Wednesday, July 30, 2008

Console Post of the Week: Earnings

Everyone released earnings in the last week: Microsoft, Sony, and Nintendo. Let's take a look at what's interesting.

First off, Sony said that they shipped 1.56 million PS3s to retailers in the last quarter, while Microsoft said they shipped 1.33 million.

Nintendo? 5.17 million. Holy crap.

Again, that's all shipped to retailers, not necessarily sales to consumers. However, let's do some poking around by using the consumer sales numbers we do know.

U.S. sales in the last quarter (NPD):

Japan sales in the last quarter (Media Create):

Totals for the two regions combined:

No, the 360 doesn't need a price cut. Not at all! It's just going to continue to wallow while Robbie Bach touts the addition of another 172 features to Xbox Live:
And I said earlier that the goal in the gaming business was to expand our audience and to reach out to new customers and to new people. And one of the ways which we just announced that we're going to do that is we really are going to create a whole new interface for Xbox. And you see here a graphic representation of multiple screenshots of what that new interface will look like. This is an interface that will be more comfortable for casual gamers, for people who aren't into serious hard-core games, and at the same time will be a great way for serious gamers to have avatars, to create a social experience, to dig deeply into Xbox Live and really reach into the depth that is the Xbox experience. So we are adding avatars, we are adding something called Xbox Live Primetime, which is basically television shows brought to a gaming environment. And the idea that you could play a game like “1 vs. 100” on Xbox Live with other Xbox players is actually a very rich and powerful idea, and we're going to bring that to market later this year.

We've also announced an arrangement to expand our video offering with Netflix. We've announced arrangements with NBC, Universal, and Constantin internationally to expand that in Europe, again expanding the breadth of the customers we can reach and really reaching out to those new audiences.

That's excellent, because the reason you guys are puking in terms of consoles sold has everything to do with millions of potential customers waiting until you had a deal with Netflix and dumbed down an interface that a six-year old could already navigate and nothing to do with the price of the unit.

That was an aside.

So if we look at how many units are "missing" (shipments reported - known sales in U.S. and Japan), here's what we get:

Hmm. So the PS3 outsold the 360 by over 60% in the last quarter in Japan/U.S. combined, but Microsoft has 150,000 more units "missing" for the rest of the world than Sony? Either Microsoft is doing much better in Europe than is generally being reported (and Sony is doing much worse), or Microsoft is stuffing the channel again (which would be odd, because at this point, there should be somewhat of an inventory equilibrium reached).

Either way, though, both Microsoft and Sony are doing incredibly poorly in terms of unit sales. Microsoft's June sales in the U.S. were only 22,000 above last year, when every analyst was screaming for a price cut. It's hard to understand why they're not doing that now.

The Wii? In the glory years of the PS2 (2002-2005), here were the January-June sales totals in the U.S.:

The Wii from January-June this year? 3,483,300.

That's right: the Wii sold 39% more consoles in the U.S. in the first six months of 2008 than Sony did in the best year for the PS2. That's incredible. Analysts still don't seem to be saying that Wii sales are "historic," but the numbers need to be put into proper context. What we're seeing is absolutely unprecedented.

Does Nintendo have any exposure at this point? I don't see how. I'm not thrilled about their first-party lineup this fall, to say the least, but I think we're going to see third-party support improve significantly (the recent release of Order Up, which is an excellent little game, is a good example). They're still selling everything they make, there's still unfilled demand, and they still haven't needed to even think about reducing the price (and anyone who says they need to is crazy).

Nintendo as the juggernaut and Sony and Microsoft as two also-rans. Who would have believed that two years ago?

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