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May 23 / Ozymandias

Monday Morning Quarterbacking of April NPD Sales

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A good friend of mine, N’Gai Croal, just posted an interesting discussion he had with Geoff Keighley about April’s NPD report. I’ve known N’Gai for a long, long time now… perhaps ten years or so? We tend to disagree a great deal about certain topics, particularly Sony’s strategy around the Playstation (including PS2′s online “strategy” as well as almost everything about the PS3). That’s led to some (sincerely) fun discussions over dinner and wine at trade shows (with hopes of many more!) That said, this time around I found that I actually agree with many of his thoughts. Take this for example:

The reason nearly a million fewer people have bought PS3s than bought PS2s during each system’s first six months on the market is that at $599, the PS3 isn’t as perceived to be as good a value as was the $299 PS2. At this point in the PS2′s lifespan, it had the following meaningful exclusives: next-gen Madden, SSX, Onimusha, the Metal Gear Solid 2 demo with Zone of the Enders packed in, NBA Street and Medal of Honor Frontline, with Gran Turismo 3: A-Spec a couple of months from release. PS3 has Resistance: Fall of Man, MotorStorm and…what, exactly? Many of us were waiting to see how much the PS3′s positives (brand strength, Blu-Ray playback, superior computing power) would offset its negatives (high price, lack of killer apps, tricky architecture, Xbox 360′s lead and Nintendo simultaneous arrival) during its first six months in stores. Now we have the answer: not much.

Bravo! I completely agree! This is a bit of a shift for N’Gai as I recall him being a very strong believer in the ability of the Sony brand to sell PS3s early on (with me just not buying it.) Welcome to the light, N’Gai! Wink

Also in the discussion Geoff summarizes another of Sony’s challenges quite well – the fact that the Xbox 360 is the lead development SKU for the vast majority of platforms. This bit us last generation with the Xbox (which is why so many multi-platform ports looked similar to the PS2). This time around the shoe is on the other foot, and developers are leading on the Xbox 360.

As to your point about third party support for the PS3, I agree that most publishers will continue to produce PS3 SKUs no matter the near-term hardware sales numbers. But programming for the PS3 is a challenge, and I’m not sure I buy Yves’ suggestion that porting a 360 game to PS3 only costs 10% of the budget. (This is coming from the publisher that still hasn’t shipped Rainbow Six: Vegas for the PS3 six months after it was due out.) The likelihood of ports aside, the most important trend to watch is which system publishers use as their base development platform. Sony maintains that publishers will soon switch from the 360 to the PS3, but as of yet I’ve seen very little evidence to support that claim. Over the past few months almost 100 percent of the third party games I’ve seen have been demonstrated on the 360. Will things be different at E3? For Sony’s sake I sure hope so. But even if publishers port 360 games to the PS3 I don’t expect the games to look any different on Sony’s platform. And that’s a major problem for the PS3, especially given its premium price.

Finally, there’s a bit of discussion around the Wii’s current impressive sales. I think I tend to agree a bit more with Geoff here as he struggles to imagine a long life-cycle for the Wii, as well as sales remaining as robust as they have been through holiday. Don’t get me wrong, I love the Wii for what it is, but I (and a lot of people I know) just aren’t playing it right now. We’re waiting for the next round of impressive games (the “holy trinity” of Super Smash Bros Brawl, Super Mario Galaxy and Metroid Prime 3 as Geoff puts it.) And we continue to be disappointed by the quality of game visuals.

It is worth stating that there really may be a significant crowd of gamers out there who just aren’t as hardcore, and who are completely happy with the Wii as-is. But as the 360 and PS3 come down in price and broaden their portfolios to more family-friendly and crowd-engaging content, I just can’t see Wii’s momentum continuing. To quote Geoff again:

As for your question about Nintendo storming to first place, it’s creating concern but not panic. Most of the executives I speak with still think the Wii has a shorter lifespan than the other consoles and may begin to slow down sales-wise later this year. That being said, it’s hard to ignore the continued strong software sales for the Wii, including the bafflingly good sales of Wii Play. Again, I look back to those 115 million PS2 owners as the tea leaves. How many of those 115 million will decide to move to the Wii instead of the PS3 or 360? There’s certainly a scenario here where Sony gets attacked on two fronts: The 360 starts to steal away the enthusiast gamer crowd that bought the PS2 in year 2 or 3 and the Wii starts to steal away the broad mainstream crowd who bought the PS2 in year 4 or 5 (and is still buying it now.) If that happens I don’t know where Sony goes from here. Do you really think a $100 price drop solves any of Sony’s problems? Is that disruptive event that the PS3 needs to kick it back above 150,000 a month in sales?

