December NPD: hardware sales push industry to new heights

Well, well let check out the 360 -Firstly, focus on multiplayer. Which means - the only "Top 5" game on XBOX Halo2 is obsolete with Gears and gears will be wiped out by Halo 3 - with the emphasis of multiplayer, your earlier games are valueless. Secondly, the lack of an installed base of single-player games. FF and MGS are still Sony's, and if you want to play earlier games in the majestic RE / FF / MGS franchises, you have to buy the PS3. "system-selling franchise in Gears of War and Blue Dragon" Funny that both these games actually failed to shift sales - check console sales in US just after Gears or Blue dragon, the FF copy despite which PS3 outsold 360 in Japan. And finally - most XBOX "exclusives" come out on PC, so Bioshock cant drive 360 sales - if you really want it, you can play it on PC. So what matters are PURE exclusives (i.e. you cant play it anywhere else) We will see how many will buy Ninja Gaiden 2 vs MGS4. AND it’s a fact that PS3 is expensive. AND that Live is better. As 360 fans keep repeating. But my point is - not both together. With Live, cost of 299USD 360 = 499, AND you still cant watch HD movies, save games or have wireless.

Holy cow the spin here is so out of control I'm dizzy.

Just.....stop it. All of you.

35
quote:
What was the reason MS didn't have as many in the US as the wii and PS3 had at launch, "wait for it" "wait for it" because they did a worldwide launch. The only company to pull it off.
end quote

I will have to disagree with you there. CBOX360 in march in Australia while the Wii was in December.

Both however were launched November in the USA.

As for all the sony fanboys stating that the PS2 makes them boat loads of cash at each sale...

Your MISSING the main point... Each PS2 sells for $129... It still costs a bit to make/ship plus retail markup etc, so they probably only make $30-$40 per console.... AND (big AND here)... Every PS2 sold takes a potential PS3 sale away..... AND every PS3 sold, loses them $250 (or close)....

Now factor in that the sales are tapering off (even you guys have to admit that)... $600 is just too much...

SO, Sony has to drop the price for most of the people I know to buy one... However, they CANT drop the price for at least 1-2 years... The only way to drop the price is sell 10-20 million and get a HUGE install base so the software will actually make them some money...

See the problem here? Its called an infinite loop with a downward spiral...

10 PS3=$600
20 Customer = TOO EXPENSIVE
30 IF PRICE = TOO EXPENSIVE GOTO 60 ELSE 40
40 NO ONE BUYS IT-(TOO EXPENSIVE AND NO DEVELOPER LOVE)
50 END (OF SONY)
60 SONY = DROP PRICE
70 SONY = LOSING TOO MUCH MONEY
80 END (OF SONY)

Case closed... They've put themselves in a very bad position right now.... They may or may not survive this one....

Karma.....

1.1 Million?? That's it???

XBOX 360 is in trouble...

Sony managed to sell almost 70% as many PS3's than Microsoft. And the PS3 is at the least, $100 more and doesn't have allot of games.

This doesn't look good for Microsoft. If Sony drops the price, things are going to get really scary for M$.

Okay, guys, why don't you all take a valium and calm down.

1.4M PS2 sales means an $11.2M profit for Sony.
953,200 PSP sales means a $7.6M profit for Sony.
490,700 PS3 consoles means a $98.1M LOSS for Sony from PS3 sales.

Thus, we're looking at a net loss to Sony of $77.5M on consle sales.

Now - can Sony afford to take those kind of losses on console gaming? That's going to depend on what happens with software. Regardless of your specific feelings one way or the other, the actual fact of the matter is that Sony Corporation as a whole is in financial difficulty - especially when the console market is 60% of their total profit. Thus, if their console market shows a loss, they're basically in deep crap.

Now - why did PS2 sell more than Xbox 360? It's $129, and has a huge library of games available. What's scary is looking at the volume of sales, and actual profits from each console.
$180.6M in PS2 sales, $11.2M in profit
$411.4M in 360 sales (75/25 split), $28M in profit

As was mentioned in a previous Joystiq post (http://www.joystiq.com/2007/01/11/analyst-in-stock-ps3s-are-troubling/) the PS3 appears to have a demand issue. The supply is there, in the supply and demand chain. However, the demand just - isn't.

