Wednesday, May 07, 2008

Console Post of the Week: Across the Pond

This week, we focus on Europe, thanks to some help from you guys.

Yesterday, SCEE President David Reeves had this to say (thanks Eurogamer):
"I am delighted to be able announce today that we have sold more PlayStation 3s throughout Europe than Xbox 360 - even though they launched sixteen months before PS3," he said.

Referring to Xbox 360, Reeves said Sony's machine has been outselling its closest competitor since October 2007, despite the latest price cut. He offered no comment on sales of the Wii.

Microsoft hasn't rebutted either of these data points, and if they were inaccurate, I'm sure they would have been howling immediately.

So in spite of being cheaper and having a far deeper selection of games, and also having being in the market over twice as long, Microsoft is now behind Sony in Europe.


Also, according to Chart Track numbers, here were Grand Theft Auto IV sales in the UK for the first five days:

I don't have information on cumulative installed base in the UK, but I strongly suspect that the 360 is still ahead in the UK, at least marginally, and if so, these numbers are more bad news for them. That's not much of a gap between a dedicated gaming platform and a "media center" (and it's a much smaller gap than I expected).

Let's take a more detailed look at a specific country--in this case, Germany, thanks to DQ reader Julian Dasgupta.
Since you're always interested in some numbers from Europe, here are some Q1/2008stats from Germany (Media Control):
Software sales (console): 149m Euros (+41% compared to Q1/2007)
Software units (console): 4.3m (+40%)
Marketshare per platform (in terms of software units/sales):
NDS: 39.3%
PS2: 25%
Wii: 11%
PS3: 8.9%
Xbox 360: 5.6%

The 360 has pretty much the same marketshare it had a year ago. Considering the overall growth of the market that means that they sold more units, but they can't be too happy about the numbers given the headstart they had. Sony certainly has more momentum over here, same for the UK and other countries if you see the monthly sales.

I'd say there's not a single explanation for why Microsoft is having a hard time in Europe. Sony simply happens to have a very established brand and the PS2 did exceptionally well in Europe with Sony shipping almost the same amount of units over here as they did in North-America. Maybe the reputation of the 360 also still is too 'PC-ish', which means that primary PC gamers consider the PS3 (and the Wii, of course) a better secondary system due to the different software library.

Microsoft also lacks software like EyeToy, SingStar or Buzz!. Maybe it's hard to understand on the other side of the Atlantic Ocean, but these are very important franchises over here and helped Sony reach beyond the typical audience. SCEE made these brands as big as they are today and it'll probably pay off in the long run.

I know several people who didn't own a new console and recently bought a PS3 for GTA IV. They knew that the 360 version will get exclusive content, but when they had to decide between being able to play the coming episodes or being able to watch some of these new fancy Blu-ray movies on their shiny new HDTV sets or via beamer, they all found the 'movie option' to be more appealing.

I'm totally baffled by SingStar and EyeToy and Buzz!, so Julian's comment about it being hard for us to understand the appeal of these games is true, at least for me. Certainly, Microsoft appears to understand, since they promoted Scene It? fairly heavily, but understanding the appeal of a genre and making a game that appeals to fans of that genre are not the same thing.

We also have information from the UK, thanks to reader Frank McGlade, who sent information from a Games Group investor presentation. Based on Chart Track information (UK only), the 360 was roughly 25% ahead of the PS3 at the end of 2007 in terms of total sales revenue of hardware, software, and peripherals.

Given that the 360 has been in the UK for 24+ months at the end of 2007 compared to 8+ for the PS3, though, that's a thin lead.

I think it's safe to assume that Microsoft's strategy versus Sony a year ago was something like this: dominate in the U.S., draw in Europe, and lose badly in Japan. Actually "losing badly in Japan" wasn't a strategy, really, just a reality (although they've done excellent work attracting premier Japanese developers to the platform).

A year ago, that seemed like a winnable vision. Now, it seems to be in ruins, even though Sony is still throwing up all over itself in Japan (51,053 units in the last five weeks). Microsoft can still hold off Sony in the U.S., but Europe seems like a big loss, and even in the U.S. they made an extraordinary blunder with inventory in the first three months of 2008.

Shockingly, even Sony's executives seem to have rediscovered their grip on reality. Look at what Kaz Hirai had to say to Next-Gen:
"I think it's fair to say that the first year of PlayStation 3 was somewhat a difficult one," said Hirai at Sony's PlayStation Day in London. "There were some teething problems, success from our competitors, and our customers were a little underwhelmed by the range of titles that were available.

"This is something that we're very much aware of, and something we were always confident we could overcome."

Holy crap--a Sony executive admitting that they had problems (in the past tense, of course, because they'd never admit they still have problems). What's the world coming to? Where are the delusional space travelers that gave interviews in 2007?

Oh, wait:
"We are very confident PS3 will have at least a 10-year lifespan, and that the power under its casing and the potential for improvement in all areas is simply astonishing."

Ah, there we go. Eight miles high.

Next week: what Microsoft can do to regain the momentum.

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