The whole discussion is well worth reading as it gives you some very different viewpoints. But I should again highlight that for once, I’m in more agreement with N’Gai than not. That’s rare and noteworthy. I’m just not sure whether one of us owes the other dinner or not. Wink

Related posts:

  1. Xbox 360 Holiday Sales Spike
  2. Industry Sales Estimates Up for this Year
  3. PS3 Price Drop? Not Really….
  4. Achievements: The Asynchronous Metagame that Drives Sales
  5. SCEA: PS3 price won’t drop for two years…

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  • Todd

    "That being said, it’s hard to ignore the continued strong software sales for the Wii, including the bafflingly good sales of Wii Play."

    I’ll tell you why I bought it: It was a $10 game. I needed another wii-mote for my wife and I figured, what the hell? Still cheaper than a 360 game. ;)

    While my wife and I didn’t find the content very compelling, my mother and sister loved it.

  • http://technowledgy.spaces.live.com BackScatter

    Really great read – Thanks for sharing.

    … Would I ever like to be a fly on the wall during your next conversation with N’Gai.  :-)

  • islandkiwi

    The only thing holding the 360 back from massive sales is concern about the console’s reliability.  Too many stories from people who are on their (insert number here) 360 as a result of overheating.  

    I’ve had the ps3 on for a solid week folding@home, and haven’t worried about it at all.  I would worry about my 360.

    Have the 360 problems been fixed?  MS isn’t saying, and because of that people are staying away.  And that’s a shame, because the 360 has the good games…Sony has no game at all right now.

  • Im The Map

    I don’t buy the reliability issue.  Several people I know, including myself…bought 360′s at launch and they are fine.  I’ve had problems with specific games, but I would subject that two dirty discs, or heat issues.  Personally I think the people on console number 4 or 5 just don’t understand the need for ventalation for the power brick and the unit itself.  If MS could do anything to the box, I’d say fix that brick…shrink it if you can, and make the system quieter.  Those are my only two complaints.  The Wii on the other hand just sits on my TV stand collecting dust.  I think the Wii will end up appealing to casual gamers.  And that’s fine.  But how many casual gamers are buying Zelda, Paper Mario, etc. with their Wii?  Not very many.  Most people I know that aren’t really gamers are just buying the console…and playing Wii Sports…nothing else, nada.  Nintendo was smart to pack that game in.  I can’t imagine their attach rates are very impressive.  There just isn’t enough good content on the Wii to suggest any kind of dominance for this generation.  You can say they have sold a lot of units, but units alone don’t make a console great…you need to have good solid enjoyable games.  Not hacked up Wii-mote control games or 10 second mini-games (Wario anyone?)

  • Porktree

    Color me not surprised.  I bought a ps2 on launch and an xbox about a year after it’s release.  I bought a 360 on launch, a wii as soon as I could find one, and really never plan on getting a ps3. I’m one of the early adopters that jumped ship.  For me it’s about the quality of the experience, and if I thought the ps3 brought more to the table I’d get one, It doesn’t and I don’t think it ever will.

  • United Devil

    Quality article. Not sure if i agree with all of it but its nice to see things from other angles.

  • Karmakin

    I half think that the Wii sales will slow down this summer, and half don’t. It depends on how strong the launch demand is. If there’s 10 million people out there who want to buy the Wii at launch, it’s very likely that the launch demand will last through the end of the year.

    But in any case, if it does…so what? Nintendo’s fall line-up, just talking 1st party (not much is finalized when it comes to 3rd parties at this point..) is competitive, with Metroid, Galaxy and Smash Bros. all coming out before the end of the year. Put on top of that Fire Emblem and Batallion Wars 2, and whatever else they have up their sleeves, and that’s not a bad lineup.

