Wednesday, February 21, 2007

January NPD Numbers

From Gamasutra:
According to a Bloomberg report, which cites NPD Group data obtained by Credit Suisse analyst Heath Terry, 436,000 Wii consoles were sold during January and the first week of February. The Xbox 360 was the second highest selling home console with 294,000 units sold, ahead of the PlayStation 3 at 244,000 units sold.

Let the spinning begin. I can't wait to see how Microsoft and Sony mangle this data.

To start with, remember that January was a five-week reporting period. There are four of those during the year, along with eight four-week periods.

Second, I expect more of the "Nintendo isn't really a competitor" statements from from Microsoft and Sony. Nintendo is absolutely hammering both of them--the Wii is outselling everyone, and they're doing it in an environment where their supply is extremely limited compared to the readily available 360 and PS3.

Remember I said that I expected the Wii to overtake the 360 (worldwide) by the end of the year and how ridiculous that sounded? Well, they're right on track--they'll sell at least three million more units in Japan alone in 2007. And they're tracking to sell over two million more units in the U.S., plus at least a million more in Europe. That will close the gap worldwide before the end of the year.

Also, please remember that the Wii is still extremely supply constrained, while the 360 and PS3 are available almost everywhere in the U.S. and Japan.

So what about Microsoft? Well, the positives are that the 360 sold almost 300,000 units in January, which is almost 50,000 more than their monthly average for last year's January-October period.

However, that number is also the bad news. Last January, the 360 sold 277,000 units, but it was extremely short of supply. So this year, with no supply constraints whatsoever, the 360 sold less than 10% more units. That's not every impressive.

What has to be even less impressive for Microsoft is that one, the Wii is killing it, and two, Sony only sold 50,000 fewer units and it's $200 more expensive. If I'm Microsoft, I start reducing the price of the console by at least $50 before I start considering putting out the high-end unit with the 120GB hard drive and HDMI connection (which has been strongly rumored).

Finally, let's talk about Sony. Hey, they sold almost 250,000 units at an insane price and with almost zero software. I thought the number would be closer to 220,000, even with a five-week reporting period, so it's better than I expected. But they're still getting outsold almost 2-1 by the Wii in America and over 3-1 in Japan, and selling less than 50,000 units a week not only won't catch Microsoft in the U.S., it won't even stop them from falling further behind.

Here's the other question for Sony, and I think it's the biggest one. If you look at the weekly sales in Japan (where accurate weekly data is available), over 70,000 units were sold during the first week in January, which is when PS3's started flooding the stores both in Japan and in the U.S. Every week after that, though, sales have been less than half that.

If that's what happened here (a reasonable guess, although weekly data isn't available), and the first week in January represented the fulfilment of all excess demand related to December inventory shortages, then the PS3 sold 80,000 units the first week and 40,000 units in succeeding weeks.

How will we know? Not until next month, unfortunately, when the NPD numbers for February come out. If the PS3 sells in the 160,000 unit range (which would be a very weak number), then that per-week estimate was reasonably accurate.

Here's the comforting news for Sony, though. Even at insane prices, the PS3 is still moving units, and it was only 10,000 units a week behind the 360 in January. Sony can juice demand whenever they want to just by lowering the price. And it clearly looks like Sony has greater native demand than Microsoft--only the price disparity is holding them back.

There's nothing Microsoft or Sony can do about the Wii, though. But then, the Wii isn't a "direct competitor," right? Heh.

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