I will illustrate with a case example from when I was in a store earlier this week, doing a minor repair to the 360 console.

A customer came up to the sales person that was chatting with me, with a PS2 game in his hand, and asked if the PS3 could play PS2 games. The sales person said, "Yes, the PS3 can play most of the PS2 games. There are some that it can't play at this time, just like the 360." I said, "Yes, that's right. The only difference is that we said from the get-go that we would try to make all games backwards compatible, and obviously EA won't let us, and we're gradually working on it, whereas Sony said originally that all games would work and now we find out that a few won't." (Hey, I wouldn't be a rep if I didn't get a dig in with a customer if I could.)

Anyway, the customer then asked if he could play the PS3 demo machine, and the sales person had to tell him, "Sorry, it broke a week after we got it and Sony hasn't ever sent anyone in to fix it, or sent us anything since we called them about it." (This is the way of the world in retail - if you're not in a large city, Sony does NOT care about the retail kiosks. Both Nintendo and Microsoft have people out in the field fixing them.)

Then the customer looked at the price tags. "Wait a minute! This is a mis-print, right? The PS3 is $599?" (Oh, and they had 4 60 GB systems in the case, along with 6 more in the back room.) "You've got to be kidding me - it's a damn game console, not a computer!"

That's when I had to say, "Well, not according to Sony. They've stated that they consider it an alternative to your home computer, and that it should be the center of media for your house. Granted, Microsoft thinks that the 360 should be combined WITH your computer for that means, but in the console side, we've always been about games first."

The customer said, "They're nuts if they think I'm going to spend $600 on a gaming console. Do you have any PS2's in stock?"

His PS2 had died, and that's why he was thinking of the PS3. I did NOT sell him a 360 - he had too many PS2 games at home.

Now - I'm going to throw my own analytical two cents worth in here, and I'm fully prepared to get slammed by the SDF. (Yes, I DO work for Microsoft - I've never hidden that, so stick that argument where the sun doesn't shine!) As the calendar year progresses, sales of PS3 consoles are going to lag FAR behind those of the Wii and the 360 - and HUGELY behind the PS2. Why? Because to the average consumer - NOT the rabid gamer that posts here - playing games isn't worth $600.

Now - Sony has irritated a lot of European consumers, and at the same time is pinning great hopes on that launch. It's possible that Sony could have huge success in Europe - but given the higher prices there due to assorted taxes, and other consumer issues, it's also possible and I think probably that within a month of launch, PS3 units will be sitting on the shelves in Europe in as great a numbers as are here in the U.S.

What that means is that retailers will be cutting orders for PS3 consoles - so all the production in the world won't help what doesn't sell. That's going to put FURTHER financial pressure on Sony Corporation and on their stocks AND on their investors. It's not going to do Sony any good if they can manufacture 6 million PS3 consoles by June of 2007 if they only have total worldwide sales of 3 million consoles - because retailers can't afford to have THAT much money tied up in inventory and have 3 million consoles just sitting on the shelves not being sold.

At this point, I consider the PS3 launch in the U.S. to be a failure due to the inventory of consoles - the demand just isn't there. Whether the PS3 as a console itself is viable or not will be determined later this year - but at this point, I'd say that Sony has a LARGE white (black, actually, but you know what I mean) elephant in this console. It's entirely possible, and not a good thing, that this could kill Sony as a corporation. (Yes, I know that games are only a small portion of the corporation - but they're the PROFITABLE portion. You can only stay in business for so long when you're taking these kind of losses without having deep pockets.)

As a non-fanboy 360 owner (I support all three), I have to take issue with samik's assessment of 360 exclusives. You can't just dismiss Dreamwalker's two RPGs as "FF clones" and not count them. They were made by people with long and storied histories in RPG development. Blue Dragon has been well reviewed, and doen't look anything like the metrosexual (hey, I still like it!) Final Fantasy series.

On top of that, some exclusive 360 games you forgot are BioShock, Gears of War, Crackdown, Halo 3, and my personal favorite Dead Rising. You may not personally be interested in any of those, but they are all triple A titles that will sell millions, and many of us non-fanboys are looking forward to.

