Famitsu: XBOX 360 global domination through 2007

The problem is that the anti-trust authorities have been very lazy and slow when it comes to dealing with monopolies lately. When it came to Standard Oil and AT&T, the authorities acted decisively and split the companies up. The baby Bells and SOs became the the vibrant and competitive oil companies and telecom companies we know today. The problem is that with globalisation, there is a degree of protectionism granted by anti-trust authorities to companies from their own countries. For example Lockheed and Boeing are the only two aerospace companies left in the US and with the exit of Lockheed from civil aviation and McDonald Douglas taken over by Boeing, the US government is going to find it difficult to get a competitive tender in future for defence jobs. If they want a tanker or EW platform, they only have Boeing to go to. If they want a fighter, they have to go to Lockheed since with the loss of the F22 and JSF by Boeing, means Boeing is effectively out of the fighter business for future fighters. The vibrant, inventive US aerospace industry of the past is gone for ever. In US and Europe - anti-trust authorities don't want to break up monopolies up because they feel bigger companies will be able to compete better in the global market. That is why Microsoft has been treated very differently from SO or AT&T.

What I mean by laws of economics, is that in a competitive market, you can't charge your customers extortionate prices, threaten your customers with price hikes or withdraw your product if they do business with a competitor, or dictate draconian terms and expect them to accept. In a competive market, you cannot hike up the price in one sector and indefinitely run at a loss in another. If you do this in a competitive market environment, the laws of free market economics (as promoted by Adam Smith) will mean you go out of business because your customers will walk away.

I understand what you meant now, I'm very much in agreement with what you wrote but I just have a lot more belief in the regulators, especially the trigger-happy EU comissioners whose propensity to get involved knows no bounds.

I would say having a lock on all the important japanese franchises is excluding others. A real monopoly does not have to cut prices because there is no true alternative. A real monopoly can charge what they want because there is not viable competition. If you want to play the biggest japanese titles you have to buy a PS3 no if ands or buts. Because of this sony can get away with charging an outragous price for thier product. They can use gamers to push a stupid movie format because of they have excluded others. You can bet your ass if sony was in MS or ninendos position coming off of last generation they would of not charge a kings ransom to push a movie format.

Sony might not have a complete monopoly right now but they are inches away from it. Nintendo has already given up directly competing with sony they are going to try and make it as a niche player. If the 360 fails like the xbox before it MS will be gone also leaving just sony and a niche player in nintendo. Times are interesting but also damn scary.

Sony does not have a lock on the important Japanese franchises. Just how important these titles are in Japan is also up for debate, FF seems to be a 2m-3m seller at most, with >70% of sales racking up in the first days of release alone. DQ is still powerful but Sony has not got that under it's belt at all, Square often releases it on the console with the most units sold in Japan and well that may well be Wii. DQ isn't a game concerned with visual presentation and would not suffer, from the point of view of its audience, if it were on Wii - where as the rationale for no FF on Wii is the direct opposite.

MGS, DMC, RR, Tekken, VF, Monster Hunter are all easily capable of going multiplatform and they might well do if PS3 does poorly while PES is already multiplatform. This only leaves Sony's first party (Gran Turismo) and Nintendo franchises. There is no lockout in Japan. The appearance of a Sony lockout is only due to the rejection of the 360 by the Japanese consumer. For Konami, Square and Namco that plays a large part in dictating their policy.
 
March 2007, when PS3 hits Europe and production/fulfillment of PS3 is no longer constrained is perfect IMO. No need to combat a foe who is not effectively on the battlefield yet, as Sony will not be until early 2007 as limited production will mean that every system made will be snatched up by hardcore buyers anyway.

at $329- $349 in March (maybe with a bundle) the Premium will look amazingly bargain-like compared to $499/$599.

and $229-$249 for the core? :oops:

It is also my prediction. (bookmark it) ;)

You assume Sony doesn't pricedrop at E3 which I think they will.

You guys keep saying now's not the time, but the fact is PS and XBX are not on an even playing field, the brand recognition and percieved quality of the Playstation brand is still HUGE compared to XBOX, once PS reaches anwhere near a reasonable pricepoint it will probably explode, they could percievably pass MS like they're standing still.

Now, maybe the mainstream does hop aboard 360 in 07 and 08, but I don't think now is the time to be complacent with mediocre sales, the PS brand is still so much stronger that they need to do everything they can NOW while they have the market to themselves.
 
