Xbox 360: Focus shifts from Japan to Europe?

[StefanS]

Here are some interesting numbers who can help us figure out few things.

The GDP(PPP)per capita* of US for 2007 is 45.175$.
The GDP(PPP)per capita for EU(27 countries) is 28.213$.
The average price of a new released game in US is 60$.
For EU is about 65 euros ( 91$).
That means that the Average EU citizen pays 31$ more to purchase a new-released game, despite the fact that his purchasing power is from lower to substantially lower than the one of US citizen.

The real problem for xbox360, in order to become casual in EU, is not its hardware price (right now is appealing for many millions of EU consumers) but the software prices.
Also this is why piracy is so important for the commercial succes of a console in Europe.



*Gross domestic product based on purchasing-power-parity per capita

Using purchasing power parity is entirely useless in this context. In fact, consoles are more expensive in the emerging economies such as new EU member states (e.g. there's a thread on Wii price in Brazil, etc.). So using it is fairly useless, since they're not part of the basket determining PPP.

A more relevant metric would be the price of the console compared to median income (even better yet versus the median discretionary income) and even that would be somewhat sketchy given that the market is evenly distributed across age groups.

A more direct metric would be comparing the number of sold consoles and sold software. But that comparison is a bit marred by the fact that Europe / Asia are not well-defined categories in the yearly fiscal reports and vary from manufacturer to manufacturer. E.g. Nintendo reports Japan / The Americas and Other while Sony and MS have different categories.

But, it really is irrelevant how the EU compares to the US, what is of importance here, is how it compares to Japan. Frankly, the gap is far closer in that case.

 

[liolio]

Elite: 450 EUR
Premium: 350 EUR
Core: 280 EUR
Premium with Forza 2: 385 EUR

I posted this on another thread but the pricing in France will change on november 2:

The arcade wil cost 279 + a 256 MB memory card + 5 live arcade games + hdmi (as rumored)

the pro pack will cost 349euros +hdmi+ forza II + viva pinata

For this topic I think MS has been really slow to admit their failure in Japan, but it's not to late.

I think that MS will beat Sony in UK (they're already widening the gap) and with better pricing (if they do the same they will do in France with games matching UK gamers tastes) and a marketting push it won't be a tough battle.

For others countries, it will be tougher MS should have focused on Europe earlier, but Sony pricing left them some legs to adapt.

My bet (I don't put nintendo in the same league) is that Sony should be happy to match MS in Europe to many people here consider Europe a given for Sony witch is not.

 

[groper]

Using purchasing power parity is entirely useless in this context. In fact, consoles are more expensive in the emerging economies such as new EU member states (e.g. there's a thread on Wii price in Brazil, etc.). So using it is fairly useless, since they're not part of the basket determining PPP.

As i said before even if you leave the new EU members out of the list, the GDP(ppp) of members like Germany,France,Spain,Italy is clearly lower than the one of U.S. So how is this irrelevant to my point?

A more relevant metric would be the price of the console compared to median income (even better yet versus the median discretionary income) and even that would be somewhat sketchy given that the market is evenly distributed across age groups.
A more direct metric would be comparing the number of sold consoles and sold software. But that comparison is a bit marred by the fact that Europe / Asia are not well-defined categories in the yearly fiscal reports and vary from manufacturer to manufacturer. E.g. Nintendo reports Japan / The Americas and Other while Sony and MS have different categories.
But, it really is irrelevant how the EU compares to the US, what is of importance here, is how it compares to Japan. Frankly, the gap is far closer in that case.

My main point wasn't about how Ms will gain more marketshare in Europe vs Sony (this is already happening allthough in a limited extend), or if they did well by shifting their priorities to European market (they should have done it earlier imo)
I just keep reading in every thread how they will approach the Casual/Mainstream market and this is where i adressed my point.
This is not going to happen any time soon because of their pretty expensive software prices who ignore the European standards and the exchange rate between dollar-euro and not because of their hardware price policy which is more than good.

