Console Post of the Week
First off, let's look at those February NPD numbers again:Wii - 432,000
PlayStation 2 - 351,800
PlayStation 3 - 280,800
Xbox 360 - 254,600
As bad as January was, February has been stellar. Look at February 2007:
Wii - 335,000
Playstation 2 - 295,000
Playstation 3 - 127,000
Xbox 360 - 228,000
Up over 33%? That is amazing.
What console "races" become after about a year are chess matches. In this generation, Microsoft and Sony are at the table. Nintendo is playing in another tournament, having crushed them both.
Sony's first big move was the 40GB unit for $399 in November. Here's an idea of how desperate they were for that SKU--Sony sold 711,000 PS3's in the U.S. in the preceding six months.
I mentioned last year's 360 sales as a good comparison for the perceived value of the PS3 at the same price (for the primary 360 SKU). Well, for the first two months of 2007, Microsoft sold 522,000 units. In the first two months of this year, Sony 550,000 PS3's. Again, though, this year contained an extra week in January, so it's nine weeks of data for the PS3 compared to eight for the 360.
On a weekly basis for January and February, the 360 sold 65,250 units. This year, the PS3 sold 61,111 units.
That's remarkably similar. So for now, I think it's fair to say that Sony's demand at $399 resembles Microsoft's, and the perceived value-add of Blu-Ray is somewhat negated by the quality of Xbox Live and the game selection.
There's one important point to add, though. In 2007, Microsoft's sales per week actually declined by about 16,000 from January to February. Sony's weekly sales, in contrast, increased by about 16,000 from January to February this year. So while the weekly rate looks very similar for the first two months, the momentum looks to be significantly different.
Here's a question: how the hell could Microsoft sell 91,000 fewer 360's this year than last, even with a $349 Premium and an extra week? Good grief, if you calculate per week sales, they're down 20%.
Microsoft is claiming "supply shortages." Are they high? This is the third year of the console, and they can't support sales in the U.S. at a higher level than 20% down from the previous year?
That's why I believe I was incorrect when I said manufacturing issues were the most likely suspect for the inventory problem. Not with these kind of shortages. I'm almost certain at this point that Microsoft will be introducing a new SKU within the next four weeks.
Like I wrote last week, this new SKU needs to include a larger hard drive (60GB) and a $50 price reduction to $299. If all they do is add a larger hard drive, that would belong to the category of "dicking around." If they add a larger hard drive and lower the price, though, then they're serious.
Oh, and if they have some kind of bundle that includes a larger hard drive and a game, but is still $349 for the Premium unit--still dicking around. Microsoft's hurt themselves by trying so desperately to hold onto their price point. They brag about how long the $399 price held, when all it really did was expose their fundamental lack of understanding of how consumer demand in the console market works.
I believe demand after a $50 price cut in the U.S. would settle at a level about 25% above Sony. Then it's Sony's move. And, if I remember correctly, two months ago I believed that the 360 would have be close to having that kind of advantage without a price cut, so Sony's position has improved.
Nintendo continues to own the world. Not much to report there. And Super Smash Brothers Brawl has an average review score of 95 on Metacritic, so it looks like another huge hit. Well, "looks like a huge hit" is misleading--according to Nintendo, it sold 1.4 million units in the U.S. in its first week. So "is a huge hit" is more accurate.
One note of discord (thanks Red): some consoles are having trouble reading the double-layer disc that holds the SSBB data, and Nintendo's explanation (disc drive lens contamination) seems dubious. However, they're offering repairs to Wii's with this problem, and there is no charge for either the repair or the shipping charges. Good customer service FTW.
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