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NDP numbers are almost exactly 80% of actual sales - we've recently done a fairly thorough analisys based on NDP numbers for the PS2 and Sony's numbers of actual units shipped.
This puts their reported X360 US sales of 2.672.280 closer to an actual 3.340.000 units sold. It also means that about 50-60% of X360 sales go to the US, as back in July they were at 2.7 million units.

Now for the rest of the year, traditionally October is about as strong as September, but November adds 100%, and December adds 100% again. So we can expect NDP sales to be about 270.000; 540.000; and 1.1 million, which should add up their numbers to 4.6 million, and that would mean 5.8 million actual units just for the US. If that's really 55% of the world market, then MS would already reach their goal of a 10 million strong userbase at the end of 2006.
I'd like to add that the original Xbox, with Halo 2, has actually managed to reach somewhat better sales for the end of 2004. I think that Gears has a good chance to power up X360 sales to a comparable level.

It's also worth noting that this September has set a record for video game sales and hardware too - so we should expect a particularly strong Christmas season. The big quiestion is, how will the console sales divide up between the X360 with strong supply, the Wii with unknown interests, the PS3 with very limited supply, and the PS2 with surprisingly strong sales?
 
You assume Sony doesn't pricedrop at E3 which I think they will.

If the PS3 costs an arm and a leg to manufacture and still makes a loss at $500-600 in this October, then what exactly would make it cheaper in only 6 months? That they won't have to rent a fleet of Jumbos to supply the US? And they would sell every single one they can make even for as much as $800, probably until they reach 10 million units, so they don't even need to do it at all.

Also keep in mind that MS has been making Xboxes for a year and they still don't plan to drop the price yet.
 
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You guys keep saying now's not the time, but the fact is PS and XBX are not on an even playing field, the brand recognition and percieved quality of the Playstation brand is still HUGE compared to XBOX,

true, but they can also not afford to appear to be the "bargain" console when on the shelf. They can not give the impression that the machine is somehow inferior which by and large, most ignorant consumers would naturally assume based on price alone.
 
You assume Sony doesn't pricedrop at E3 which I think they will.

You guys keep saying now's not the time, but the fact is PS and XBX are not on an even playing field, the brand recognition and percieved quality of the Playstation brand is still HUGE compared to XBOX, once PS reaches anwhere near a reasonable pricepoint it will probably explode, they could percievably pass MS like they're standing still.

Now, maybe the mainstream does hop aboard 360 in 07 and 08, but I don't think now is the time to be complacent with mediocre sales, the PS brand is still so much stronger that they need to do everything they can NOW while they have the market to themselves.
I would agree with you if you could point to faltering sales. But the 360 sales have been steady. Adding that the holiday season will be their best season and I fail to see why you'd want to do a price break.

If they are currently making a small profit per unit, why turn that back into a loss. If they are still taking a loss, why make that loss even greater (especially compounded with the number of units they're expecting to sell).
 
NDP numbers are almost exactly 80% of actual sales - we've recently done a fairly thorough analisys based on NDP numbers for the PS2 and Sony's numbers of actual units shipped.
This puts their reported X360 US sales of 2.672.280 closer to an actual 3.340.000 units sold. It also means that about 50-60% of X360 sales go to the US, as back in July they were at 2.7 million units.

Now for the rest of the year, traditionally October is about as strong as September, but November adds 100%, and December adds 100% again. So we can expect NDP sales to be about 270.000; 540.000; and 1.1 million, which should add up their numbers to 4.6 million, and that would mean 5.8 million actual units just for the US. If that's really 55% of the world market, then MS would already reach their goal of a 10 million strong userbase at the end of 2006.
I'd like to add that the original Xbox, with Halo 2, has actually managed to reach somewhat better sales for the end of 2004. I think that Gears has a good chance to power up X360 sales to a comparable level.

It's also worth noting that this September has set a record for video game sales and hardware too - so we should expect a particularly strong Christmas season. The big quiestion is, how will the console sales divide up between the X360 with strong supply, the Wii with unknown interests, the PS3 with very limited supply, and the PS2 with surprisingly strong sales?

hmmm very interesting
 
You assume Sony doesn't pricedrop at E3 which I think they will.

You guys keep saying now's not the time, but the fact is PS and XBX are not on an even playing field, the brand recognition and percieved quality of the Playstation brand is still HUGE compared to XBOX, once PS reaches anwhere near a reasonable pricepoint it will probably explode, they could percievably pass MS like they're standing still.

