Tuesday, October 20, 2009

Console Post Of The Week: The Effects of Price Cuts

First, a quick review of yesterday's numbers:
PlayStation 3--491,800
Xbox 360--352,600

Let's look at these in order of least impressive to most impressive this month.

Compare these two sets of numbers:
Set #1--205,000. 195,200. 347,200.
Set #2--202,900. 215,400. 352,600.

Almost identical, right? Set #1 is last year's July-September NPD unit sales for the 360, by month. Set #2 is this year's July-September numbers.

The 360 had a substantial price cut on September 5 of last year, so it can be argued that the $100 price cut on the Elite (resulting in the elimination of the Pro model) had a similar effect as last year's across-the-board price cuts.

That's surprising, as I believed the price cut (which I regarded as more of a product line revamping than true discounting) was going to have minimal effect. What we won't know until next month, though, is what effect Halo: ODST had on these numbers. If sales track in the same arc as last year, then October sales should be very similar to September.

Next up is Sony, and as I've said on more than one occasion, I like the new "Slim" and the $299 price, and so do consumers. In September 2008, the PS3 sold 232,400 units in the U.S. This year, they sold 491,800, which is a huge increase.

I don't know how much follow-through there will be in the coming months, but Sony finally has fortified their game lineup, and based on the September numbers, I expect them to outsell the 360 in the U.S. during the holiday season.

If you're wondering why I put Nintendo in the "most impressive" slot, it's because of this date: September 27. That's the day that the Wii dropped to $199, and if you work the numbers, it's easy to say that October looks like a huge month for Nintendo.

First, let's look at July-September unit sales from last year:

If you look at those sales on a per-week unit rate, it looks like this:

September sales don't show a significant ramp on a per-week basis.

Now look at July and August of this year (per week):

Based on those numbers, and adding the fifth week of September sales, it would be fair to have expected the Wii to sell in the 325,000 unit range.

Instead, the Will sold 462,800 units.

In other words, four days of the new $199 pricing resulted in an additional 125,000+ units.

That's why I think Nintendo is looking at a huge October. Absolutely huge.

Oh, I almost forgot: The PSP Go. NPD isn't splitting out sales for the Go (at Sony's request, I'm guessing, because the Go is a separate SKU for retailers), and it's a good thing, because the PSP "family" only sold 190,400 units in September, compared to 238,100 units last year.

There was clearly a bump from July-August sales this year (in the range of 15%), but that's so small as to be essentially a non-event.

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