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October 2010 NPD Article (Gamasutra)

J

jvm

Gamasutra.
I did what I could with the latest NPD Group figures for October 2010 retail sales. Not having a weekend to do things really made this more rushed, so if you feel it could have been better, I apologize. Gamasutra is graciously hosting the article:
Direct link to Gamasutra story about October 2010 NPD data.
Some stuff folks might be interested in:
  • Software revenue broken out in various ways, looking at Jan - Oct 2009/2010.
  • Music revenues so very small.
  • Some perspective on how hardware sales have changed in the past three years.
  • October hardware average prices: PS3 = $333, Xbox 360 = $256, Wii = $194.
  • Not in the article, but Michael Pachter noted that PS2 hardware was down 72% YOY and down 45% MOM. Hope that helps fill in the final data point we need for donny2112's hardware thread.

I think there are some other data points I have that didn't end up in the final text. I'll try to get them later, and if people have specific questions I can answer I'll do my best.

An image from the article:
wii-hw-sales-history.png


As always, I'm up for corrections, comments, etc. Please don't take a lack of immediate response personally -- I may simply not be here. (Today will be exceptionally busy for me.) My overlordseditors will probably be watching the thread, so changes may happen without a direct response from me.

In case you'd like to review previous threads:
2007: Oct Nov Dec
2008: Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2009: Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2010: Jan Feb Mar Apr May Jun Jul Aug Sep
 
Interesting note you have about PS3 average hardware prices. I'm surprised it isn't closer to $299. You could look at that meaning perhaps the $399 move bundle made up 1/3 of hardware purchases for the month, but Sony also has the $349 bundle too. Still much higher than I would expect.
 
The drop in Wii software sales is amazing as are the current software sales relative to the huge install base. The system is either gathering dust for lots of owners, or they just play Wii Sports and Mario Kart forever.
 
The folks at Nintendo have to be shitting themselves when they see data like that. No doubt their internal tracking shows the whole story.

If this holiday is as poor for them as the rest of the year, I imagine they will start fast-tracking a few things for the next console.
 
Beer Monkey said:
The drop in Wii software sales is amazing as are the current software sales relative to the huge install base. The system is either gathering dust for lots of owners, or they just play Wii Sports and Mario Kart forever.
Click to expand...

Um, no, it's because Nintendo has done jackshit in a while - and no other company is filling the gaps.
 
Music games are EXACTLY the type that should not be sold for 60$ now, after people have spent SO MUCH money on getting the instruments (sometimes not even just the guitar, but the drum set, the second guitar, de mic, etc.).

Imagine DJ Hero 2 / GH xy standalone sold at the price of 19.99$. Or 29.99$ max.
I suppose that would prove more incentive for old instrument-owners to go and play some music games again.
 
Vinci said:
Um, no, it's because Nintendo has done jackshit in a while - and no other company is filling the gaps.
Click to expand...

Yeah, this is pretty much my take on the matter, too. What has Nintendo done this year that's worthy of the numbers they used to pull down?
 
V_Arnold said:
Music games are EXACTLY the type that should not be sold for 60$ now, after people have spent SO MUCH money on getting the instruments (sometimes not even just the guitar, but the drum set, the second guitar, de mic, etc.).

Imagine DJ Hero 2 / GH xy standalone sold at the price of 19.99$. Or 29.99$ max.
I suppose that would prove more incentive for old instrument-owners to go and play some music games again.
Click to expand...
Sure, but given the prices of the licensing for the songs, that's not exactly doable, is it?
 
AlphaTwo00 said:
Sure, but given the prices of the licensing for the songs, that's not exactly doable, is it?
Click to expand...

Seriously. V_Arnold, the economics of those games is what is really killing them from a publisher viewpoint. They can't make money on those games like they used to. They used to be able to license songs for fairly cheap, but as the music industry caught on they raised their prices to get as much money as they could and that's squeezed the game publishers.

The profit margins on games is already slim enough....
 
Mrbob said:
Interesting note you have about PS3 average hardware prices. I'm surprised it isn't closer to $299. You could look at that meaning perhaps the $399 move bundle made up 1/3 of hardware purchases for the month, but Sony also has the $349 bundle too. Still much higher than I would expect.
Click to expand...
Michael Pachter in fact commented that about 1/3 of PS3 systems were Move bundles, which are $400. (Side note: that's around 80K added to the Move installed base.)

I think my own estimate, based on his comment and the ASP, was 60% $300 models, 30% $400 models, and 10% $350 models. That gets you down to $335.
 
Vinci said:
Um, no, it's because Nintendo has done jackshit in a while - and no other company is filling the gaps.
Click to expand...
Well, jack shit in comparison to the other two, who have been ultra-aggressive and forthcoming, constantly going all out with their new initiatives. I know it's unfair to say, but it really feels that Nintendo rested on their laurels and are paying the price in the US right now.


It seems like the 3DS is hogging most of their development resources right now.
 
Wow. Looks like Microsoft is going to hit for the first time 6 million sales this year.

