NPD October 2007

[patsu]

[Long and reasonable post about European PS3]

I asked about European sales because if PS3 is doing well there, then the PS3 sales issues/factors in NA is likely region specific. Even based on Teasy's numbers, PS3 may be outselling Xbox 360 since it only launched about 9 months ago, while Xbox 360 has been already around much longer. In addition, Blu-ray is also doing much better than HD-DVD over there.

Assuming that PS3 sales issue is specific to NA (and Japan !), then we should analyze the problems by region. I would investigate in the following areas:


* Impact of negative buzz on PS3 sales (reinforced by media), which may extend all the way to store clerks. I am still unsure why the official Playstation magazine was terminated a year ago.


* Sony's execution issues. Too many things trained the consumers to wait. Waiting for initial launch, waiting for 60Gb price drop despite denial, waiting for 40Gb price drop in NA throughout the month of October, delays in the video service until March 2008 ? plus global delays in key titles. They are giving consumers a lot of excuses to push their purchase back. Some may just say... "I'll check it out in 2008 then".

In the face of PS Home and other key delays, their marketing stalled. In an aggressive company, *especially if* there are delays, the marketing will move in to cover the hole to sustain the momentum, or create new values.... which brings us to the next point.


* Poor PS3 marketing in 2007 (May or may not be relevant to title sales). Sony's "game console" marketing is non-existing until near 40Gb PS3 launch. They did not attempt to excite and prove to the NA guys why PS3 is worth it (until second half of this year s-l-o-w-l-y). Even after the price drop, many people will still have the impression that PS3 is expensive.

The recent PS Eye tech demos is also only an insufficient start (since no consumer can use it, and there is zero follow up). The most active marketing effort is actually from Blu-ray side (At least 3 rounds of BD titles sales). The most recent TV ads is awareness building, but again is only a temporary blast unless they also planned sustaining marketing programs to change the perception and communicate/prove the value over the next few months. That is why I mentioned that Sony has to cough out a significant sum of money to rebuild the momentum.

A few people cited XBL as an example of "grass-root" buzz building. It is a helpful tool but may not be enough in itself. The main problem is: Sony lacks a central, end-to-end, closed loop marketing approach. Everything is hit and run individually (but not stringed together to form a series of home-runs).

I would start from the Playstation owners themselves and extend the network out via a pre-PS Home marketing program over the Internet. IMHO, even when the Home is not ready, Sony should still be able to use the Internet to do network marketing (not just blogging). When PS Home is finally there, Sony should be able to consolidate its marketing more naturally. Sony, where is your marketing tie-in with your consumer electronics division this shopping season ?

 

[Zaphod]

In other words Wii doesnt necessarilly steal potential PS3 owners. It may gain consumers that the PS3 or 360 would have never won over. Unless they had something similar in store.

Well, that's my point. I kind'a think that the same argument could be applied with the PS2 vs. the PS2: The people who bought the PS2 @ $149 in 2004 to play Singstar wouldn't have bought the PS2 @ $299 in 2001 to play GTA (edit: nor would they have bought the PS2 @ $299 to play Singstar).

At some point the PS3 will also reach 'Singstar territory'. At that point, could it be that a group of those who might have bought a PS3 to play such games won't - because they 'recently' bought a Wii, which fulfills their desire to play games with a similar appeal?

Thus (again): Current PS3 sales aren't competing with the Wii, but potential future PS3 sales could be competing with current Wii sales?

 

[Silent]

I don't think that the 360 is very popular here in Europe. A couple of months ago I've read that the machine doesn't do it very well in the Benelux countries. Even the PSP sells more units.

There are allot smaller independed stores that stopped selling games for the machine, because there is just no demand. They only sell Wii, PS2 and PS3 games.

The local "Bart Smit" does sell the games but they have such a big pile of "older" games that they have put them on the floor in boxes (15 a 20€ each) They even have allot of old GOW bundles still for sale.

I certainly need to drive a while for finding some 360 games for sale.

