NPD April 2007

[Carl B]

BTW, I do not think the Xbox 1>Wii comments by MS were anything but innocent truth, something that B3d has discussed before. Now the outgrow at 14 comments clearly were aimed at Wii.

Hmmm... I don't think the graphics comments were that innocent to tell you the truth.

BTW, Sonycowboy a good source at GAF says Elite sales were 67k in April. Which was only 1 week. Now one must interpet this news. Did Elite cannibalize 360 sales, or save them from an even worse month? As SC pointed out, take away Elite and that leaves only 107k 360's sold. It bears close watching to me if Elite becomes the new default SKU, which I dont think would be good news for MS as it would be a virtual price hike. It also confirms what I thought, that MS probably shipped ~100k Elite's and they sold out quickly. Elite's are still mostly sold out as of right now.

The Elite stats were posted earlier in the thread, but I think there's another angle to them. Sure - sales boost, canabilized premium sales, but also... how many current 360 owners went and bought one of these as well? Situations like this are hard because when existing users upgrade or repurchase, their purchase essentially counts as a 'blank,' because they are not in fact going to serve as an additional unit in terms of software acquisition. But that's not something unique to 360 here - PS2 going slimline was a similar situation where there was a nebulous/indeterminate crossover population.

 

[TheChefO]

how many current 360 owners went and bought one of these as well? ... their purchase essentially counts as a 'blank,' ...

Also repurchasing for defective units I'm sure counts for a significant number of ps2 units given their time on the shelf. Shamefully, xb360 may also be in this boat were it not for them extending their warranty.

 

[dobwal]

BTW, Sonycowboy a good source at GAF says Elite sales were 67k in April. Which was only 1 week. Now one must interpet this news. Did Elite cannibalize 360 sales, or save them from an even worse month? As SC pointed out, take away Elite and that leaves only 107k 360's sold. It bears close watching to me if Elite becomes the new default SKU, which I dont think would be good news for MS as it would be a virtual price hike. It also confirms what I thought, that MS probably shipped ~100k Elite's and they sold out quickly. Elite's are still mostly sold out as of right now.

I could see the Elite becoming the standard sku but under the condition that the current price and color is to garner additional sales from the hardcore crowd and that a white version will be introduced at the premium's current price and the premium and the core dropping to new price points. Elite's current price makes sense as a limited edition product but as a standard that price point will never garner the level of sales of the premium over the last year. HDMI and black covering isn't adding that much cost to the 360 and a 120gb driveisn't worth $179.00.

 

[dobwal]

Hmmm... I don't think the graphics comments were that innocent to tell you the truth.



The Elite stats were posted earlier in the thread, but I think there's another angle to them. Sure - sales boost, canabilized premium sales, but also... how many current 360 owners went and bought one of these as well? Situations like this are hard because when existing users upgrade or repurchase, their purchase essentially counts as a 'blank,' because they are not in fact going to serve as an additional unit in terms of software acquisition. But that's not something unique to 360 here - PS2 going slimline was a similar situation where there was a nebulous/indeterminate crossover population.

Not necessarily as if you bought a Xbox 360 that was sold by MS for a loss and went out and bought a Elite, which should be a profit, then MS has effectively reduce the initial profit loss associated with you as customer.

Its only has a negative effect when the new purchase is sold at a loss.

 

[Carl B]

Not necessarily as if you bought a Xbox 360 that was sold by MS for a loss and went out and bought a Elite, which should be a profit, then MS has effectively reduce the initial profit loss associated with you as customer.

If the Elite is sold at a profit - which I tend to believe - then I agree with you that there would be a 'positive' association in all circumstances. But it was worth mentioning as it's worth noting all the nuances of who and what new sales can actually represent.

For example, I know Nav's getting one, but that's in part ot replace his latest burned-out system.

 

[Cheezdoodles]

Not necessarily as if you bought a Xbox 360 that was sold by MS for a loss and went out and bought a Elite, which should be a profit, then MS has effectively reduce the initial profit loss associated with you as customer.

And your gonna sell\give away your own console, and that new owner is going to buy new games.

