Friday, February 23, 2007

Console Follow-Up

Here's the follow-up from the NPD post yesterday. The console installed base numbers I'll be referencing come from Videogame Charts.

There's an interesting disparity about the PS3 developing between the United States and Japan that I'm not sure anyone is noticing.

If you look at U.S. data and compare the PS2 monthly sales with the PS3, the PS3 after three months has about 75% of the installed base the PS2 did. That sounds very good, really, considering the price differential.

At first.

After that third month, though, from January-October of 2001, the PS2 sold an average of 370,000 units monthly. 3.7 million units in ten months. And remember, that was a from a smaller base of gamers back then.

If the PS3 can sell 2.5 millions units from January-October of this year, I would be stunned. I believe that without a significant price cut. 2.25 million units would be the absolute top end in terms of possibilities. That's roughly 60% of what the PS2 did.

Is that successful? I guess it depends on how you define "success." Sony can argue that with a system costing double what the PS2 cost, the PS3 is doing very well. I don't agree with that, but it can be argued.

In Japan, though, Sony has an utter disaster on its hands. Remember that Sony cut the price of the console before launch, so the Japanese consumer is not paying as much as we are. In spite of that, though, the PS3's installed base is 33% the installed base of the PS2 at the same point in its lifespan. That's a difference of 1.5 million units, and while part of that can be explained by the limited launch quantities of the PS3 (the PS2 sold over 700,000 units its first week compared to 87,000 for the PS3), a giant gap in weekly sales has emerged in the last six weeks.

As an example, look at the last six weeks of sales in Japan for the PS3:

Virtua Fighter 5, which was a high profile title, helped "boost" sales by about 8,000 units the first week of its release. After that, nothing.

Compare that to the corresponding six weeks of the PS2's lifespan:

The system with the PS2-like ramp in Japan is the Wii. 1.6 million and going strong. The PS3? Just under 700,000 in three more weeks.

Sony's other problem, besides price, is that exclusives for the PS3 are drying up. In the U.S., through the end of May, there's one non-Sony developed exclusive: Coded Arms Assault by Konami. The only other Coded Arms game came out on the PSP and has a 60.7% average review score at Game Rankings.


Sony does have Motorstorm, MLB 07: The Show, and Lair scheduled to come out before the end of May. But even though MLB 06 (on the PSP, anyway) was a superb game, and Motorstorm and Lair are both at least interesting, will any of those games move large numbers of people to buy the PS3? No. Does Sony have an equivalent exclusive to Halo 3 this fall? No. Is Sony going to fall further behind all through the year? Yes. Can they afford to?

If they want to be the dominant console of this generation, then the answer is "no."

Nintendo, meanwhile, needs to make sure they don't go all Nintendo on us and have a puzzling disconnect from reality. And they need a big hit in the next six weeks--maybe it will be Paper Mario, or maybe something else will surprise us. But they need another game besides Wii Sports, and they're going to need it fairly soon.

Microsoft? They're absolutely loaded. They have a huge lineup of software this year, and almost every month they have at least one AAA title coming out. And they need to, because considering the available games and the difference in price, they should be outselling the PS3 in the U.S. by a far greater margin.

This is fun to watch, and as soon as someone gets desperate, prices are going to start dropping, which will put pressure everyone else to respond. It's an ulcer if you're a console executive, but it's candy for us.

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