NPD June 2011

[Shifty Geezer]

I'm finding a bit hard to read some people's take on these xbox numbers. Basically, unexplained situation must mean a conspiracy is a foot. Are there any facts that backup this?

I don't think it's that black. There should be a logical explanation for anything and everything. Without a decent explanation of something, it shouldn't be taken at face value. Brad's question (what would cause such a spike) I found very valid. Rekator's suggestion of PSN defectors seems a very good one. Dobwal also shows a June spike isn't that extraordinary. Putting the two together, you'd need something like 150-200k sales to ex-PS3ersm which is maybe 1% of the uinstall base in NA - seems plausible.

So no need to accept or discredit these numbers on blind faith. We can take a data point and relate it to the system being sampled, query it, and determine the likelihood of it being a rogue value or an accurate one. Isn't that good practice?

 

[mrcorbo]

I'm finding a bit hard to read some people's take on these xbox numbers. Basically, unexplained situation must mean a conspiracy is a foot. Are there any facts that backup this? No, just the opinion that those numbers shouldn't be that high. So, we have an unexplained situation being explained by circular logic: This is wrong because it must be wrong. It could well be some Brazillian connection (starring Antonio Banderas) but what kind of facts are being put forth that sustain this?

Anyway, as rekator mentioned, I'd be a lot more inclined to believe the aftershock of PSN + windows 7 promo + kinect push explains this. If people agree 300k would be the "expected" sales numbers, are these three circunstances not capable of explaining the extra 200k in the whole NA?

Well said Richard.

I suppose some view the Win7 promotion as cheating, but I don't really see it as particularly different from other promotions that reduce the price of entry. It's just another promotion, and if people jump on it because of the included hardware, why shouldn't it be considered a sale?

At the end of the day, we're really counting sold to retailers are we not? HP or the computer hardware retailer still has to put orders in for the hardware in order to have the promotion in effect.

People in general are more willing to accept a given piece of information as valid if it reinforces a pre-conceived belief and conversely will be more skeptical of information that contradicts their preconceptions.

Pachter apparently was the source for both the giveaway and Brazilian distributor information, the former via twitter and the latter apparently having been communicated via an e-mail to VGChartz.

 

[NavNucST3]

Some of this has been explained before if a promo goes through retail and is rung up it is going to count this assumes that the retail sale is either accounted for in the NPD panel or a member organization. If a promo is akin to giving away items to a crowd at E3 that will generally come out of a company marketing budget and not count.

So, Windows 7 laptop > $699 + Free 360 counts because the 360 is actually scanned. Buy a TV and get a Sony 3D "package" will count because the items are scanned. The stipulations apply.

I'm not sure I grasp the inflated notion, well, not entirely true...I know why but still... If your favorite console happens to be made by sne or ntdoy they I suggest you email them that maybe they should have a better marketing dept.

inFamous 2 looks to have the same user base as the first title I would have thought that it had become much larger. I'm also not sure why they get "shafted" with a June launch.

 

[RancidLunchmeat]

So no need to accept or discredit these numbers on blind faith. We can take a data point and relate it to the system being sampled, query it, and determine the likelihood of it being a rogue value or an accurate one. Isn't that good practice?

Except that Brad was putting forth the notion that Patcher's theories must necessarily be taken as fact because he couldn't imagine any other scenario that would explain sales above what he deemed personally realistic.

So, no. It's not good practice and didn't become such until other explanations were provided. Explanations that Brad stated were quite impossible to even exist.

 

[Richard]

So no need to accept or discredit these numbers on blind faith. We can take a data point and relate it to the system being sampled, query it, and determine the likelihood of it being a rogue value or an accurate one. Isn't that good practice?

You know I agree with that. What I have an issue with is when faced with an odd occurrence someone proposes one of the least likely options as the explanation. Let me clarify; Brad (and this isn't directly aimed at him and I don't think there's any need to point fingers) saw a much higher than expected sales numbers and he thought:

There is no alternate explanation being put forth. Absent a major game release, a price drop, a new hardware revision or a major holiday, there is simply no other way to explain a huge jump from May to June [...]

My issue is the first sentence. How can there be no alternate explanation; very quickly three different and more plausible explanations were provided. Let's say this is the only explanation that comes to mind. Just as one should question one's reality and not accept the world that is presented to us so should we be just as skeptical about our own reasoning.

