Xbox 360 Software Attach Rate Is 'Alarming'

[Ben-Nice]

I always thought a high attach rate is good. How else are you going to get companies to keep making games for you?



The latest issue of Jason Kraft and Chris Kwak's 'Video Game Journal' for the Susquehanna Financial Group examines the software attach rate for the Xbox 360, and explores why such an “alarmingly highâ€￾ rate may not bode well for Microsoft's next-generation console.

Specifically, the report cites the recently announced Xbox 360 attach rate of around five games per console sold as confirmed by Microsoft in October, a number that was up from the roughly four games per console attach rate announced by the company at the console's launch in 2005.

While traditionally a growth in attach rate is considered to be a positive, the report suggests that such an increase could mean that even though Xbox 360 software continues to enjoy brisk sales, the hardware itself has not seen similar increases in consumer demand. In fact, it concludes: “We believe the unusually high attach rate on the 360 is a sign of an increasingly unhealthy console growth rate, and should be worrisome to publishers and investors.â€￾

Full article

http://www.gamasutra.com/php-bin/news_index.php?story=11796

 

[Skrying]

Not huge sells (I wonder why, oh yeah that's right, the other two big players, one being the biggest of them all) had not released their console, and prices were high. Therefore sells were not amazing, but those who had the system continued to buy games. Its really not surprising to me. I expect the precentage to drop a decent amount after this holiday season.

 

[heliosphere]

So a low PS3 attach rate is bad because it means everyone is selling their consoles on ebay and a high 360 attach rate is bad because it means only hardcore gamers are buying the consoles? Would these analysts have issued a report saying what good news a low attach rate was if the 360's was low because it meant they must be selling lots of hardware? I'm guessing not - they'd probably have been writing about the alarmingly low attach rate. Presumably if it had been just about average it would have been alarmingly average and indicative of the 360 not living up to expectations.

I wonder what the attach rate would make the analysts happy for either system?

 

[BRiT]

I wonder what the attach rate would make the analysts happy for either system?

They really hate 5, but appearantly like 4. Go figure.

 

[Nesh]

The analysts didnt describe well their point I think. What they wanted to say (I think), is that the high attach rate is a result of less 360 being sold than they should have..

But the attach rate is not alarming. It shows that the 360 onwers care and enjoy the product thus the ratio per console sold.

They use a flawed logic and it goes like this (imaginative numbers): "The product has a high attcah rate because it sold 10000 software units and just 2000 hardware units. Thats why it seems so high(5:!).
10000 software units and 2500 hardware units would have been an indication of a healthier console(4:1)."


Well they ignore the fact that if it sold 3000 hardware units the software sales might have been 15000. The attach rate would remain 5:1 (Not 4:1. What? Someone would lose interest just because there are more hardware owners? At an average 5 quality games will still be there)

The same might have happened if the console sold only 1000 hardware units. Then the sofware sales might have been 5000. Attach rate still 5:1. Or do they think the attach rate might have increased to 6:1 due to less hardware sold? Realtive figures show nothing.

The individual level interest and utility is the same and is not affected by the total numbers sold. Its not like the software sales are a steady figure and 360 owners share that figure with each other. They DO NOT share a limited amount of software units. If they want 5 games they will always find 5 games. If hardware sales increase the software sales and units increase accordingly and most likely at a steady rate(not diminishingly), unless the newer owners arent much informed and interested on gaming compared to previous gamers.

The individual will always seek and buy at an average 5 games if the quality games are there independedly of how many 360 owners (hardware sales) exist in total.

Where do they get these stupid analysts anyway?

If they want to see if the console isnt doing well they should observe the sofwtare units left unsold. If there are too many then it will show that expected hardware sales didnt grow as fast as expected.
The attachment rate IS a positive sign since it shows the interest and satisfuction of the consumer.

If you ask me the analysts are stupid. They are trying to look proffesional with idiotic interpretations that may seem "proffesional" to people that dont know how the gamer works as a consumer or how the gaming industry works.

Well they dont know either. They are ignorant supposed proffesionals

 

[expletive]

Why do these analysts try to make a social science out of thin air, the hardware sales figures can be estimated very closely so why try and extrapoloate anything from attach rate.

