EA sales break down by platform

[Teasy]

Nesh, you might have a point on the profit margins thing if it wasn't for the fact that Wii is far cheaper to develop for then either 360 or PS3. So your argument simply puts Wii's revenues in an even better light.

You are confused here and you lack the ability to combine and understand various numbers/variables. The PS3 does not have the install base of the 360 or the Wii. The problem with the PS3 based on what we ve got indicate to low userbase most likely.

Wii - 88 million net revenue / 9 million users = 9.8 million in net revenue per million users

PS3 - 28 million net revenue / 4 million users = 7 million in net revenue per million users

Do you understand those various numbers and variables Nesh?...... What's the problem now? It certainly isn't a under base size problem, so where do you go from here then?

Wii and 360 have a similar userbase. Yet they generate way too different net revenues. Is it because of different costs? Wii is supposed to have the lowest costs to produce games on among the three. This should increase profits. On the contrary net revenues generated by wii is around 1/4 of net revenues generated from 360. This indicates to probable much lower sales. EA may be selling much more on 360 than on Wii despite similar userbases.

No, you're getting confused again. These numbers are net revenue. They don't include development or manufacturing costs. Oh and BTW, Wii's EA userbase (as in minus Japan) is still considerably lower then 360's, plus 360 had more EA games to buy. I'm not denying 360 software sales are very good BTW.

Nobody denied that Wii games will sell and generate some profits for third party developers. What many of us argued in the past was that third party sales on Wii probably wouldnt be enough to make the big third party developers choose Wii as their primary and most profitable platform.

Actually some people on these forums have claimed that third party games just don't sell well on Wii full stop AFAIR. As for being the primary development system. To be honest I've never tried to claim that Wii will be the one and only main system for developers in the future. My comment was meant only for people who perpetuate the myth that third party games don't sell well on Wii.

 

[Nesh]

Nesh, you might have a point on the profit margins thing if it wasn't for the fact that Wii is far cheaper to develop for then either 360 or PS3. So your argument simply puts Wii's revenues in an even better light.

Wii - 88 million net revenue / 9 million users = 9.8 million in net revenue per million users

PS3 - 28 million net revenue / 4 million users = 7 million in net revenue per million users

Do you understand those various numbers and variables Nesh?...... What's the problem now? It certainly isn't a under base size problem, so where do you go from here then?

Then PS3's numbers are low from both perspectives. Consumer preferences AND low userbase although still probably there might not be a perfectly linear relation between preferences and sales as the userbase increases.Still I never mentioned the PS3 until you did and it wasnt my intention to compare the PS3 with Wii or 360. Thats why I didnt. It was obvious that the PS3 isnt doing well anyways. Potential PS3 owners that were also potential EA consumers probably moved already to the 360. There were also delays but this is irrelevant to my initial post anyways.

No, you're getting confused again. These numbers are net revenue. They don't include development or manufacturing costs. Oh and BTW, Wii's EA userbase (as in minus Japan) is still considerably lower then 360's, plus 360 had more EA games to buy. I'm not denying 360 software sales are very good BTW.

Thats because I didnt have a clarification on what these net revenues are. You didnt either until someone clarified a few posts above,

Even if they are simply revenues it does not indicate to the opposite direction I was pointing at earlier. Price variation between the two consoles isnt large. It still indicates to lower sales. Why dont you try doing the math for the 360 just like you did in the above post for PS3 and Wii. Also about Wii's EA userbase not being large. This is ironic because thats exactly what I said earlier so you are supporting my arguement. You just admited that Wii owners may prefer other types of games. Lastly the fact that EA releases more games on the 360 indicates once again that developers see more interest to develop higher cost games on 360 than on Wii. This indicates again to the probability that EA doesnt profit as much as expected from Wii. Now you might say "yeah and why are they making games on the PS3?". They are simply ports. The assets are ready.
And I may also remind you that there were many that claimed third party developers will target Wii greatly because of its lower costs of development and large userbase growth rates. But you just admited again that EA prefers to make more games on 360 than on Wii.

Actually some people on these forums have claimed that third party games just don't sell well on Wii full stop AFAIR. As for being the primary development system. To be honest I've never tried to claim that Wii will be the one and only main system for developers in the future. My comment was meant only for people who perpetuate the myth that third party games don't sell well on Wii.

Depends how you interpreted what they said. Also this is just one third party developer. Sales so far seem to be a mixed bag and sometimes lower than expected.
And you put words in my mouth there. I said nothing about people claiming Wii would be the one and only. People claimed that huge franchises and exclusives will start shifting towards Wii and that developers will support mostly the Wii. Still not the case and you partially admitted it with this post.

