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July 2009 NPD Article (Gamasutra)

J

jvm

Gamasutra.
Another month, another set of negative numbers to discuss. I hope you guys will find something of interest in here.
Direct link to Gamasutra story about July 2009 NPD data.

A couple of things that may be of interest:

  • NDSL vs NDSi ratio discussed (from 4-to-1 down to 1-to-1, roughly), price cut possible?
  • NCAA Football stats from last three years (Xbox 360, PS3, PS2)
  • A bit of discussion of hardware sales

I was unable to get my data request to NPD fulfilled this month, so that makes it a bit more challenging. Things that got cut from the article: estimated PSP software was $20 million while the NDS was $80 million. The PS2 was a bit more than $25 million according to Mr. Pachter. Three worst months for software units this year: May (worst), July , June.

One image for fun:
nds-weekly-rates-mid-2009.png

It's still possible we'll get some data from NPD today, so stay tuned.

As always, constructive criticism is welcome. If I made an error, kindly let me know and I'll get it fixed ASAP.

I may be unavailable for much of the day, so silence won't mean I'm ignoring you. I'm just trying to be a good dad on vacation! I'm earning the bread the feeds my kids.

However, my editors will be monitoring this thread, I suspect, so changes may get made without me replying directly here. They'll punish me later for the mistakes, I assure you.

Thanks, guys.

In case you'd like to review previous threads:
June 2009
May 2009
April 2009
March 2009
February 2009
January 2009
December 2008
November 2008
October 2008
September 2008
August 2008
July 2008
June 2008
May 2008
April 2008
March 2008
February 2008
January 2008
December and all of 2007
November 2007
October 2007
 
jvm said:
As always, constructive criticism is welcome. If I made an error, kindly let me know and I'll get it fixed ASAP.
Click to expand...
I think your space bar is broken. :)


Time to Cut theDSi Price?

After only four months, theNintendo DSi has reached an installed base of 2 million units in theU.S. faster than any system for which we have data.

The PlayStation 2 reached 2million units in March 2001, five months after its October 2000launch. Microsoft's original Xbox didn't reach the 2 million markuntil its sixth month while its successor, the Xbox 360, took sevenmonths, mostly due to supply issues in early 2006.

Nintendo's Game BoyAdvance and GameCube each took four and a half and eight months, respectively, to achieve aninstalled base of two million units. The original Nintendo DS tooknine months while its successor, the Nintendo DS Lite took between four and five.

The Nintendo Wii comes close, with essentially four and a half monthsrequired to reach an installed base of 2 million systems.

With that said, the Nintendo DSialso faces a very strong competitor which has slowly claimedmarketshare over the past three months: the Nintendo DS Lite.
Click to expand...
 
Thanks, jmv.

It looks like there are just some errors on the page in regards to spacing and article navigation.
 
Interesting stuff on the DSi sales, I don't think Nintendo has made a real effort to make it a compelling option yet over the DS, we'll see how they approach that going forward. Interesting how from NCAA 08 to 09 the PS2 users seemingly didn't translate to either 360 or PS3, just basically disappeared.

Also, you have a lot of missing spaces (words running together) in the article in case you don't know.

EDIT: Ha, beaten on that point.
 
And if consumers have become even morecost-conscious as a result of the ongoing recession, the consumerswilling to spend $300 on a game system may feel they get more valuefrom a $200 system and two inexpensive games than they would from aWii and a single game (other than the pack-in, Wii Sports).
Click to expand...

wat
 
We note that Mr. Michael Pachter, analyst for Wedbush Morgan Securities, came to similar conclusions in his notes on Friday after the release of the NPD Group data. He suggests that Nintendo will cut the DS Lite to $100 and the Nintendo DSi to $150 or lower before the Holiday 2009 season. We concur, but would consider the price cut of the DS Lite to be of the fire sale variety as the focus shifts entirely to the Nintendo DSi.
Click to expand...

Why would Nintendo do that?

I mean, yes, the rates are almost the same at this point, but let's not forget the DS itself STILL sells like HOTCAKES. Why would they drop the price when they sell _540k_ units in freaking JULY?

If they did though, well, I cannot even fathom to think how much the DS would take off again :lol
 
donny2112 said:
No Wii version this year.
Click to expand...

Yup we already have some evidence that PS2 owners were shifting to Wii, no Wii version and I guess they figured why bother.

