Ozymandias has put together his game industry predictions for 2007 which, not surprisingly, include some very bad news for Sony.

Here's his list and my take:

Ozy: The original PSP (with memory stick) will be discontinued, and replaced by a new model with an integrated hard drive. The new model will enable connectivity to the Playstation store via internet connection, and allow you to purchase and download both emulated PS1 and native PSP games directly. Over time (meaning not in 2007), it will also allow you to purchase music and movies from the Sony store.
Me: A new PSP is coming, it has to be, but I suspect the purchase of music and movies from the Sony store will come first. When I talked to Sony about this last year, they denied that any new PSP model was in the works but said they were full speed ahead on getting music and movie download support. The new model will likely be a bit smaller, have a longer battery life and while I'd love for a harddrive to pop up, I don't see Sony abandoning their pig-headed support of the Memory Stick.

Ozy: The Playstation 3 will have an effective price drop of at least $100 by Thanksgiving 2007. By effective, I mean that it's also possible that the price will remain the same, but at least $100 of value will be added to the bundle.
Me: Not in a year. What I can see happening is retailers doing their own bundles, much like what occurred with the Xbox 360 this year.

Ozy: Nintendo will release their own Live Arcade service for the Wii. Specifically, this means Nintendo will enable third-party developers to create, distribute, and sell casual games for the Wii and DS through a new Wii channel.
Me: Nintendo has already announced that they will be enabling third-party game development for their store channel so this is sort of a no brainer. They haven't announced the sale of downloadable DS games through the service. While I think this is a great idea, they'd need to come up with a way to save that content to the DS. Currently turning the system off erases downloaded data.

Ozy: The Nintendo DS will continue to outsell the PSP in 2007. It will also enable DS<->Wii wireless connectivity, enabling cross-platform gaming scenarios and the purchase of Nintendo DS casual games. It will not enable the download and purchase of full retail games for the DS, however.
Me: Totally agree on all parts. Further more, I'd predict that Wii to DS gaming would hit around Thanksgiving.

Ozy: Apple will expand their gaming efforts significantly. The most likely scenario is investment in iPod and the (soon to be announced) iPhone devices to enable a common game development platform for developers to target. This platform will include WiFi wireless connectivity, user accounts and presence, and the ability to trial and buy content from a games channel in the iTunes store. Apple will not enter the gaming market with a home console of their own.
Me: I agree, though their phone probably can't be called the iPhone and I also see them trying to expand their home computer gaming market too.

Ozy: HD-DVD will begin to pull ahead of Blu-Ray in the high-definition DVD format war. This will be measurable by number of DVDs available for either format on Amazon, and total player sales (including the Xbox 360's HD-DVD add-on and the Playstation 3's internal Blu-Ray drive).
Me: This is a hard one. Much of the Blu-ray format's success hinges on the success of the Playstation 3 and I'm certainly not ready to count-out Sony's new console. If the console has the sort of epic sales that the PS2 has, Blu-ray will absolutely crush HD-DVD.

Ozy: By the end of 2007, total lifetime unit sell-through of home consoles will be led by the Xbox 360, followed by Nintendo's Wii, with the Playstation 3 third. This order will also be true of units sold-through solely in 2007 (ie, not lifetime sales).
Me: Not in a million years. Either the Wii will be first or it will be a very distant third. No second place for this console. If the innovation concept takes off and more games come out for the system that manage to cross the line from gimmick to innovation, than it will continue to be a run away hit. If that doesn't happen, it will become a glorified toy. While I understand Ozy's reasoning on the Xbox 360, I think it's still too early to tell if the PS3 is going to do the sort of sales the PS2 did, but I suspect it's going to end up being neck-and-neck between Microsoft and Sony.

Ozy: Google will show significant public interest in the gaming sector for the first time, including interest in acquisitions to bolster their Ad-sense business. The most likely target will be IGA Worldwide (to combat Microsoft's acquisition of Massive). If unsuccessful, Google will seek to acquire one of the larger game publishers on the market to gain a foothold in the in-game advertising market. Likely targets include Electronic Arts (though it would be extremely expensive), Activision, or THQ.
Me: I see Google's interest in gaming being more about information, as in a newsite or blog, and casual games, than in actually creating the games. Sure I can see them wanting to inject ad-sense into gaming, but I don't think they need to buy anyone to do it and Google seems to be more about creation than taking over.

Agree or disagree, Ozymandias' predictions are certainly well thought-out and interesting. What do you think? Brian Crecente

2007 Predictions

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