 

[aaaaa00]

LOL. Sony wishes it has the "problem" MS has with attach rate.

 

[nelg]

Yogi Berra would have made a great analyst.

"Nobody goes there anymore; it's too crowded."


In related news.


Top Most Popular Week Ending Nov. 20, 2006
Chart posted on Monday, November 20, 2006

1. Call of Duty 3 (Xbox 360)
2. Gears of War (Xbox 360)
3. F.E.A.R. First Encounter Assault Recon (Xbox 360)
4. Tom Clancy's Rainbow Six Vegas (Xbox 360)
5. Tony Hawk's Project 8 (Xbox 360)
6. Marvel: Ultimate Alliance (Xbox 360)
7. Sonic the Hedgehog (Xbox 360)
8. Viva Pinata (Xbox 360)
9. Superman Returns (Xbox 360)
10. WWE SmackDown! vs. RAW 2007 (Xbox 360)

 

[Dave Baumann]

At this stage in the game I find a high attach rate entirely unsurprising. 360 (and PS3) are priced to a point where a lot of casual gamers aren't really going to be able to afford the console, and a goodly proportion of those that do have it are going to have the disposable income that a game isn't really that much of a big deal - a quick wizz through my gamer profile indicates that I've played 22 retail games and I count that I still have 17 in my possession (I didn't realise I had that many still until I counted!!). When the console(s) drops in price more people will be able to afford it, but you'll also get more people being more circumspect about the games they play, hence as the hardware sales go up the attach rate is likely to drop.

For now, though, its good news for the publishers as they know they are going to get good sales on the console(s) even without having an enourmous install base at this relatively early stage in the lifecycle.

 

[speng]

To echo what Dave said it's mostly the hard-core gamers that have these systems. This means they will be buying 5-10 games for the console per year depending on income and the games released.

I can hardly see how high attach rate can become a negative as it means more revenue. If the consoles were sitting on shelves and not selling then there would be a problem.


Speng.

 

[AzBat]

From my point of view(eg: Average Joe) I can see how it can be bad for a high attach rate. It means that Microsoft isn't growing their installed base of consoles outside of hard-core gamers. Microsoft must be concerned because in order to flourish they need to get the average gamers. The pricing is a road block for consumers like myself who aren't biting on the higher than normal pricing. And with no more original Xbox hardware in the sales channel to help on the low end it could get ugly real fast. Microsoft is basically between a rock and hard place. If they drop the 360 price too quickly or too much, then they look they are scared of the competion or that they're failing(like Dreamcast). If they don't drop the price pretty soon, then Sony could take advantage when their production is up to speed and catch up with Microsoft's numbers. Personally I can't see how Microsoft can keep going with a $300 and $400 price point for much longer. They had a year with their launch price and converted as much as the hard-core segment as they could. Now it's time to bring the price down where normal folks like myself can get one. I'm hopeful that it will happen between March and June. Any later than that and I think Sony will take advantage of it and possibly preempt with a price drop of their own. That's the last thing Microsoft wants to see.

Tommy McClain

 

[Jon Brittan]

a quick wizz through my gamer profile indicates that I've played 22 retail games and I count that I still have 17 in my possession (I didn't realise I had that many still until I counted!!).

Dear God, a quick lean over the edge of my sofa and a count shows 23 games for me, I'd never even thought about how many I'd bought... I think it's also indicative of the amount of spare time you have compared to me when you look at gamer score relative to games owned, I have loads and no time to play any of them

Still, I think you're entirely correct, early on is always a funny time in a consoles life, massive sales (relative to availalbe stock) at launch, then a drop while it's still at full price and the hardcore have brought theirs, when price drops come, the games library has grown and more peoples friends own them then the sales pick up again. In that same time, it's the hardcore who are always going to buy the most games, I've bought pretty much everything that's interested me, some casual gamers will buy consoles when they're cheaper simply for Grand Theft Auto or similar games.

