NPD April 2008 (Post #16)

Are MS playing their cards right though? GTA is out and hasn't shifted tons of units for any platform, despite expectations it would, while PS3 has crept up to match XB360 sales. At current trends, PS3 is growing faster in all markets than XB360 and will slowly overtake. Why aren't MS turning early lead into snowballing growth? That's what's supposed to happen, and AFAIK the theory behind the 'first to 10 million consoles wins'. That install base is supposed to drive interest and more sales. Is it just a matter of Wii upturning everything, and if not for Wii XB360 would be selling that strongly?

All markets besides US. Only 2 of 18 months did it beat 360 and only by a few thousand units at that.
 
At current trends, PS3 is growing faster in all markets than XB360 and will slowly overtake.
How slowly would that be, though? Looking at Sony's EOY financial statements they only expect a moderate growth in PS3 sales year over year until March 31 2009. Now, they probably decided to go conservative as they've come up short two years running, but any notion of an overtaking momentum would either require the 360 to stop selling at all (which obviously isn't happening as of yet) or it has to be seen in a multi-year perspective.

It's not really about winning or overtaking at this point it's about establishing enough of a foundation for "guaranteed" future profitability. In that regard, it seems like MS is almost there and are probably evaluating their strategy going forward based on that while Sony is looking to spend the next year doing so.

While they'd both obviously like to come out on top, whether the totals are 40-50M or 50-40M a couple of years from now are of preciously slim importance if you don't make money getting there.
 
iceberg187 in regard to the price cut in US, I'm sure that Ms is just opportunist there, Sony is just able to match them while the difference in pricing is only 50$.

And with Sony announcement lately, it's clear that MS will wait till october before cut the price in US.

Sony favors profit over marketshare, Sony isn't trying to match anything with the PS3

Not when they are losing $130 per PS3 You can only bleed so much.

Nor when the CFO clearly spells out that they consider profit first. They have to because they have all the OEM who signed up for Blu-Ray and they need to be able to make their money. If Sony continues to drop the price, no OEM would ever sign up to do a hardware initiative with Sony again.

http://seekingalpha.com/article/773...-earnings-call-transcript?source=yahoo&page=5

Operator

And your next question comes from the line of Colin Sebastian with Lazard.

Colin Sebastian - Lazard

Thanks for taking my question. I guess as a follow-up to Evan's third question, I was hoping you could maybe provide a little more detail on the linearity of sales of the PS3 on a quarterly basis, assuming that the production level is pretty stable at around 800,000 units a month, just looking at the implied guidance. And related to that, to achieve profitability in the game segment, is it necessary to maintain the current retail pricing?

Nobuyuki Oneda - Executive Vice President and Chief Financial Officer

Yes, we don't give the quarterly information, but I could give you some guidelines. The game business itself is pretty much the seasonally affected business. So therefore the second half of the fiscal year, we would sell more quantity than the first half. And the pricing itself, basically we don't disclose any pricing strategies for the coming year, but as I said that the... we don't aggressively adjust the price for the coming year. And to maintain the 10 million level of the quantity this year, I don't think that we really have to adjust the pricing so much.

Colin Sebastian - Lazard

Okay. But it sounds like on balance you are favoring the profitability over unit sales and market share, is that a fair characterization?

Nobuyuki Oneda - Executive Vice President and Chief Financial Officer

Yes.

Colin Sebastian - Lazard
 
While they'd both obviously like to come out on top, whether the totals are 40-50M or 50-40M a couple of years from now are of preciously slim importance if you don't make money getting there.

Yup.

And really, the Wii is something else. Sales wise and content wise. I wonder how long the machine will last though.
 
All this talk of the Wii "winning" this generation reminds me of a "Gone with the Wind" quote, "Frankly my dear, I don't give a ...." A more succint version of an above post. The following may come off a little harsh, probably because I just do not understand the draw. The same way I don't understand how what passes for "comedy" movies actually have anyone pay to see them rather than the other way around. Say the Wii grabs 120 million market share, so what? Does anyone really see it affecting the way MS, Sony, Sega, Bungie, Epic, Bioware, Turn 10, Konami, Capcom, EA, Ubisoft, etc. etc approach the industry? Maybe they try for a piece of that market share, but do our favorite core games get the Disney treatment as a result? Do we really believe that the Wii is some kind of turning point for the industry due to its success? (Warning: The following contains generalizations which are not applicable in all cicrumstances. - The simple fact that I felt the need to include that line bothers me.)