    It’s competitive. Not just in terms of value, but it’s straight up competitive with the other two systems. Sales can slow down, but I don’t see how Nintendo doesn’t sell out this holiday season.

    Oh. And by the way. WiiPlay sells because it packages in a remote. Are the games worth 50? Hell no. Are they worth 10? I would actually say yes. It’s a good disc to have to show to non-gamers. And to be honest, Wii-vangalizing is fun.

  • http://www.wii60.com/forum Drew

    Great article, a lot of thought provoking things in there.

    Like I said over a MN.com, I really think that Microsoft is going to pick it up this summer. Halo 3 and GTA:IV on the same console for $300 less than the PS3? Yeah.

  • iamholam

    Have to remember that Nintendo are making money on every Wii sold whereas Microsoft and Sony are running at a loss.  So technically Nintendo don’t have to have a long life cycle like it’s competitors.  That being said though, as long as Nintendo can market a truly new way in playing at a low price it will always get my vote over generic game A.

  • vittala

    I think the Wii is going to continue to sell because as developers (especially 3rd party) nail down the controls the games are going to be better. Also, I think a lot of 3rd party developers didnt take Wii very serious at first and did not put a lot of time and effort into the games especially visually but now that the Wii is selling you will see them put more time and effort into their games and even see some Wii exclusives.

    I know I plan on picking up a Wii this Summer and my son already has one.

    That being said I think the 360 is in a good place, has some great games, with more to come. On the other hand, I have not heard of a single game coming out for the PS3 that would make me want to buy one. I think the PS3 is in for a world of hurt.

  • Anonymous

    Re: "Have to remember that Nintendo are making money on every Wii sold whereas Microsoft and Sony are running at a loss.  So technically Nintendo don’t have to have a long life cycle like it’s competitors.  That being said though, as long as Nintendo can market a truly new way in playing at a low price it will always get my vote over generic game A."

    Somewhat true. Yes, Nintendo is making money, but they can’t simply release another console 2 years down the road. That would infuriate third-party partners and customers who have bought the platform with a (rough) expectation of having five years of life.

  • cc99999

    I love the 360, I have about 200 games for it (legitimately). But the lack of dominance for the console is sad to me. Maybe I’ve always run with the underdogs, I had a Genesis and it was overshadowed by the SNES, I loved my Saturn and Dreamcast, and even the original Xbox, I thought, was better than the PS2 in terms of functionality.

    This generation, it seems that Microsoft innovated (with achievements) something that no console maker had done before- they made all of the games on the system have a uniform, cross-cultural value. For hardcore gamers, games like Open Season are as welcome as Gears of War because of the points.

    I just bought a Wii and I love the concept. Love the system’s architecture- but I’m reluctant to play anything but casual games on it because it just doesn’t seem to call to me like the achievement games do.

    And no, before you start, achievements aren’t going to ruin gaming- they just give obsessive people something cool to obsess about.

    BTW, XBOX live arcade needs NEC and NEO GEO games.

  • jonat3

    Right now, the wii doesn’t have any compelling titles. Heck, i don’t play with the wii anymore as well for quite some time. Even so, i’m fairly convinced Nintendo will continue its dominance. The sales of the hardcore will probably slacken off, cause of hardcore game drought. However, i think the casual and nongamer crowd will compensate for that, which will allow Nintendo to continue selling their hardware, despite the game drought.

    Eventually, the hardcore type games WILL come, simply because the install base of the wii is continuing to grow at a faster pace than the competition. Third party will simply have no choice, but try to cash in on the wii.

    While there is a game drought right now, it’s fairly standard for a console that is just out for 6 months. And with the rate its selling at and will probably continue to sell at, the momentum of the wii will reach its peak when both hardcore type games and nongamer/casual type games are released at the same time. I think the wii will pretty much be unstoppable then. Momentum building off from more momentum followed up by even more momentum. That’s how it went with the PS2 and i see something similar happening here.

  • 360 sucks

    - dpad sucks

    - live cost you psn is lag free

    - rings of death sucks

    - disc scratch sucks

  • P$3 blows

    1)True

    2)Not hard to be lag free when you have a fraction of the user base live supports. (+ you get what you pay for)

    3)True, M$ needs to own up to this and fix it.

    4)Retards who move their console when the disc is spinning deserve scratched discs.