 

[Tap In]

I don't think that the 360 is very popular here in Europe. A couple of months ago I've read that the machine doesn't do it very well in the Benelux countries. Even the PSP sells more units.

There are allot smaller independed stores that stopped selling games for the machine, because there is just no demand. They only sell Wii, PS2 and PS3 games.

The local "Bart Smit" does sell the games but they have such a big pile of "older" games that they have put them on the floor in boxes (15 a 20€ each) They even have allot of old GOW bundles still for sale.

I certainly need to drive a while for finding some 360 games for sale.

not to sound Xenophobic but I truly wonder how much of that is based on the "EVIL American Corporation" backlash.

 

[Nesh]

Well, that's my point. I kind'a think that the same argument could be applied with the PS2 vs. the PS2: The people who bought the PS2 @ $149 in 2004 to play Singstar wouldn't have bought the PS2 @ $299 in 2001 to play GTA (edit: nor would they have bought the PS2 @ $299 to play Singstar).

At some point the PS3 will also reach 'Singstar territory'. At that point, could it be that a group of those who might have bought a PS3 to play such games won't - because they 'recently' bought a Wii, which fulfills their desire to play games with a similar appeal?

Thus (again): Current PS3 sales aren't competing with the Wii, but potential future PS3 sales could be competing with current Wii sales?

Well that will depent whether the Wii games are close substitutes to those PS2 games you mentioned. At first glance they might not be. But I think price will play the factor here. If the PS3 is considered too expensuve for some to play Singstar or DDR then Wii might be their alternative choice if they want to play something. Or they might not get it at all. Some might still get a PS3 for singstar or DDR whatever the price. I cant make estimations though how many will have a certain behavior.

You ve got a good point. I wonder if we can find out.

 

[ninzel]

Is there a way or a service that keeps track of game sales over longer periods of time like over a three year span?

 

[scooby_dooby]

Well the type of gamers that bought a PS2 for these specific games probably wouldnt have bought a console anyways if they didnt exist.

Not true in general. These people would've bought the console that most appealed to their casual gaming tastes. Last generation, that was the PS2, there was no better option. Gamecube lacked the 3rd party support necessary to overcome the PS2's massive game library, and offered little else to differentiate itself.

This generation, those consumers have a much better option and that is the Wii, or even 360 as it continues to have a stronger 3rd party library.

In other words, Ps3 has none of the advantages that attracted mainstream consumers last generation. It went from having the most games, to the least. It went from being the most mainstream, to the least. And it has nothing to compete with the consumer friendly motion controls on the Wii.

What reason is there to believe that the PS3 will appeal to mainstream/casual gamers? A smattering of PSN titles, and a couple key franchises??

It's not enough.

Not while XBLive has a ton of arcade titles, and Wii is offering SNES and N64 hits with Wii Classics.

In other words Wii doesnt necessarilly steal potential PS3 owners.

There is zero doubt that Wii is taking away some of the huge mainstream market Sony enjoyed with the PS2. PS3 simply offers nothing to attract these consumers over 360, and especially over Wii.

If the PS3 is considered too expensuve for some to play Singstar or DDR then Wii might be their alternative choice if they want to play something.

I think a more realistic scenario is that people are finding they enjoy the Wii's titles as much, or more than they enjoyed DDr or Singstar, and are thus buying a Wii.

The people who enjoyed Karaoke and Dance games, are the same people who would have fun with a social gaming platform like the Wii.

 

[Nesh]

Not true in general. These people would've bought the console that most appealed to their casual gaming tastes. Last generation, that was the PS2, there was no better option. Gamecube lacked the 3rd party support necessary to overcome the PS2's massive game library, and offered little else to differentiate itself.

This generation, those consumers have a much better option and that is the Wii, or even 360 as it continues to have a stronger 3rd party library.

In other words, Ps3 has none of the advantages that attracted mainstream consumers last generation. It went from having the most games, to the least. It went from being the most mainstream, to the least. And it has nothing to compete with the consumer friendly motion controls on the Wii.