...

This is by far the best post I've come across so far in this topic.

*nods in approval*

Really nothing more to say to it. People declaring winners by comparing different markets should give themselves a good shake. The success of the Wii doesn't necessarely have to be in direct competition with the other consoles - not with what it's offering and the appeal it has going for it by people that are looking for something simpler, or simply different.
 
I think one factor here is that Microsoft has not made any huge price drops in the US yet, so I think they can probably afford to make one before sony does, since Sony already took a $200 cut, and even then still cannot sell more with BR and all the supposed superiority.
 
Horrible HD console numbers. Thoroughly disappointing. MS clearly needs a price drop. The execs up high missed a big opportunity to push a lot of consoles by stupidly sticking to high prices.

I don't think is so much horrible hd numbers, as the Wii is an extraordinary phenomenon and is just selling in numbers that no one can quite figuer out.
 
I don't think is so much horrible hd numbers, as the Wii is an extraordinary phenomenon and is just selling in numbers that no one can quite figuer out.

I think it's horrible in respect that GTA4 did not push much console units at all. I don't really blame anyone other than MS and Sony which stick to redicuously high h/w prices, especially MS. They have to be making a decent amount on h/w by now at current prices.
 
I'm surprised by the low numbers, but I don't think it's such a big deal. Microsoft and Sony have to work towards profitability. It might take a little while for prices to come down, but eventually they will. I don't think it would be a good idea for either to slash prices, and accept greater losses, just to appease people who want either console to "win" the console war. These guys are thinking about dollars at this point, and they need these systems to start becoming profitable.
 
All this talk of the Wii "winning" this generation reminds me of a "Gone with the Wind" quote, "Frankly my dear, I don't give a ...." A more succint version of an above post. The following may come off a little harsh, probably because I just do not understand the draw. The same way I don't understand how what passes for "comedy" movies actually have anyone pay to see them rather than the other way around. Say the Wii grabs 120 million market share, so what? Does anyone really see it affecting the way MS, Sony, Sega, Bungie, Epic, Bioware, Turn 10, Konami, Capcom, EA, Ubisoft, etc. etc approach the industry? Maybe they try for a piece of that market share, but do our favorite core games get the Disney treatment as a result? Do we really believe that the Wii is some kind of turning point for the industry due to its success? (Warning: The following contains generalizations which are not applicable in all cicrumstances. - The simple fact that I felt the need to include that line bothers me.)
...
Just wanted to say that this is an absolutely terrific post. I've had a hard time trying to describe my own feelings towards the Wii. I can see Nintendo clearing house in NPD every month, but I find myself not caring at all. I've got a Wii, I bought into the hype somewhat, but it's the least used system of my three by a huge margin. The only game I'd say I truly enjoyed on it was Super Mario Galaxy. Smash Brothers just isn't the same now that I don't live in a dorm, Mario kart isn't the same now that I'm not a child, etc.

I don't want to rehash the "is the Wii in a different market?" argument, but in my mind it undoubtedly is -- and I'm not in that market.
 
I'd love to see a poll done to determine the percentage of Wii owners that have previously owned another console and whether the Wii is the primary (most used) console in the household.
 
The Xbox 360 and the PS3 both continue to be irrelevant. I wonder what Microsoft and Sony will do next-gen to become relevant again.

The systems that carried GTA4 to $500 million in a week are irrelevant? COD4, Guitar Hero 3, Rock Band, Halo3 ... These games are all HUGE. The systems are not irrelevant. They're being outsold by the Wii, but they're not irrelevant. The brands are both strong.
 
The systems that carried GTA4 to $500 million in a week are irrelevant? COD4, Guitar Hero 3, Rock Band, Halo3 ... These games are all HUGE. The systems are not irrelevant. They're being outsold by the Wii, but they're not irrelevant. The brands are both strong.

You know it seems that 2008 is going to be the year of GTAIV, MGS4 (PS3), GoW2 (X360), and any other so called "Next Gen" game facing off against the dark horse that is Wii Fit.

You wanna know something scary?



