NPD November 2010

[Silent_Buddha]

First with the opening post.

HOLY Carpe at COD: BO. 8.4 million in the US alone. Even including PC sales, that is a huge number. Potential for more than 14 million worldwide. Absolutely amazing. The following months will be interesting to see if it has as long a legs as COD: MW, MW2, and WAW. Activision is absolutely dominating the FPS sector. And if this is driving the COD franchise into the ground, many franchises should be so lucky. EA with the MoH series is a classic example of grinding down a FPS franchise into non-relevance. Activision with COD on the other hand continues to hit them out of the park.

Fable 3 is pretty amazing taking the number 5 spot despite being single platform and this being the 2nd month on the market.

Dance Central is respectable at number 11 since it was only selling to a small fraction of the X360 userbase.

X360 at 1.37 million. Up 42% YoY. With no price cuts. It may or may not have had a YoY rise without Kinect. But I'd be willing to bet money that most, if not all of the rise, could be directly attributed to Kinect. Again, it can't be stated enough how big a 42% YoY rise in sales is when there is no price cuts this late in the life of a console. That is absolutely huge.

PS3 at 530k is pretty disappointing. It's obvious the Move didn't have as much of an impact on system sales as Sony were perhaps hoping for as it hasn't "appeared" to boost PS3 console sales signficantly in any of the months it was available. And in terms of overall revenue didn't have nearly the impact of Kinect (see below).

And lastly. 50% of all console related consumer spending for November was on X360 consoles, software and accessories? Again, I'd be willing ot bet this is mostly due to Kinect pulling in non-core people into the X360 install base with a fair bit contributed by COD: BO. Sure it isn't unusual for X360 to pull in 1/3 of all console related revenue in the US, but 50% is still a rather large jump over that.

Even COD: MW2 and Halo 3 wasn't able to push X360 over ~35% of all console revenue. So I think it's safe to say that thus far MS have hit one out of the park with Kinect. It'll be interesting to see if they can keep it going. I hope they do. I absolutely love the alternative and free feeling games that having no controllers brings.

Definitely but I still expected better of Dance Central (though if you read my posts in the price thread I though Sports would outsell it).

I'm going to say it...there is no way I envision Fable 3 in month two outperforming Gran Tourismo 5 launch month floating release dates be damned. I also expected Donkey Kong to outperform Fable 3 though I expect Donkey Kong will have an excellent second month.

Dance Central is a bit understandable as it was selling to a small fraction of the X360 userbase. Since we don't know what the regional breakdown for Kinect is, it's hard to say if they sold to 1/3, 1/4, or 1/5th of the total Kinect install base in the US.

As for GT5, that seems to be more to do with a general lowering of interest in racing games at least in the US. Compare it to Forza 3 sales at launch (granted only 3 days) at ~175k. It also probably did better than NFS: HP on PS3.

Also the number of days on sales is another key factor.

It certainly helps but it's not sure thing it'll do better in December (not sure if you were implying it would or not). KZ2 and Forza 3 for instance didn't do better the following months even though they had 1 week or less worth of sales.

What GT5 has going for it though is December is going to be a big month, so there's a fair chance it'll do better then.

Either way, it sold less than what I was expecting after all the waiting. But I'm putting that down as I said above, just a general lack of interest in the US for racing games in general.

Regards,
SB

 

[DonaldDuck]

The GT5 numbers WW seems to be good -if good is the contrast with GT4 that, on the other hand, had a bigger userbase available. In Europe the game is selling really well, extremely well if we consider other car franchises this gen -obviously the Forza affaire. I have the feeling that with continuous support from PD the game will hold for some time in charts, and it´s pretty clear than in the future it will be aggresively bundled, as was Forza -in Spain at least.

So the point here is Kinect alone skyrocketing sales. How interesting will be to have UE numbers. The other country with detailed track (JPN) showed Kinect -and Move- fail miserably.

 

[Mintmaster]

not to impressed with the 360. Felt it should have been higher due to kinect.

You're crazy. This is November, not December. 1.37M is extraordinarily good for the 360. A few months ago I never thought Kinect would be such a hit.

The way MS has transformed XBox from a hardcore platform to one that also targets the casuals has been brilliant. Conversely, Sony must be kicking itself day after day. First it watches Nintendo make gobs of money with a console that they could have easily overwhelmed with a PS2 accessory. Now they're watching MS overtake them in the fun factor image that takes companies decades to build.

