NPD April 2007

[Dave Baumann]

Recent Peter Moore interviews have indicated that Elite numbers were pretty good, possibly soundling like it surprised even MS:

http://www.next-gen.biz/index.php?option=com_content&task=view&id=5599&Itemid=50

“For the final quarter we’ll be in and around twelve million. The Elite numbers are coming in very strong. We introduced a SKU that we don’t quite have a feel on the demand but the numbers are doing very well.”

 

[Zaphod]

So, that's 12 million worldwide by June 30. Doesn't sound like they see any pressing need to stimulate demand by dropping price just yet.

 

[TheChefO]

First of all -

at the ps3 #s!

I did not figure they would dip much below 130k as it seemed to be the baseline for performance. I'm guessing the sales difference can be directly matched to the absense of the $500 model.

Secondly - What the giblybah is wrong with MS?!?! Drop the price already! These numbers are trending downward and in a hurry. Slow sales are expected at this time of year which is why a price drop is normally associated with this time of year (check historical price-drop timing... May).

Third - Nintendo owns. *repeat loop*

...Irony of it all is that Sony pro-claimed their PS3 would sell 5 million consoles even if they didn't bother to make any games for it...

See quote:

 

[expletive]

Well, if you listen to the MS language lately... I think they're being pressured to consider the Wii and the overall market rather than just the PS3. I agree that the PS3 is a more natural foe, but recent comments out of Microsoft have turned into insulting the Wii where once they treated it like a benign symbiote.

I mean I think they're going to ride it out too, as they've got to reach their own profitability goals and Sony is seemingly adrift for now in "threat level." But it's interesting to see that MS has begun to posture themselves a little against the Wii recently... which I don't think is honestly a worthwhile effort.

I agree its not a worthwhile effort at the moment, but they may be building their case in preparation for their first price drop in the next 3-6 months. If they have the stomach to do something bold, say $100 off all the SKUs, then the core really becomes a value proposition wrt to the Wii.

Once they are at that point, then watch the PR salvos fly. Maybe not quite as nasty as the ones theyve fired at Sony (cause after all, what'd nintendo do to deserve it), but theyll be sure to get the point across on how 'inferior the Wii tech is'.

Point being, it serves them well to start building that perception now, when the higher price *validates* their claims, rather than trying to make it after they are priced similarly.

 

[NovemberMike]

Secondly - What the giblybah is wrong with MS?!?! Drop the price already! These numbers are trending downward and in a hurry. Slow sales are expected at this time of year which is why a price drop is normally associated with this time of year (check historical price-drop timing... May).

Check the weekly numbers. April this year was actually better than March (I think it was up ~2%).

 

[TheChefO]

Point being, it serves them well to start building that perception now, when the higher price *validates* their claims, rather than trying to make it after they are priced similarly.

Good point.

Check the weekly numbers. April this year was actually better than March (I think it was up ~2%).

Saw that after posting ... Still, the #'s aren't good and if they were bolstered by Elite sales then that's even worse.

I'm thinking it would be a good idea to drop all existing sku's and repackage the core system with a wireless pad and hd cables and sell at $250. Also adjust the peripheral pricing accordingly:

Wireless pad $40
Wired pad $30
Wireless net $75
Wireless hp $30
Camera $30
20gb $75
120gb $150

Still some very healthy profit margins available with this model while not completely ripping off customers.

 

[scooby_dooby]

Actually scooby, every console in history (disregarding price-cuts and supply constrained launch periods) drops about 20% in terms of sales from February to April, this is because the weather is getting better, and people go out more.


Take a look here

360 didn't last year though. It's shown an uncanny ability to sell just around 50k/week or more every single week.

 

[Carl B]

Once they are at that point, then watch the PR salvos fly. Maybe not quite as nasty as the ones theyve fired at Sony (cause after all, what'd nintendo do to deserve it), but theyll be sure to get the point across on how 'inferior the Wii tech is'.

Point being, it serves them well to start building that perception now, when the higher price *validates* their claims, rather than trying to make it after they are priced similarly.

First of all Expletive, I feel like you and I are never in the same threads these days.

But second of all, on the MS PR, well... it's already started getting a little caustic. Saying the Wii is less powerful than XBox 1 and that "kids" will "grow out of it" when they turn 14 or whatever it is... I mean, that's harsh.

Anyway but I don't think 360 core can really compete with the Wii in the immediate term, price-drop or not. Lower price will of course raise sales mind you, but as mentioned elsewhere I don't think PS3 and 360 sales take away from Nintendo sales in the present context. I think either Wii will just begin to flame out a little on its own, or honestly it will in fact be a 'Revolution,' and indeed the game market will be fundamentally shifted. Maybe in the longrun there's a lot of grey in there as well.

 

[dobwal]

360 didn't last year though. It's shown an uncanny ability to sell just around 50k/week or more every single week.

Maybe MS figured that since a die shrink for Xenon and Xenos is coming this fall and with the Sony having problems moving units and Nintendo making enough units that it can drag the current price point till the fall when price cutting would be more feasible.

 

[ninzel]

Well hopefully now that the Wii is showing some good potential more 3rd party devs will warm up to supporting it. The software sales aren't bad but aren't great either.

 

[Corwin_B]

360 didn't last year though. It's shown an uncanny ability to sell just around 50k/week or more every single week.