After last years horrible game though they might have stayed away even if it was available :lol
 
chubigans said:
More vacation JVM? Weren't you at the beach a few months ago?

You're the luckiest guy I know man. :D
Click to expand...
Ah crap, so much for copying and pasting. I'll fix that.

It's actually precisely the opposite ... real work!
 
# NDSL vs NDSi ratio discussed (from 4-to-1 down to 1-to-1, roughly), price cut possible?
Click to expand...

It is selling the same amount as the ds but makes way more money for nintendo ? i tink a price cut is possible but they clearly dondt need one, still 149 would be a nice price point for the dsi...
 
jvm said:
[*]NDSL vs NDSi ratio discussed (from 4-to-1 down to 1-to-1, roughly), price cut possible?
Click to expand...

Hopefully. Bringing the price up with the NDSi was just ridiculous. Sadly the DSL is still selling great so possibly Nintendo should just bring the price down to $150?
 
Flying_Phoenix said:
Hopefully. Bringing the price up with the NDSi was just ridiculous. Sadly the DSL is still selling great so possibly Nintendo should just bring the price down to $150?
Click to expand...
So it is ridiculous to sell better hardware at a higher price ? :D
 
cw_sasuke said:
So it is ridiculous to sell better hardware at a higher price ? :D
Click to expand...

It's ridiculous to sell the next entry of half a decade old hardware (for now) at a higher price. I mean this really isn't something that should be made standard.
 
Flying_Phoenix said:
It's ridiculous to sell the next entry of half a decade old hardware at a higher price.
Click to expand...


You don`t own a Wii console ?
 
I don't see why Nintendo's strategy shouldn't just be to keep both handhelds at the price they're at now? They probably cut the cost of production for the DS lite so they will profit from the hardware sales either way. The solution should be to keep increasing the value of the DSi with things like DSiWare and DSi exclusive games.
 
Great analysis like usual, Gamasutra.

One thing I'd like to discuss:

Gamasutra said:
Combined with the persistent rumors of a new, slimmer model of the PlayStation 3 hardware and Sony's stated sales goals for the current fiscal year, timing is right for a price cut. An announcement is widely expected this coming week at GamesCom 2009 in Cologne, Germany.

As we have said before, we believe that market share and mindshare considerations may now outweigh the need for putting its game division into the black, and consequently we favor a $100 price drop.
Click to expand...

Does Gamasutra generally believe that MS feels confident with a $300 Elite SKU vs $300 80GB PS3 SKU battle?
 
Great article as always.

Nintendo has to make their first tough choices in quite some time. Marketshare/profitability are now legitimately at odds with each other, which is the normal condition for normal products.

Sony is in a much worse position, of course. I agree with your assessment: Sony's profitability is very poor, but their marketshare position may be viewed as even worse. 15-20% marketshare wouldn't be terrible for some companies (Apple profits nicely with 5% of the PC market), but Sony's entire business model in the gaming sector is built on marketshare driving ancillary revenue (game royalties, blu ray, DLC, and even Sony HDTVs purchased to maximize the Blu Ray/PS3), which makes their current position untennable.
 
JKBii said:
I don't see why Nintendo's strategy shouldn't just be to keep both handhelds at the price they're at now? They probably cut the cost of production for the DS lite so they will profit from the hardware sales either way. The solution should be to keep increasing the value of the DSi with things like DSiWare and DSi exclusive games.
Click to expand...

That is the plan for the two systems. Nintendo introduced the DSi as a complementary system to the DS Lite. One of the major goals with the DSi is to make it much more personal than a typical handheld (get it? I!... I'll keep my day job). This is a core part of their updated goal of increasing DS penetration from 'one-per-household' to 'one-per-person.' The DSi will attempt to identify the barriers certain consumers face with the previous editions of the DS and try to win them over.

As we seen in the past, success for Nintendo's handhelds, especially the Gameboy and DS, was independent of broad changes in price. They really needed a key piece of software to revive sales, such as Pokemon reviving interest during the late stages of the Gameboy's life. While Iwata isn't completely opposed to price drops, he will try everything else before he resorts to a price drop. We should see the typical Nintendo tag-team (Brain Age/Nintendogs, Wii Fit/ Mario Kart Wii) that will attempt to differentiate the system, build a userbase, and introduce/create consumers for the system. If that doesn't work, we'll start seeing different colors galore, bundles, and contracted third-parties. I'm guessing this is all going to occur at a glacial pace because the PSP Huns aren't invading the expanded audience and the bulk of Nintendo's developers are working on the Wii.
 
