NPD July 2009

[mrcorbo]

They did drop the price, last September. That's what allowed them to dwell on yoy comparisons so much. Parity with last year is probably less than they had hoped for, but console hardware in general is way down. Current economic climate something something.

Pretty nice sustained effect for this particular price drop, though. Certainly better than the previous one which seemed to fall off after a couple of months. This indicates to me that there is some significance to the absolute price point reached that goes beyond just the price drop itself.

Oh, yeah. And nobody really seems to be trying very hard right now. You have to think everybody's gearing up for an epic showdown for the holiday shopping season. With the Wii coming back to the pack, this end of year might actually be interesting.

 

[RancidLunchmeat]

With the Wii coming back to the pack, this end of year might actually be interesting.

Why? There were lots of questions about the Wii's sustainability or lifespan, if you will, and most people poo poo'd those who put forth that idea because the Wii's legs seemed longer than predicted.

But, in comparison to the other more advanced consoles, the Wii's legs simply can't be as long. The other issue is market size, which is something we still don't have a grasp on. Because it launched at a far more 'reasonable' price point, it was more easily obtainable earlier in its life.

Its very possible there is no 'value proposition' with the Wii, and that the market for those who want one is shrinking and won't ever significantly increase.

This is, in fact, the inverse of the argument for those who still believe the PS3 can 'rebound'. Because the PS3 does have a value proposition and there is a large market of people who would buy one, but either can't afford it or even if they can, they can't really justify the purchase at the current price. (You can put me in the last category, btw)

I know for a fact the PS3 sales figures will increase by +1 when it hits $199, because that's when I'll buy one. I also know for a fact that unless the Wii is selling for $99, I'm not buying one and I'm not rushing out to buy one at that price point either. I also know, I'm not alone in these things.

 

[22psi]

HMM this sets up for a very interesting Fall, maybe 360 will pull out ahead of Wii this Nov and Dec?

 

[Nesh]

July 2008 US Games Industry Summary

Total Sales - $1.19 billion USD
Hardware Sales - $446.9 million USD
Software Sales - $591.1 million USD
Accessory Sales - $152 million USD

July 2008 US Hardware Sales Platform Unit Sales Unit Sales per Week Year-to-Date Lifetime-to-Date
1. Nintendo DS 608,000 152,000 3,795,000 21,385,000
2. Nintendo Wii 555,000 138,750 4,037,000 11,407,000
3. Sony PlayStation 3 225,000 56,250 1,833,000 5,081,000
4. Sony PlayStation Portable 222,000 55,500 1,704,000 12,216,000
5. Microsoft Xbox 360 205,000 51,250 1,559,000 10,670,000
6. Sony PlayStation 2 155,000 38,750


July 2008 US Top Ten Software Rankings Platform Title Publisher Release Unit Sales
01. 360 NCAA Football 09 Electronic Arts 07/2008 397,600
02. WII Wii Fit Nintendo 05/2008 369,600
03. NDS Guitar Hero: On Tour Activision 06/2008 309,700
04. WII Wii Play Nintendo 02/2007 284,000
05. PS3 NCAA Football 09 Electronic Arts 07/2008 242,500
06. 360 Soul Calibur IV Namco Bandai Games 07/2008 218,900
07. WII Mario Kart Wii Nintendo 04/2008 174,500
08. WII Rock Band MTV Games/Electronic Arts 06/2008 165,800
09. PS3 Soul Calibur IV Namco Bandai Games 07/2008 155,800
10. 360 Sid Meier's Civilization Revolution Take Two 07/2008 147,600

What made the PS3 sell slightly above he 360 for the month?

 

[betan]

Absence of 360 price drop (at the time).

 

[DuckThor Evil]

What made the PS3 sell slightly above he 360 for the month?

Well the PS3 was pretty much outselling the X360 in NA from the start of the 2008 till the end of July, helped by it's own price cut at the end of 2007 and games like MGS 4 in June. I think it points out that atleast in the past PS3 seems to have had more demand at a price parity with the X360 (note I didn't say there ever was a price parity) and that there is a good chance that dropping to 299 would again spur sales. I hope the drop happens so things would get a bit more interesting. PS3's last price cut had the legs for spurring sales for about a year and the next 100 off could be better in terms of sustained sales.

