Opinion Business Analysis PlayStation brand ‘is in decisive decline in Japan’, research firm claims

[Tschumi]

All the guys who were die hard PlayStation fans in the 00s are buying their kids switches now... Well i mean really a pocket sized console is far more attractive than a small refrigerator (no judge) if you've got kids and only one tv

 

[dvdvideo]

It must be kind of odd in a way to sell a product to a primary audience that isn't from your own country / culture - you probably have to do a really good job listening to your western division and partners to make this work. I think back to sega in the early days and how they had no clue, but made some good choices / connections / advertising and made it work. Good on them.
Its something for sure ms never did do the other direction successfully, though they likely don't care as much now. A handheld might change things......

 

[noshten]

Playstation Ecosystem Famitsu Top 100(2014-)

1. PS4/PSV/PS3 2016 - 11.932.290
2. PS4/PSV/PS3 2014 - 11.199.346
3. PS4/PSV/PS3 2015 - 10.382.176
4. PS4/PSV 2017 - 9.462.066
5. PS4/PSV 2018 - 9.228.298
6. PS4 2019 - 7.181.200

Playstation Ecosystem 2020 Famitsu Top 50:
PS4/PS5 2020 - 3.672.148

Even with a best case scenario we are looking at sub 5 million result for Playstation ecosystem this year

There is a few things to consider

• Majority of software sales on the PlayStation ecosystem are third party
• 2018 was the peak year for the PS4 with MHW but because of the decline of Vita it was actually the second worse year for the PlayStation ecosystem in Japan
• Vita managed around 24 million physical software sales in Japan,

Overall when Sony tried to transition their partners from PS3/PSV to PS4, we notice that the PSV audience actually didn't migrate, that's mainly because Nintendo occupied this space. It's also one of the reasons why in January Nintendo's sales have actually gone up in the past few years - January used to be a stronger month for Playstation ecosystem in the past but now the audience is on Switch, it has become an important month for Nintendo.

Overall 3rd Parties will have key decisions to make, and it's not only about Japan - East Asia is trending the same way. Nintendo have already caught up to the PS4 in China despite only launching officially in December 2019, they currently have around 80% of the hardware and software market in South Korea and Taiwan, they will enter Thailand officially next year. 3rd Parties could have ignored the Switch if it was only popular in Japan, but PS retained leadership in East Asia, but with the current trends - they have two major markets for their games to consider.

From their last financial: Asia is Nintendo’s fastest-growing market, with sales outside of Japan growing 152% this fiscal year

Asia is Nintendo's fastest-growing market, with sales outside of Japan growing 152% this fiscal year | Business News | MCV/DEVELOP

Nintendo is seeing significant growth outside of Japan | MCV/DEVELOP

www.mcvuk.com

The majority of Japanese games actually make more than 50% of their sales in Asia. With Monster Hunter Rise, Bowser's Fury, Olive Town, Rune Factory 5, Stories 2, Bravely Default 2 etc lined-up for 2021 this trend is likely to continue, meaning that PS5 is likely to face a similar competitive situation in countries geographically and culturally close to Japan, something which the PS4 didn't face when it launched.

 

[PleaseWaitStation4]

 

[Celine]

Frankly it's not terribly informative article, it's just an analyst lamenting that Sony isn't more successful with their recent consoles in Japan.
It fails to give any insight on what is the state of the japanese console market and how the power struggle between Nintendo and PlayStation have played in recent years.

First off a very basic concept which is very important to keep in mind:
The battle between Nintendo and PlayStation isn't just about two similar brand of consoles, it's a struggle between two totally different way to manage a console platform.
Nintendo's a first-party driven console manufacturer, meaning it's the platform holder output the main responsible to generate the momentum that make on of its console an enduring success.
Sony's a third-party driven console manufacturer, meaning it's the mass of third-party output the main responsible to generate the momentum that make a PlayStation console an enduring success.

A very brief history of the japanese console market.
Nintendo's founded the mainstream console market in Japan with the release of the Famicom in 1983.
From 1983 to 1995 the annual biggest amount of software was sold on Nintendo platforms.
The biggest publisher of which was Nintendo.
In 1996 the market shifted toward PlayStation consoles thanks to the decisive support of the japanese third-party publishers to Sony ecosystem (one name above all: Squaresoft).
Overall Nintendo remained among the strongest publishers (often it had the highest yearly software sales among the japanese publishers) but its influence was constrained.
From 2006 the majority of the annual software sales returned back on Nintendo platforms and since then it happened each year with the sole exception of 2011.
How Nintendo regained the crown was by outgrowing the competitors, everyone of them.
In 2006 in fact Nintendo's First-Party software sales represented a staggering 46% of the total software sold in the year.

