A few of you may have read the Sony FY2015 Q1 thread where I noted that the quarterly shipment of PlayStation 4 consoles was higher than the combined sell in for Xbox One, Xbox 360, Nintendo Wii U, Wii and 3DS combined. I now have further information that confirms total revenue generated by sales of PlayStation 4 and PlayStation 3 computer entertainment system was higher than that of all other home consoles combined in 2014 calendar year.
Sony's PlayStation 4 & 3 generated a total of $8 billion in revenue compared to the combined $7.2b generated by Microsoft and Nintendo's home consoles. Total revenue generated by home console sales in 2014 reached $15.3 billion including all other brands. 2014 is the first time since 2008 that total console revenue has exceeded $15 billion and marks the start of a resurgence in console sales.
The new console launches have allowed both Sony and Microsoft to increase revenue quite drastically compared to the declining revenue trend seen before 2013. In fact the PlayStation 4 has allowed Sony to double the amount of revenue they made in 2012 across all home console sales. Nintendo on the other hand have seen a sharp decline in the revenue they generate from Wii and Wii U sales with total revenue down 25% since 2012.
Nintendo’s sharp decline actually came about before the launch of the Wii U, in 2009 Nintendo was still the leader for revenue generated by console sales but sales of the Wii started to drop off in 2010 causing revenues to decline whilst the successful launch of Xbox Kinect and PlayStation Move allowed Sony and Microsoft to maintain revenues and overtake Nintendo in this space. The launch of the Wii U did nothing to stop the decline that Nintendo were seeing and this can mainly be attributed to the high pricing of the console and the confusing marketing that failed to capture the attention of the mainstream market. To date the Nintendo Wii U has only sold 10 million units worldwide.
Microsoft's Xbox 360 actually generated low revenue early on in the console cycle but continued to grow and thanks to the launch of Kinect we saw revenues almost match Sony's PlayStation 3 and PlayStation 2 revenues in 2010 and 2011. However the Xbox One launch whilst successful was not enough to increase revenue to PlayStation levels in 2013.
Sony have been able to hold their $399 price point for almost two years now whilst Microsoft has had to drop the price from $499 to $349 in the space of a year just to remain competitive. It’s fairly clear that Sony are expecting revenues from home console sales to increase further in 2015, that should line up with increased profits on hardware as Sony stated in a recent financial report that the PlayStation 4 is now cheaper to produce, whereas Microsoft could see a year where revenue remains flat or could even decline. One area where Sony have seen a decline is in portable console sales, the discontinuation of the PSP and lack of worldwide appeal for the Vita have caused revenues from handhelds to drop by almost half since 2009.
Overall the console video game hardware market remains healthy and has beaten the slump that we saw at the end of the last generation.
Sony's PlayStation 4 & 3 generated a total of $8 billion in revenue compared to the combined $7.2b generated by Microsoft and Nintendo's home consoles. Total revenue generated by home console sales in 2014 reached $15.3 billion including all other brands. 2014 is the first time since 2008 that total console revenue has exceeded $15 billion and marks the start of a resurgence in console sales.
The new console launches have allowed both Sony and Microsoft to increase revenue quite drastically compared to the declining revenue trend seen before 2013. In fact the PlayStation 4 has allowed Sony to double the amount of revenue they made in 2012 across all home console sales. Nintendo on the other hand have seen a sharp decline in the revenue they generate from Wii and Wii U sales with total revenue down 25% since 2012.
Nintendo’s sharp decline actually came about before the launch of the Wii U, in 2009 Nintendo was still the leader for revenue generated by console sales but sales of the Wii started to drop off in 2010 causing revenues to decline whilst the successful launch of Xbox Kinect and PlayStation Move allowed Sony and Microsoft to maintain revenues and overtake Nintendo in this space. The launch of the Wii U did nothing to stop the decline that Nintendo were seeing and this can mainly be attributed to the high pricing of the console and the confusing marketing that failed to capture the attention of the mainstream market. To date the Nintendo Wii U has only sold 10 million units worldwide.
Microsoft's Xbox 360 actually generated low revenue early on in the console cycle but continued to grow and thanks to the launch of Kinect we saw revenues almost match Sony's PlayStation 3 and PlayStation 2 revenues in 2010 and 2011. However the Xbox One launch whilst successful was not enough to increase revenue to PlayStation levels in 2013.
Sony have been able to hold their $399 price point for almost two years now whilst Microsoft has had to drop the price from $499 to $349 in the space of a year just to remain competitive. It’s fairly clear that Sony are expecting revenues from home console sales to increase further in 2015, that should line up with increased profits on hardware as Sony stated in a recent financial report that the PlayStation 4 is now cheaper to produce, whereas Microsoft could see a year where revenue remains flat or could even decline. One area where Sony have seen a decline is in portable console sales, the discontinuation of the PSP and lack of worldwide appeal for the Vita have caused revenues from handhelds to drop by almost half since 2009.
Overall the console video game hardware market remains healthy and has beaten the slump that we saw at the end of the last generation.