 

[NathansFortune]

Yeah, I'm inclined to think that having a decent, usable Arcade model is doing a lot more for MS than Kinect is. Obviously, I won't know until Gamasutra releases the average selling price in their analysis. Being the preferred platform for one of the biggest game releases in history probably doesn't hurt either.

The unfortunate thing is Sony can't follow suit with their own Arcade, even with a bigger chunk of flash. They've encouraged developers to use the hard drive as cache, so the PS3 is stuck with either a regular hard drive or an SSD that can handle all the writes.

I think the long term position of not having a HD has worked pretty well for MS, it allows them $40 worth of savings in the low cost model, it lets them have the $199 model with a sustainable pricing model.

The best Sony could do is a 40GB model next year in a super-slim, but even that would be pretty expensive, but shifting to SSD would bear long term savings for Sony in the same way the 4GB model lets MS have a $199 model.

 

[Silent_Buddha]

I'm not sure a move to SSD would be prudent from a cost standpoint at this time. You can get a 1 TB notebook HDD for 10 USD more than a 40 GB SSD.

Granted bulk direct prices by contract for large corporations will be lower, but the size discrepency is still going to be huge. For an average consumer seeing say a console with 750 GB of storage versus one with 40 GB of storage for the same price, most would probably go with the 750 GB model.

I think we're still at least 4-5 years before SSDs are a decent alternative to a HDD.

Regards,
SB

 

[NathansFortune]

Next year a 40GB SSD will be cheaper by around a third and Sony could make a super slim to revamp the line whilst keeping an HDD SKU as a premium model much like Microsoft have done with Xbox. Including SSDs will bear long term cost savings for Sony, and getting the consumer used to the idea that a smaller amount of faster storage is better than 750GB of HDD storage so they could eventually phase out HDDs entirely and replace them with 256GB SSDs when they become cheap enough.

I think the og Xbox is enough eveidence that having any type of HDD in a console is bad for long term savings.

 

[AlNom]

Update: Half of the 360 hardware sales were Kinect bundles.

http://www.gamespot.com/news/6285151.html

 

[NathansFortune]

Nice. $500m well spent I think.

 

[eastmen]

A super slim ps3 would be stupid. It would make many people simply wait another year for yet another possible slim.

A slim console is a gun that can only be shot once , perhaps twice a generation.

 

[eastmen]

Pachter also noted that one third of PS3 sales were $400 PlayStation Move bundles, versus one half of all Xbox 360 purchases being Kinect bundles. (There are two Kinect bundles, a $300 4GB model and $400 250GB model.) "Xbox 360 Kinect console bundles outsold PS3 Move console bundles by more than 5 to 1," said the analyst.
Source: http://www.gamespot.com/news/6285151.html

 

[patsu]

What's missing from that set of numbers are:
* What's the ratio between $300 and $400 Kinect bundles ?
* ratio between standalone Kinect and Move sales vs their respective bundles

 

[Silent_Buddha]

Next year a 40GB SSD will be cheaper by around a third and Sony could make a super slim to revamp the line whilst keeping an HDD SKU as a premium model much like Microsoft have done with Xbox. Including SSDs will bear long term cost savings for Sony, and getting the consumer used to the idea that a smaller amount of faster storage is better than 750GB of HDD storage so they could eventually phase out HDDs entirely and replace them with 256GB SSDs when they become cheap enough.

I think the og Xbox is enough eveidence that having any type of HDD in a console is bad for long term savings.

I wouldn't count on it dropping much. MLC SSD's have only recently dropped back down to the price they were at 3 years ago. Every year someone claims SSD prices will drop significantly in a year, and every year that doesn't happen. Until last year, year over year prices for SSDs were actually going up.

And I don't anticipate 256 GB SSDs dropping below 300 USD for at least another 3-4 years at the very earliest unless there's a breakthrough in manufacturing.

And I don't expect SSDs to become more cost effective than HDDs for at least another 10 years making HDDs still the most cost effective solution for mass storage in consoles.

Anyway, all this is straying off topic so if you want the last word go for it.

Update: Half of the 360 hardware sales were Kinect bundles.

http://www.gamespot.com/news/6285151.html

Well, not unexpected, but still surprises me somewhat. And still shortages of them in the US although availability seems to have improved slightly.

Walmart has them in stock but they are ONLY available as combo bundles.
Newegg has spotty stock, and are pushing combo bundles also.
Gamestop is also pushing combo bundles but do offer non-combo bundles with limited stock.
Target is very spotty but situation improving, there's at least occasional stock locally there now.

