NPD January 2009

[DuckThor Evil]

Ag
I think 'flat out crazy' is a bit extreme. We know how much emphasis Sony have placed on LBP. We also know it's probably the best download revenue stream for any game. There could well be a specially good deal for MM here. We don't know, but we can't rule it out out-of-hand. Consider also that the developer only gets a small cut. A big chunk of the stand alone price goes to retailers and the publisher. The amount MM would have to be paid per bundle wouldn't need to be extravagant to match retail takings.

Ok flat out silly then

It would be pretty extravagant imo, when you factor in that Sony is losing money with every PS3 sold, so basically they would be making their losses significantly bigger if they hand out something like 15£ to the developer out of already a negative number. Compare this to a full price retail sale, where Sony would have net gain of around 15£. Do you really think it's possible that Media molecule or Sony is in such a position that a deal like could actually have been negotiated as that would have been an absolute miracle deal for MM. If Media molecule got more than 5£ per bundled title I'd be surprised.

edit: that 15£ is just a number I came up with, whether it's 13 or 18 doesn't really matter.

 

[mrcorbo]

What is the long-term horizon in your mind then? People need to really grasp that the losses of the PS3 gen have almost wiped out the *entirety* of the profits of the preceding two; the PS1 and PS2 eras. I think if they were to ignore short-term profitability, it would effect their long term potential for existence!

I remember when you first posted that about the losses and it's still pretty amazing to contemplate. So WRT to price cuts is it really that they can't, or is it that they won't? The distinction I'm making here is that can't indicates that they would if they could, while won't indicates that they could but don't see any advantage to be gained from it. Determining which is the case would give some insight into the corporate mindset when it comes to the PS3.

If you really beleive that they can't, I'll take your word for it.

As for the 360, it won't be profitable this gen on its own terms either, let alone make back even one cent of what the XBox brand-building effort cost.

I figure the latter is probably a given, but are you so sure about the former. Especially if this generation is extended as Sony and MS are claiming it will be.

 

[Shifty Geezer]

Compare this to a full price retail sale, where Sony would have net gain of around 15£. Do you really think it's possible that Media molecule or Sony is in such a position that a deal like could actually have been negotiated as that would have been an absolute miracle deal for MM. If Media molecule got more than 5£ per bundled title I'd be surprised.

A full retail sale would be worth more to Sony than £15. £15 per bundle is still cheaper than a £50 price cut. The lossiness of the PS3 hardware is definitely coming down, possibly around break-even. And we also don't know how much a developer gets for each copy sold. For MM, to have their software included in lots of PS3's sold and lead to DLC is probably more profitable than hoping those PS3 buyers buy LBP individually.

 

[nelg]

Viability is measured in the ability to make money though, so I don't think we'll be seeing price cuts for the sake of future consoles.

For Sony, yes. For developers no. Sony's profitability comes at the expense of sales. Smaller sales is less potential revenue for developers. A tragedy of the consoles, if you will.

 

[DuckThor Evil]

For MM, to have their software included in lots of PS3's sold and lead to DLC is probably more profitable than hoping those PS3 buyers buy LBP individually.

Yes definately, which is a large part why they won't be getting the full pay per title from Sony. By bundling MM get's way more volume which offsets the less profit per unit thingy... and in return Sony get's to add value cheaply to their package. It would not be a well balanced deal if MM get's the same amount of money per bundled title compared to a full price retail sale and despite it being cheaper than a 50£ price cut, it would still be a bad deal to Sony.

 

[BadTB25]

MM would also have more of an install base to sale DLC to, so it may be considered a win from their end.

 

[eastmen]

Originally Posted by Carl B
As for the 360, it won't be profitable this gen on its own terms either, let alone make back even one cent of what the XBox brand-building effort cost.

whos to say. The 360 could be around for a long time and there is still plenty of cost cutting left. 45nm and intergrating the cpu and gpu together. It will most likely see a revision ala the pstwo and psone.

The system could continue to sell well into the next gen and could create plenty of revenue. We really don't know how bad the losses for the 360 are considering most of its life its been bundled with the zune and other products.

Attach ratios say otherwise. We've seen attach ratios for PS3 and XB360 tracking similarly, about 5-6 over a year. I saw this link just now on the forum, but can't recall where!

