NPD August 2008

[obonicus]

Rancidlunchmeat brought up demographics, which is why I responded with information about demographics. If you're not going to follow the conversation, don't butt in.

Before you turn on the snark, maybe you should follow the conversation. This is about sales. Part of the whole upset over Wii sales is that maybe they're reaching a new demographic. That's why demographics came up; they're framed from the point of reference of sales. Talking about users does not help one tiny bit, not when your own numbers point out that the owners are the same! I mean, fine. 45% of players are females. Again, what does this mean? Is this more or less than last gen? Out of Wii's very respectable sales, how many are to women? A number with no frame of reference is worse than useless.

Did you know that NPD also tracks software sales? The unprecedented success of Carnival Games, the popularity of Wii Fit, and the demographics of the people who play (and therefore result in sales of) Wii games are quite relevant to publishers, which is why 3rd-party Wii games go for mass appeal based on the user demographic. It's why the Wii shelf is full of puzzle games and mini-games. Demographics matter. I can't think of a single industry that doesn't follow its user demographics, but instead blindly follows raw sales numbers.

Except NPD supposedly discovered who the demographics are! That's where the 18/19% of PS2 owners owning a Wii comes from. The peanut gallery seems to think that the success of Carnival Games, of Wii Fit, the appearance of Wii stuff on Ellen means that the Wii has hit a completely new market. Too bad the peanut gallery seems to thrive on being wrong. They might actually be right, but again, NPD seems to say otherwise. Now, I can't say that the Wii hasn't hit an actual new demographic (there's plenty of anecdotal evidence otherwise regarding moms and grandmas) but how big is it? If NPD is correct, then it's no larger than about 30%.

Do we have evidence that these 'ultra-casual' titles would not have succeeded on the PS2's userbase? That's what I'm guessing at: that if NPD's numbers are right, then maybe this 'new' 'ultra-casual' market isn't new at all. It's always been there, at least since PS2 days, just very few people actually targeted it specifically. That's the dirty secret; that the 'core' audience from previous generations has always been an extremely vocal minority -- it's not a phenomenon new to this generation.

But if you have insight into NPD's data regarding console ownership, please share it. The idea that the Wii hit a new demographic was more palatable to me as well, but I'm in no position to question actual numbers.

 

[obonicus]

Edge Online has an analysis for August's NPD here.

 

[Cheezdoodles]

I can't think of a single industry that doesn't follow its user demographics, but instead blindly follows raw sales numbers.

I can think of quite a few: oil,finance (except for insurance agencies), illegal drugs, weapons, all raw material industries, etc etc.

 

[Shifty Geezer]

I can think of quite a few: oil,finance (except for insurance agencies), illegal drugs, weapons, all raw material industries, etc etc.

I'm guessing Fearsome meant 'consumer market', but I may be wrong.

 

[Cheezdoodles]

I'm guessing Fearsome meant 'consumer market', but I may be wrong.

Financial products,oil and illegal drugs are usually bought by consumers...

I dunno if you have some unique personal definition of consumer markets, but when economists talk about consumer markets its usually any commodity thats demanded by persons.

I think you can see where this is going..

Besides, he said "i cannot think of a single industry".
There is plenty of industries that dont give a rats ass about demographics.

 

[upnorthsox]

I can think of quite a few: oil,finance (except for insurance agencies), illegal drugs, weapons, all raw material industries, etc etc.

Oil maybe not so much, but Finance is big time, you ever want an avalanche of target marketing thrown your way just payoff a credit card sometime.
If you think drug dealers don't know their customers and their tendencies then you've never bought and/or sold drugs.
Weapons dealers? There may be no other industry more finely tune to their demographic audience.
B2B's don't sell to consumers (usually) but they sure as hell know their customers or they become fly-by-nights really fast.

Monolopies are the only ones who can afford to ignore demographics so I guess then that brings us back to MS.

 

[Shifty Geezer]

I dunno if you have some unique personal definition of consumer markets

Clearly mine isn't the same as your official Economist definition By Consumer I mean Joe Bloggs, high street, advertised on TV type products. (Edit : By way of additional description, think 'consumer' in the term 'consumer electronics'.) Things you or your mum or kid sister or teenage boy will be looking to buy, in part because they've been marketed to, where the marketeers (all three of them) have considered the demographics. However, Fearsomepirate's argument is not one I'm agreeing to or making myself. I agree Fearsome's phrasing was very loose and I may just be making excuses for him instead of actually explaining his true intentions

 

[DuckThor Evil]

The PS3 is not an upgraded PS2. With consoles, the success of the previous product does not guarantee in any way the success of the current product, as each machine essentially has its own library and thus must stand alone.