I was at the gym in the morning and these two fine looking girls were talking about Nintendo Wii and some new game that they can lose weight or excercise with.

on topic I feel that GTA4 is more of a word of mouth impact this time so although April seems weak as the months go on things will go in favor of PS3 at least unless the $50 million MS spent to add hype to the 360 version and make people forget about RRoDs
 
The systems that carried GTA4 to $500 million in a week are irrelevant? COD4, Guitar Hero 3, Rock Band, Halo3 ... These games are all HUGE. The systems are not irrelevant. They're being outsold by the Wii, but they're not irrelevant. The brands are both strong.

During the N64/PSone era, games like Super Mario 64, Zelda: OOT and Goldeneye sold mountains of copies, but the N64 was still irrelevant. It was all about the PSone because it had the most sales. Unfortunately, the Xbox 360 and the PS3 are simply seen by the mainstream as the console that nerds, virgins, perverts (Soul Calibur 4 is apparently trying to appeal to this crowd :LOL:) and losers buy. Microsoft and Sony need to change this "perception" before the next generation begins. If they dont, they will fall into the abyss of irrelevance again.
 
You know it seems that 2008 is going to be the year of GTAIV, MGS4 (PS3), GoW2 (X360), and any other so called "Next Gen" game facing off against the dark horse that is Wii Fit.

You wanna know something scary?

I was at the gym in the morning and these two fine looking girls were talking about Nintendo Wii and some new game that they can lose weight or excercise with.

on topic I feel that GTA4 is more of a word of mouth impact this time so although April seems weak as the months go on things will go in favor of PS3 at least unless the $50 million MS spent to add hype to the 360 version and make people forget about RRoDs

There's no question the Wii is a huge success and it will be bolstered by Wii Fit. I might buy Wii Fit, or at least I'm going to go find a place to try it out. It's not a game, but it might be useful for me. I exercise a fair bit at home and I want to see what this thing is all about.

But does the success of the Wii make the playstation3/360 irrelevant? No. They're both successful products.

The April sales of GTA look pretty good to me. I think with the number of sales counted in April for GTA, it's a pretty good indication that the ratio between 360/PS3 will stay roughly the same.
 
During the N64/PSone era, games like Super Mario 64, Zelda: OOT and Goldeneye sold mountains of copies, but the N64 was still irrelevant. It was all about the PSone because it had the most sales. Unfortunately, the Xbox 360 and the PS3 are simply seen by the mainstream as the console that nerds, virgins, perverts (Soul Calibur 4 is apparently trying to appeal to this crowd :LOL:) and losers buy. Microsoft and Sony need to change this "perception" before the next generation begins. If they dont, they will fall into the abyss of irrelevance again.

I guess my definition of irrelevant is different. These consoles are selling well, just not as astoundingly well as the Wii, and they're moving a boatload of software. Wii is not going to poach the "hardcore" titles away from the HD systems.
 
I was at the gym in the morning and these two fine looking girls were talking about Nintendo Wii and some new game that they can lose weight or excercise with.

For the sake of this industry, I'd pray that this does not become the norm. *I* for one would hate to see either game developers solely chasing after the success of the Wii with simpler games that I don't give a damn about or the big players (Sony, Microsoft) reducing next gen gaming to something along the lines of Wii for a broader approach.

Good if Nintendo can bring non-gamers interested to Wii and their games. I would hate if that's what gaming is about to become though. If that ever happens, you can count one console gamer less.

It's already scary enough reading all these posts on people declaring Wii the clear winner this generation with games that I simply couldn't care about. It's even more scary when you come to think that developers *may* follow suit with simpler games (cheaper development) and larger install base for more potential sales. Is mainstream gaming as we know it today, about to become niche compared to a much larger demografic more interested in waving their hands to simple party games or looking to lose weight with Nintendo Wii Fit?
 
I guess my definition of irrelevant is different. These consoles are selling well, just not as astoundingly well as the Wii, and they're moving a boatload of software. Wii is not going to poach the "hardcore" titles away from the HD systems.

Well Wii managed to poach Monster Hunter 3 from PS3. Who knows maybe Resident Evil 6 will return to Wii. Looking at Japan I'm waiting for Square Enix to anounce the switch of FF13 from PS3 to Wii, much like FF7 from N64 to PSX. Over there PS3 is tracking worst than Gamecube at this stage with no console mover in sight.

But most likely Wii won't poach the hardcore titles, what it will do is reduced the number of hardcore titles from HD systems as 3rd parties shift resources from HD systems to Wii.
 
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