The brazillian thing starts out as an article post about an email Patcher sent. It's not clear from the article whether the Brazil came out of Pacher or was added from a secondary source. That alone is convoluted but assuming it's true that would mean one or several things:

a) Patcher has information that severely undermines NPDs credibility, instead of publishing an article that would garner hundreds of thousands of hits and probably a pay-rise he instead discloses this information via email to a website that is considered by many as untrustworthy.
b) NPD is knowingly compromising their standards. Next month PS3 could reach 700k if it includes shipments to Spain; things will escalate until NPD is laughed out of every gaming outlet.
c) If the NPD does not allow Sony the same rope, the NPD must be conspiring with Microsoft against Sony.

Despite there not being a shred of evidence Patcher said that or even that it's true, despite the ramifications of the information if true, according to some this is the only possible explanation.

So let's consider that is the explanation, the article in question states:

Michael Pachter did tell me in email however that much of the X360 year over year rise came from a) free X360s given away with Windows 7, and b) X360s sold directly to distributors (some of these units apparently ended up in Brazil) - and Microsoft convinced NPD to count both. Pachter didn't have figures on how many units those promotions added, but estimates that X360 would have dropped slightly year over year (-5% to -10%) without those inclusions.

Note the underlined part. The first is a promotion, the second is cheating. Jacob casually ignores the later. So, to reach those numbers, that would mean the sales between 380k and 400k. Patcher has no figures for the promotions but estimates it (how?) at around 110k.

To reiterate: we haven't seen the email, the author would be more interested in publishing himself, than to divulge that to a "competitor". If true it would mean a colossal blunder or a conspirary involving the NPD. The VGC article casually ignores cheating. Finally, the article mentions there's no figures but there are percentages, without explaining how those percentages came to be. And this is the only explanation being put forth?

 

[Rangers]

Brad explained that above. 360 Slim released last June. That explains why 450k last year. What's the rationale behind 500k this year without any obvious spiking event?

Aha so that explains that. Still...

I then ran the numbers for PS3 May 11 vs June, PS3 saw a nice increase too about +25% in weekly sales rate, where 360 was about +50% in weekly sales rate over May.

So by Brad's logic we would have to say 25% increase in sales with no price cut etc = fine, but 50% =completely unexplainable. I guess you could hold that position but it does seem a little tenuous.

My personal position is that the "free" consoles may have been counted by NPD or may not (and if they were , who's to say it wasnt legitimate inclusion under longstanding NPD policies? None of us really know any of that), what I'm resisting is the rapid jump to conclusions by some that already behave as if it's just established fact, when it isn't. I cant help but see some trying to discredit a nice 360 number, even no doubt taking it so far as eventually throw all future NPD 360 hardware numbers into question because NPD must be in cahoots with MS or something.

As to the Pachter email, everybody can read what they want into it but I've followed Pachter for long enough to feel like I know his character in some sense, it's not that he's a liar but he tends to throw out things without much thought or concern. So I just dont put much stake in it.

And again, if Sony wants to (and has the hardware costs low enough) give away 100k consoles next month and they're counted by NPD, more power to Sony. Haven't Sony done plenty of "buy a Sony HDTV get a PS3" type deals in the past? Dont remember any controversies about those and whether they were counted. In the end hardware in consumer hands is hardware in consumer hands.

 

[AlphaWolf]

And again, if Sony wants to (and has the hardware costs low enough) give away 100k consoles next month and they're counted by NPD, more power to Sony. Haven't Sony done plenty of "buy a Sony HDTV get a PS3" type deals in the past? Dont remember any controversies about those and whether they were counted. In the end hardware in consumer hands is hardware in consumer hands.

They do, they just apparently haven't been linked with any significant uptake. Rogers (major cell and cable dealer in Canada) has been giving away ps3's with certain phone contracts, Bravia's (3d models anyway) have also been including a ps3.

It was my understanding that these units were not counted in the past, perhaps I was mistaken. Or perhaps there has been a change in policy as to what is being counted at NPD. I just wish we had more information from NPD as to what is being counted. In any event I very much doubt these bundles are being counted for only one vendor as NPD's credibility would be out the window and reliability of numbers is pretty much their business.

recap of what's new in 2011 to potentially contribute to 360 sales.
1) Kinect
2) $50 Gift Card bundling from major retailers/etailers (ps3 also)
3) Student pc/xbox bundle (maybe maybe not)

If 3 is true, it's going to be a much much bigger number in august when back to school sales peak.

