Tuesday, August 12, 2008

Console Post of the Week

I thought this was pretty fascinating:
Speaking at the Edinburgh Interactive Festival this morning, former SCEE president Chris Deering predicted Sony and Nintendo will tie in the hardware sales stakes by 2011.

The EIF chairman presented figures he arrived at by triangulating Screen Digest and IDG data. He also took into account factors such as the growth of hi-def and the grey gamer market, the emergence of new game engines and increasing ubiquity of wi-fi access. He said the active installed base for hardware is set to rise from 316 million to 500 million over the next three years, with "two big mega-powers" leading the charge.

According to Deering sales of the DS and any future iterations of the hardware will reach 150 million by 2011, while the figure for Wii will be 80 million. He predicted the installed base for PS3 will be 70 million, and said for PS2 it will be 90 million and PSP will be 70 million. In other words, Sony and Nintendo will each have sold 230 million machines.

Deering said he believes the Xbox 360 and any sequels will experience "decent growth", predicting an installed base of 40 million by 2011.

Triangulation? Is that what people call it when they pull numbers out of their ass?

I'm not trying to pick on Deering--okay, maybe I am--but I've seen multiple industry figures and analysts following this line of thinking in the last few months. Somehow, they extrapolate from data which doesn't even exist yet to call the "race" a draw at a long-distant point in the future. True, Deering's draw includes the PS2 and the PSP, but he still believes that the Wii is only going to be 10 million units ahead of the PS3 by 2011.

Maybe we should take our own look.

Let's take a look at the numbers that do exist so far, because that seems like a reasonable place to start. The Wii has outsold the PS3 by roughly 2-1 worldwide since both systems launched twenty-one months ago.

For the countries where we have solid sales information--Japan and the U.S.--let's look at the total ratio of Wii sales to PS3 sales this year (Japan+US sales for each platform).

In June, when arguably the biggest game release of the year occurred for the PS3 (Metal Gear Solid 4), and no high-profile titles came out for the Wii, the Wii still outsold the PS3 by more than 3-2, and i'm willing to bet that July sales (when released) will show that the 3-1 ratio (or higher) is back.

Those five months represent a gap, in absolute terms, of over three million units.

So how in the world does anyone go from those numbers to the PS3 drawing nearly even at some point in the future? Really, they can't. They have to make so many assumptions at this point that are entirely unsupported by existing data that they might as well be saying that cows will live in trees someday. They're engaging in magical thinking, essentially.

For the sake of discussion, though, let's assume that somehow Sony did catch up. What would that look like?

Well, I don't know. I wrote up several scenarios, but they all quickly became so ridiculous that I scrapped them. Wait, here's one. If Sony drops the price of the PS3 to $199--by the end of this year--I could see them catching up.

Failing that, though--no chance.

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