Buy.com has massive price gouging. 400 USD for 4 gb bundle, 600 USD for 250 gb bundle, and 235 USD for stand alone bundle.

Amazon is almost as bad, but at least they have limited stock of 4 gb bundles at retail price (probably won't last long). And prices similar to those at Buy.com.

At this point MS can't produce them fast enough.

Looks like stock problems with Move controllers and starter bundles at some locations as well as some price gouging on those. PS3+Move bundle still apears to be well stocked however. Sony's problem is that it isn't really pushing consoles with it, and I'm not sure how much software it's pushing since users can get Move experiences with existing games they may already own.

Regards,
SB

 

[bkilian]

I think the long term position of not having a HD has worked pretty well for MS, it allows them $40 worth of savings in the low cost model, it lets them have the $199 model with a sustainable pricing model.

The best Sony could do is a 40GB model next year in a super-slim, but even that would be pretty expensive, but shifting to SSD would bear long term savings for Sony in the same way the 4GB model lets MS have a $199 model.

The problem is that a hard drive has a lot of fixed costs. About the only variable cost is the platter density (and number of platters), and I'm not sure how variable that is. A 40GB hard drive costs about the same to manufacture as a 120GB drive. This makes it very difficult to offer a "low end" model with 40GB, because your BOM costs haven't changed much.
MS discovered this with the original XBox, and it's the main driving reason behind the lack of required drive in the 360.

 

[joker454]

The killer application is not clear at this point.

Thing is, the killer application this gen is not an application at all. To the hardcore, what matters is online and multiplatform games. Sony loses badly in online, as it's become fairly obvious that people are willing to pay for the superior online solution. Multi platform games in general are always the top sellers and Sony still by and large provides the worse versions of those games, even if some online publications like to gloss over that fact to protect advertisers. Add a higher price to go Sony and it's just s recipe for disaster that an exclusive game here and there can't fix. Now add to the mix the casuals to which I've been fairly vocal in the past on how totally wrong I thought Sony's direction was in that regard. They screwed themselves with move, they have committed long term to an older methodology and in the process also partly screwed themselves next gen because they will either have to keep going in the wand direction, or start over with something else whereas Microsoft are building tomorrows foundations today with the no controller approach. Also there is the social aspect which is totally lacking on the Sony platform given how few people use microphones. Not being able to consistently talk to people on a modern console is ridiculous. Finally there is no proper mobile solution. Microsoft is begining to build that foundation as well, basically tying the console and their phones together, a most obvious thing to do. Sony is still spinning it's wheels there, the psp phone will be doa. Basically, Sony have been consistently executing wrong, over and over and over again. It would be comical if it wasn't kinda sad.

Conversely, Sony must be kicking itself day after day. First it watches Nintendo make gobs of money with a console that they could have easily overwhelmed with a PS2 accessory.

The sad part is that Move *was* a ps2 accesory. That's how it all started, and it was available many many years ago. And yet they just sat on it, did nothing with it. It's incredibly hard to understand what is going through the minds of the people running the Sony show. Is it incompetence, cluelessness, egos? I mean really, wtf is it. In my mind, with the way they are executing they risk becoming another Sega, remembered fondly as a once great console maker that just couldn't keep pace.

 

[patsu]

I agree Sony would need to internally produce a killer app to draw marketshare away from MS at this point. Something as revolutionary as GTA was on ps2. I don't think graphics will be able to pull it ahead this gen unlike last gen.

The shock and awe that GT3 was able to provide to potential consumers last gen is long gone this gen. I don't expect GT5 sales to mirror gt3 for that reason. GT3 was able to draw in a lot of people just for how shockingly realistic and beautiful the game was in comparison to everything else at the time so people not even interested in a driving game were drawn to ps2 and gt3. This gen, gt5 is a pretty game, but nowhere near pretty enough to fully distance itself from the competition.

Regarding Sony pricing, I disagree.

Ps2 quickly dropped price to $200. 18 months after launch in fact. This gen they are squeezed largely by the BOM which was forced largely by BR which also forced a HDD to keep load times reasonable.

Still surprised to see them doing so well everywhere else in the world.

A lot of anti-MS sentiment still around the world I suppose.

PS3 needs a price cut, and needs it now.

Dropping price is one way to generate temporary demand. Besides dropping price, PS2 has a huge software library and unchallenged access to consumers.

Banging on individual titles may not be sufficient. They also generate spikey demand. Last year, PS3 has a lot of interesting software, fueled by price drop. This year, MS has price drops and Kinect.