 

[Rangers]

Hmmm... I don't think the graphics comments were that innocent to tell you the truth.



The Elite stats were posted earlier in the thread, but I think there's another angle to them. Sure - sales boost, canabilized premium sales, but also... how many current 360 owners went and bought one of these as well? Situations like this are hard because when existing users upgrade or repurchase, their purchase essentially counts as a 'blank,' because they are not in fact going to serve as an additional unit in terms of software acquisition. But that's not something unique to 360 here - PS2 going slimline was a similar situation where there was a nebulous/indeterminate crossover population.

I agree. There are some 5.4m 360's in the US according to NPD. 67k is a drop in the bucket, even a tiny percent of those converting to Elite can drown 67k.

However, I think in this case, the 360 owner is surely going to sell his original 360. Either by ebay, back to gamestop which ran a special trade in deal on Elite, etc. Considering many 360's are under warranty in one shape or another, even if a unit is defective and replaced by Elite it makes financial sense to have it repaired and then sell it. In fact, in many cases even if it's not under warranty it probably makes sense, as the flat out of warranty repair fee is $129, and a used 360 has a $200+ value. (Gamestop normally gives $220 credit for a used X360 premium, $250 under the special Elite trade in this month)

So I think most "upgraders" to Elite are selling or handing down their old systems, which does lead to two consoles in circulation for ms and the same effect as new owners.

I can see PS2 being bought more as a replacement for defectives because it's only $129. The finances are different. It's much easier to write off $129 than $400.

 

[dobwal]

And your gonna sell\give away your own console, and that new owner is going to buy new games.

very true.

 

[Mintmaster]

BTW, Sonycowboy a good source at GAF says Elite sales were 67k in April. Which was only 1 week. Now one must interpet this news. Did Elite cannibalize 360 sales, or save them from an even worse month? As SC pointed out, take away Elite and that leaves only 107k 360's sold. It bears close watching to me if Elite becomes the new default SKU, which I dont think would be good news for MS as it would be a virtual price hike. It also confirms what I thought, that MS probably shipped ~100k Elite's and they sold out quickly. Elite's are still mostly sold out as of right now.

Itrackr is a site I look at to check availability, it's flawed apparantly but appears to give a general clue. Anyway, it has Elite at 17% national availability right now. Wii is at 11% for comparison.

I don't think the Elite is cannabilizing sales. People who would have bought the Premium simply chose the Elite instead (or that's what effectively happens, as per Ostepop's argument). 100K units (1% of XB360) isn't really enough to establish a trend of demand, especially since the rumours have been flying around for a while.

As for future price drops, I think it's doable for there to be only 2 SKUs at $199 and $399 with the latter being about as good as the Elite. I'm not sure if the reports are true that a minority of the XB360's sold are the Core model, but if so I think its price isn't low enough yet to get the attention of value buyers. If you go into the store expecting to spend $299, going up to $399 isn't a huge deal when you realize everything you get. A $200 difference would actually target significantly different markets.

In the long run I think it's important to have a model with features that shows it can hang with or outdo the PS3 (except for BR, of course) alongside a model that is cheap. The former for perception, and the latter for volume. In a way Sony is already doing that with the PS2/PS3, but Microsoft has the advantage that both models build on the same userbase.

Some people like to buy all the frills at once, while others want the basics first. Doesn't look like there's much between. I really don't see the Elite as a mistake in any way.

 

[Carl B]

However, I think in this case, the 360 owner is surely going to sell his original 360. Either by ebay, back to gamestop which ran a special trade in deal on Elite, etc. Considering many 360's are under warranty in one shape or another, even if a unit is defective and replaced by Elite it makes financial sense to have it repaired and then sell it. In fact, in many cases even if it's not under warranty it probably makes sense, as the flat out of warranty repair fee is $129, and a used 360 has a $200+ value. (Gamestop normally gives $220 credit for a used X360 premium, $250 under the special Elite trade in this month)

So I think most "upgraders" to Elite are selling or handing down their old systems, which does lead to two consoles in circulation for ms and the same effect as new owners.

Agreed; I do think that the used systems will (not in all cases though) re-enter the collective pool.