What I believe is one of the more interesting parameter to evaluate how the power struggle between Nintendo and PlayStation is proceeding is to compare the annual Nintendo's First-Party software sales (include games published by Nintendo and Pokemon Co.) to the annual software sales by the every third-party games on PlayStation platforms.
Here a graph that show what happened in the last 4 years, well there are only the years from 2017 to 2019 cause the data for 2020 isn't yet available however 2020 is even more lopsided in favor of Nintendo.
2021 will likely shape out to be a reaffirmation of the trend which is emerging.
The data pertain software sales at retail and cover around 99% of the physical software market (source: Media Create)

Nintendo's first-party software outsold the total third-party software sales combined on PlayStation platforms for the last 4 years.

Keep in mind that this comparison is obviously between a very different number of games.
The entirety of PlayStation's third-party support can in fact output a far higher number of games than what Nintendo alone can ever produce (the ratio often range between 4:1 to 8:1 depending on the years).
However the average sales per game is far better for Nintendo's software which also highlight a key element in Nintendo's favor that is that most of the mainstream big hits in Japan in the recent years were Nintendo published titles.

 

[Celine]

• Vita managed around 50 million physical software sales in Japan, which is a similar result to what we are anticipating for PS4

50M units as PSV total physical software sales in Japan is way way too high.
PSV total physical software sales in Japan is 24M units per Media Create.

EDIT:
Though 50M and something is indeed what PS4 will end up selling in term of physical software.

 

[noshten]

50M units as PSV total physical software sales in Japan is way way too high.
PSV total physical software sales in Japan is 24M units per Media Create.

EDIT:
Though 50M and something is indeed what PS4 will end up selling in term of physical software.

Thanks for the informative post and for the clarification I had the wrong information for the PSV physical sales

 

[The Mad Draklor]

Overall 3rd Parties will have key decisions to make, and it's not only about Japan - East Asia is trending the same way. Nintendo have already caught up to the PS4 in China despite only launching officially in December 2019, they currently have around 80% of the hardware and software market in South Korea and Taiwan, they will enter Thailand officially next year. 3rd Parties could have ignored the Switch if it was only popular in Japan, but PS retained leadership in East Asia, but with the current trends - they have two major markets for their games to consider.

Do you know where to find the 80% figure in South Korea and Taiwan? I read through the MCVUK article assuming that's where you got the number from and it's not there.

 

[noshten]

Do you know where to find the 80% figure in South Korea and Taiwan? I read through the MCVUK article assuming that's where you got the number from and it's not there.

Media-create Whitebook provides this data, we don't have anything official for this year but these markets are up 150% YoY for Nintendo this year and last year they had 51% in Taiwan and 63% in South Korea. They are basically mirroring the pattern of Japan where Switch had 65% of the market last year and saw an uptick to 90% this year.

There is also a weekly Top 5 released for the two countries and it's dominated by by Switch titles 90% of the time since New Horizon launched and Ring Fit started to get it's supply problems resolved.

 

[The Mad Draklor]

Media-create Whitebook provides this data, we don't have anything official for this year but these markets are up 150% YoY for Nintendo this year and last year they had 51% in Taiwan and 63% in South Korea. They are basically mirroring the pattern of Japan where Switch had 65% of the market last year and saw an uptick to 90% this year.

There is also a weekly Top 5 released for the two countries and it's dominated by by Switch titles 90% of the time since New Horizon launched and Ring Fit started to get it's supply problems resolved.

Thanks for the info. I'm not surprised that Taiwan is following similar trends to Japan. I have relatives in Taiwan and their impression is that Nintendo and PC are the go-to platforms. Ghost of Tsushima made some noise, which Media Create Taiwan also showed. But other than that, it has been all Nintendo.

 

[assurdum]

This 'japan is moving away from home consoles myth' is so stupid it makes my head hurt

Prior generation consoles sales don't support that at all and as for the current situation

Nintendo doesn't have a tradtional home console on the market

XBOX has never been a factor in Japan

and Sony moved HQ to US and has been pushing anti-Japan everything since 2016

Japan isn't moving away from playstation, playstation is moving away from japan

also they never should have killed the vita while it was still popluar there and started censoring for no real reason

From a Japanese gamer or US fan of Japanese games persepective Playstation sucks now and it moving away from what made them great in the first place

The PS5 is basically this dude

Stupid? Even Nintendo give up and released a Trojan horse to "trick" the home console market :/ I don't know if some of you live just in their bubble or simply not want to accept that reality

 

[Goro Majima]

How hard would it be to create a portable PS4? Always wondered why the Big 3 three have avoided the concept (edit: on further thought, the Switch is sorta a portable Wii U now but the licenses didn't exactly transfer) and that the concept as a whole hasn't been touched since the 90s.

It would be kinda awesome to be like "Oh you know the PS4? Yeah that's fully portable now and all of your digitally bought games work on that day 1"

 

[Jethalal]

How hard would it be to create a portable PS4? Always wondered why the Big 3 three have avoided the concept and that the concept as a whole hasn't been touched since the 90s.