 

[Shifty Geezer]

My main point wasn't about how Ms will gain more marketshare in Europe vs Sony (this is already happening allthough in a limited extend).

Is XB360 outselling PS2 and PS3 combined? That's the market-share Sony is getting at the moment.

 

[groper]

Is XB360 outselling PS2 and PS3 combined? That's the market-share Sony is getting at the moment.

No, i was meaning "vs Sony's ps3"

 

[expletive]

Is XB360 outselling PS2 and PS3 combined? That's the market-share Sony is getting at the moment.

Thats a complicated argument tho, are you saying that console marketshare is = to the aggregate install base of all platforms from a company? I see your point, but developers of next gen games certainly arent counting it as such.

 

[mrcorbo]

Is XB360 outselling PS2 and PS3 combined? That's the market-share Sony is getting at the moment.

I don't know how much this applies to the European market but in the US I don't see the continuing PS2 sales as being that significant. They are not bringing increased software sales and in fact PS2 software sales have been on the decline for quite some time now. I have a suspicion that a lot of these are either replacement units (to play an existing library of games) or budget buyers who are buying PS2's and a couple of games from the used and budget games section. This is good for Sony, and good for the game retailers, but the developers and publishers? Not so much.

 

[borowki]

The real problem for xbox360, in order to become casual in EU, is not its hardware price (right now is appealing for many millions of EU consumers) but the software prices.

Well, that's not a problem particular to the Xbox 360. New releases for the PlayStation and Wii costs around the same. And since it has been out longer, it has more games that have reached the budget price range.

 

[Arwin]

Not really. The gap between rich and poor, is huge in every wealty capitalistic country.

That is not true. The U.S. is fairly extreme in these matters. Just test some global sites with statistics on these matters, for instance from the U.N.

In any case this is irrelevant when it comes to console sales because those who get the better from these benefits are poor/unemployed anyway and thus they are not prospective buyers of a next gen console (with or without the benefits).

It does matter some, because potentially more people have enough money to buy a console.

It irritates me by the way that so many stores in the Netherlands mark up PS3 prices for Sony games, which should be around the 50 euro mark, but are often sold at 65 euro. In Belgium this seems to be less often the case, and stores like play.com also carry the proper price.

 

[Crossbar]

Here are some interesting numbers who can help us figure out few things.

The GDP(PPP)per capita* of US for 2007 is 45.175$.
The GDP(PPP)per capita for EU(27 countries) is 28.213$.
The average price of a new released game in US is 60$.
For EU is about 65 euros ( 91$).
That means that the Average EU citizen pays 31$ more to purchase a new-released game, despite the fact that his purchasing power is from lower to substantially lower than the one of US citizen.

The real problem for xbox360, in order to become casual in EU, is not its hardware price (right now is appealing for many millions of EU consumers) but the software prices.
Also this is why piracy is so important for the commercial succes of a console in Europe.

*Gross domestic product based on purchasing-power-parity per capita

groper, I guess you are not living in Europe, right?

"the fact that his purchasing power is from lower to substantially lower than the one of US citizen."

Yeah right, completely overlooking the fact that EU has recently embraced a number of not so well managed eastern european countries as members and now has a total population of more than 496 million people(2005) compared to USAs meagre 298 million.

I challenge you to add the "interesting" numbers of the richest EU countries matching the 298 million population number. I assure you they will show pretty good purchasing power.

You should also take into account that the wealth is much more evenly distributed in those countries compared to the US.

 

[AlphaWolf]

I challenge you to add the "interesting" numbers of the richest EU countries matching the 298 million population number. I assure you they will show pretty good purchasing power.

While correct in some ways, the fact is that the US has a significantly higher PPP value than Britain, France, Italy, Spain and Germany which are making up the bulk of the EU's population. All of those countries are listed ~$32k or less to the US's $43k+. Some smaller countries have marginally more PPP than the US (and Luxembourg which has almost double that of any EU nation?!?).