As for PS3 WAW at less than Skate even, half of XB360's 235k WAW's is ~115k. Through in a bit of market variation, PS3 shooter fans having perhaps just bought R2 or saving for KZ2, and this doesn't look particularly removed from what I'd expect.

As opposed to the 360 in which gamers just bought gears 2 and l4d along with saving for upcoming titles ?

I don't really get this thinking , if anything i think cod ww would have sold less on the 360 due to the competition.

 

[Silent_Buddha]

Attach ratios say otherwise. We've seen attach ratios for PS3 and XB360 tracking similarly, about 5-6 over a year. I saw this link just now on the forum, but can't recall where!

As for PS3 WAW at less than Skate even, half of XB360's 235k WAW's is ~115k. Through in a bit of market variation, PS3 shooter fans having perhaps just bought R2 or saving for KZ2, and this doesn't look particularly removed from what I'd expect.

Except MS just said they have an attach ratio for games of between 8-9. Even being generous and saying PS3 has a 6 attach ratio that's still quite a difference (25% less).

Granted people could have gone for R2 instead of WaW, but the same could be said for Gears 2 in relation to WaW on X360. Or even more relevant, Left 4 Dead instead of WaW. Or are you impling that X360 owners have more disposable cash and thus can afford more games simultaneously?

As well according to NPD WaW at best may have sold 112k which is close to half. Enough that it can match installed user base. However nothing else for PS3 comes even remotely close to half of Left 4 Dead or Skate 3.

And since we don't know numbers for the 11-20 spots it's hard to say if it's even possible anything on PS3 came close to half of Gears 2 or Fallout 3.

Depends on the exclusive, surely? Not every exclusive sells well on any platform. The real problem would be if a cross-latform title sells far, far better on another platform. eg. If Valykiria Chronicles wasn't exclusive and sold relatively 5x as many on XB360, that'd point to PS3 being a weaker platform for this game. But as it is, we can't look at VC on PS3 and say 'PS3 owners aren't buying exclusives' when it's just as likely that the reason is gamers regardless of platform just aren't buying this game. I point to Okami as an example. An exclusive onPS2 it didn't sell well, and neither has it sold well on Wii.

That's my whole point though. That PS3 exclusives just don't seem to be resonating with the masses (except for rare cases such as MGS4) as much as either X360 exclusives or past PS2 exclusives. That combined with the high price of PS3 is making the battle for Sony an even tougher one. The PS3 may be overpriced compared to the competition, but it's not a bad system is any way shape or form. Well unless you consider cost to build = overpriced = bad system.

As long as relative figures are about right, which they generally have been the past year or so AFAIK, PS3 represents a respectable 33% increase in potential market in NA, and more in the rest of the world, which is why developers continue to produce cross-platform titles.

Except that it's only in certain months where PS3 appears to track at 50% of the equivalent X360 title. Skate 3 for example right now isn't even in the top 20, which probably means it's sold far less than 100k units. And that's the number 2 selling PS3 title. So top 3 X360 titles sell Approximately 700k units. While top 3 PS3 titles sell around 200-250k units. That's a huge attach rate discrepency. I mean Left 4 Dead by itself sold almost 250k units.

I wonder if sales of Sony exlusives do significantly better in Europe. It's too bad they don't have an accurate and consolidated tracking system for Europe.

Regards,
SB

 

[obonicus]

As well according to NPD WaW at best may have sold 112k which is close to half. Enough that it can match installed user base. However nothing else for PS3 comes even remotely close to half of Left 4 Dead or Skate 3.

And since we don't know numbers for the 11-20 spots it's hard to say if it's even possible anything on PS3 came close to half of Gears 2 or Fallout 3.

On Skate 3, it's the peanut gallery problem again. We're looking at incomplete numbers, a partial picture and trying to draw meaningful conclusions from them. But we don't even know what number 20 is. Is it 50k? In which case, yeah, Skate 3 really underperformed on PS3. Is it 100k? In which case Skate 3 PS3 might've done 50% of the 360 version and we wouldn't know. What's half of Gears of War 2? 50k? Maybe Resistance 2 did sell exactly that many copies. Your guess is no more valid than anyone else's, and this whole line of argument becomes rampant speculation.