I think the Wii is done. It's huge advantage / gimmick was waggle. Now, that X360 and PS3 have it too, I can't really see many people picking a Wii over them. Nintendo was right to not drop the price by $50 because it won't make much of a difference other than loosing more money whatever sales they may have left. Pretty sure, they still remember how the lower price GC didn't do much.
 
Nintendo has to be legitimately concerned. They're responsible for the entire decline of the home console market in the US, both software and hardware, and they're probably going to have to reduce their FY units forecast again.

I can't believe they stayed at $200 for this holiday.
 
V_Arnold said:
Music games are EXACTLY the type that should not be sold for 60$ now, after people have spent SO MUCH money on getting the instruments (sometimes not even just the guitar, but the drum set, the second guitar, de mic, etc.).

Imagine DJ Hero 2 / GH xy standalone sold at the price of 19.99$. Or 29.99$ max.
I suppose that would prove more incentive for old instrument-owners to go and play some music games again.
Click to expand...

This is honestly why I feel like Harmonix should have just kept releasing a track pack every 6 months, skip the big releases, and stop with the damn band themed games.

jcm said:
Nintendo has to be legitimately concerned. They're responsible for the entire decline of the home console market in the US, both software and hardware, and they're probably going to have to reduce their FY units forecast again.

I can't believe they stayed at $200 for this holiday.
Click to expand...
They're only responsible for the decline this year because they were responsible for almost all the growth over the last three years. Let someone else pick up the slack while they figure out where the fuck they went wrong after smashing all of those sales records (and boy did they go wrong...)
 
jcm said:
Nintendo has to be legitimately concerned. They're responsible for the entire decline of the home console market in the US, both software and hardware, and they're probably going to have to reduce their FY units forecast again.

I can't believe they stayed at $200 for this holiday.
Click to expand...

I can believe it as it has been a year since the last. MS will be approaching 3 years since the last if they wait until fall 2011.

Anyhow repeating myself from the official thread this chart says a lot;


ven56s.png


Anyhow stark contrast in what the Wii has done this year with SW compared to last and I say $500 million between it and the 360 that the 360 has secured the unit lead as well. I'm thinking 360 is getting close to 200 million units sold LTD.
 
El_TigroX said:
Seriously. V_Arnold, the economics of those games is what is really killing them from a publisher viewpoint. They can't make money on those games like they used to. They used to be able to license songs for fairly cheap, but as the music industry caught on they raised their prices to get as much money as they could and that's squeezed the game publishers.

The profit margins on games is already slim enough....
Click to expand...


Well. If new games reach way less people, licensing costs will have to go down. That is for Acti/MTV games to negotiate, but no new RB/GH games due to low sales means no licensing fees at all from this revenue source. Not saying it is easy to accomplish, but IS something they should have been aiming for.
 
DangerStepp said:
We haven't finished Nov and December is yet to come, though. How can we judge just yet?

P.S. How exactly am I supposed to read that chart?
Click to expand...

Um, length of each horizontal bar denotes how many consoles they sold per year, each colour corresponds to how much they sold in a given month.
 
DangerStepp said:
We haven't finished Nov and December is yet to come, though. How can we judge just yet?

P.S. How exactly am I supposed to read that chart?
Click to expand...

Well sales up to October for this year are way ahead of where they were for the past 3 years. It is a pretty good indicator that Nov and Dec sales will surpass prior years as well.

Although what is a bit interesting is that sales for October 2010 are actually lower than sales in October 2007 and 2008.
 
DangerStepp said:
We haven't finished Nov and December is yet to come, though. How can we judge just yet?

P.S. How exactly am I supposed to read that chart?
Click to expand...

360 is already well ahead of its usual numbers and I'd bet anything 360 wins the holiday over Wii especially with the Kinect bundles.
 
Pureauthor said:
Um, length of each horizontal bar denotes how many consoles they sold per year, each colour corresponds to how much they sold in a given month.
Click to expand...

Okay, I assumed as much but it still felt a bit weird to me. Thanks!

Kusagari said:
360 is already well ahead of its usual numbers and I'd bet anything 360 wins the holiday over Wii especially with the Kinect bundles.
Click to expand...

Right. I misinterpreted some posts and assumed they were being grim. My mistake.
 
Xbox 360 does have great summer. That's explain software really high in the summer term than other years.
 
Proven said:
They're only responsible for the decline this year because they were responsible for almost all the growth over the last three years. Let someone else pick up the slack while they figure out where the fuck they went wrong after smashing all of those sales records (and boy did they go wrong...)
Click to expand...

Um... Who?? No one is going to pick up the slack. No one else gives a shit about the Wii other than Nintendo. They're all it's got. If they're not pushing the damn thing forward, nobody is - and it's actually pretty miraculous that, given as little as they have, the damn thing is still selling PS2 numbers.
 
jling84 said:
Although what is a bit interesting is that sales for October 2010 are actually lower than sales in October 2007 and 2008.
Click to expand...
October 2007 / 2008 were five week months for NPD so it looks more drastic than it actually is. In reality it's only about 10k a week difference.
 
I knew the drop off in Wii hardware sales was harsh but that chart really puts it into perspective. Shit would have already hit the fan if not for NSMB last year and I don't see any saviour this year.