What reason is there to believe that the PS3 will appeal to mainstream/casual gamers? A smattering of PSN titles, and a couple key franchises??

It's not enough.

Not while XBLive has a ton of arcade titles, and Wii is offering SNES and N64 hits with Wii Classics.

There is zero doubt that Wii is taking away some of the huge mainstream market Sony enjoyed with the PS2. PS3 simply offers nothing to attract these consumers over 360, and especially over Wii.

I think a more realistic scenario is that people are finding they enjoy the Wii's titles as much, or more than they enjoyed DDr or Singstar, and are thus buying a Wii.

The people who enjoyed Karaoke and Dance games, are the same people who would have fun with a social gaming platform like the Wii.

I didnt not imply anywhere that Wii didnt get at all from the mainstream Sony was enjoying in the past. Some were potential PS3 owners too. The point is these could be fewer than suggested

Ofcourse some of the PS2 casuals may have jumped towards Wii. Thats what me and Zaphod said earlier. Can you count how many of these casuals were planning to get a 360 or a PS3 or not? Or if they arent planning to get a 360 or a PS3 after they got a Wii?

You forget that Wii managed to get the interest from people that werent interested in games before because of its uniqe gameplay style. These werent 360 or PS3 potential consumers.

There are more chances that 360 may steal a large proportion from the PS3's potential and original PS2 owners than Wii. It is more similar, it is cheaper and has more games. DDR and a Karaoke game on 360? Perfect. Also once someone gets a 360, interest for a PS3 is more likely to decrease. They are too similar and offer almost identical experiences. Wii offers different experiences. More Wii owners are likely to own a 360 or a PS3 too, than 360 owners getting a PS3 in the future. Wii=cheaper and different.

The PS3 doesnt sell because in general it was expensive with small library. But this is irrelevant to whether Wii steals most of the PS2's consumers. 360 may be stealing much more than Wii does. This sounds like a more realistic scenario and thats what I was saying.

Lastly just because you personally group DDR, Singstar and certain Wii titles in a certain type you call "niche"/"party" or "casual" doesnt mean that they indeed fall in the same group. Preferences vary even there. Just as someone prefers a FPS and someone else a sports game. Some may prefer DDR more than any Wii game and could purchase a 360 instead if it is released on PS3 and 360 only.
Also you cant put all casuals in the same bag. You dont know how many casuals shifted exclusively towards Wii. Based on the characteristics of each console Wii is more likely to create new gamers and add to the experience of the old than any other console, while 360 is more likely to steal market share. My grandma or gf who never owned a console before but love Wii isnt a 360 or a PS3 potential owner. My cousin who bought a Wii and is planning to get another console because he also likes old style gameplay isnt a lost 360 or PS3 potential owner. So how many of these Wii owners are old casuals moving exclusively to Wii?

Thats the question I would love to be answered hence my last post.

 

[patsu]

Just came back from Metreon in SF. I bought Uncharted. The title seems to be selling well (5 sales in less than 5 minutes when I was there). Someone also bought AC, Stuntmen and something else.

Don't want to distort any of your opinion
I think it is also possible that people are waiting/delaying. There are simply too many good PS3 and Xbox 360 games fall 2007. R&C is a great title, I'm still hopeful that it has legs.


My peeve is more with Sony not able to close the marketing loop despite expensing so much effort in development. It's a simple thing (conceptually). That's why it's a little frustrating seeing the gaps.
EDIT: ... especially when I believe the Sony guys know "closed loop marketing" too.

Scooby, I think the exclusive games and some "serious games" (aka home applications) on PS3 can define its role nicely. I don't think Sony is out of cards, but I don't have much patience to see them waltz their way in. So I'm out of this thread. Anyway, I might disappear for a couple of days yet again. Have Uncharted, AC and EoJ

 

[quest55720]

I would be willing to bet most of the Wii owners are casual PS2 owners who will only buy 1 machine for the next few years. I would guess 70% of the Wii owners are casual gamers who bought PS2s at sub 150 near the end of the generation. These are the kind of gamers who buy sing star, guitar hero and licensed type games like disney games. Looking at the best selling Wii software it is almost all casual type games like guitar hero, carnival games and rayman. Look at metroid that is not a real casual game and well it did not do so well for being a major franchise.