Now, maybe the mainstream does hop aboard 360 in 07 and 08, but I don't think now is the time to be complacent with mediocre sales, the PS brand is still so much stronger that they need to do everything they can NOW while they have the market to themselves.

Just a general feeling but I think Xbox's cache in North America is very close to that of PlayStation nowadays. I'm a Euro so sitting here in the UK and trying to work out what the underlying trends are in the North American market is a bit difficult, but just going from things I've read and general US popular culture/media I would stand by my assumption. It's a different story elswehere but in North America Microsoft does not have a branding problem of any kind.
 
I would agree with you if you could point to faltering sales. But the 360 sales have been steady. Adding that the holiday season will be their best season and I fail to see why you'd want to do a price break.

If they are currently making a small profit per unit, why turn that back into a loss. If they are still taking a loss, why make that loss even greater (especially compounded with the number of units they're expecting to sell).

Well sales aren't faltering, but they surely could be better at just around 50k/week.

I dunno, I think they are taking the Sony brandname too lightly, they need to captialize better on the situation, and price seems to be the obvious limiting factor that is holding back sales.
 
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Well sales aren't faltering, but they surely could be better at just around 50k/week.

Did you mean better THAN 50k a week?

They are selling at 50k per week right now. Have been for a few months.


And I still say MS would be better waiting to see what the market does. For all we know the market may reject the PS3 price point, and that once the hardcore fans of the PS3 get their systems the sales for it will fall flat. If that happens then MS would be taking a loss for nothing.

For Europe and Japan I can understand going with bundles and price drops now to bolster support, but in the US, I think MS is doing just fine for now.
 
Yes, better than they are currently at 50k/week. Though, that should be more like 60k given what Laa Yosh has pointed out.

You might be right with the wait and see approach, though I wouldn't hold my breath for consumers to reject the PS3's pricepoint at just $100 more than 360.
 
NDP numbers are almost exactly 80% of actual sales - we've recently done a fairly thorough analisys based on NDP numbers for the PS2 and Sony's numbers of actual units shipped.
This puts their reported X360 US sales of 2.672.280 closer to an actual 3.340.000 units sold. It also means that about 50-60% of X360 sales go to the US, as back in July they were at 2.7 million units.

That doesn't really make sense. If it's 80% for Sony, it doesn't necessarily mean it's 80% for everyone else. One companies shipping habits may be completely different than another (and in Sony's case, they often are). And from what I've seen, companies overship by a certain number of units, not necessarily a static percent (they may overship 2-3 million when they have 10 million out or 40 million out). Overshipping a couple million units isn't unheard of in the console world (Sony pretty commonly overships more than that). You're also adjusting numbers that don't need to be adjusted -- if that was the case, then you'd have to go and adjust Sony's numbers too to get their accurate numbers and then you'd get numbers that don't gel with reality. Unless you think only Sony's numbers are accurate from NPD? Either NPD is making a mistake everywhere (which is possible), and then you'd need to adjust by that factor everywhere (like you did for 360 only, but that'd make PS2's numbers outside of reality), which would also imply NPD's methods differ based on the product they are looking at (which wouldn't make sense really)... or NPD is more accurate than the 80% you've mentioned and we're right back where we started.

NPD says PS2 has sold around 40m in the US -- Sony says they've shipped ~45m, last I've heard... that's not 80%. (not completely sure on this, and I can't check while at work -- maybe someone knows for sure offhand)

Maybe I'm not understanding how you came up with that (which is possible), but from what you explained there... it makes no sense to do what you did.

Regardless, I don't think MS will have any issues meeting their goal of shipping 10million by years end -- sales will undoubtedly be below that unless you guys think 360 is going to be sold out everywhere (it could happen, who knows!). It's sort of a pointless, if not a bit fun/interesting, discussion though!
 
Yes, better than they are currently at 50k/week. Though, that should be more like 60k given what Laa Yosh has pointed out.

You might be right with the wait and see approach, though I wouldn't hold my breath for consumers to reject the PS3's pricepoint at just $100 more than 360.


Sony dropped the price to $400 already?

Or are we just pretending the core 360 doesn't exist, despite the fact that it's only purpose is to sell to those who aren't willing to spend $400 or more on a console?
 
Sony dropped the price to $400 already?

Or are we just pretending the core 360 doesn't exist, despite the fact that it's only purpose is to sell to those who aren't willing to spend $400 or more on a console?