I disagree with this. I think the success of the previous product is the single most important thing for a success in the next round also, however it's still only one thing, but you have to mess up to loose that advantage. N64 messed up with the cartridges and loosing FF. Saturn wasn't doing that bad until FF exclusivity was announced. The time when Sega Rally and VF2 was released Saturn looked pretty strong and Genesis/Megadrive was not as strong as PS1 or 2 were.

The best thing Sony has going for PS3 is the legacy that previous Playstations laid out for it. People were growing up with Playstations and have many pleasant memories attached to that brand. Average risk avoiding people see it as a safe buy that will once again offer them good times, that and more is made possible by the success of previous generations.

 

[RancidLunchmeat]

Before you turn on the snark, maybe you should follow the conversation. This is about sales. Part of the whole upset over Wii sales is that maybe they're reaching a new demographic. That's why demographics came up; they're framed from the point of reference of sales.

Now, I can't say that the Wii hasn't hit an actual new demographic (there's plenty of anecdotal evidence otherwise regarding moms and grandmas) but how big is it? If NPD is correct, then it's no larger than about 30%.

Do we have evidence that these 'ultra-casual' titles would not have succeeded on the PS2's userbase? That's what I'm guessing at: that if NPD's numbers are right, then maybe this 'new' 'ultra-casual' market isn't new at all. It's always been there, at least since PS2 days, just very few people actually targeted it specifically. That's the dirty secret; that the 'core' audience from previous generations has always been an extremely vocal minority -- it's not a phenomenon new to this generation.

The idea that the Wii hit a new demographic was more palatable to me as well, but I'm in no position to question actual numbers.

Exactly, and the bold is mine.

My point, which I thought was actually Rangers (although he bowed out of this discussion) was that the commonly held belief about the underlying success of the Wii maybe completely false when we look at the NPD numbers a bit more closely.

People have been jumping from assumption to assumption, so much so that we've had a thread on here about how MS and Sony need to alter their next-gen strategy to mirror that of Nintendo's because their current strategy (and that from past generations) is out dated and unsupportable.

I don't think that's the case. I don't believe the facts, based on sales figures, support it.

Based on the numbers I see, and the easy explanations I can make for the success of the Wii, I see both the 360 and the PS3 selling more units than the Wii by the time all of these consoles have been terminated.

It's about value, it's about product, it's about life span of the individual consoles. I have no doubt that the PS3 is going to sell more consoles than the Wii when everything is over and the final numbers are reported. I have a little doubt about the 360, but that's only because MS has a shorter history and you do have to factor in their early abandonment of the Xbox, even though they had reasons to do so that don't currently exist.

I think some people are going to be shocked this holiday season when the 360 outsells the Wii, and I also think that those same people would be more shocked to know that if Sony were able to muster any sort of legitimate price drop this holiday, it'd outsell the Wii as well. Even without a price drop from the PS3, I expect the combination of the 360 and the PS3 to outsell the Wii by 3-1.

I am utterly not convinced that this 'new demographic' that is attributed to the Wii's success exists at all. If it does exist, I think it's so minute it's insignificant in explaining the sales.

 

[Squilliam]

Exactly, and the bold is mine.

My point, which I thought was actually Rangers (although he bowed out of this discussion) was that the commonly held belief about the underlying success of the Wii maybe completely false when we look at the NPD numbers a bit more closely.

People have been jumping from assumption to assumption, so much so that we've had a thread on here about how MS and Sony need to alter their next-gen strategy to mirror that of Nintendo's because their current strategy (and that from past generations) is out dated and unsupportable.

I don't think that's the case. I don't believe the facts, based on sales figures, support it.

Based on the numbers I see, and the easy explanations I can make for the success of the Wii, I see both the 360 and the PS3 selling more units than the Wii by the time all of these consoles have been terminated.

It's about value, it's about product, it's about life span of the individual consoles. I have no doubt that the PS3 is going to sell more consoles than the Wii when everything is over and the final numbers are reported. I have a little doubt about the 360, but that's only because MS has a shorter history and you do have to factor in their early abandonment of the Xbox, even though they had reasons to do so that don't currently exist.

I think some people are going to be shocked this holiday season when the 360 outsells the Wii, and I also think that those same people would be more shocked to know that if Sony were able to muster any sort of legitimate price drop this holiday, it'd outsell the Wii as well. Even without a price drop from the PS3, I expect the combination of the 360 and the PS3 to outsell the Wii by 3-1.