IMO Sony is caught between a rock and a hard place. On one side the 360 is taking the rich hard core gamers who buy game after game. On the other side the Wii is stealing the casual crowd that Sony owned for the last decade. Were does does sony attack to gain ground?

Do they go after the hardcore gamer and go toe to toe with MS. If they do that PSN has to be better than live to get people to switch sides. If people are going to leave their friends on live the PSN network better crush live. The PS3 needs to have the superior version of 3rd party games on the same day. Also I think there are only so many people in NA who will buy a 399+ dollar console. By launching first MS stole a lot of those people.

Do they go after nintendo. Nintendo has a huge price advantage. Nintendo also has the ultimate casual game in Wii sports. Also the casual gamer is not likely to be playing on a HDTV so the blu ray and superior graphics are really moot. Also the cheap PS3 has no BC which IMO hurts it big time when going after non hardcore gamers. The casual gamer is only going to by a few games a year so the BC comes in handy to increase their personal game library till they have boughten more next gen games.

I am sure the price cut and holiday season will help sony come next NPD. The question is can they maintain that or will it be like the last price drop and with in 6-8 weeks sales are back to 30k a week. Also can sony find a way to put some games into the top 10 of the NPD on a regular basis. You don't think they are freaking out at the major 3rd party board rooms of big budget PS3 exclusives after seeing what hs, RC and liar have done?

The people in charge at the sony game division better pray that Blu Ray beats HD-DVD. Or else sony just game away a dominate 70% market share for nothing. The writing is on the wall the PS3 will be lucky to have half the installed base of the PS2. It all can be traced back to Blu Ray IMO. If sony would of launched at 299/399 with out the blu ray drive they would of crushed MS. Also they would of been in a much better position to fight Nintendo for casual gamers.

 

[patsu]

Heh... one last post. It is also likely that Wii is bringing in new gamers because of the way Nintendo markets Wii. I don't think all of them are PS2 gamers.

When PS3 is sufficiently low in price, people may get tired of Wii by that time anyway. The key is still content.

 

[RobertR1]

When PS3 is sufficiently low in price, people may get tired of Wii by that time anyway. The key is still content.

I keep hearing this why does this matter? Nintendo are ranking in a shitload of profits so if it fizzles out a couple of years later, they'll have made a ton of money and likely could be the first to market with yet another new console. I just don't think Sony or MS have the mass consumer appeal, repeat MASS CONSUMER appeal with their consoles that the Wii has. Also for something this hot, atleast is the US, it won't die off fast. The mass consumer isn't anywhere close to having the graphics knowledge so the power of the 360 and PS3 honestly isn't that big of a factor. Infact, I don't think it even makes top 3. I'd say fun factor, known names(like mario/pokeman) and streez buzz are more critical to them than to many of us. Difference here being fun factor to us include graphics. Not to them. As usual, I speak regarding the US only. Don't know or care too much about Euro's or Japan.

 

[patsu]

I keep hearing this why does this matter? Nintendo are ranking in a shitload of profits so if it fizzles out a couple of years later, they'll have made a ton of money and likely could be the first to market with yet another new console. I just don't think Sony or MS have the mass consumer appeal, repeat MASS CONSUMER appeal with their consoles that the Wii has. Also for something this hot, atleast is the US, it won't die off fast. The mass consumer isn't anywhere close to having the graphics knowledge so the power of the 360 and PS3 honestly isn't that big of a factor. Infact, I don't think it even makes top 3. I'd say fun factor, known names(like mario/pokeman) and streez buzz are more critical to them than to many of us. Difference here being fun factor to us include graphics. Not to them. As usual, I speak regarding the US only. Don't know or care too much about Euro's or Japan.