I think MS also has further room for cutting though. The new Elite at 299 could come down in price, because it's not really 100$ more expensive to make than the Arcade unit.

 

[obonicus]

I think MS also has further room for cutting though. The new Elite at 299 could come down in price, because it's not really 100$ more expensive to make than the Arcade unit.

We don't know if the Arcade is subsidized, though. Also the HDD probably adds significantly to the cost.

 

[DuckThor Evil]

We don't know if the Arcade is subsidized, though. Also the HDD probably adds significantly to the cost.

The HDD should be under 50$. The reduced cables and the missing 512MB chip (that is on the Arcade unit) on the motherboard also brings the costs down for the Elite. Arcade might be subsidized, but I think that if Sony puts lot's of pressure on MS, they might drop the Arcade/Elite to 179/249$ or 179/279$

 

[Squilliam]

The HDD should be under 50$. The reduced cables and the missing 512MB chip (that is on the Arcade unit) on the motherboard also brings the costs down for the Elite. Arcade might be subsidized, but I think that if Sony puts lot's of pressure on MS, they might drop the Arcade/Elite to 179/249$ or 179/279$

I would say the former rather than the latter price. Theres no rule which states that they have to be $100 apart and infact the prices used to be $70 apart between $280 and $350. Though personally I would pick $169 as the price, a $20 cut is almost not worth it. However with only $70 between the Arcade and the PS2 they can start digging into to that market as well, so they can hurt them whether they steal a PS3 sale or a PS2 sale.

 

[Nesh]

Absence of 360 price drop (at the time).

Well the PS3 was pretty much outselling the X360 in NA from the start of the 2008 till the end of July, helped by it's own price cut at the end of 2007 and games like MGS 4 in June. I think it points out that atleast in the past PS3 seems to have had more demand at a price parity with the X360 (note I didn't say there ever was a price parity) and that there is a good chance that dropping to 299 would again spur sales. I hope the drop happens so things would get a bit more interesting. PS3's last price cut had the legs for spurring sales for about a year and the next 100 off could be better in terms of sustained sales.

I think MS also has further room for cutting though. The new Elite at 299 could come down in price, because it's not really 100$ more expensive to make than the Arcade unit.

Oh I thought it was July 2009

I didnt realize it was 2008

 

[Teasy]

Maybe if some of you took the time to look and see that every system has dropped significantly this month we wouldn't have to wade through the same old "Wii in trouble" "Wii was just a fad" sillyness

Only 360 has bucked the trend to some degree by only losing 16% of its sales. The rest are all down by between 25% and 30% compared to June.

July sales vs June:-

Wii = -30%
DS = -30%
PS2 = -29%
PS3 = -26%
PSP = -25.5%
360 = -16%

 

[DuckThor Evil]

Maybe if some of you took the time to look and see that every system has dropped significantly this month we wouldn't have to wade through the same old "Wii in trouble" "Wii was just a fad" sillyness

Only 360 has bucked the trend to some degree by only losing 16% of its sales. The rest are all down by between 25% and 30% compared to June.

July sales vs June:-

Wii = -30%
DS = -30%
PS2 = -29%
PS3 = -26%
PSP = -25.5%
360 = -16%

June was a 5 week month and July a 4 week month. Wii has dropped big time year on year and that is what people are saying. In a week to week basis X360 sold better in July compared to June.

 

[Teasy]

June was a 5 week month and July a 4 week month.

Ah right, I was wondering why the drop for nearly every system was so high.

Wii has dropped big time year on year and that is what people are saying.

Some are yes, but it seems to me others are mainly just jumping on what looks like a massive drop from last month. I mean its not as if this is the first time Wii has been significantly behind its 2008 performance (same goes for most games systems).

Its also still awaiting its first price drop. Which I'd expect to happen not too long from now in order to try to reach they're sale estimate for the year.

 

[fearsomepirate]

Wii's loss of momentum I think is easily explained by the lack of killer 1st party software this year. Neither Wii Music nor Animal Crossing did as well as Nintendo expected, and the New Play Control series has not generated interest. The evidence is in the software. Games released over a year ago are still some of the big sellers on Wii and DS. I think Nintendo forgot that games need content.