It would be kinda awesome to be like "Oh you know the PS4? Yeah that's fully portable now and all of your digitally bought games work on that day 1"

Playstation and XBOX don't really appeal to casuals as much as Nintendo so they can't get away with making an underpowered system which they will have to if they want to have a reasonable price point. Power consumption is another issue too. It would end up being more like a laptop than switch if they want to pack that much stuff into it.

 

[hybrid_birth]

Ah the Japanese version of Michael Patcher.

 

[Woopah]

Stupid? Even Nintendo give up and released a Trojan horse to "trick" the home console market :/ I don't know if some of you live just in their bubble or simply not want to accept that reality

What would you say is the cause of Japan moving away from the console market?

 

[assurdum]

What would you say is the cause of Japan moving away from the console market?

Do you think Nintendo Switch would have sold well if it was a traditional home console?

 

[Woopah]

Do you think Nintendo Switch would have sold well if it was a traditional home console?

As well as it has done? No I don't think so, but Ialso don't think that it would have sold as well if it was just a portable.

I do think a traditional home console Switch with the exact same lineup (and one that wasn't as badly marketed as the Wii U) would have done fairly well and sold better than the PS4 or PS3 in Japan. Nintendo's relative strength in software is much higher in Japan than it is in the West.

 

[JLB]

As well as it has done? No I don't think so, but Ialso don't think that it would have sold as well if it was just a portable.

I do think a traditional home console Switch with the exact same lineup (and one that wasn't as badly marketed as the Wii U) would have done fairly well and sold better than the PS4 or PS3 in Japan. Nintendo's relative strength in software is much higher in Japan than it is in the West.

nah, switch being only portable would have sold as good as its selling now.

 

[assurdum]

As well as it has done? No I don't think so, but Ialso don't think that it would have sold as well if it was just a portable.

I do think a traditional home console Switch with the exact same lineup (and one that wasn't as badly marketed as the Wii U) would have done fairly well and sold better than the PS4 or PS3 in Japan. Nintendo's relative strength in software is much higher in Japan than it is in the West.

Did you missed the WiiU? Would be a disaster another home console for Nintendo. Even if they handle a better overall sales (but I doubt and in a minimal way) no way in the hell a traditional home console would sell decently in Japan by anyone.

 

[Woopah]

nah, switch being only portable would have sold as good as its selling now.

Then why is the Switch you can play on a TV selling much much better than the cheaper, portable only one?

It's not that point. Did you missed the WiiU? Would be a disaster another home console for Nintendo. Well maybe could handle a better overall sales (but I doubt and in a minimal way) but no way in the hell a traditional home console would sell decently in Japan

Launch aligned the Wii U sold fairly similarly if not better than the PS4 in Japan (at the start). It was only when the PS4 line up began increasing that it started to beat the Wii U. A Nintendo platform with the publisher's combined output, even one that is home console only, would do very well in Japan.

 

[JLB]

Then why is the Switch you can play on a TV selling much much better than the cheaper, portable only one?

Launch aligned the Wii U sold fairly similarly if not better than the PS4 in Japan (at the start). It was only when the PS4 line up began increasing that it started to beat the Wii U. A Nintendo platform with the publisher's combined output, even one that is home console only, would do very well in Japan.

One thing does not invalidate the other. Most people will bite if given the chance for a few bucks to have that extra feature. But Having it ot not wont make a sell -or not- IMO.

 

[Woopah]

One thing does not invalidate the other. Most people will bite if given the chance for a few bucks to have that extra feature. But Having it ot not wont make a sell -or not- IMO.

It's not just a few bucks more, it's 10,000 yen more (a 50 per cent higher price). The fact that the vast majority of Switch buyers are willing to pay so much more to play games on a TV shows that they value that feature.

To look at things from another angle, one of the biggest games in Japan this year (Ring Fit) can not be played portably. A portable only Switch would not have had this key peice of software.

 

[Woopah]

Sorry, double post.

 

[JLB]

It's not just a few bucks more, it's 10,000 yen more (a 50 per cent higher price). The fact that the vast majority of Switch buyers are willing to pay so much more to play games on a TV shows that they value that feature.

To look at things from another angle, one of the biggest games in Japan this year (Ring Fit) can not be played portably. A portable only Switch would not have had this key peice of software.

Ok, fair enough. Of course anything we can suggest is counterfactual, so we dont know for sure, but your argument is logical.

 

[Woopah]

Ok, fair enough. Of course anything we can suggest is counterfactual, so we dont know for sure, but your argument is logical.

Yes we're all dealing in hypotheticals here but it's fun to speculate

In the end Nintendo went for a hybrid approach and I think that was the right approach.

 

[IbizaPocholo]

 

[D.Final]

They need more time to grip