There's so much talk and expectation of price cuts, but all 3 hardware companies have been much more reluctant to take any this gen than they were in the past.

Nintendo has had only one, and that was on the original DS (and of course, they've raised the price with each revision). And they've been very clear on that point: they don't want to do price drops, on hardware or even on software. That's not just the typical "no price drop coming" PR in response to expectations, it's something they've reiterated when no one expected a cut. I think Nintendo is going to be stubborn and stick with their prices long past the point where it seems reasonable to lower them. Their success with high hardware profit margins and key software long-term sales have really changed their philosophy on pricing.

Sony has financial woes to blame for their reluctance to lower their hardware's price, and of course there are unique reasons for the PSP Go to launch with a high tag. We can only guess at their internal viewpoint on balancing market share vs profits, but I wouldn't be surprised to see them continue to hold firm on price in order to chase profitability.

Microsoft was briefly the record-holder for having the console that went longest without a price drop, but Nintendo now holds it for the Wii. Microsoft also clearly believes in high hardware pricing (particularly accessories), which I attribute to an obvious high priority on finally turning a profit from the videogame sector. But they have to be pleased with the results of last year's Xbox 360 price cut. It had a much better and longer-lasting effect than price cuts historically have had on console sales. While Nintendo seems to think price cuts are now beneath them, and Sony has concerns that may outweigh the benefits, Microsoft has a positive precedent to take a price cut in the near future, looking for a repeat of last year's success.
 
The core concept of making an improved product for a greater price is a sound one and it frequently works well (see Apple products, DSfat ->DSlite), however in a recession environment we might be seeing folks opt for the cheaper option. The problem is that Nintendo hasn't done a good job of making the DSi obviously better enough over the DSlite for it to be a "must by." From that graph I'd say that it looks like Nintendo is exhausting it's amount of "will buy at any cost" hardcore fans, and is now selling to the usual, price concious crowd.

Nintendo needs to do a better job of explaining what makes the DSi so special. Us with cellphone cameras, the DSi camera is a useless gimmick, but for young kids, it could well be their first camera. That's a huge plus to a parent who doesn't want to buy their kid anything expensive. Highlight that on the box somehow. Make it a big deal.

Another area that Nintendo could look at is the DSi service. Having 1000 points to spend as you'd like is great, but maybe they need to go the extra step and have a compelling DSi game to provide free as a sort of pack in/free download. Highlight the free game on the box. Even if it's only a $2 game I think that would have a beneficial effect.
 
LosDaddie said:
Does Gamasutra generally believe that MS feels confident with a $300 Elite SKU vs $300 80GB PS3 SKU battle?
Click to expand...

Not speaking for Gamasutra, but MS shouldn't feel confident.

However, it looks like Sony is going to be nice and give Microsoft a couple of months to measure the impact and then decide whether to cut 360 price again for the Holiday season.
 
I believe that Nintendo will maybe change the perceived value of the packs and not the price.

The DS Lite came with a variety of games for a while that while causing headaches at retail (I want the Blue console and the free game thats in the Green console box...) did generally benefit the consumer. I can see this happening again but with older, general appeal software. Brain academy in the colours, and training 1 in the B&W maybe?


The DSi is selling well at it's current point and isn't really targeting the same market. They want people to go online and to use the services so I expect the shift to be towards emphasizing the free points and downloads that already exist. Announcing any 1st party DSi 'only' games will cause gamers to shift more towards this system too.
 
The content of these write ups is always good but the number of little errors GAF caught this time is silly. Do you not have an editor?
 
Tiktaalik said:
The core concept of making an improved product for a greater price is a sound one and it frequently works well (see Apple products, DSfat ->DSlite), however in a recession environment we might be seeing folks opt for the cheaper option. The problem is that Nintendo hasn't done a good job of making the DSi obviously better enough over the DSlite for it to be a "must by." From that graph I'd say that it looks like Nintendo is exhausting it's amount of "will buy at any cost" hardcore fans, and is now selling to the usual, price concious crowd.
Click to expand...