All the rest, essentially what people are reiterating saying is that the PS3 has about half the install-base of the 360. And we certainly get that. We really do. We get it.

 

[mrcorbo]

Except MS just said they have an attach ratio for games of between 8-9. Even being generous and saying PS3 has a 6 attach ratio that's still quite a difference (25% less).

The average 360 owner (as of the latest NPDs) has owned their console for 5 months longer than the average PS3 owner. That completely accounts for the difference in attach ratio.

That's my whole point though. That PS3 exclusives just don't seem to be resonating with the masses (except for rare cases such as MGS4) as much as either X360 exclusives or past PS2 exclusives.

Partially true. The average PS3 exclusive and the average 360 exclusive have very similar attach ratios, actually. The problem is that the 360 has had more exceptionally selling exclusives than the PS3 which has really just had the one.

The apparent difference in the how the overall lineup of exclusives are selling, though, is really just a function of the difference in install base. Marginally successful titles still chart on the 360. Not so on the PS3.

That having been said, the output of Sony's first-party studios was supposed to be a key advantage for them this gen. So far, this advantage has not materialized. At least not from a sales perspective. By contrast, Microsoft's smaller first-party and larger second-party strategy has already generated several blockbuster titles, not just as measured in raw sales, but also by attach rate.

 

[Silent_Buddha]

On Skate 3, it's the peanut gallery problem again. We're looking at incomplete numbers, a partial picture and trying to draw meaningful conclusions from them. But we don't even know what number 20 is. Is it 50k? In which case, yeah, Skate 3 really underperformed on PS3. Is it 100k? In which case Skate 3 PS3 might've done 50% of the 360 version and we wouldn't know. What's half of Gears of War 2? 50k? Maybe Resistance 2 did sell exactly that many copies. Your guess is no more valid than anyone else's, and this whole line of argument becomes rampant speculation.

All the rest, essentially what people are reiterating saying is that the PS3 has about half the install-base of the 360. And we certainly get that. We really do. We get it.

Number 11 on the list has at most 112k. While I'm sure it might be possible that number 11-20 all sold more than 100k, it's pretty unlikely. Likewise we don't now if Skate 3 for PS3 would land at number 21 or farther down the charts.

Yes, I agree, making absolutes from incomplete data isn't entire accurate. Even considering that. We know that the top 3 X360 titles made close to 700k units. While at most the top 3 PS3 titles would account for 336k units (if every single title between WaW and LBP (number 3 PS3) sold exactly 112k units). In that even more unlikely scenario yeah it's approaching half the units sold.

As it was I was crediting Skate 3 and LBP each with 50-75k units which seams reasonable considering where they are positioned (somewhere less than 20th overall). It's possible I was too generous or not generous enough.

Regards,
SB

 

[Silent_Buddha]

The average 360 owner (as of the latest NPDs) has owned their console for 5 months longer than the average PS3 owner. That completely accounts for the difference in attach ratio.

Actually attach rates in general tend to be higher at launch than later on in a consoles lifetime. And new buyers will tend to buy more games in their first month than in subsequent months. And considering X360 has now been out 38 months and PS3 26 months, most of the launch bias for both systems will have been removed.

Partially true. The average PS3 exclusive and the average 360 exclusive have very similar attach ratios, actually. The problem is that the 360 has had more exceptionally selling exclusives than the PS3 which has really just had the one.

The apparent difference in the how the overall lineup of exclusives are selling, though, is really just a function of the difference in install base. Marginally successful titles still chart on the 360. Not so on the PS3.

Which again is only partially true. If we assume same level of desirability (as a percentage of installed user base) for exclusives from both companies then Exclusives on PS3 should sell roughly half the number of X360 exclusives (on a per title basis) and thus should chart more often even if it's in the lower 11-20 spots.

But it doesn't happen often. And PS3 exclusives appear to fade faster. But that perception may be more closely tied to the fact that numbers for titles below 20 are rarely if ever provided.

Regards,
SB

 

[tuna]

I don't, but it's not necessary to know it to make logical conclusions. Bundling a game could be an ok deal to the developer, but if you think Media Molecule is making the same profit per copy as they would with full price retail sell, then you are just flat out crazy.