 

[Rangers]

I'm not sure if the reports are true that a minority of the XB360's sold are the Core model,

They are true. On a few occasions NPD broke down the sales, or the revenue and I was able to derive them from that. Core sales were 8% of the total in the last month I was able to check, which was a couple months ago. I'd say Core sales are probably ~10%.

As for future price drops, I think it's doable for there to be only 2 SKUs at $199 and $399 with the latter being about as good as the Elite.

That's fine but MS has not given any indication of dropping any SKU's. Until then I have to believe they wont. If you had a 199/399 split you have to assume most sales are of the premium variety. That's the essential problem.

MS will no doubt price cut by Winter. Lets say they do $100 across the board. The simple "problem" is the Elite ends up at $379, most people buy it, and you end up with little effective price cut.

If the premium remains the default SKU as MS expects, "problem" solved. However, I need to see several months of sales to see whether that settles out to be the case..

 

[thatdude90210]

MS will no doubt price cut by Winter. Lets say they do $100 across the board. The simple "problem" is the Elite ends up at $379, most people buy it, and you end up with little effective price cut.

If the premium remains the default SKU as MS expects, "problem" solved. However, I need to see several months of sales to see whether that settles out to be the case..

If I was spending Microsoft's money, I would swap a 60GB into the premium, in addition to the cut to $299. It would be more attractive, or at least less of a tard pack, compared to the elite. That would also make download content like tv shows and movies more disk space friendly.

 

[PARANOiA]

The Elite stats were posted earlier in the thread, but I think there's another angle to them. Sure - sales boost, canabilized premium sales, but also... how many current 360 owners went and bought one of these as well? Situations like this are hard because when existing users upgrade or repurchase, their purchase essentially counts as a 'blank,' because they are not in fact going to serve as an additional unit in terms of software acquisition.

Software sales is definitely not one of the 360's problems. It has easily surpassed all expectations of both the developers, and the gaming community as a whole.

What I do find funny is how the PSP sells reasonably well (although only a fraction of the competition mind you, but still...), yet tanks in terms of software sales. It's just so damned easy to pirate the games that people buy them with no games and are set for life. It makes me scratch my head as to why US devs bother making games for it at all.

Japan on the other hand doesn't seem to pirate PSP games at all. What's with that? Why are the Japanese gamers so different in terms of rejecting piracy?

 

[Silent]

does ms really want to be the market leader in videogames market or just stopping sony on the living room media center front and creating a healthy proftable platform that is also the leader of hd gaming would be enough for them?

How can microsoft become a videogames market leader when they are doing so bad in Japan and not really that good in Europe (understament for my country at least) ?

Thats what baffles me the most in these discussions. Its like the US is the only market on the planet.

 

[Nesh]

Observing each country individually and observing global sales give different conclusions

 

[oli2]

How can microsoft become a videogames market leader when they are doing so bad in Japan and not really that good in Europe (understament for my country at least) ?

Thats what baffles me the most in these discussions. Its like the US is the only market on the planet.

I agree : i already stated that several times here but that doesn't stop people to discuss as if Xbox360 's US "success" was the same in Japan and EU ...

IMO, most of the arguments given are consequently flawed ...

 

[Rangers]

How can microsoft become a videogames market leader when they are doing so bad in Japan and not really that good in Europe (understament for my country at least) ?

Thats what baffles me the most in these discussions. Its like the US is the only market on the planet.

In Europe they are still the hefty leader over the PS3.

BTW might as well post these here, new Germany sales article spotted:

http://www.heise.de/newsticker/meldung/89889

Total:
360 262,000 (Since Dec 05)
Wii 222,000 (Since Dec 2006)
PS3 70,500 (Since March 2007)


April 2007:

1. Wii 20,000
2. PS3 16,000
3. 360 9,500

Now before you claim it 360's deathknell consider the following: It shows how even in EU countries where it's allegedly shunned, 360's headstart has given it a big lead especially on PS3. It shows decent enough monthly sales that it could easily overtake PS3 on a monthly basis as things normalize (this is PS3's second month only). And thirdly, it show how tiny Germany's videogame market actually is (I've heard it described as near zero market for gaming by those over 14, although DS does well there). Also, many of MS big titles have been censored/banned their, so there's even less reason to buy a 360.