That said I'm still not really sure why people have such a problem with Xbox 360 june numbers, June is their smallest increase percentage wise increase this year over 2010 numbers. Did the kinect effect supposedly wear off when June rolled around?

 

[MrFloopy]

It was my understanding that these units were not counted in the past, perhaps I was mistaken.

It was my understanding that they are generally included in sales numbers. I have no specific knowledge of NPD, but I know Australian sales always included the Bravia PS3 give-aways, as they are often quoted in context of the total numbers.

And so they should be. Have a think about what these numbers are for. Contrary to what you would think reading gaming websites, they are not a scoreboard for gloating rights. They are a market research tool used by retailers, publishers and advertisers. There is absolutely no reason to exclude give away units. They have the same impact on market share and future software sales as any other sale. Give-aways like this are indeed simply a price cut. Some of the price is cut from the console and some from the purchased product, whereby the total cost paid is for both products. Have a think of the case with the Bravia PS3 deals. Do you think the Playstation division is happy to make their numbers look worse to help out the TV guys?

Mobile phone contracts that include a free phone are the same marketing mechanism just at a retail level.

 

[bkilian]

It was my understanding that these units were not counted in the past, perhaps I was mistaken. Or perhaps there has been a change in policy as to what is being counted at NPD. I just wish we had more information from NPD as to what is being counted. In any event I very much doubt these bundles are being counted for only one vendor as NPD's credibility would be out the window and reliability of numbers is pretty much their business.

If they are rung up at a retailer, they will be counted, irrespective of the price or discounts applied. If it's a mail in offer or included in the box, then it won't be counted.

We went through this with HD DVD. The 5 free movies you mailed in for were not counted in the sales numbers, but BOGO offers were.

Amazon Students who purchase a qualified Windows 7 personal computer from Amazon.com will receive an email within 8 business days after the Windows 7 PC ship date, letting them know a promotional credit has been added to their account. Open the email, click on the link back to Amazon.com, place an Xbox 360 4GB console in your cart, and the discount will automatically be applied at checkout, no coupon code required.

Since the console goes through the checkout process, it is counted as a sale, although with a really good discount. The Microsoft Store version of the deal looks similar.

 

[RudeCurve]

Personally my take on the trend in higher numbers from May to June for both MS and Sony over the years not just this year is due to highschool graduation gifts to students.

 

[Silent_Buddha]

If they are rung up at a retailer, they will be counted, irrespective of the price or discounts applied. If it's a mail in offer or included in the box, then it won't be counted.

We went through this with HD DVD. The 5 free movies you mailed in for were not counted in the sales numbers, but BOGO offers were.


Since the console goes through the checkout process, it is counted as a sale, although with a really good discount. The Microsoft Store version of the deal looks similar.

That makes sense, and hence we can conclude that past promotions of PS3 with the perchase of a TV/whatever were likely also counted in NPD numbers.

It'd be interesting looking back to see how those impacted PS3 numbers for months when those promotions were in effect. Makes one wonder if this goes partially to explain PS3's dominance in Europe where PS3 giveaways with TV's were more prevalent.

As well, as someone mentioned, this could mean that August sales numbers for X360 could be quite stratospheric if the promotion is still going on.

Regards,
SB

 

[Brad Grenz]

recap of what's new in 2011 to potentially contribute to 360 sales.
1) Kinect

Why was the effect so great in June as opposed to previous months?

2) $50 Gift Card bundling from major retailers/etailers (ps3 also)

There were big deals on both beginning in May. Why were 360 sales disproportionately affected and primarily in June?

3) Student pc/xbox bundle (maybe maybe not)

Seems very likely a significant contributing factor based on our information.

That said I'm still not really sure why people have such a problem with Xbox 360 june numbers, June is their smallest increase percentage wise increase this year over 2010 numbers. Did the kinect effect supposedly wear off when June rolled around?

It's just the question of how June magically managed to defy all expected trends and market effects to beat what was already a really impressive number last year obtained on the hype of a newly launched form factor. If Pachter's projected 380-400K had come to pass, we would not be having this conversation. That figure makes sense.

PSN debacle? It's a possible explain also, people with only PS3 before, buy 360…

But the PSN debacle was over by June. The sales effect would have been felt in May. The hack occurred in April. And if this was the cause, why were the PS3 sales not more negatively impacted?

