In a recent report In-Stat/MDR have predicted that worldwide shipments of game consoles will reach 19.3 million this year, compared with 35 million in 2003. Indeed, sales of video gaming consoles have dropped to almost half their 2003 level. A likely explanation is consumers awaiting speedy new machines, as it seems that even the blockbuster releases of this year such as Halo 2 - as well as price cuts for the PS2 and Xbox - can't help matters.

"At this point, the market is much closer to the saturation point, even with the price cuts." - In-Stat/MDR analyst Brian O'Rourke.

What is more, sales are expected to decline even further next year, as game companies find a limited audience of casual players willing to invest in hardware, even with many price cuts. Only with the introduction of new hardware will this trend reverse.