Tuesday, September 15, 2009

Console Post Of The Week: Danger, Will Robinson

Unfortunately, that Will Robinson reference has nothing to do with this post, although I am quite fond of it.

First, for review:

Also for consideration:

Please remember that the first point on the graph appears after a console has been on the market for a year (to accumulate twelve months of sales).

1. The Wii badly, BADLY needs a price cut. Rumors abound that it will be $199 shortly. It needs to be. From the historical information I have, consoles never rebound from the fishook in terms of twelve month moving sales averages--it usually indicates a slow and steady decline going forward.

It would not surprise me at all if the Wii is third in the U.S. in September sales if no price cut is announced.

2. Based on year-to-date data, it's a fair estimate that the PS3 would have sold in the range of 120-130k units in August without the price cut. With the announcement coming roughly two-thirds of the way into the month, and retailers selling the Slim almost immediately, the August numbers work out something like this, I think:
Aug 1-Aug 20: 80,000 units
Aug 21-Aug 31: 130,000 units

Sales went up over 3X for that short period. Sure, Gamestop had at trade-in deal, and the inventory swamp (to some degree) was being drained to prepare for the new units, but it's still quite impressive. A few weeks ago, I mentioned potential September sales as in the 330,000 unit range (if the effect of the price cut roughly matched the effect of the $299 to $199 PS2 price cut in 2002), but that may wind up being low.

So Sony is finally doing a large number of things right. This console is never going to match what the PS2 did in terms of sales (the PS3 has never gone over 4 million units sold in the U.S. in a twelve-month period. The PS2 didn't dip BELOW 4 million until over seven years after it launched, which is just incredible), but at $299, it's finally relevant.

Cue cheering after Sir Robin's minstrels were eaten.

3. Microsoft has, rather remarkably, continued to push up the 12-month moving average of sales of the 360 for almost four years, and I think they'll continue to do so with the recent price cut. Halo: OCD (that would be a good title) is coming out this fall, and the compare for last year isn't impossible by any means.

I do think Sony is lining up titles (Uncharted 2, God of War III, Final Fantasy XIII) that should be an enormous source of concern for Microsoft, and they have to respond strongly.

This is when it starts to get fun in terms of watching sales numbers. Instead of sitting around saying "Brand X needs a price cut" every month for a year, we're at the point where everyone (including the Wii shortly, presumably) has already had substantial price cuts. Now it should be quite a free-for-all.

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