Like or not MS has crippled the core version, so that it is not attractive to very many gamers at all. 80% of 360's being sold are at the $400 pricepoint, it's clear people do not want the core.

So essentially the premium is the 360 people want, it's directly comparable in features to the base PS3, so I think most non-hardcore people will be chosing between the premium 360 or the core PS3, a $100 difference.

I don't see how consumers will reject the $500 PS3 pricepoint, when X360 is selling at $400 and does not carry the powerful Sony brand name.

I thought the Core would sell well, but MS's ridiculous peripheral pricing on the HDD, inclusion of a wired controller, and overpriced undersized memory card seem to have pretty much crippled it.
 
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Like or not MS has crippled the core version, so that it is not attractive to very many gamers at all. 80% of 360's being sold are at the $400 pricepoint, it's clear people do not want the core.

So essentially the premium is the 360 people want, it's directly comparable in features to the base PS3, so I think most non-hardcore people will be chosing between the premium 360 or the core PS3, a $100 difference.

I don't see how consumers will reject the $500 PS3 pricepoint, when X360 is selling at $400 and does not carry the powerful Sony brand name.

I thought the Core would sell well, but MS's ridiculous peripheral pricing on the HDD, inclusion of a wired controller, and overpriced undersized memory card seem to have pretty much crippled it.

I think it is to early to talk price and a price cut for MS. The 360 and Wii are the only next systems you can get this holiday season with out spending 1000's on ebay. It is going to be 6 months or longer before a person can walk into a store and get a PS3. If MS does not drop the price of the 360 by the time you can walk into a store and buy a PS3 then they are making a mistake. I think a price cut right now would be a sign of weakness to a consumer honestly. I think a price cut would be better served around march when sales slow and there are the occasional ps3 on the shelf.
 
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I thought the Core would sell well, but MS's ridiculous peripheral pricing on the HDD, inclusion of a wired controller, and overpriced undersized memory card seem to have pretty much crippled it.

I have said and continue to believe that the Core is designed to reap its benefits in late 2007 or 2008 and beyond when it drops to $199, $149 etc.

this is a marathon, not a sprint ;)
 
Did you mean better THAN 50k a week?

They are selling at 50k per week right now. Have been for a few months.

The only two months where MS failed to sell 50K/week (according to NDP! so in fact this means about 62K per week) were february and march - just the time when they've had supply issues.
They've only managed to beat the PS2 in April though, I wonder what the reason was.
 
That doesn't really make sense.

I am adjusting Sony's numbers too. According to NDP's monthly sales reports, it should be around 34.6 million units, whereas Sony has shipped about 45-47 million so far (source).
I keep and update a nice Excel file with all the data for PS2, Xbox, GC and X360.

If you or anyone else has any reliable sources for sales data, I'd be glad to check it out too.
 
I am adjusting Sony's numbers too. According to NDP's monthly sales reports, it should be around 34.6 million units, whereas Sony has shipped about 45-47 million so far (source).
I keep and update a nice Excel file with all the data for PS2, Xbox, GC and X360.

If you or anyone else has any reliable sources for sales data, I'd be glad to check it out too.

That makes sense now. I guess I looked at the numbers from Arwin (the PS2 had 40m under total) and assumed (since the rest of the numbers seemed accurate) that it was correct. Thanks for the clarification! Would have looked at numbers myself, but work blocks any place I could think of to check.
 
Laa-Yosh is completely correct regarding the NPD data.

MS is sitting pretty right now IMO. They're somewhere around 3.5 million in NA right now, 1.5 million in the rest of the world. They'll sell at least 2.5 million units in the US for Oct-Nov and about 1 million elsewhere for a total of 3.5 +1.5 + 2.5 + 1 = 8.5 million units sold though (at a minium IMO). This should put them right around 10 million shipped as they forecasted.

That's very good at the $399 price point with $60 games and no Halo offering.

Next year during the PS3 supply problem period they'll push Lost Planet, Crackdown, Half-Life 2 and Forza 2. Then when the PS3 supply problems are over they will drop price by $100. Sony will be forced to do the same. Not long after they'll release Halo 3 and Blue Dragon. Then later in the year as Sony is struggling to get GT and MGS out, MS will put out Assassin's Creed, Bioshock, Too Human (revamped), Alan Wake, Banjo Kazooie, Mass Effect, The Darkness and Resident Evil 5.

MS is in great shape IMO.
 
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