In general, Sony needs to review 3 areas:


1) Customer Focus (to counter balance Cost Focus)
============
May be time to designate or hire a Chief Customer Office to consolidate and manage customer relationships/satisfaction and brand. The responsibility is now scattered (in a bottom-up fashion) amongst hardware marketing, PSN marketing, blah. If there is a unified customer view, it becomes more effective, and easier to prioritize needs, communicate with the customers.

I remember as of last year, about 300 large organizations started the CCO position or department.



2) Product Vision and Communication
=======================
It's great in the past years. It seems overly constrained perhaps by finance department now. You see Dr. Marks and Anton cite cost as one of the reasons why Move is better. You see Sony talk about Move like it's only a motion device and nothing else. These people should focus on and talk about innovation + new experiences instead. I feel that some of the interesting and useful applications should have been possible with the current Move setup, but the team didn't go far enough. Shuhei talks about cross division collaboration but it is a very internal view, useless to most of us. As a top management in software, he should be championing new experiences. Instead, they choose to line up their vision behind Wii, just to become a slightly better Wiimote.

The picture is wrong when:

+ Vision being set by users and competition while their cutting edge R&D guys can only show tech demoes we have mostly seen before (Most people can't tell the differences; some launch games don't use 1-1 and precision effectively anyway). Move launched and yet there is no breakthrough in usability and new experiences. The Move advantages are there but unlike Cell, Sony's own first parties and XMB crew have not tapped them. The unique Move games are there, but they are tiny and buried like yet another PSN title, not packaged properly, in general, showing a lack of attention by Sony. In comparison, Phil Harrison took the small LittleBigPlanet concept and ran with it. They even had a special event to show us Home and LBP.

+ Pachter -- as an outside analyst -- can declare PSP2 dead before people see it. Yet Sony didn't say a word. The Playstation vision is clearly outside Sony's court/control now.

Sony needs to re-establish its entertainment vision internally and externally. Move or Kinect is really only a part of the total experience.



* Platform + Integration.
===============
In terms of integration and platform, they are not there yet. Qriocity is still hidden. Integration with Blu-ray is mentioned but no external party has seen it yet. Blu-ray gets lumped with their disc and B2B operations. They should move it up to the software level. The Blu-ray software stack is highly fragmented now. It's high time to consolidate them and add more features (e.g. add hotspots for interactivity so we can do interesting things with Move; where is my Managed Copy ?).

Sony sells Blu-ray authoring software and services. They should consider giving out strategic pieces like interactivity tagging for free (even to competitors) to advance the Blu-ray platform.

For GoogleTV, it's yet another separate effort. Different from PS3 and 3DTV. They should rope the features into PS3 at least since all the major video services are there now.



OTOH, I also think that Playstation may focus more on core gamers. Find another way to reach out to non-gamers. But I am not sure yet.

 

[TheChefO]

...In my mind, with the way they are executing they risk becoming another Sega, remembered fondly as a once great console maker that just couldn't keep pace.

Harsh!

But spot on...

I truly hope Sony can regain competitive form with ps4. It would be bad for the industry to not have a strong competitor like Sony. In fact, I fear without Sony in the game industry, we may lose what we have commonly thought of as "hardcore" games.

By that I mean MS is a business. The best return on investment (as demonstrated by Nintendo) is targeting the casual market. The games are significantly cheaper to produce. The hardware is cheaper. And the market is significantly larger.

This all leads to a no-brainer to target this market, but without Sony keeping them in check by offering a competitive "hardcore" experience, we may lose the market all together as the investment just isn't worth the risk in comparison to casual games.

Granted, some lame on-live type service could offer rich cloud gaming experiences, as long as you don't mind lag and heavily compressed imagery. And of course content creators wouldn't be as willing to push the boundaries if their intended market was too small so that limits the number of games available and their "quality".



In short, get your act together Sony!

 

[AlphaWolf]

Harsh!

But spot on...

I truly hope Sony can regain competitive form with ps4. It would be bad for the industry to not have a strong competitor like Sony. In fact, I fear without Sony in the game industry, we may lose what we have commonly thought of as "hardcore" games.

By that I mean MS is a business. The best return on investment (as demonstrated by Nintendo) is targeting the casual market. The games are significantly cheaper to produce. The hardware is cheaper. And the market is significantly larger.

This all leads to a no-brainer to target this market, but without Sony keeping them in check by offering a competitive "hardcore" experience, we may lose the market all together as the investment just isn't worth the risk in comparison to casual games.