I've no idea how so many believe Nintendo can, or more importantly, would want to, maintain that sort of slump for another 2 years.

Holidays 2012 is the absolute latest a Wii successor is going to launch. Leaving it any later would be complete idiocy.
 
A lot of people who never bought a console before bought a Wii and I think part of Nintendo's thinking with the 45 mil goal is that there are ~100 mil households in the US alone, so let's keep trying to get more 1st time ever buyers. The problem now is there is competition that wasn't there before in trying to get into these 1st time buyers.
 
Looks like 360 is going to have a monster year. Sony chances to catching them worldwide this year is going to take something short of a miracle. As for the Wii I think everyone knew the Wii would have a shorter sell curve as it started out at a cheap price.
 
Subitai said:
A lot of people who never bought a console before bought a Wii and I think part of Nintendo's thinking with the 45 mil goal is that there are ~100 mil households in the US alone, so let's keep trying to get more 1st time ever buyers. The problem now is there is competition that wasn't there before in trying to get into these 1st time buyers.
Click to expand...

That talk of 45 million is all bravado and PR, its not based in reality.

It only took one year of slumping NDS sales before Nintendo presented its successor. They're not about to allow Wii sales to declin for 4 years before presenting a successor as so many here seem to be convinced of.

It wouldn't be a big deal if software sales had remained consistent but they've now slumped below even the PS3. Nintendo aren't going to leave a platform on the market forever more which is damaging their core software business.
 
jvm said:
Michael Pachter in fact commented that about 1/3 of PS3 systems were Move bundles, which are $400. (Side note: that's around 80K added to the Move installed base.)

I think my own estimate, based on his comment and the ASP, was 60% $300 models, 30% $400 models, and 10% $350 models. That gets you down to $335.
Click to expand...

The $350 model only launched in November, I think.
 
PistolGrip said:
Looks like 360 is going to have a monster year. Sony chances to catching them worldwide this year is going to take something short of a miracle.
Click to expand...

If if Sony catches them it won't change anything. The 360 software revenue chart shows 360 is in no danger of losing support.
 
Proven said:
They're only responsible for the decline this year because they were responsible for almost all the growth over the last three years. Let someone else pick up the slack while they figure out where the fuck they went wrong after smashing all of those sales records (and boy did they go wrong...)
Click to expand...

It's not a team sport. Someone else (actually two someones) are picking up the slack, but that does nothing for Nintendo.


Jtyettis said:
I can believe it as it has been a year since the last. MS will be approaching 3 years since the last if they wait until fall 2011.
Click to expand...

The 360 and Wii are completely different. Expecting their pricing strategy to be the same doesn't make sense.

Anyway, obviously Nintendo decided to try to squeeze one last holiday out of the $200 price point. From where I'm sitting, holiday at $175 or even $150 would have been the right choice. They are much better businessmen than I am, and have access to much more data, so maybe they're making the right decision. But I'd love to see what their forecast was for October. I'd bet money they missed it by a bunch.
 
DangerStepp said:
We haven't finished Nov and December is yet to come, though. How can we judge just yet?

P.S. How exactly am I supposed to read that chart?
Click to expand...

It says 360 is going to have its best year yet by a large margin.
 
jcm said:
It's not a team sport. Someone else (actually two someones) are picking up the slack, but that does nothing for Nintendo.




The 360 and Wii are completely different. Expecting their pricing strategy to be the same doesn't make sense.

Anyway, obviously Nintendo decided to try to squeeze one last holiday out of the $200 price point. From where I'm sitting, holiday at $175 or even $150 would have been the right choice. They are much better businessmen than I am, and have access to much more data, so maybe they're making the right decision. But I'd love to see what their forecast was for October. I'd bet money they missed it by a bunch.
Click to expand...

Oh I don't expect anything except for the fact I never expected Nintendo to drop the price 12 months after the last.


jvm said:
Really? Dang. I hate getting stuff like that wrong. I'll double check and thanks for the tip.
Click to expand...

Very tail end of the month iirc.
 
DangerStepp said:
Right. I misinterpreted some posts and assumed they were being grim. My mistake.
Click to expand...

My 'holy shit' is based on the fact that the 360 is already at last year's November YTD sales in October. Couple that with Kinect excitement, the current bundles already selling well, CoD:Black Ops coming out, and other various factors, and you have a recipe for one big fucking holiday and year.
 
Psychotext said:
October 2007 / 2008 were five week months for NPD so it looks more drastic than it actually is. In reality it's only about 10k a week difference.
Click to expand...

I don't think that's true.
 
brain_stew said:
That talk of 45 million is all bravado and PR, its not based in reality.

It only took one year of slumping NDS sales before Nintendo presented its successor. They're not about to allow Wii sales to declin for 4 years before presenting a successor as so many here seem to be convinced of.

It wouldn't be a big deal if software sales had remained consistent but they've now slumped below even the PS3. Nintendo aren't going to leave a platform on the market forever more which is damaging their core software business.
Click to expand...
Yeah you're right. It will be interesting to see what they present at E3 next year.
 
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