I'm not really convinced that PPP is that big an issue as Japans PPP is right around most of those major EU nations.

 

[avaya]

PPP as a measure is totally erroneous in this argument. You need to analyse disposable income averages and the marginal propensity to consume from the consumption function.

Those are hard figures to obtain, the latter being an estimate based on sampling but there are some non-financial numbers that are more useful - penetration per head of population likely the biggest of that bunch of figures. I read a report some time ago that using those figures Japan and UK are way ahead of the US. The PAL average will be a lot lower though since the concentration of consoles on the continent is very very low.

 

[Crossbar]

PPP as a measure is totally erroneous in this argument. You need to analyse disposable income averages and the marginal propensity to consume from the consumption function.

Yeah, the median income in those countriess would provide better understanding as well, together with a description of how social security is financed etc., besides some people also seem to fail to see that games sold at the higher price also will give better margins. The whole discussion seems pointless.

Off topic, I got the impression that the PSN games has pretty equal world wide pricing so far, am I right?

 

[Jesus2006]

Is XB360 outselling PS2 and PS3 combined? That's the market-share Sony is getting at the moment.

In Europe? No, even PS3 is leading over 360 there in monthly sales afair (but of course Sony has to take some time until the can overtake MS due to the later launch).

 

[liolio]

In Europe? No, even PS3 is leading over 360 there in monthly sales afair (but of course Sony has to take some time until the can overtake MS due to the later launch).

Sources? We know this is not true at least in UK.

 

[Cheezdoodles]

Not really. The gap between rich and poor, is huge in every wealty capitalistic country.

While gap from rich and poor may be "huge" everywhere (depends on how you choose to define it) , if you go ahead and start reading on the matter, wealth is far more evenly distrubuted in a lot of the EU countries than in the US.

For example, in norway if you apply for all social services thingy (if you have no job, you dont seem to get a job and you are poor) you get $27,125 a year (using current NOK to USD rates) from social services. I dunno how much a grown poor person in the states get, but i reckon its next to nothing compared to this.

The US, is the country with by far the most dollar millionares divided by citizens in the world (if we dont include certain small countries, like Monaco). The amount is astonishing compared to european countries..

Note: As far as the GDP per capita numbers being used in this thread, i think most of them has to be seriously outdated, or are using wierd USD to european currency ratio's. For example: Norwegian GDP per capita today 461 665 NOK = 83 639,841 USD.

 

[Shifty Geezer]

[modhat]This isn't an economics thread. Quite how one measures wealth and buying power isn't that important to how MS wins Europe over.[/modhat]

 

[schmuck]

Dont forget the dollars has lost almost 30% compared to the euro and other european currencies in the last 3-4 years.

 

[Jesus2006]

Sources? We know this is not true at least in UK.

There were some sources some weeks ago iirc. Just found one of those for Germany's July sales:

http://www.heise.de/newsticker/resu...Verkaufszahlen&T=playstation 3 verkaufszahlen

...basically saying that PS3 sold 8000 units in Germany in July, whereas Xbox 360 sold 5000 in the same time (however with more available software and much cheaper pricing).

For overall figures (again Germany):

Xbox 360 from launch til July 281.000 units (in ~21 months)
PS3 from launch til July almost 100.000 units (in 4.5 monhts)

 

[Cheezdoodles]

There were some sources some weeks ago iirc. Just found one of those for Germany's July sales:

http://www.heise.de/newsticker/resu...Verkaufszahlen&T=playstation 3 verkaufszahlen

...basically saying that PS3 sold 8000 units in Germany in July, whereas Xbox 360 sold 5000 in the same time (however with more available software and much cheaper pricing).

For overall figures (again Germany):

Xbox 360 from launch til July 281.000 units (in ~21 months)
PS3 from launch til July almost 100.000 units (in 4.5 monhts)

One month in july = a source for better sales in the entire europe?

Germany alone = a source for better sales in the entire europe?

If your going to claim something like that, you need a real source, this info is worth nothing.