Console Post Of The Week: NPDs and Sony's StrategyFirst off, let's see the numbers again:
Xbox 360: 185,000
PlayStation 3: 180,800
Last year, for comparison:
Xbox 360: 175,000
PlayStation 3: 127,000
Sony appears to have gotten zero follow-through from God of War 3. Their sales continue to mirror, to a remarkable degree, Microsoft's sales last year (180,000 for Sony versus 175,000 for Microsoft last year). Given that Sony has only projected a 15% increase in PS3 sales for their new fiscal year, this is probably less surprising than it seems.
Wii sales collapsed, although there may have been inventory issues. Of note, however, is that there was also a tremendously steep dropoff last year at the same time (down 43% last year from March to April versus 50% this year).
Mathematically, since March is considered a five-week month by NPD for data reporting purposes, a 25% drop would be considered normal, so Nintendo's drop isn't as large as it first seems (but it's still large).
Here's something I'm surprised more analysts haven't noticed (or any analysts, really): that compared to a normal year, these numbers have been propped up by the unusually first-half heavy release schedule. I've never seen so many high-profile games come out in the first half of the year. It's unprecedented, and it means the fall release schedule isn't nearly as concentrated as it has been in the past.
I think that means we may not see as pronounced a holiday buying season this year. It would seemingly make sense that if publishers front load the year to a greater degree, then console sales would follow. To a minor degree, anyway, not a major one, because holiday seasonality mostly overwhelms any other influence.
I've been looking forward to Natal, to some degree, until I realized yesterday that I can't actually use it. I have a 360 in my study but not in the living room, and space is somewhat tight (only about 7' from the display to the wall). Plus, my drum kit is in-between (I raise my seat and look over). From what I understand about how Natal works, that makes my study a no-go, and I'm not going to move my drum kit or buy a second 360 for the living room.
That means nothing, individually, but I wonder how many other people are in the same boat.
I did some additional poking around in Sony's past earnings reports to gain some additional context to what I wrote last week about their product strategy for this fiscal year. I found a few things that surprised me, so let's take a look.
First, here's a graph of CRT and LCD sales since FY00:
It's interesting to note that Sony's LCD sales actually HAVE increased 60% annually before, but off a very small base. More recently, in FY08, they initially forecast 17 million units (a 70% increase), but later revised the forecast to 15 (final result: 15.2).
As I've mentioned on multiple occasions in the past (usually in reference to EA), it's one thing to have high-percentage growth off a small number. It's another thing entirely to continue that growth as the base number gets larger and larger. Sony is trying to project 60% growth off a 15-million unit base, and that seems impossible.
I also saw something interesting about the gaming division. Remember when I said that Sony was losing a ton of money this generation? Going back to FY02, Sony has (combined) lost over 230 billion yen in gaming. So they're net negative for the last eight years.
Oh, and before an eagle eye e-mails me, I'm not excluding FY00-FY01 for gaming on purpose. I found a slide in Sony's FY03 annual report that listed television shipments for FY00-FY01. I couldn't find profit information for those years for gaming on Sony's website (their earnings statements only go back to FY03).
Because I was curious, we stopped by Best Buy on Saturday night to take a look at Sony's current LCD lineup.
First off, I assumed that the 60% projected sales increase was going to heavily depend on consumers purchasing displays that are 3D-compatible. That's Sony's big push right now, seemingly.
They're not out yet, though. Roughly 15% into the fiscal year, they're not available. And the date on their website says "summer."
I did look at their existing LCD line, and unlike Sony in the past, they appear to be quite competitive in a pricing sense. However, their LCDs, in addition to being priced the same as their competitors, look the same, too, at least in Best Buy (which did at least a decent job of adjusting the displays). Nothing stands out for Sony versus its competitors, and I don't think the Sony brand carries nearly the premium image it carried years ago.
In sum, I'm still baffled as to how they'd project a 60% increase in sales this year. As far as I can tell, it's not happening, and they won't be close.