The copyright and trademarks on all things LBP says SCE, not Media Molecule. It is entirely possible that (though not likely) that the contract between SCE and Media Molecule has no royalty clause included. If considering this aspect makes me "crazy", well I guess I'm a lunatic then.

BTW, making "logical conclusions" based on zero facts is not really something that advances any topic, not even a forum discussion.

 

[mrcorbo]

Actually attach rates in general tend to be higher at launch than later on in a consoles lifetime. And new buyers will tend to buy more games in their first month than in subsequent months. And considering X360 has now been out 38 months and PS3 26 months, most of the launch bias for both systems will have been removed.

Yeah, but you compared raw attach rates. You can't compare those directly because when considering how many titles that an average console owner purchased, how long the average console owner has owned the system (and therefore had the opportunity to buy games) is a factor.

A few months ago I used the average time of ownership in months to normalize the attach rates and multiplied by 12 to come up with a yearly purchase rate. All 3 of the current gen consoles came within a single game of each other and 360 and PS3 were identical.

You're right, though, about early attach rates being inflated. I've noticed that as average time of ownership increases, the yearly purchase rate decreases. The fact that the 360 and PS3 were identical despite the 360 userbase being 5 months "older" actually seems to show that 360 owners are more active game buyers, but the difference is slight.

But it doesn't happen often. And PS3 exclusives appear to fade faster. But that perception may be more closely tied to the fact that numbers for titles below 20 are rarely if ever provided.

Heck numbers for below 10 are rarely provided. Even just the list of 11-20 without numbers isn't always made available.

 

[DuckThor Evil]

The copyright and trademarks on all things LBP says SCE, not Media Molecule. It is entirely possible that (though not likely) that the contract between SCE and Media Molecule has no royalty clause included. If considering this aspect makes me "crazy", well I guess I'm a lunatic then.

Yep I usually like to go with the most likely instead of some "wild unlogical unlikely lalala I live in a dreamland" speculation, but you are free to think whatever you want of course.

BTW, making "logical conclusions" based on zero facts is not really something that advances any topic, not even a forum discussion.

Luckily there were facts in my posts, look closer and you might rise to the occasion and find atleast one. Just because we don't know exactly what's in the contract, doesn't mean we can't still rule out some really unlikely scenarios, especially when we all know that Sony has been in this business for a long time.

 

[tuna]

Yep I usually like to go with the most likely instead of some "wild unlogical unlikely lalala I live in a dreamland" speculation, but you are free to think whatever you want of course.



Luckily there were facts in my posts, look closer and you might rise to the occasion and find atleast one. Just because we don't know exactly what's in the contract, doesn't mean we can't still rule out some really unlikely scenarios, especially when we all know that Sony has been in this business for a long time.

The only bit of fact I can see on page four is that SCE the cost of the PS3 is higher than SCE sells it for. This has been confirmed by SCE. Some retail prices seem to be based on facts as well. Most of it is just speculation based on no facts at all.

The contract between Sony and MM could just as likely be the following:
SCE pays for the development of LPB (plus extra money for allowing MM to grow as a company) plus a royalty of 1€ per copy for the first five years after release. That seems like a pretty reasonable deal, but I, and most other people outside SCE and MM, do not know what the contract really is. But of course, we can speculate all we want.

BTW, does anyone know how these deals usually are set up? Not just in the MM-SCE case but in general cases in the industry.

 

[Shifty Geezer]

Except MS just said they have an attach ratio for games of between 8-9. Even being generous and saying PS3 has a 6 attach ratio that's still quite a difference (25% less).

That's lifetime attachment where XB360 accumulated a lot in the beginning, bought by gamer hoares! IIRC the yearly attach ratio for last year was both 5.5-ish.

Except that it's only in certain months where PS3 appears to track at 50% of the equivalent X360 title. Skate 3 for example right now isn't even in the top 20, which probably means it's sold far less than 100k units.