I am utterly not convinced that this 'new demographic' that is attributed to the Wii's success exists at all. If it does exist, I think it's so minute it's insignificant in explaining the sales.

I would say that you're completely forgetting that the Wii is extremely compelling on its own and for many people the motion controls answer the basic and critical issue of ease of use. So for these people there simply is no better alternative than the Wii, for that reason its an incredibly powerful value proposition which cannot be ignored. The HD systems sure got more powerful, but they haven't gotten any easier to use and therein lies the crux of the problem. In simple terms people prefer ease of use to flashy graphics or you could say most people would prefer to drive a comfortable car than a sports car.

So to say or assume that the Wii will be outsold on the basis of little more than a hunch when the Wiis demise has been predicted since its first release isn't wise to say the least.

 

[Acert93]

The most interesting thing to me in these numbers is Madden. Comparing sales numbers to last gen numbers (2 or 3 years ago) is interesting. Also very interesting seeing how a traditional stalwart franchise struggles on the Wii yet other titles that do great on the Wii wouldn't fly on the other consoles.

 

[Laa-Yosh]

If we're at software sales... GTA4 is between 8 and 9 million, right? Safe to say that there's at least as many copies left to sell, noone would replace this game with anything on the Wii. Meaning that a large part of the market has still been waiting for price drops on the HD consoles - the holiday season hw sales will show if this assesment is right.

 

[ShaidarHaran]

I disagree with this. I think the success of the previous product is the single most important thing for a success in the next round also, however it's still only one thing, but you have to mess up to loose that advantage.

Patently untrue.

Case-in-point:

Every single console this generation is on the opposite side of the sales curve from its predecessor. The Wii is out-selling the Gamecube. The 360 is out-selling the Xbox. The PS3 is under-selling the PS2.

 

[DuckThor Evil]

Patently untrue.

Case-in-point:

Every single console this generation is on the opposite side of the sales curve from its predecessor. The Wii is out-selling the Gamecube. The 360 is out-selling the Xbox. The PS3 is under-selling the PS2.

Your case-in-point proves nothing and like I said it's the single most important thing, but still only one thing out of many... X360 is selling this well largely due to the fact that the first Xbox paved the road for it. Wii is something completely new and innovative and as far as we know PS3 might be dead already or doing much worse if its predecessors didn't exist...

In my opinion it's kind of like rich kid has a better chance of staying rich than poor kid becoming rich, but it's still possible for the poor kid to become rich, if he for example comes up with a great business idea. Wii is kind of like that.

If each generation is a clean slate then I quess you and Fearsome would think that it would be smart for Sony to sell the rights to use the Playstation name to some other company to be used on their console and for Sony to just come up with a new name for their own console. I mean if it is a clean slate then surely that brand name means nothing?

I however think that the Playstation name is probably the most valuable asset Sony has at the moment and they wouldn't sell that for pretty much any amount of money, and all the worth in that name is mainly because of PS1 and PS2. Don't try to tell me that it doesn't matter.

 

[Cheezdoodles]

Patently untrue.

Case-in-point:

Every single console this generation is on the opposite side of the sales curve from its predecessor. The Wii is out-selling the Gamecube. The 360 is out-selling the Xbox. The PS3 is under-selling the PS2.

Its ridiculous to dismiss the theory that the success of a companies previous products doesn't matter, just because this generation consoles is outselling or underselling their previous incarnations!

How the PS3 is doing vs the PS2 (or any other console) in terms of sales is a totaly irrelevant statistic in regards to if previous success is important or not.

The question you should ask yourself is this:

"Would the PS3 sell as well as it does currently, if it was made by a brand new unheard of manufactuer?" (obviously it wouldn't be called the PS3..)


Of course previous success matters, brand names matter a lot to consumer! I have not seen a single study that has proven otherwise, outside of very homogenous products.

Even thought previous success matters, that does NOT mean that the sales of the successor product should sell the same. Products are different, different prices, different market different competition.

It just means that BRAND NAME AND RECOGNITION matter to costumers when they purchase goods. This has been proven over and over again with empirical studies. It does matter!

You may of course argue about "How much\little" brand name and recognition means, but saying it doesn't matter is quite frankly, stupid.

 

[dobwal]

Its ridiculous to dismiss the theory that the success of a companies previous products doesn't matter, just because this generation consoles is outselling or underselling their previous incarnations!