Granted, some lame on-live type service could offer rich cloud gaming experiences, as long as you don't mind lag and heavily compressed imagery. And of course content creators wouldn't be as willing to push the boundaries if their intended market was too small so that limits the number of games available and their "quality".



In short, get your act together Sony!

Hardcore games aren't going anywhere, with or without Sony. As popular as kinect is right now, its the hardcore games and live that carried xbox360 for the first 5 years. Do you think CoD, Halo, Gears etc. are going anywhere?

 

[kagemaru]

Surprised on PS3's low sales with GT5 launching this month =/ I saw more PS3/Move commercials this month than those for the 360 or Wii. Sony has been doing a lot right the last couple years, they deserve more than that.

I'm not going to read too much on NFS selling better than GT5, it's a multiplatform title against an exclusive, but I am surprised about Donkey Kong selling better than GT5. Just talking to a friend last night, I expected GT5 to be # 2 or 3 on the sales charts, knowing CoD would take #1.

Congrats to Ninty and MS, great sales.

not to impressed with the 360. Felt it should have been higher due to kinect.

It's the second best month for 360 sales, they haven't dropped the price in ~2 years, and you think it should have done better?

looking at these npd numbers I have to say that 2011 will be the last 360 year for ms. At least with it being thier main console. sony needs to drop prices asap and I think once the ps3 hits the $200 price point it will squeeze life from the 360 . I bet the 360 will hit $150 next year and in 2012 we will get the xbox next

The real factor is kinect in these numbers. but right now the 360 is $200-$400 and the ps3 is $300-$500.

I don't really see where ms can move to with pricing . I don't see even kinect + 360 out selling the ps3 when its at similar or cheaper price points and how far down the hole do both companys want to go in terms of pricing ?

Aside from that , i'm sure there is a portion of the user base who is ready to move on. the 360 can continue to sell in 2012/13/14 while an a xbox next starts to take off. The xbox next wouldn't really affect things in 2012. The 360 didn't affect ps2 sales in 2005 or really in 2006.

I wonder tho , if this is the start of a downward trend for the ps3 and it really is dead in the states. will there be a ps4 ?

This post confuses me. You don't see the 360 outselling the ps3, but then you question about the start of a downward trend for the ps3. So both are going to suck in sales?? Sorry if I'm just not reading this right.

Also IMO, MS has a lot of room for pricing. Their primary (IMO) SKU is still $300, the same price the PS2 and xbox launched with. How low they can go with the HDD is the real question I think, but then that's where the arcade version comes in. It's in this respect that I think Sony has more to worry about since the PS3 requires a HDD.

Regardless, with how much both MS and Sony have lost this gen, I don't see either launching before 2013 at the earliest. The hardcore crowd that have had these systems since launch may be ready to move on, but I suspect most of the userbase is more than happy still. Plus make no mistake, if MS were to release the next xbox in 2012, it WILL effect 360 sales. The 360 is no PS2 in terms of market or mindshare.

If anything it has rather amazed me over the years how MS has successfully convinced people 360 is supposed to be the same price as PS3, even without a blu ray player etc. Sure there is the 199 SKU but MS consistently maintains SKU's at 399 (remember they often do 399 special bundles too ala MW2, FF13 etc).

I always thought MS sent the message that the 360 offers the same "value" as the PS3 but is expected to be roughly $100 less. True there have been $400 bundles, but I don't think most people see limited bundles as a way to gauge the average price of a system.

The Kinect and Move bundles does change that up quite a bit though, aren't both high end SKUs $400? Even in this case, Kinect is seen as the new/fresh device where I would imagine most of the general consumer base would see the Move as being too similar to the Wii, thus less interesting.

 

[TheChefO]

Hardcore games aren't going anywhere, with or without Sony. As popular as kinect is right now, its the hardcore games and live that carried xbox360 for the first 5 years. Do you think CoD, Halo, Gears etc. are going anywhere?

Yes.

It's great that those few games have made a boatload of money, but look at all the ones that have invested tens of millions and didn't even get their initial investment back.

It's a broken business model and without Sony there to push for consumers, I don't see a reason why MS would continue to aggressively invest for these experiences which are difficult to profit from.

 

[AlphaWolf]

The Kinect and Move bundles does change that up quite a bit though, aren't both high end SKUs $400? Even in this case, Kinect is seen as the new/fresh device where I would imagine most of the general consumer base would see the Move as being too similar to the Wii, thus less interesting.

The kinect bundles are $100 more than just the console. $300 for the 4GB kinect bundle, $400 for the 250GB kinect bundle.