 

[dobwal]

I really wish we could accurately measure console usage and not just new game sales since it could be giving us only a small part of the picture.
Looking at the PS2 for example and seeing new sales dropping, some would automatically assume it's loosing popularity and the 360 is gaining it.
I wonder though if an older, cheaper system like the PS2 is getting more use from used games and rentals.At this point it's obviously appealing to a demographic that is less likely to spend on hardware,so the same is probably true for software.
The PS2 could still be the most popular system,but just not measured strictly by new game sales. Not that it really matters to this discussion,just a thought. Knowing how much a PS2 user is using their system,and what they are actually spending could help a publisher cater software more appropriate to the 2007 PS2 user vs the 2002 user.Assuming there is a difference.
Edit: I assume all three platform makers are mining for this kind of info on the new consoles.

Its rather a big part of the picture. Its hard to imagine that used games sales and rentals are inversely related to new games sales for the PS2 or any console for that matter.

New games sales may be dropping at a faster pace than the sales of used games or rentals, but for rentals or used game sale to pick up while new games sales drop seems odd. Especially considering the fact that new game releases actually drive all three markets.

 

[fearsomepirate]

The interesting thing is that nothing has replaced the ~60% falloff in PS2 sales. Furthermore, Nintendo is the only manufacturer that's shown software sales growth over 2006. Looking at 6 month figures:

Microsoft: -$34m (-11%)
Sony: -$207m (-56%)
Nintendo: +$69m (+288%)

Over the 3 month window, you get similar results, except that software sales on MSFT platforms are down only $1m over the previous year. IMO, 360 sales are growing enough that EA should eventually outdo what they were doing on Xbox, but I doubt they'll make up for the loss on PS2. They're obviously doing better on Wii than they were on Gamecube, but the change is inflated because Cube saw very little from EA (or anyone else) in its last year.

Handheld sales interesting, too. EA's sales on DS have tripled since 2006, while their PSP sales have dropped by more than half. At the same time last year, PSP software sales dominated Nintendo; we've seen a complete turnaround there.

 

[dobwal]

The interesting thing is that nothing has replaced the ~60% falloff in PS2 sales. Furthermore, Nintendo is the only manufacturer that's shown software sales growth over 2006. Looking at 6 month figures:

Microsoft: -$34m (-11%)
Sony: -$207m (-56%)
Nintendo: +$69m (+288%)

Over the 3 month window, you get similar results, except that software sales on MSFT platforms are down only $1m over the previous year. IMO, 360 sales are growing enough that EA should eventually outdo what they were doing on Xbox, but I doubt they'll make up for the loss on PS2. They're obviously doing better on Wii than they were on Gamecube, but the change is inflated because Cube saw very little from EA (or anyone else) in its last year.

Handheld sales interesting, too. EA's sales on DS have tripled since 2006, while their PSP sales have dropped by more than half. At the same time last year, PSP software sales dominated Nintendo; we've seen a complete turnaround there.

What do you expect?

Its rather hard to keep up with the drastic fall of last gen software sales which consisted of a userbase of ~170 million consoles with the current gen software sales that has a userbase of ~30 million consoles.

Its the growing pains of transitioning to the next gen. Activision would be going through this too, if it wasn't for the power of Guitar Hero which has performed well and actually helped increase revenue from the PS2 platform over last year.

 

[ninzel]

Its rather a big part of the picture. Its hard to imagine that used games sales and rentals are inversely related to new games sales for the PS2 or any console for that matter.

It's just a theory but it's something I think can be imagined if you consider the type of gamer that buys the PS2 in 2007 at $130 might by different than the gamer that buys it in 2002 for considerably more. Different gamers have different spending habit's. That's a given. It don't think it's a stretch or odd at all to imagine that that gamer, that held off buying the PS2 until it was $130 is the same type of gamer less inclined to spend $50 for a new game vs. renting the same game for $6 or buying a good used game for $20. I never said I thought it would be perfectly inversely related,but I could see the ratio changing greatly
Until we can see accurate tracking of used games and rentals vs new game sales in a given period to compare,no theory can just be dismissed.

 

[dobwal]

It's just a theory but it's something I think can be imagined if you consider the type of gamer that buys the PS2 in 2007 at $130 might by different than the gamer that buys it in 2002 for considerably more. Different gamers have different spending habit's. That's a given. It don't think it's a stretch or odd at all to imagine that that gamer, that held off buying the PS2 until it was $130 is the same type of gamer less inclined to spend $50 for a new game vs. renting the same game for $6 or buying a good used game for $20. I never said I thought it would be perfectly inversely related,but I could see the ratio changing greatly
Until we can see accurate tracking of used games and rentals vs new game sales in a given period to compare,no theory can just be dismissed.