How the PS3 is doing vs the PS2 (or any other console) in terms of sales is a totaly irrelevant statistic in regards to if previous success is important or not.

The question you should ask yourself is this:

"Would the PS3 sell as well as it does currently, if it was made by a brand new unheard of manufactuer?" (obviously it wouldn't be called the PS3..)


Of course previous success matters, brand names matter a lot to consumer! I have not seen a single study that has proven otherwise, outside of very homogenous products.

Even thought previous success matters, that does NOT mean that the sales of the successor product should sell the same. Products are different, different prices, different market different competition.

It just means that BRAND NAME AND RECOGNITION matter to costumers when they purchase goods. This has been proven over and over again with empirical studies. It does matter!

You may of course argue about "How much\little" brand name and recognition means, but saying it doesn't matter is quite frankly, stupid.

I agree if a $600.00 console from someone other than Sony had been release this generation, getting the volume of sales of the PS3 would have been considered a "parting of the red sea" type of miracle. The "Playstation" brands brings with it a certain amount of expectation that no other brand can muster in the console manufacturing world. A $600.00 xbox 360 or Wii would have tanked harder and produced a more dire situation than the current predicament faced by Sony.

The PS3 still is a viable product and brand recognition has played a very large role in creating that viability despite the circumstances.

 

[RancidLunchmeat]

If we're at software sales... GTA4 is between 8 and 9 million, right? Safe to say that there's at least as many copies left to sell, noone would replace this game with anything on the Wii. Meaning that a large part of the market has still been waiting for price drops on the HD consoles - the holiday season hw sales will show if this assesment is right.

Completely agree.

In the analysis that has been happening about how great the Wii has been doing, everybody seems to disregard price point.

I agree that the interface for the Wii was important, and the Nintendo IP was important. But I don't see the Wii as selling to any different audience than that which bought me my Atari 2600.

Parents who can get an affordable system and understand how to play PacMan or Space Invaders or Missile Command with me.

As I grew older and systems got more complicated, my parents were buying, but not playing, the Sega Genesis with me.

The reason they bought it was because I wanted it. The fact that they couldn't really sit down (or stand up) and play it with me wasn't important. They didn't spend a lot of time playing the 2600 with me, anyway.

If you measured the amount of time I spent playing the 2600 VS the amount of time they spent playing it with me, their playing time wouldn't even register as a blip.

Once the consoles that can play Halo, GTAIV, Assassins Creed, COD, Madden, etc.. etc.. drop to a price point BELOW that of the Wii?

The parents/grandparents/etc.. who were buying the Wii because it was cheaper and 'THE GIFT' to give, are going to stop buying it when the 360 is cheaper and their target audience wants a 360 rather than a Wii.

MANY children got Wii's as gifts because 1) It was significantly cheaper and 2) the parents thought it might be fun to play with their children in 'family time'.

But parents aren't stupid. They know a game console isn't going to 'bring them together'. They were more interested in price point.

Now that the 360 costs LESS and their children want to play GTA and Halo and Gears and not Mariokart, they're going to buy them the 360.

As LY said.. let's wait and see for the holiday sales figures, but I don't think it'll even be close when you combine the PS3 and 360 sales, and I expect the 360 to outsell the Wii on its own.

 

[-tkf-]

But parents aren't stupid. They know a game console isn't going to 'bring them together'. They were more interested in price point.

Now that the 360 costs LESS and their children want to play GTA and Halo and Gears and not Mariokart, they're going to buy them the 360.

As LY said.. let's wait and see for the holiday sales figures, but I don't think it'll even be close when you combine the PS3 and 360 sales, and I expect the 360 to outsell the Wii on its own.

Parents buy consoles for kids aged 18+ ?

It shall be interesting to see if your bold predictions will hold, first indication will be October NPD numbers.

What if Nintendo lowers their price?

 

[AlphaWolf]

Parents buy consoles for kids aged 18+ ?

Because only people aged 18+ play games like halo and gears in the US?

It shall be interesting to see if your bold predictions will hold, first indication will be October NPD numbers.

What if Nintendo lowers their price?

The fact is that the Wii barely outsold the 360 in December of last year, it's not really much of a stretch to think that a much lower priced 360 will do better this year.

Do you really think nintendo is going to lower the price? Why would they?

 

[Arwin]

Over here I'm seeing the Wii now for 279 euro with the extra controller / Play bundle included (so Wii, two controllers, Sports, Play). That seems to suggest things are starting to change.