Is the job of the DSi to be a better DS Lite though? If we go by what Iwata has been saying, and indeed, by the features of the DSi, it isn't meant to replace the DS Lite (not for now at least). If the DSi is to fail, it won't be because it isn't better than the DSL, but because its new differentiating features and software didn't do a good job of attracting more people.

Read Johann's reply, because he nailed it.
 
Kilrogg said:
Is the job of the DSi to be a better DS Lite though? If we go by what Iwata has been saying, and indeed, by the features of the DSi, it isn't meant to replace the DS Lite (not for now at least). If the DSi is to fail, it won't be because it isn't better than the DSL, but because its new differentiating features and software didn't do a good job of attracting more people.

Read Johann's reply, because he nailed it.
Click to expand...

No matter what Iwata told the press, the best case scenario for Nintendo is everyone going out and getting a DSi (why support two products when you can support one?). Right now you have folks going to the store, seeing a DSlite and a DSi, and opting for the cheaper option, even though qualitywise, the DSi is the better product. This isn't ideal. Especially since it means those people aren't buying DSi games.

If the DSi fails to connect with the audience it will be because Nintendo did a poor job of communicating that the DSi features are really significant enough to be worth purchasing a DSi for. I think the best thing they can do to achieve this is to go further than just providing 1000 points, but also to provide a free DSi game itself and to show this DSi game on the box.
 
Tiktaalik said:
No matter what Iwata told the press, the best case scenario for Nintendo is everyone going out and getting a DSi (why support two products when you can support one?). Right now you have folks going to the store, seeing a DSlite and a DSi, and opting for the cheaper option, even though qualitywise, the DSi is the better product. This isn't ideal. Especially since it means those people aren't buying DSi games.
Click to expand...

Of course this isn't ideal, but it's not my point :p.

If the DSi fails to connect with the audience it will be because Nintendo did a poor job of communicating that the DSi features are really significant enough to be worth purchasing a DSi for. I think the best thing they can do to achieve this is to go further than just providing 1000 points, but also to provide a free DSi game itself and to show this DSi game on the box.
Click to expand...

Nintendo can communicate all they want the best they can, if people aren't interested in what the DSi brings to the table, or if the jobs the DSi can do aren't jobs that many people want done, it won't sell much, period.

Maybe the DSi is connecting with its audience, I don't have data. But maybe that audience isn't huge, or wants more of what makes the DSi unique before making the jump. I wouldn't bury the DSi just yet though.

What baffles me is why there still isn't a Virtual Handheld. Advertise the DSi as the system that can play Tetris —the Tetris that everyone knows and loved back in the day— and voilà! Add Super Mario Land and Pokémon Blue/Red/Yellow for good measure too.
 
what iwata says is irrelevant when you consider the spec upgrade in the DSi, it's meant as a replacement, and when the DSi only features in Nintendo's own games are annlounced, and then DSi only first party games are revealed, it will be obvious to everyone.
 
The Faceless Master said:
what iwata says is irrelevant when you consider the spec upgrade in the DSi, it's meant as a replacement, and when the DSi only features in Nintendo's own games are annlounced, and then DSi only first party games are revealed, it will be obvious to everyone.
Click to expand...

This argument assumes that most people know, notice and care about the difference between DS/DSL and DSi hardware. I'd wager they don't. That difference isn't even that widely known among enthusiast gamers, and Nintendo never communicates about it.
 
I would think that Nintendo would want people to shift over as rapidly as possible, both because they want to maximize re-buys, and because if they have any intent of doing the DSi-only software thing, they'll want a positive symbiosis between software driving hardware purchases and having a hardware base to drive software purchases.
 
Call me crazy
which many of you already do
but I think that Nintendo isn't trying to position the DSi as a "replacement" for the DSL, but advertising to a somewhat different audience than the DSL while sharing part of a market overlap between the two.
From that perspective, I believe that any heavy effort from Nintendo to encourage double-dipping from the DSL to DSi may not be the direction they seem intended on following.
 
Kilrogg said:
This argument assumes that most people know, notice and care about the difference between DS/DSL and DSi hardware. I'd wager they don't. That difference isn't even that widely known among enthusiast gamers, and Nintendo never communicates about it.
Click to expand...

Yes. This is why DSi sales are fine but sinking. Nintendo needs to advertise that it isn't just a DS++ but has a kid safe camera and exclusive awesome games. It'll distrupt their nice minimalist box art but they gotta show this stuff up front and centre.