It doesn't matter to Wii because by that time, it would have moved on (to bigger and better things). It just means that PS3 and 360 will have some opportunities and face time with so called casual gamers too at a lower price and selected casual titles. Graphics wise, it'd always be a plus on those 2 powerhouse. That's all.

EDIT: Can I go play now ?

 

[quest55720]

Heh... one last post. It is also likely that Wii is bringing in new gamers because of the way Nintendo markets Wii. I don't think all of them are PS2 gamers.

When PS3 is sufficiently low in price, people may get tired of Wii by that time anyway. The key is still content.

You don't sell 500k in a month were you are supply limited unless you are selling to the casual gamers of the last generation. I don't care what advertising Nintendo has done there is no way they could bring in that many new gamers. It is not 1 month it is month after month Nintendo is selling 100k a week or all they can ship. I doubt nintendo can even come close to meeting demand in NA this holiday season. They could ship 4 million units in the next 2 months and I think there would be shortages. The Wii is positioned to be the hot x-mass item again this year.


Lets not go to the they will get tired of the Wii argument. The casuals who are buying the Wii are IMO more likely to stay with the less complicated motion controls. The Wii control system is perfect for the casual gamer and really incredible if you ask me. I just recently found a Wii and the reactions from the casual type gamers is amazing. Watching people really get into Wii sports. I heard to comments over and over of how come it took so long for games to have motion controls. I just don't see most casual gamers wanting to go from simple motion controls to 10 buttons and 2 analog sticks of the PS3/360 type controller.

MS and sony will lower prices over time but so can nintendo. They are making a ton of money off of each box. I am sure if momentum slows a 50 dollar price cut would re ignite demand and they would still make money off of each unit.

 

[one]

IMO Sony is caught between a rock and a hard place. On one side the 360 is taking the rich hard core gamers who buy game after game. On the other side the Wii is stealing the casual crowd that Sony owned for the last decade. Were does does sony attack to gain ground?

Do they go after the hardcore gamer and go toe to toe with MS. If they do that PSN has to be better than live to get people to switch sides. If people are going to leave their friends on live the PSN network better crush live. The PS3 needs to have the superior version of 3rd party games on the same day. Also I think there are only so many people in NA who will buy a 399+ dollar console. By launching first MS stole a lot of those people.

Do they go after nintendo. Nintendo has a huge price advantage. Nintendo also has the ultimate casual game in Wii sports. Also the casual gamer is not likely to be playing on a HDTV so the blu ray and superior graphics are really moot. Also the cheap PS3 has no BC which IMO hurts it big time when going after non hardcore gamers. The casual gamer is only going to by a few games a year so the BC comes in handy to increase their personal game library till they have boughten more next gen games.

Looking at COD4 and Assassin, third-party engines are reaching an acceptable point in terms of optimization on PS3, and more first-party games + Home will arrive in 2008. The price diff between 360 and PS3 hardwares becomes $20-$120 depending on the models this Nov, down from $200. If 360 hadn't had as many sales as it had this year it would have been disastrous for MS since 2007 is the second and harvest year for them symbolized as the launch year of Halo 3, comparing it with the first year of a $600 console doesn't make much sense.

Casual crowd don't give a crap about BC, because, literally, they are casual. Those who care about BC are hardcore crowd who have a large software library. That's why Wii is popular. Who cared about its BC with GC and its incompatibility with PS2? Wii's direct competitor is PS2 that has price advantage. These people don't have $399 this winter anyway.

 

[AlphaWolf]

I don't think you can say casual people don't give a crap about BC, just like any feature in any consumer demographic it's going to influence some. To me casual just means they use their system less or for more niche purposes, it doesn't mean they value the feature set less.

