Era of exclusive video game deals ending
Game expects higher profits in 2008Exclusive games are not only pricier for independent studios to make than in the past, but analysts say it's hard for them to commit to one console since the Xbox 360 now rivals the PS3 for sales, unlike in previous generations.
The Xbox 360, with a year's head start in sales, has sold over 19 million units globally compared with 14 million PS3 units, according to data from the two companies. U.S. sales of the Xbox 360 and PS3 are 10.7 million and 5 million units, respectively.
"The lack of a dominant console means it's too difficult (for software makers) to give up on a console," said BMO Capital Markets analyst Ed Williams. "With the PS3 or Xbox 360, you don't have a clear winner like the PlayStation 2 or PlayStation were."
With exclusive games fading, console makers will have to depend on games developed within their own studios instead.
"The reality of exclusives is that they will become far more infrequent. The way hardware companies have to offset that is through enhancing the quality of games coming through their own studios that will drive customers to buy their own hardware system," said Williams.
Lazard Capital Markets analyst Colin Sebastian agreed that Microsoft and Sony would focus more on making games. He identified Microsoft's flagship "Halo" franchise as one of the company's biggest blockbusters that will continue to spike sales of the Xbox.
"People were buying the Xbox in anticipation of Halo 3," Sebastian said of the game's release last September.
Sony expects that its studio's release in October of "Little Big Planet" will be positive for PS3 sales during the fall and holiday season.
Still, some analysts say exclusives are not gone for good. Software makers can also give a head start to one console. Microsoft has secured the September release of "Rock Band 2" by Electronic Arts, Harmonix and Viacom Inc's MTV Games, on the Xbox - months ahead of versions for the PS3 and Nintendo Co Ltd's Wii console.
"Relationships with console manufacturers is important to all third party publishers," said Sterne Agee analyst Arvind Bhatia. "Deals are being done less and less, but they're not dead."
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