Also, people saying 'wait till the PS3 has a price drop the 360 is going to be screwed' need to pull their head of the clouds. 360 hardware is currently profitable at $399, while the PS3 is losing $200 per console at $599 and has been plagued with never-ending production problems. In addition, Sony as a company is hemorrhaging money and they have to stop the bleeding.

Now, which piece of hardware should we expect to see a price drop first? Well, maybe the Wii, but certainly not the PS3. I think in the next 12 months we'll be looking at a situation where the (in both cases non-gimped) PS3 is still priced at $599 and the 360 has been price cut to $349 or (less likely) $299.

If the 360 core pack gets dropped to $199, the barrier for entry becomes absurdly low compared to the PS3.

I'm rooting for Sony to get their act together, because their failure is bad for video games. But at this point, as an unbiased gamer, Sony is not looking at a pretty 2007.

@ Samik,
Your comments are always so absurd. Thanks for posting because you actually amuse me for some reason. I think it is how your posts are so absurdly based in fantasy world, yet you present them in a semi-intelligent spin heavy way. You are like the Pat O'riley of fanboys (not getting political, just refering to his excessive spin and rhetoric usage).

I mean, the 360 clearly is the system of choice for having the best next gen games from last year through at least the next year and a half. There really isn't any logical way to argue that (assuming we are refering to American game tastes, seeing this is an American website. I could care less about FF or Blue Dragon or even MGS. Ninja Gaiden is much better than MGS anyways, though they are different from one another)

Anwho, I got off subject. Bottom line is that I am playing Dead Rising, Gears of War, Oblivion, R6V, PGR3, and Lost planet while you are playing Resistance. And a year from now it is going to be essentially the same thing. You would cream yourself if the PS3 had as many solid looking titles coming up as the 360 does, seeing how excited you guys are about Lair and Warhawk. lol.

Wow Anonymous Rep, I didn't know the PS2 and PSP only made 8$ profit per unit. I tried, but I couldn't find the number for that anywhere. Could you provide a current link so I can use your source in the future? Or are you just spouting fanboy bullshit? Either way, I wait patiently for your response :)

who gives a shit what japan is playing those muthafucka have shit like pokemon on the list like 3-4 times...why does every get so caught up with this japanese bullshit.....xbox is from america its made for america..not those panzy sissy pokemon playing princess saving muthafuckas They obviously love fantasy shit well guess what were at war and or media is filled with news about terror.....Of course we gonna be playing shit like halo and sports and gears of war........save that fantasy shit for kids im a grown man I dont have time for no damn pokeman....get a damn dog or something geeesh

The $8 figure came from the Joystiq forum member Epobirs, in a previous post discussing console profit. That was also where he squashed the comment that was going around that stated the 360 was making $75 in profit per console - it's considerably less than that. He has a lot more sources inside that company than I do.

(Hey, at that time he mentioned this (which was on here around November, IIRC) I thought they were making around $20 - $25 per console - and those were the figures I was using at that time. Unfortunately, apparently he's like me in some respects - we've signed NDA's and while we can post some stuff, there's a LOT we just can't cite because it's told to us in conference calls or in training documents that - if you as a member of the general publc could access it from the web, then me as an employee could lose my job.)

actually, dsub, the price difference between playing games on the PS3 and the 360 is $100. there is a $499 system that dissenters such as yourself love to overlook in order to make your purchase of a 360 seem justified in your eyes.

the fact that you bought a 360 justifies the purchase. you wanted one, you bought one, awesome. the same thing applies to people who bought a PS3. obviously, the people that bought them knew what they were getting, or else they wouldn't have bought one.

not everyone is a shallow consumer lemming that will purchase something because someone else said it was cool. most early adopters are educated shoppers. if they didn't want a Games Console/Blu Ray player/Internet capable/multi-media hub device, they wouldn't have bought a PS3.

but back to my original point. the $499 PS3 does everything the $399 "Premium" 360 does. why do people continue to ignore this very simple fact?

you don't *HAVE* to get the $599 PS3.

