Console Post Of The Week (part one)This is going to be such a long post that I'm going to split it up over two or three days.
To frame the December NPDs, let me use an excerpt from the post about November's NPDs:
Here's the rough scaling rule:
So if November more accurately reflected ongoing demand, December sales would be in the 1.25 million range, and Microsoft would breathe a large sigh of relief. If October was closer to "true" demand, then December sales would be in the 950,000 range.
And this about Sony:
November was a lower-performing number, based on seasonality, than October, so which number is more reflective of ongoing demand? The good number for Sony (multiplying October) is about 1.1 million units. The bad number (multiplying November) is about 1.05 units.
I screwed that "good number" up--it's 3.75*320,000 (October), which is 1.2 million, not 1.1.
Okay, so now that we have some basic context for seasonality, let's look at the numbers:
Both Sony (+160K) and Microsoft (+60K) exceeded their "good demand" numbers. Nintendo, though, blew their number out to an absolutely incomprehensible degree: over 6x their September/October number, and 3x November. Context: Sony sold 2.7M PS2s in December 2002, the previous largest month on record.
Look, people can stir up all the haterade they want about the Wii (some of it entirely justified), but it outsold the PS3 and the 360 combined by over a million units in the biggest month of the year. Oh, and from October-November in the U.S., the Wii sold 5.6M units. The PS3 and 360 each sold about 2.4M.
Wait--let's just look at the whole year. Wii 9.59M units, 360 4.77M, PS3 4.33M. That's more than both consoles combined again (and it was not a great year for Nintendo).
The last three years? Still true.
Seriously, how much of an ass kicking does this have to be before people stop using the word "fad"? How insulting is that?
Yes, maybe more "casual" gamers prefer the Wii. Yes, there's tons of crap software. Yes, Nintendo has made some very strange decisions in the last eighteen months. But in a business sense, here's the word that matters: BANK. Nintendo is bank, while Microsoft is slightly in the hole for this generation and Sony is still in the San Marinas Trench.
Speaking of Sony, that tidal wave of momentum the $299 console was supposed to create has turned into last year's 360. Compare the last three months of 2008 (360) with the last three months of 2009 (PS3):
Oct 371K 320K
Nov 836K 710K
Dec 1.44M 1.36M
Want to know what PS3 sales will probably be in 2010? For the first nine months, at least, just use the 360 numbers for 2008--about 1.0M consoles in the first three months, about 600K in the next three, and about 750K in the third quarter.
That's what Sony's big price cut got them, and I promise that it was far less than Sony expected, at least in the U.S. In Japan, the price cut seems to have a much bigger effect.
Yes, God of War 3 is coming soon, and that's going to sell some consoles. Sony's problem in the U.S., though, is that the half-life sales effect of all these big moments seems to be much shorter than expected, and have been since the console launched.
But wait, you might be saying. Microsoft and Sony are going to absolutely EXPLODE in fall 2010 because they're both putting out their long-awaited motion controllers.
I have just one question for you: long-awaited by whom?
That's what I believe is the cautionary tale for 2010: that motion control is not necessarily a slam dunk for Microsoft and Sony. Yes, I left out Q4 in that 2008/2010 projection for Sony, because it is a major hardware introduction, but I don't think I buy the general argument. The reasoning seems to be that since Nintendo's solution is so "primitive", then people should really love "real" motion control, right?
Doesn't that sound suspiciously like a version of the same general argument that Microsoft and Sony have been using about the Wii since it launched?
Plus, so many people have the Wii now that the Wiimote, for many people, IS motion control. It's the standard. So even though 360/PS3 motion control might be more impressive in a technical sense, they're still competing with "the standard."
I hope I'm wrong. I hope that everyone is going crazy this fall with motion controllers from everyone, and I hope they're all superb and the game support is breathtaking and awesome.
I just don't think so.
Let's say a parent has to decide in November of this year what console to buy, because let's face it, parents drive these big holiday numbers. They could buy a PS3 or 360 and pay an additional cost to get the motion controller solution for either console, which means they'll be dropping $300-$400, roughly, depending on the console and motion control hardware.
Or they can buy a Wii for $199, with a pack-in game that perfectly demonstrates why motion control is potentially so much fun, a pack-in game that their kids have already been playing over at their friends' houses for months.
See the problem here? Motion control is very cool, and it will be heavily, heavily promoted by Microsoft and Sony this fall, but until it's included with a new console for free, I don't think it's going to generate nearly as many new console purchases as analysts are expecting.
Of course, Nintendo periodically goes into a period of self-sabotage, and it seemed like they were headed in that direction in the last twelve months, but there was clearly a mountain of untapped demand at $199, and I don't think that mountain is nearly exhausted, even now.
Tomorrow: why this console generation has extended itself and updated 12-month moving average sales graphs.