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April 2011 NPD Article (Gamasutra)

J

jvm

Gamasutra.
I put together an article on the April 2011 results reported by the NPD Group. As usual, Gamasutra has graciously agreed to publish it:
Direct link to Gamasutra story about April 2011 NPD Group estimates.
Some stuff folks might be interested in:
  • We have official figures for Xbox 360, PS3, Wii, NDS, and 3DS. Given the figure cited by Anita Frazier (hardware unit sales up 3%) and the historical values for PS2 sales this year, I estimated PSP sales at around 89K.
  • That suggests that the PSP got one strong month from its price cut. I think it's dead from here on out.
  • Estimated ASP for the big three consoles at this point last generation: $188. Estimated ASP this generation: about $265.
  • YTD figures show that hardware revenue is up even though hardware units are down, software units and ASP are both down, accessories is way up. Overall however the industry is up a modest amount for the year, which is a welcome change.
One image from the article, just for fun:
console-hw-sales-jan-apr.png

I did not feel that I had as much to work with this month as I'd wanted. So I apologize in advance. Also, this is my 48th column on the monthly NPD figures, so I've done this for four years straight now. (I wasn't asked to start a separate thread for the columns until November 2007.)

I'll be around some of day, so when you find mistakes, please let me know. I'll try to answer questions too, if there's something you think I got wrong or that would be worth chatting about.

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. 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 Oct Nov Dec
2011: Jan Feb Mar
 
We think that Sony and its third party partners may be able to deliver with a strong slate of software at the system's launch, but we are very dubious about Sony's ability to price the system competitively.
Click to expand...

That sounds like code for $350 MSRP. :)

I wonder if soft second month 3DS sales has gotten Sony's attention. If Nintendo can't sell a handheld at $250, Sony has no shot at $350, even if it as remarkable as advertised.

Thanks for the article.
 
Nice article, as usual. Well thought out at most points. I really dig that "Industry Revenue Subdivided Monthly" chart.

A thought on console generation cycles: Can ASP be used as a predictor of the end of the generation? That is, does the generation reboot tend to happen when ASP falls below a certain percentage of the starting ASP?
 
WaltJay said:
That sounds like code for $350 MSRP. :)

I wonder if soft second month 3DS sales has gotten Sony's attention. If Nintendo can't sell a handheld at $250, Sony has no shot at $350, even if it as remarkable as advertised.

Thanks for the article.
Click to expand...

Sony is really screwed with whatever price they choose. If it's too low, they'll never make money off it given the amount of tech and probable cost to manufacture it. If they price it too high, it won't sell.

Even the 3DS is struggling a bit at it's price point, although I think that's still about the lack of super amazing software, and general continued popularity of the DS.
 
Criminal Upper said:
Sony is really screwed with whatever price they choose. If it's too low, they'll never make money off it given the amount of tech and probable cost to manufacture it. If they price it too high, it won't sell.

Even the 3DS is struggling a bit at it's price point, although I think that's still about the lack of super amazing software, and general continued popularity of the DS.
Click to expand...

I was thinking that too (screwed either way), but I think they need a strong start, so pricing it at a loss (or greater loss) is the way to go. Or maybe that's just my wishful thinking because I want one, but not if it's going to mean having two jobs to pay for it.
 
Criminal Upper said:
Sony is really screwed with whatever price they choose. If it's too low, they'll never make money off it given the amount of tech and probable cost to manufacture it. If they price it too high, it won't sell.

Even the 3DS is struggling a bit at it's price point, although I think that's still about the lack of super amazing software, and general continued popularity of the DS.
Click to expand...

NGP's costs will drop like a rock. It's mostly off the shelf parts, anyways.
 
Does the writer mean PS3 or 2000?
For this discussion, we will take the October 2006 launch of the Sony PlayStation 2, at $300, as the beginning of the last generation of hardware. The Nintendo GameCube ($200) and original Microsoft Xbox ($300) followed the next year, in November 2001.
Click to expand...
 
