In-Stat/MDR reports that the video game console market remains in the back end of its current cycle, with declining shipments expected to continue until the next generation of consoles come to market.

"As is typical with the back end of a market, this one is characterized by companies cutting prices on both hardware and software to entice more casual, value-oriented consumers," said Brian O'Rourke, a senior analyst with In-Stat/MDR. "However, as can be expected, year-over-year shipment declines will continue until all next-generation consoles are on the market in 2006."

According to the In-Stat/MDR, the first next-generation console should hit the market in the fourth quarter of 2005 with the introduction of Microsoft's Xbox 2. Sony, however, is not likely to give Microsoft too much lead time before launching its PS3 console, which should occur by mid-2006. Nintendo will try to launch its next-generation GameCube 2 console either before, or simultaneously with Sony, which Nintendo considers to be its primary competition.

In-Stat/MDR has also found that:

- Nintendo's GameCube has performed solidly over the past year, with a worldwide price cut in the fourth quarter of 2003 significantly increasing sales.

- Microsoft's Xbox is in a struggle with the GameCube for second place in the market. It has performed well in North America, and is doing increasingly well in Europe.

- Sony will ship the most next-generation consoles through 2008. It has a proven track record built over the last 10 years, and has shown itself to be a marketing powerhouse. However, Microsoft and Nintendo are expected to narrow Sony's lead in the next generation.

This information is based on the report released by In-Stat/MDR, "Game Consoles 2004: Waiting for the Next Generation".