For the sale to Brazil's distributor, if this distributor is base only on Brazil, difficult to incorporate him to US sales.

I don't know, if MS was exporting US models maybe they figured they should count, too.

 

[AlphaWolf]

Why was the effect so great in June as opposed to previous months?

Try again. Here's the YoY bumps from 2010 to 2011 for the 360.

January 14%, Feb 27%, Mar 28%, Apr 60%, May 39% June 12%. So why does June have the smallest bump?

There were big deals on both beginning in May. Why were 360 sales disproportionately affected and primarily in June?

Again, they haven't been. They are showing the same or less bump than other months this year.

Seems very likely a significant contributing factor based on our information.

With no real idea of the effect. If august is 700k I'll believe 100k of June was the student promo.

But June isn't out of line at all with other numbers this year. Try putting your agenda down for a minute and actually look at the numbers.

 

[Brad Grenz]

Try again. Here's the YoY bumps from 2010 to 2011 for the 360.

January 14%, Feb 27%, Mar 28%, Apr 60%, May 39% June 12%. So why does June have the smallest bump?

Again, because June 2010's numbers were abnormally large last year thanks to the launch of the 360 Slim.

 

[DuckThor Evil]

Try again. Here's the YoY bumps from 2010 to 2011 for the 360.

January 14%, Feb 27%, Mar 28%, Apr 60%, May 39% June 12%. So why does June have the smallest bump?

Because last June was pretty big due to slim launch. I think Brad makes sense. Something like 400k for the month + different promotional things boosted the good number to even better. X360 shows disproportional gains in June over May compared to the other platforms.

I think Shiftys "conspiracy theory" with regards to MS keeping the year on year growth streak alive is a valid point to consider. Not saying it's the sole reason for the campaign, but a welcome side benefit.

 

[AlphaWolf]

Again, because June 2010's numbers were abnormally large last year thanks to the launch of the 360 Slim.

Every month has been up since the slim model launched, not just June.

 

[Shifty Geezer]

You know I agree with that. What I have an issue with is when faced with an odd occurrence someone proposes one of the least likely options as the explanation. Let me clarify; Brad (and this isn't directly aimed at him and I don't think there's any need to point fingers) saw a much higher than expected sales numbers and he thought:

My issue is the first sentence. How can there be no alternate explanation;

Okay, I agree wholeheartedly in that. The problem is one of jumping to conclusions without asking more probing questions. We all shouldn't be averse to asking questions and shouldn't be quick to take a particular understand as fact. Or at least, if we do, be just as quick to drop it and change our stance if things are proven otherwise!

As regards the June PSN thing, I'm changing my view there. Forgot it happened in April, so any increase should happen in Apr/May. June is way to late to benefit. So mer personally, I'm still uncertain as to why this spike in 360's numbers and it remains a puzzler.

 

[DuckThor Evil]

Every month has been up since the slim model launched, not just June.

June 2011 was the first month where YOY comparison is 360S vs 360S and launch month of the slim in June 2010 is naturally/logically the hardest month to get YOY growth against.

I think the summer promotion is a nice tool to carry the 360 vs the strongest slim launch window months year ago. After August the ripple effects of last years slim launch should have worn off and getting YOY growth with strong holiday lineup should be possible with the lineup alone.

 

[Shifty Geezer]

Every month has been up since the slim model launched, not just June.

Yes, but last year's was already pushed up beyond the typical growth. If last year's June sales weren't up 85% on the previous year (240k sold June 2009), this 500k figure would represent an increase of like...100%. An increase of 85% for 2010 was explainable by Slim. Without slim, or some other key event to drive sales, we should be seeing the same sort of sales inline with monthly averages.

So let's imagine no Slim last year. Sales were have been 240k for June 09. 30% growth (pie in the sky figure) YoY would be 312k June 2010. June 2010 only saw much larger sales because of Slim's launch. 30% growth on 300k for a June 2010 would be 400k this year. 500k represents 60% growth. We saw that in April (PSN effect?) but otherwise growth is nearer 30% average.

The point is last year's figures aren't a standard reference point because there was an exceptional event to drive sales, so sales this year's shouldn't be expected to match last year's any more than we should expect sales in March to match those in November where November has a reason to push sales up. 500k for June is anomalous, and anomalies need an explanation!

 

[AlphaWolf]

Except there were also the $50 gift card promotions and kinect wasn't available in June last year.