I've never denying 360 struggles in Europe outside UK, yet it still probably has a large lead on what could be considered it's main rival there (PS3) by virtue of it's headstart.

If you look at the three largest game markets in the world they are:
1. USA
2. Japan
3. Uk

360 is well accepted in two out of three.

 

[Teasy]

sony couldn't do better with psp. its their first handheld device out there, only being 2-3m units behind NDS is not bad imo

Its 3.1 million behind actually and based on current sales trends over the last several months that gap will keep increasing fast. DS is now selling 2.5-3 times as much as PSP month after month in the US, which is what's been happening in the rest of the world for a long time now, and look at worldwide sales:

DS 43 million
PSP - 21 million

The US is following that route now (worldwide sales will skew even more in DS's favour as well now that the US is joining the rest of the world in DS domination).

 

[Graham]

Microsoft seems to be shaking off the 'sony land' image over here (New Zealand).
Mostly by being quite competitive with their prices (horray!)

For example, taking advantage of a current promotion, you can get the following:

360 premium, hd-dvd drive (with KK, remote), 120gb hdd upgrade, Gears of War, PGR3 and kameo... Retail prices...
For the exact same price as the PS3.

Microsoft are laying the smack down over here. The 360 has recently been $650nz with gears, the hd dvd drive is 250 ($170us - yes, cheaper!), the 120gb is 230nz (cheaper again!), PGR3 and kameo are $35 a piece.

That adds up to exactly $1200, or the price of a PS3 on it's own.


So. What about sales figures? Well, it's a hard one to measure over here. However the biggest dedicated gaming online retailer in NZ lists the sales ranking:

360 + PGR/DOA bundle, #41
360 + Gears bundle, #138
360 Elite preorder, #61 (I'm not kidding!)

There are also the core,premium and forza bundle, but they are not in the top 1000 store wide numbers, so are not listed - (the numbers I've used are for the game section).

So combined, the system is a good seller.

The wii?
#264.
The PS3?
#206.
PS2, #91.

The Wii hasn't had the good fortune of decent advertising (there is no nintendo NZ), so it's basically dead in the water. Ironic huh?

As for hand helds? The DS destroys all. (not surprisingly)

PSP, #98.
DS black, #23.
DS white, #38.

 

[Rolf N]

Now before you claim it 360's deathknell consider the following: It shows how even in EU countries where it's allegedly shunned, 360's headstart has given it a big lead especially on PS3. It shows decent enough monthly sales that it could easily overtake PS3 on a monthly basis as things normalize (this is PS3's second month only).

What Microsoft does in Germany could be considered massive price-dumping. While everyone else (and Microsoft, officially, too) equates €=$ for their prices, the "Core" SKU has dipped below 200€ at times, and the other one is hovering around 300€. All the while the Wii consistently stayed above 240€ and the PS3 is back at 599€. There have been some PS3 deals at 550€ for a short time, but that seems to be over. Anyway, that's an 8% cut for the PS3 at best vs a 3.5% cut for Nintendo vs a whopping 25% cut for Microsoft.

The way the prices stack up relative to the US of A prices go a long way to describe Microsoft's confidence in that market. If it were just "allegedly shunned", the prices could reflect that better.

And thirdly, it show how tiny Germany's videogame market actually is (I've heard it described as near zero market for gaming by those over 14, although DS does well there).

It's rather that the German market for XBoxes is extremely small (though I hear XBMC was all the rage for a while). 220k Wiis isn't all that bad actually, but the real volume is in the PS2 which is not shown here, for some reason. It shouldn't be so surprising to see the PS3 lagging behind with the extreme price, thin library and short time on the market.

Also, many of MS big titles have been censored/banned their, so there's even less reason to buy a 360.

That is wrong. Microsoft apparently does not want to sell software here, because every other company can do it just fine. God Of War II was just officially released and can be bought everywhere. Microsoft is just opting out of having a clue how to do business in a regulated market.