the $399 Premium 360 has:
Wireless Controller
Headset
Remote
No Wi Fi
No HDMI
No HD Movie player (that will run you $199 extra)
X Box Live Silver (Gold will run you $50 a year extra)
Component Cables (nice)
20gig HDD (with no option as yet to upgrade to a larger HDD)

The $499 PS3 has:
Wireless Controller
No Headset (any USB or Bluetooth enabled headset should work)
No Remote
No Wi Fi
HDMI built in
Blu Ray player built in (a $680 value, considering that the cheapest Blu Ray player; a Samsung, is $679.99)
Free Online
No Component Cables (boo!)
20gig HDD (with the option to upgrade to any sized 2.5" SATA HDD. so far, up to 160gigs)

i'm failing to see why the cheaper PS3 is a bad deal. clearly, if the $399 Premium 360, with it's features, is "AWESOME! IT PWNS EVERYTHING!!!", then the just as capable $499 PS3, with added HDMI and built in Blu Ray player, is also a steal. the swappable HDDs and Free Online are also added value. you may lose the Headset, Remote, and Component Cables, but i'd much rather get an HD capable player for, say, $100, and buy some Component Cables for less than $5 on the net.

each console is a great deal. i really wish people weren't so goddamned insecure in their purchases that they're constantly searching for validation from sites like this, that skew the news and add so much spin as to lose all semblance of the truth in the mix. i'm still waiting for joystiq to post the story of the woman who had the PS3's baby, and Sony refuses to pay child support, what with the tabloid nature of this site lately.

the PS3 is expensive, but you get what you pay for, and there is a $500 alternative. just because the $299 X Box 360 "Core" is laugable and a slap to the face of X Box fans (jeebus, even the original X Box had a HDD), doesn't mean the second PS3 is. the cost doesn't need to be justified, because it already is in it's inherent value.

i also forgot to add in my list of features each console has, the 360 requires a seperate charger for $19.99 in order to recharge your controller, while the PS3 comes with a USB cord that will charge your controllers.

No need to include Mexico in the PS3 North America numbers, the console hasn't been released officially here. If there are PS3 in Mexico, they are bought in USA.
XBOX 360, in the other hand, has beeen very popular here selling well as far as I know. About the Wii, I don't know, I can't find it.

Frank, you better check your math again... Sony didn't sell half as many PS3s and the 360. Even with all of it's launch hype... they are still on the shelves. Matter of fact combine wii's and ps3 total and you still don't beat the 360's(sorry if i missed your sarcasim).

And I wouldn't tout ps2 sales over next gen sales.. while it's good for sony now, their grasp of the nextgen market(their livelyhood in the future) is slipping out of their fingers.

I don't see why people just don't admit that the PS3 is expensive. But who cares. Those that will buy it will buy and those that can't (or don't see the worth of spending that money even if they have it) won't. NEO GEO back in the day was very expensive (I believe $599) and it became the system that only those who had could get. Why can't PS3 become that much needed status symbol system the for the industry and just let everyone else by their 360's and wii's.

@dsub
The Wii outsells the PS3...WORLDWIDE. Want to know why? It's $249. It doesn't take rocket science to figure that shit out. Dumbass.

Considering Sony makes money on every PS2 sold and loses a shitload of money on every PS3 sold. I'm sure they are quite happy that most of their sales are for the box that's MAKING them money hand over fist.

@ Figboy

Your argument has one glaring flaw. There are NO 20gig PS3s available. Practically all of the PS3s Sony has shipped thus far are of the 60gig variety, and all the available units I've seen have been 60gig.

So as of right now, there is no choice. If you want a $500 PS3, you're gonna have to wait.

Aside from that I find the rest of your argument rather silly. Who cares what "features" a console has? Apparently not the people who buy them, considering DS, Wii, and PS2 are the game systems in the most demand right now, and none of them really have any "extra features" (not any worth noting anyway). They sell well because of the games.

And PS3 is NOT selling well because of it's LACK of games. If Sony had released PS3 in Spring 06 as originally planned, this would not have been an issue. But now PS3 has to go up against 360's full year of games and Wii's new, innovative launch lineup that was surprisingly strong.

And all the big PS3 titles won't be coming out in a while, and 360 may end up getting them anyway.