Wednesday, April 22, 2009

Console Post Of The Week

First off, the March NPD numbers:

And March 2008:

That seems to be a fairly clear demonstration of the power of price cuts. Three systems without price cuts in the last twelve months--all down by at least 15%. The system with the price cut--up over 25%.

It's not quite that simple obviously, but it's also not nearly as complicated as some people claim. If the price on a console is cut, then more people will buy that system. When that number flattens out to the same number that were buying before the price cut, then it's probably time to cut the price again. The exception to this would be if a price cut increased sales, but not to the desired level, in which case there would be no satisfactory peak to trough pattern to begin with.

Let's look at the first quarter compared to last year:
360--up 37%
Wii--up 42%
PS3--down 13%

In other words, don't expect a price cut for the 360 or the Wii in the next six months, because unless sales suddenly plummet, there's no need.

In Sony's case, they're third and sales are dropping. It's inconceivable that Sony wouldn't be announcing a price cut soon, but then, it's inconceivable that they haven't already announced one, so who knows?

Plus, and this to be quite worrisome, the contribution of Killzone 2 to PS3 sales appears to be negligible. Every time Sony touts a game as a system seller, it winds up not doing much, and even worse, the effect of both Killzone 2 and MLB 09 The Show should have been reflected in March numbers.

April could be pretty bleak for Sony. I wouldn't be surprised if PS3 sales are below 160,000, which would be awful.

Oh, and this should give you an idea of how scattered and batshit insane Sony has become: Peter Dille did an interview with Gamasutra where he said this:

We believe that the family that's been involved in Wii gaming -- having a PS3 as the centerpiece of their living room is a great thing that the whole family can enjoy much the same way that you can enjoy Wii but perhaps on steroids; it does so much more."

Seriously, I'm not kidding. I couldn't even make this shit up.

[Random news note which I shouldn't have placed here, but since I did, I'm just going with it:
Chris Kohler of Wired posted the news that Wii Motion Plus is going to be bundled with Tiger Woods for an additional $10. That seems like a good move for both Nintendo and EA.]

Okay, now let's look at console sales using the 12-month rolling averages I introduced for Japan last week. We're going to look at the same data, but for the U.S. instead of Japan.

I'm going to discuss next week how the U.S. graphs compare to Japan, but as a note, this graph begins later because I have twenty-two more months of data for Japan. Oh, and one brief teaser: it's interesting that the trough for the U.S. between generations is so much more shallower than it is for Japan.

Okay, now to the invidual console numbers, and I'm skipping the Scooby-Doo mystery graph this week and getting right to the unmasking:

Two things to note before we do anything else: one, I think the utility of this graph is going to improve significantly going forward (as we get more data over time), but I wanted to introduce it now, because I think it's still interesting. Two, you'll notice the funky flatline for the PS2 for twelve months. That's because NPD wasn't publicly disclosing their numbers until twelve months after the PS2 launch. So there's a twelve-month data gap for the PS2 compared to the other systems, and I wanted to show that as obviously as I could.

Here's something I hadn't realized: at this point in its lifespan, the PS3 is behind the original Xbox in terms of installed base in the U.S. Well behind, as in over 800,000 units. And if you have any questions about why the PS3 is not and will never be the PS2, just look at the graph. That chasm isn't going to bridged.

Also of note, and good grief this post is running long, is that the Wii craze has never stopped in the U.S. Those rolling twelve-month numbers are insane. However, we have just seen the number taper off for the first time (that previous dip was entirely supply-related).

My apologies for the sloppiness of this post, because it's all over the place. I'm still a bit under the weather (although Eli 7.8 is making a comeback, which is great).

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