Wasn't the 360 still mostly supply-constrained during Feb-April last year ?

 

[expletive]

First of all Expletive, I feel like you and I are never in the same threads these days. .

Yeah, i'm not in a lot of threads lately, new job and all.

But second of all, on the MS PR, well... it's already started getting a little caustic. Saying the Wii is less powerful than XBox 1 and that "kids" will "grow out of it" when they turn 14 or whatever it is... I mean, that's harsh.

Hadn't read that, it is a little harsh...

Anyway but I don't think 360 core can really compete with the Wii in the immediate term, price-drop or not. Lower price will of course raise sales mind you, but as mentioned elsewhere I don't think PS3 and 360 sales take away from Nintendo sales in the present context. I think either Wii will just begin to flame out a little on its own, or honestly it will in fact be a 'Revolution,' and indeed the game market will be fundamentally shifted. Maybe in the longrun there's a lot of grey in there as well.

I'm holding fast to the mindset that there is little more than simple economics at work here. The performance of the PS3 to date and the Wii are just too stark and coincidental for me to see it any other way (plus, its my major course of study).

I know we've all seen videos of grandmas playing a Wii but are they really the ones entering the market to drive the high sales? I feel that it is simply the fact that a $199 wii (249 with a game and a memory card) has an immense potential buyer pool compared to the other consoles. While the early sales are staggering, once this pool has been saturated and competition is in place at the price point, we'll see reality set in and what we thought was a Revolution, is simply getting to last gen's limits faster.

In this context, is any console a revolution until it surpasses the sales of the PS2?

 

[scooby_dooby]

Wasn't the 360 still mostly supply-constrained during Feb-April last year ?

Feb/March yes. In April it had a big jump, and never let up since.

Maybe MS figured that since a die shrink for Xenon and Xenos is coming this fall and with the Sony having problems moving units and Nintendo making enough units that it can drag the current price point till the fall when price cutting would be more feasible.

Maybe. Which is why I started looking at the summrr game libraries, if it's not strong the sales will continue to whither away. Meanwhile, Wii does not show any signs of slowing down, and 360 sales in EU are going nowhere fast.

Interesting gamble that's for sure. Really giving Sony quite a large opportunity to get back on their feet.

 

[Todd33]

Feb/March yes. In April it had a big jump, and never let up since.

I walked into BB in Feb and picked one off a stack, I doubt they were hard to find in March. March just happened to be the month Oblivion and GRAW came out, hence sales picked up. But people love the urban myth of the supplied constrained 360, pretty soon it will stretch into July 2006

 

[scooby_dooby]

I feel that it is simply the fact that a $199 wii (249 with a game and a memory card) has an immense potential buyer pool compared to the other consoles. While the early sales are staggering, once this pool has been saturated and competition is in place at the price point, we'll see reality set in and what we thought was a Revolution, is simply getting to last gen's limits faster.

Agreed. The largest pool of console buyers is $199 or less, 360 and PS3 are simply not affordable/desireable for those people. Once 360 drops into that pricerange, direct competition with the Wii is inevitable.

 

[Todd33]

Agreed. The largest pool of console buyers is $199 or less, 360 and PS3 are simply not affordable/desireable for those people. Once 360 drops into that pricerange, direct competition with the Wii is inevitable.

Or maybe the PS2. Wii buyers are not old school gamers, they are some strange new demographics, I don't think they want a PS3 or 360 no matter what the price.

 

[scooby_dooby]

I walked into BB in Feb and picked one off a stack, I doubt they were hard to find in March. March just happened to be the month Oblivion and GRAW came out, hence sales picked up. But people love the urban myth of the supplied constrained 360, pretty soon it will stretch into July 2006

Ya it was easier, in March they sold just a hair under 50k/week (i think it was a 4week month). Though, it was certainly not an easy item to find, your single experience notwithstanding.

Feb was totally constrained, March was slightly.

p.s. People don't need to cling to 'supply constrained' arguments anymore. PS3's sales have made the 360 look like a glowing success, constraints or not. Feb 127k? April 82k? Ms's worst month ever was 160k.

 

[TheChefO]

I'll add my anecdotal:

I was curiously keeping tabs in March, April and in my area (Tampa Bay, FL) it was not widely available and upon shipment they would sell out within hours. After E3 they became much easier to come by and that is when I picked mine up.

 

[ninzel]

Price cut talk is almost irrelevant right now in terms of how to counter Nintendo seeing as Nintendo has the ability to beat Sony or MS in any price cut war and always will be ahead.
Nintendo could cut $100 off right now without batting an eye.
If MS drops their price they would hurt Sony but only drive Nintendo into their own price drop. Anyone want to guess what a $200 Wii would sell like?
MS is trapped by way of the Wii's price and it's own profit problems,Sony is trapped by the financial reality that they are already loosing a bunch. Only Nintendo is a position to comfortably play with pricing.

 

[TheChefO]

Anyone want to guess what a $200 Wii would sell like?

hmm... probably pretty close to what a $250 Wii sells like.

As is, Wii is severely supply constrained (still). Dropping price on the Wii in response to a xb360 price-drop would do nothing for N except reduce their profit margin.

We may be faced with an odd situation where xb360 is sold for less than Wii.