PS3 and 360 are fighting for the same customers. 360's stability could very well be interpreted as cannibalizing PS3 sales, as more and more customers decide that the extra $100 doesn't give you access to a better game library. HD console sales overall posted a slight drop. HD gaming never had the consumer interest that Wii did in the first place. How interested are customers in what publishers are producing, really? Look at the software list this way:

Sequel to Wii Sports 508.2K
HD EA Sports Sequel July-09 376.5K
HD EA Sports Sequel July-09 237.4K
Year-old Wii game 164.3K
Year-old Wii game 156.6K
4-yr-old DS game 132.2K
Director's cut of 2-yr-old DS game 116.4K
HD EA Sports 116.4K
3-yr-old DS game 101.8K
EA Fitness 96.8K

Remember, hardware is merely access to software. What this top 10 says to me is that there wasn't a whole lot of interest being generated by new software. I'm not expecting a price drop. Nintendo knows that games, not price drops, are what generate interest in a product. They swung and missed with AC and WM at the beginning of the year, and they are probably hoping they can leverage Wii Sports Resorts up to the holidays, since their new customers hear more through word of mouth than IGN or Gamespot.

 

[dobwal]

We don't know if the Arcade is subsidized, though. Also the HDD probably adds significantly to the cost.

Why? if you can buy a 2.5" 120 HDD at New Egg right now for $59.99 what makes you think a vendor who's volume order would be in the millions and orders directly from the manufacturer would pay anywhere near that?

 

[fearsomepirate]

And do you have any idea what the manufacturing run on that HDD was? Or how production cost scales with bulk?

 

[Shifty Geezer]

I thought on this board before the HDD was pegged at a $20 minimum cost. I think $30 is the peak cost to any console to include. I know I've used this figure before when talking about the inclusion of an HDD.

 

[obonicus]

Right. I consider $20 to be significant, especially if we're talking about a $100 dollar difference between arcade and pro/elite. Certainly more significant than 256/512M of built-in flash memory or a cable.

 

[dobwal]

And do you have any idea what the manufacturing run on that HDD was? Or how production cost scales with bulk?

I do know that across Western Digital and Seagate line of HDDs covering between ~20Gb to 2Tb, the average selling price for their HDDs is $59 and $68. Based on the number of models available at 250-500 Gb versus 120Gb, I sincerely doubt 120 Gb represent the average size of HDD manufactured by either Seagate or WD. I also know that big manufacturer like Seagate and WD produces dozens of different HDD models and that MS would have leverage because its contract would add millions of orders to one particular line. In the case of Seagate it has HDD models dedicated to consumer electronics, which target consoles.

Western Digitial uses third party distributors for online vendors. When you add the fact that WD will add on a profit margin, the distributor will add on a profit margin and newegg will add on a profit margin and yet still manage retail price for HDD 120-320Gb for retail prices between $50.00-$85.00, it would be hard to surmise that MS would be so incredibly ineffectual to not be able to recently negotiate a better HDD price than can be found on the retail shelves.

 

[Mboojigga]

Top 20 software sales

http://www.gamasutra.com/php-bin/news_index.php?story=24851

1) Wii SPORTS RESORT W/ WII MOTION PLUS (WII) 508.2K
2) NCAA FOOTBALL 10 (360) 376.5K
3) NCAA FOOTBALL 10 (PS3) 237.4K
4) WII FIT W/ BALANCE BOARD* (WII) 164.3K
5) MARIO KART W/ WHEEL (WII) 156.6K
6) MARIO KART DS (NDS) 132.2K
7) POKEMON PLATINUM VERSION (NDS) 116.4K
8) FIGHT NIGHT ROUND 4 (360) 116.4K
9) NEW SUPER MARIO BROS (NDS) 101.8K
10) EA SPORTS ACTIVE BUNDLE (WII) 96.8K
11) Wii Play w/ Remote (WII) 61k-95k
12) Tiger Woods PGA Tour 10 (WII) 61k-95k
13) Fight Night Round 4 (PS3) 61k-95k
14) UFC 2009: Undisputed (360) 61k-95k
15) Punch-Out!! (WII) 61k-95k
16) Transformers: Revenge Autobots (NDS) 61k-95k
17) Prototype (360) 61k-95k
18) Major League Baseball 2K9 (360) 61k-95k
19) The Legendary Starfy (NDS) 61k-95k
20) NCAA Football 10 (PS2) 61k-75k