 

[quest55720]

Looking at COD4 and Assassin, third-party engines are reaching an acceptable point in terms of optimization on PS3, and more first-party games + Home will arrive in 2008. The price diff between 360 and PS3 hardwares becomes $20-$120 depending on the models this Nov, down from $200. If 360 hadn't had as many sales as it had this year it would have been disastrous for MS since 2007 is the second and harvest year for them symbolized as the launch year of Halo 3, comparing it with the first year of a $600 console doesn't make much sense.

Casual crowd don't give a crap about BC, because, literally, they are casual. Those who care about BC are hardcore crowd who have a large software library. That's why Wii is popular. Who cared about its BC with GC and its incompatibility with PS2? Wii's direct competitor is PS2 that has price advantage. These people don't have $399 this winter anyway.

The Wii and PS2 are not competitors at all. The people buying the Wii are PS2 owners buying their next gen systems. The Wii is a next gen console like it or not and it is competing against the 360 and PS3. They might target different people right now the Wii casuals and the 360/Ps3 hardcore gamers. Nintendo basically skipped the selling to the hardcore crowd and went right to selling to casual gamers. Looking at amazon and ebay pricing the people who are looking to buy a Wii are willing to pay a premium. The only people buying a PS2 are replacing systems or looking for an ultra cheap machine with a ton ultra cheap used games.

Makes plenty of sense to compare the 2 systems right now. Only people with their heads in the sand will want to ignore the comparisons. We will see this month if the 600 dollar excuse holds in 30 days when the november NPD comes out. The PS3 this month has a model cheaper than the most expensive 360 there is no excuse now.

Sony will have to make history if it does make a comeback. I can not think of any system out sold 2 to 1 and 4 to 1 in its first year that made any sort of comeback.

 

[Acert93]

We will see this month if the 600 dollar excuse holds in 30 days when the november NPD comes out. The PS3 this month has a model cheaper than the most expensive 360 there is no excuse now.

Sales should be pretty strong in November, December, and even January if history is any indicator. November sales are typically in a range of 2x-4x of September sales and December sales are typically in the general range of 4x-8x of September sales, even last gen for consoles like the GCN and Xbox. January demand is more sensative, relating to hardware demand, software releases, and how post-holiday says are impacted by price drops. Just based on the September sales there is good reason to believe Sony could pull off sales in this range:

November: 250k-500k
December: 500k-1000k

With the 40GB/$400 PS3 price drop there is no reason that Sony shouldn't be able to go even higher. Even using the launch aligned difference (46%) and 2006 numbers, Sony should be looking at ~250k and ~550k for November and December, respectively, and the price drop is surely going to give positive momentum over that. Looking at the historical numbers the lower selling consoles throughout the year often receive a slightly better holiday bump, related to the average monthly non-holiday sales, than the better selling consoles.

I think strong November/December sales should be expected at this point and won't tell us much unless they are sustained in Feb-Apr.

On the other hand, as you point out, there is no excuse for not having good sales this holiday. That would surely be shocking if the PS3 didn't sell well this holiday. While $400 isn't a great price point we do know that Sony should be able to significantly increase monthly sales at this price point (I base this on the fact MS did so for 2 years). But I think software is an equally big hurdle right now.

 

[quest55720]

When I said good sales I was talking at least what the 360 did last holiday season. If 360 outsells the PS3 by 2 to 1 or more this holiday season it would be a complete failure for Sony IMO. I won't compare it to the Wii because of Nintendo will crush both combined if they ship enough. I think the 360 did 500k or so last november. With a price cut and 2 AAA exclusives in RC and Uncharted there is no excuse not to sell 500k+ units in November.

 

[Silent]

I don't know how much influence this have but one televison (here in Belgium) there are allot of Wii commercials. The number of PS3 advertisments that I have seen is zero. There is no marketing at the moment whatsoever.

not to sound Xenophobic but I truly wonder how much of that is based on the "EVIL American Corporation" backlash.

I don't think that it has something to do with the fact that Microsoft is an American corporation knowing the popularity of some American poducts.

I think allot of people think that it's not a "playstation". Allot of people has grown up with the playstation and form them its a synonym for gaming. Hell even my grandmother knows what a playstation is.