When I think about it I haven't seen a DSi exclusive ad. They should make one for the holidays. Show a kid taking pictures of the dog and then putting cat ears on him or something funny like that. Finish off the add with a selection of cool looking downloadable games "only on DSi". Show off in the ad that you get one of those games for free when you buy a DSi.
 
I feel the DSi losing steam and returning to Gameboy Advanced like sales as in only gamers and kids buying it, due to the iPod Touch/iPhone.
 
Tiktaalik said:
When I think about it I haven't seen a DSi exclusive ad. They should make one for the holidays. Show a kid taking pictures of the dog and then putting cat ears on him or something funny like that. Finish off the add with a selection of cool looking downloadable games "only on DSi". Show off in the ad that you get one of those games for free when you buy a DSi.
Click to expand...

Being done in the UK already - TV ads focusing on the camera and sound functionality air here regularly, and they're pretty effective at showing what the system offers in that regard.

NoE - or their ad providers - have been pretty damn on the ball this gen.

EDIT --

Sorry, this tickled me:

HowellJenkins said:
I feel the DSi losing steam and returning to Gameboy Advanced like sales as in only gamers and kids buying it, due to the iPod Touch/iPhone.
Click to expand...

+

5mbj9c.png


=

:D
 
beermonkey@tehbias said:
Not speaking for Gamasutra, but MS shouldn't feel confident.

However, it looks like Sony is going to be nice and give Microsoft a couple of months to measure the impact and then decide whether to cut 360 price again for the Holiday season.
Click to expand...

Yeah, the only time Sony beat them in sales was the months of the Blu-ray winning the format war and the months surrounding MGS4 so I think it would be smart for MS to sit back and see what sales look like in normal conditions before jumping to counteract.

I don't know if a price drop will happen though. I think they may just start bundling games, give free XBL points, maybe coupons for like $10-$20 bucks off your next game purchase. Stuff like that. I'm not sure they can drop the price more than they have so far.
 
It'll be interesting to see if Sony uses their big presence at Gamescom to highlight their new PSPGo offerings. At DEVELOP there was a lot of buzz about the amount of support they were getting from indie developers. iPhone devs Subatomic Studios (Fieldrunners) for example announced they were working on a port of their tower defence game for the PSPGo. Once we know what the PSPGo store is going to be like we can make some predictions as to which digital distribution service is going to be the strongest.

If Nintendo fails in promoting their DSi service you could see support for DSi games move elsewhere to iPhone or PSPGo.
 
BrokenSymmetry said:
weekly-hw-rates-mid-2009.png


Does this mean that in September (when ODST is released), the 360 will surpass the Wii ?
Click to expand...

Depends on when NSMB Wii gets released. I've heard November, so maybe there will be a small window in Sept where Xbox could pull ahead.
 
jay said:
The content of these write ups is always good but the number of little errors GAF caught this time is silly. Do you not have an editor?
Click to expand...
If the mean the spacing errors mentioned in the first few posts, that is apparently a bug in the content back-end that happens from time-to-time. The text looked fine yesterday when two colleagues were reading it over for me.

Other than that ... there was the Madden 09 typo. Did I forget something?

Regardless, thanks for the feedback, everyone.

My feeling on the DSi is that Nintendo would really like to use it to quash some of the copyright infringement and get people moving on the path to online distribution. Maybe I misjudge the type and strength of Nintendo's motivations here.
 
BrokenSymmetry said:
weekly-hw-rates-mid-2009.png


Does this mean that in September (when ODST is released), the 360 will surpass the Wii ?
Click to expand...

I forget, did the 360 surpass the Wii when Halo 3 was released? What months has the 360 beaten the Wii in weekly sales, if ever?
I'd imagine it would be more difficult to beat the Wii with ODST as it's not as hyped as Halo 3, and it's the second Halo game on the 360 so most Halo fans have jumped in already.
 
BrokenSymmetry said:
Does this mean that in September (when ODST is released), the 360 will surpass the Wii ?
Click to expand...


Now I keep seeing people say this so I must ask.

Why would ODST increase 360 sales? Don't all Halo fans have a 360 by now?

I guess Wii sales could drop below 360 sales for some reason next month, but would ODST cause that?
 
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