place, but Pachter notes that Xbox Live is a thriving avenue of profit for the platform, with more digital services and Natal to boost it.
"We expect the dominant console at the end of the this cycle to be the Wii, as we think that the console’s low price point, innovative control mechanism, and compatibility with standard definition televisions will provide it with a competitive advantage over the next two years," wrote Pachter, also hinting at a Wii 'Plus' model delivering HD.
"We think that the PS3 will capture significant market share, primarily due to Sony’s victory in the high definition DVD format war, and will end up in second place by 2015. Although Microsoft’s Xbox 360 enjoyed a first mover advantage, we think that its market position will fade to third place due to lack of penetration in Japan."
Microsoft have had a generally hard time of smashing their way into the Japanese market, no thanks to Nintendo and Sony have it 'locked down' to their products and services. However the Xbox 360 isn't doom to obscurity in third place, and should profit nicely.
Over 20 million users are plugged into Xbox Live which is roughly 65 percent of Xbox 360 owners.
"With over 10 million members (only 1 million of whom are Xbox Live Gold members), the Netflix installed base has an incentive to purchase an Xbox 360 and to join Xbox Live," continued the analyst. "We expect the pace of game and movie downloads to increase exponentially over the next few years, and estimate that Microsoft generates over $100 million in profit annually from downloads."
"Microsoft has positioned the Xbox 360 to be an Internet and Entertainment hub in the living room. With the rollout of Project Natal expected in late 2010, we think that Microsoft will position itself as a centerpiece of the living room."
"We envision the addition of Internet television, video on demand, and open Internet access over the coming years, once Microsoft has decided how best to monetize its product offering."
So, the Internet is to save Xbox 360 and Blu-ray movies are to propel the PS3 ahead? Non-gaming matters are to decide the fates of our gaming consoles... interesting.