No its not a stretch. However, renting, buying used and buying new all have to deal with transitioning from old gen to new gen.

http://www.123jump.com/earnings-calls/GameStop-Second-Quarter-Earnings-Call/23058/1

Colin Sebastian (Lazard Capital Markets): Could you talk about how the used business is trending relative to your expectations in terms of growth and margin and what do you expect there over the remainder of the year?

Dan DeMatteo: In terms of sales, we had 16% sales increase in the quarter, which we consider good, considering that new games grew 50%. The used video game sales will never increase like new video game sales and are more steady in their growth rates.

Our used margin rate in this quarter was impacted by increased spending on refurbishment. We have intentionally been ramping up our capabilities to fix next-generation hardware and handheld systems and instructing our stores to intentionally buy back defective units. As a result, we have doubled our refurbished hardware production over the prior-year quarter. Our used game sales benefited in Q2 and will again benefit in Q3 because of this refurbishment activity. This is intentional on our part because the margins on new video game hardware is very slight, and our margins on refurbished hardware is much greater."

Gamestop seems to be seeing most of the growth of their used game and console business due to next gen games.

 

[fearsomepirate]

It means that a large number of people who were buying EA-published PS2 games last year aren't buying anything this year. Either they've gravitated toward other publishers, or they've quit buying new games entirely.

 

[AlphaWolf]

It means that a large number of people who were buying EA-published PS2 games last year aren't buying anything this year. Either they've gravitated toward other publishers, or they've quit buying new games entirely.

I think NPD has consistently reported that overall game sales are up this year. Whether thats from increasing competition or just a shift its hard to say. Without an exact comparison of releases its really hard to make any conclusions. EA's losses seem to stem as much from increasing costs as anything else.

 

[Fred]

PS3's low attach rate and profitability is striking, you would think they would have a high attach rate with the low userbase and relatively small amount of software lineup.

Also you would think they would have the right demographic for a high attach rate (eg anyone willing ot shell out that type of cash).

Maybe its just the quality of the games from EA for the PS3 that is just lackluster.

The state of the industry sucks frankly, pretty much all around for every platform.

 

[manux]

I guess people feel bored to the same games they have already played 5 years on ps2. Just upgrading the graphics to hd doesn't mean insta sale if the game is otherwise same as on ps2(or even worse PES anyone). We need next(current) gen gameplay mechanics.

 

[Arwin]

Also, the 2006 games for the 360 that are on budget release now also count towards sales, and the 360 has a demographic for these sports games already from the Xbox I think too. Also, Xbox owners really have little choice but to go for the 360 at this point, where PS2 owners can stick around a little while longer at the same time suffering from the year-over-year update fatigue, as you mention. The 360 versions on the other hand do have more significant improvements over last year, which adds to this, as well as have a very focussed and wealthy demographic at this point. It's also a genre that was suitable for the original Xbox with better online support, and the value of online for sports games has been fairly good, so I think the original Xbox was doing better in this area already comparatively. The PS3 also sells to BluRay enthusiasts and games sales to a small extent also compete with BluRay releases for consumer dollars.

 

[ninzel]

Have we seen any numbers yet as to how the 360 Arcade system is doing? I'm interested to see how a $299.99 360 does against a $269.99 Wii.

 

[AzBat]

Have we seen any numbers yet as to how the 360 Arcade system is doing? I'm interested to see how a $299.99 360 does against a $269.99 Wii.

You mean a $279.99 Xbox 360 Arcade and a $249.99 Wii? I'd be interested as well, but I'm sure we probably won't get a good feel till next month. It wasn't officially available till the last week of October.

Tommy McClain

 

[ninzel]

You mean a $279.99 Xbox 360 Arcade and a $249.99 Wii? I'd be interested as well, but I'm sure we probably won't get a good feel till next month. It wasn't officially available till the last week of October.

Tommy McClain

Where I live it's $299.99 vs. $269.99.

 

[Asher]

Observations:
- April to June is a really slow period (low sales all around).
- DS sales in 2007 much higher than 2006, whereas for PSP it's the other way around, 2006 sales were higher than 2007.
- nice 360 sales.

The Xbox 360 apparently only brought in $47M for EA in April-June. The PC did a lot better.

Is that a typo? Or why is this?

 

[AlNom]

why is this?

http://investor.ea.com/phoenix.zhtml?c=88189&p=irol-earnings

Sales were driven by Harry Potter and the Order of the Phoenix™, Command & Conquer 3 Tiberium WarsTM, The SimsTM 2 Pets, Need for Speed™ Carbon and The Sims 2.

All hail The Sims.