Wednesday, December 16, 2009

Console Post Of The Week: November NPD

First off, let's see the raw numbers again:
Xbox 360--819,500
PlayStation 3--710,400
PlayStation 2--203,100

Like I said on Thursday, those numbers were a complete surprise to me, and here's why. Historically, September and October have been very similar months in terms of total numbers (even though September is a 5-week period and October is 4 weeks). Look at the total September sales versus October sales for the PS3, 360, and Wii in the last 3 years:

Very similar in total, right?

It would be fair to suspect that this is a trend I created by just choosing those consoles, but if you include all consoles back to November 2001 (as far back as I have NPD data), here are the totals:

Same result. It's not identical, but I think it's fair to say "same trend." Sure, there are price cuts and promotions and all kinds of things going on during the holiday season, but as a general rule, "September looks like October."

This is one reason why the October numbers, for Microsoft, were so shocking--sales dropped by 29% from September. Yes, this wasn't unprecedented--sales dropped even more from September to October 2007--but that was easily explained by Halo 3.

Sony's sales dropped even more, but again, the launch of the $299 Slim on September 1 was a reasonable explanation. The 491,000 units in September was a price cut phenomenon, and it wouldn't be unreasonable to see the 320,600 units in October as being more representive of ongoing demand.

Microsoft, though, simply had no explanation for October. Not having an explanation is generally a very bad sign.

So let's move on to November, and the obvious question is how November sales compare to September/October. This is a trickier comparison, because you can't include Novembers where no corresponding September/October data existed--in other words, you have to exclude launch months for consoles that launched in November. If you do, that, though, and create an apples-to-apples comparison, sales in November are generally two and a half times October sales.

Obviously, that's not an absolute number, but it's a very useful guide in a general sense.

This year, PS3 sales in November were 2.21x October's sales. Wii sales were 2.48x. Microsoft was 3.28x.

However, 360 sales were only 2.32x September sales, which raises this question: which month was the aberration?

We should find out with December's numbers, at least theoretically. 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.

That would be trouble.

Several people e-mailed with their explanations for the surge in 360 sales. The first theory advanced was that people were replacing their banned consoles (the number of bannings is in dispute, but claims were as high as one million). An anonymous source, who told me he frequented a well-known torrent site, said that he knew a flood of people who bought $199 Arcade units in November as replacements for their banned consoles so that they could play Modern Warfare 2 online.

The second theory advanced is that the special edition Modern Warfare 2 console sold a ton of units, and that's not unreasonable, given the horrifically high sales of MW2 (I say "horrific" because it's guaranteed to spawn an unholy number of hyper-realistic, modern warfare games, and that is a very bad thing, which is a column for another day).

Both of theories are impossible to quantify, but if either one is true, then there should be a larger dropoff from November sales than would generally be expected, which would lend credence to both of them (although I think the second theory is far more plausible than the first).

Sony, to some degree, has the same questions. 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.

One last note, and this time, it's about software. Activision is in a very, very interesting position with regards to DJ Hero and Tony Hawk Ride. In a sales sense, both of these games have been absolutely HUGE busts, so far below acceptable numbers for an Activision game in the "milk the franchise cow" era that they don't even register on the rader.

Activision is no longer in the "game nurturing" era, so what do they do now? They're still claiming that they're putting out a second DJ Hero game, but based on sales of the first, they're looking at a franchise that might never reach a million in unit sales per game. Based on their business model, aren't they just going to pull the plug here?

Same thing with Tony Hawk Ride, at least with the skateboard controller. In addition to terrible sales, though, THR also got incredibly bad reviews. Again, don't they just pull the plug here? Not the franchise, necessarily, but the focus on the new play style using the separate controller.

Instead of concluding with the utterly lame "only time will tell," I'll just stop here and say that I'm looking forward to the December numbers.

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