 

[fulcizombie]

From my point of view(eg: Average Joe) I can see how it can be bad for a high attach rate. It means that Microsoft isn't growing their installed base of consoles outside of hard-core gamers. Microsoft must be concerned because in order to flourish they need to get the average gamers. The pricing is a road block for consumers like myself who aren't biting on the higher than normal pricing. And with no more original Xbox hardware in the sales channel to help on the low end it could get ugly real fast. Microsoft is basically between a rock and hard place. If they drop the 360 price too quickly or too much, then they look they are scared of the competion or that they're failing(like Dreamcast). If they don't drop the price pretty soon, then Sony could take advantage when their production is up to speed and catch up with Microsoft's numbers. Personally I can't see how Microsoft can keep going with a $300 and $400 price point for much longer. They had a year with their launch price and converted as much as the hard-core segment as they could. Now it's time to bring the price down where normal folks like myself can get one. I'm hopeful that it will happen between March and June. Any later than that and I think Sony will take advantage of it and possibly preempt with a price drop of their own. That's the last thing Microsoft wants to see.

Tommy McClain

Lol!!So what if Sony does a price drop first(which i really doubt it will happen with Sony's financial problems).Ms could lower the price of the 360 one day later and the difference in price would remain the same except that the 360 would be much closer to "mass market pricing".

Anyway all i care is that publishers are happy with the 360 and that means more games for the 360.

 

[one]

How were attach rates for other consoles like in their early stages?

 

[Johnny Awesome]

What a bad story. Why not look at the hardware numbers instead of speculating? Seems pretty silly.

 

[AzBat]

Lol!!So what if Sony does a price drop first(which i really doubt it will happen with Sony's financial problems).Ms could lower the price of the 360 one day later and the difference in price would remain the same except that the 360 would be much closer to "mass market pricing".

Yes, but that's not the point. By waiting for Sony to drop the price before doing it themselves Microsoft lost an advantage to rope in more average gamers first. That was the whole point for first mover advantage, no? If they wait till after Sony, then those gamers might just go to Sony instead. Personally, I agree that Sony will likely not make the first move, but it's something Microsoft has to prepare for if they want to start getting those average gamers before Sony. Kinda of Deja Vu(except the roles are reversed this time around).

Tommy McClain

 

[Arwin]

What it means right now is that the current crop of 360 owners have lots of money. This is a big surprise, what with most of them likely to own a HDtv as well.

Seriously, it's irrelevant. What it does show, is that the demand for the Core unit as a low-cost entry point hasn't taken off yet. But that too probably shouldn't be a big surprise. Also, it shows that it isn't popular yet for other features than basic gaming, i.e. not being bought very much exclusively for Live Arcade or for multi-media functions. The latter definitely isn't surprising, as it's only just now starting to come into its own on that respect, and it probably takes a hardware revision that makes it a little less loud for that to reach mass-market appeal.

A Core unit should, afaik, be able to run Gears of War pretty well though, and combined with VGA output or even looking half-decent on SDtv, a bundle could do well this Christmas.

 

[LunchBox]

so the summary of that article is that they aren't selling as many hardware compared to software??

 

[fulcizombie]

Yes, but that's not the point. By waiting for Sony to drop the price before doing it themselves Microsoft lost an advantage to rope in more average gamers first. That was the whole point for first mover advantage, no? If they wait till after Sony, then those gamers might just go to Sony instead. Personally, I agree that Sony will likely not make the first move, but it's something Microsoft has to prepare for if they want to start getting those average gamers before Sony. Kinda of Deja Vu(except the roles are reversed this time around).

Tommy McClain

But even with a pricedrop a 449$/549$ (or 399/499 if you want to think of a more extreme pricedrop)
the ps3 will still not be in the "mass market" price range while a 199/299 xbox360 will be much closer.

Unless the ps3 starts dominating in 2007(which i have my doubts cause i think that a 600$ console can't have crazy sales outside of the holiday season and Sony won't be able to have more than 300k units per month on the U.S market for a very long time) and the xbox360 drops to dremacast/gamecube levels(80-130k per month), i don't see MS doing a pricedrop before Sony.

 

[London Geezer]

Dear God, a quick lean over the edge of my sofa and a count shows 23 games for me, I'd never even thought about how many I'd bought...

That means that if the average is 5, for every you, there's someone with -18 games!


wait...


Anyway yes i ageee with the analyst. 5 bad. 4 good. 6 better.