That's one title though. Who's to say Skate just doesn't resonate with the PS3 demographic? You'd need some extensive number tracking, which is nigh impossible because we don't get Top 20 sales figures, to see if PS3 really is selling at considerably less than the install base. As a broad overview, if both PS3 owners and XB360 are buying 5.5 games a year, then there's parity. Also, which is the chief argument, you were saying that with PS3 games selling so poorly, developers should think twice before developing for the platform. That opinion seems based on PS3 game visibility, that it doesn't look like PS3 games are selling. I think the figures are very muddled. I've just visited VGChartz (in the hopes their NA numbers come from some report or other, and aren't just made up!) and looked down their list until I found a cross-platform title I recognised, and DMC4 over-performed on PS3. GTA4 was about right, 50%. COD4 was a little under. All in NA sales. Worldwide PS3 does better. Yes, some PS3 exclusives don't do so well, but same with XB360. Blue Dragon performed no better than LAIR in NA, despite one being critically acclaimed and the other being a bit of a dog. VGChartz numbers aren't trustworthy, but we have heard about these titles anyway. EA complained about Mirror's Edge sales, and we all know BD didn't do well, nor LAIR. So VGChartz looks in the right ball-park if it's tallying with what we know.

Overall, I'd say the PS3 market is as safe as any other, which is not terribly safe because no-one knows what'll be a hit. Companies produce titles like Mirror's Edge and hope, but there are no certainties. Worldwide performance seems about what you'd expect given install base, going by corporate financials etc., with a huge margin for variation due to difference in tastes across the console demographics. At the end of the day, PS3 would be a silly market to ignore unless the savings in dvelopment are worth the potential 30-50% drop in market size. This is the case for a fair number of developers who, through the ease and convenience of XNA, can target XB360 and PC, so there's good reason for them to not develop PS3. But PS3 isn't otherwise a platform to be abandoned for economic reasons.

 

[Brad Grenz]

Prince of Persia is another game that overperformed on the PS3 relative to installed base.

 

[Rangers]

That's lifetime attachment where XB360 accumulated a lot in the beginning, bought by gamer hoares! IIRC the yearly attach ratio for last year was both 5.5-ish.

That's one title though. Who's to say Skate just doesn't resonate with the PS3 demographic? You'd need some extensive number tracking, which is nigh impossible because we don't get Top 20 sales figures, to see if PS3 really is selling at considerably less than the install base. As a broad overview, if both PS3 owners and XB360 are buying 5.5 games a year, then there's parity. Also, which is the chief argument, you were saying that with PS3 games selling so poorly, developers should think twice before developing for the platform. That opinion seems based on PS3 game visibility, that it doesn't look like PS3 games are selling. I think the figures are very muddled. I've just visited VGChartz (in the hopes their NA numbers come from some report or other, and aren't just made up!) and looked down their list until I found a cross-platform title I recognised, and DMC4 over-performed on PS3. GTA4 was about right, 50%. COD4 was a little under. All in NA sales. Worldwide PS3 does better. Yes, some PS3 exclusives don't do so well, but same with XB360. Blue Dragon performed no better than LAIR in NA, despite one being critically acclaimed and the other being a bit of a dog. VGChartz numbers aren't trustworthy, but we have heard about these titles anyway. EA complained about Mirror's Edge sales, and we all know BD didn't do well, nor LAIR. So VGChartz looks in the right ball-park if it's tallying with what we know.

Overall, I'd say the PS3 market is as safe as any other, which is not terribly safe because no-one knows what'll be a hit. Companies produce titles like Mirror's Edge and hope, but there are no certainties. Worldwide performance seems about what you'd expect given install base, going by corporate financials etc., with a huge margin for variation due to difference in tastes across the console demographics. At the end of the day, PS3 would be a silly market to ignore unless the savings in dvelopment are worth the potential 30-50% drop in market size. This is the case for a fair number of developers who, through the ease and convenience of XNA, can target XB360 and PC, so there's good reason for them to not develop PS3. But PS3 isn't otherwise a platform to be abandoned for economic reasons.

Yup, really you need total software revenue for both platforms.

Although we can try to draw conclusions from what we have in the top 10-20 etc.

 

[obonicus]

Yup, really you need total software revenue for both platforms.

Although we can try to draw conclusions from what we have in the top 10-20 etc.

Sure, but we have to be careful what sort of conclusions. I still suspect that 11-20 are bunched up at near 100k, mainly because I'm trying to draw a pattern from the numbers we've seen so far. Meanwhile, others are seeing the same numbers and saying that 11-20 prove that the pattern is broken. Both of us are going on hunches, until we get real results at most we can butt heads.