Friday, March 16, 2007

Follow-Up to Console Post of the Week

Let's have a little fun with math.

It's instructive to use Japan for our purposes, both because they have very accurate weekly data for unit sales and because I think they had a relatively similar inventory situation after Christmas--in other words, there was unfulfilled demand until the second week of January, but at that point there were PS3's just about everywhere.

In the first week of January, according to VG Charts (which often has a 10% variance from other published numbers, but it's fine for our purposes here), the PS3 sold 70,000 units in Japan. For the next four weeks, it sold a total of 95,000 units.

See what I mean about unfulfilled demand getting filled in that first week in January?

So after the first week in January, the PS3 was selling at about 1/3 the rate of the first week, when Christmas demand was finally satisfied.

Let's look at the January-February NPD numbers now. In January (a five-week reporting period), the PS3 sold 244,000 units. If the pattern is similar to what happened in Japan, that would be 105,000 the first week and 35,000 for each of the next four weeks (that actually works out to 245k units, but the rounded numbers are easier to use).

So based on that pattern, what would we have expected February sales for the PS3 to be? About 140,000 units. And while that's modestly over the numbers NPD reported yesterday, it's still within about 10%.

Why did I say I expected 160,000 a few weeks ago, when I seemingly used the same procedure to guess last month? Well, because I'm a dumbass, basically. I was sort of "rule of thumbing" the math (and got 40,000 units a week) instead of actually doing the math and using the exact same percentages as Japan. Lesson learned.

It's also certainly possible that the NPD numbers are off. It wouldn't be the first time they had to issue revised numbers, and it wouldn't surprise me at all if they lower January's final numbers and raise the February numbers slightly.

Either way, though, selling 35,000 units a week, even if that sounds like a large number in isolation, is going to get them killed in gaming. However, as I've mentioned previously, in the high-definition format war versus HD-DVD, it's helping them much, much more.

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