Criminal Upper said:
Sony is really screwed with whatever price they choose. If it's too low, they'll never make money off it given the amount of tech and probable cost to manufacture it. If they price it too high, it won't sell.

Even the 3DS is struggling a bit at it's price point, although I think that's still about the lack of super amazing software, and general continued popularity of the DS.
Click to expand...

You may be right.

Maybe the PSP being pretty much dead in the US might help the NGP. If you remember, the PS2 was going strong when the PS3 launched and although the $599 price was insane for a console, I think the PS2 hurt the PS3 sales wise (at least in the beginning). Same could be true for 3DS.

But I have to say, I thought the 3DS would do gangbusters at $250 and since it's not, at least not yet, it makes me worry about the NGP.
 
Snipes424 said:
You may be right.

Maybe the PSP being pretty much dead in the US might help the NGP. If you remember, the PS2 was going strong when the PS3 launched and although the $599 price was insane for a console, I think the PS2 hurt the PS3 sales wise (at least in the beginning). Same could be true for 3DS.

But I have to say, I thought the 3DS would do gangbusters at $250 and since it's not, at least not yet, it makes me worry about the NGP.
Click to expand...
Companies keep making the same mistake of thinking they can charge a price higher than the market finds reasonable and still sell a lot of systems.

3DS will become much more appealing with a price drop and more games.
 
Snipes424 said:
You may be right.

Maybe the PSP being pretty much dead in the US might help the NGP. If you remember, the PS2 was going strong when the PS3 launched and although the $599 price was insane for a console, I think the PS2 hurt the PS3 sales wise (at least in the beginning). Same could be true for 3DS.

But I have to say, I thought the 3DS would do gangbusters at $250 and since it's not, at least not yet, it makes me worry about the NGP.
Click to expand...
Did N64 help GameCube? Did Saturn help Dreamcast? I think this a pretty perilous position, it's far better to have a strong brand identity going into the next gen, even if it eats some upfront sales from the successor system (like GBA did DS).
 
I'm kind of curious about the way people value hardware versus software. People seem willing to fork out big bucks for iPads and 360s and PS3s. But I think the trade off is they now either buy less games, or have an expectation of games costing less or even being free.

Not that it's accurate or that it's all about piracy, but I remember some game executive basically said ATI and nVidia have a wink wink nudge nudge marketing campaign where they encourage users to splurge on the better GPU b/c the games are "free".

A GAFfer once said Spanish ISPs actually openly market their higher tiered packages so users can pirate faster. Or Roku and others with media boxes that organize and play your mkv library.

The principle being that hardware is "worth" more than software. That content, far from being king, is somewhat disposable. Hollywood version of this is with Netflix and Redbox. I wonder if anyone out there tracks consumer attitudes regarding this stuff.
 
Sure, a) there is no marginal cost to duplicating software, but I wouldn't even know how to begin to duplicate my Xbox 360 much less calculate the cost, and b) there is downward pressure on software entertainment prices because of the commodity mobile market. You can be sure many, many people are watching price sensitivity very carefully, especially as to how it relates to franchise management & licensed titles.
 
jvm said:
Done.
qqwqvn.png
Click to expand...

Thanks, jvm!

It's very interesting to see it laid out this way, the Wii clearly as a 5-year platform whereas the others are still looking like they're in growth or maturation stages.

I think that, depending on when the Cafe releases, if that will start the downward trend for the other platforms or not.

It's also really interesting to see that the Wii's worst year (this one) still puts it on pace for the PS3's best year (this one). But it's all about the lifecycle and growth.
 
Just wanted to add that the official NPD figures finally came through. The average for a console so far this generation is $291. (I had estimated a minimum of $265. I was too conservative.)

The Xbox 360 LTD ASP is over $300, and the PS3 is a good bit north of that (but still in the $300-$400 range). The Wii average is like $225 or so.
 
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