Support NeoGAF

[Saty]

I could live with no unit figures if we could get platform breakdowns. That stuff is even rarer to get from publishers than shipped figures globally. And i really don't see how breadown data is more sensitive and important to protect than total unit sales.

NPD could throw us a bone. Let's say tomorrow NPD decides to release February's Top 10 games with hard figures -- who would cry foul? It's a hit-driven business, only the here and now matters. Nobody who pays NPD will stop because they can get 6-months old data for free - they need it in real time. And the publishers would have already addressed those figures and questions raised by investors on those figures in their quarterly reports and conference calls.
Would publishers bother to object to releasing months-old top 10's just because some forum users will point at on of the games and scream 'BOMBA'?

 

[EGM1966]

I could live with no unit figures if we could get platform breakdowns. That stuff is even rarer to get from publishers than shipped figures globally. And i really don't see how breadown data is more sensitive and important to protect than total unit sales.

NPD could throw us a bone. Let's say tomorrow NPD decides to release February's Top 10 games with hard figures -- who would cry foul? It's a hit-driven business, only the here and now matters. Nobody who pays NPD will stop because they can get 6-months old data for free - they need it in real time. And the publishers would have already addressed those figures and questions raised by investors on those figures in their quarterly reports and conference calls.
Would publishers bother to object to releasing months-old top 10's just because some forum users will point at on of the games and scream 'BOMBA'?

You pretty much answered yourself I reckon - I figure no company wants bad performance figures aired and NPD wants to sell the data to those self same companies whose performance it would potentially be airing; that doesn't make sense.

Also general trends in selling data in current times is to try and keep it as hidden as possible to ensure it retains value as well as avoid any follow the data competitors - for example imagine if a certain site with a Z in it could grab old NPD data in a reliable fashion and leverage it for its own (arguably competitive to NPD) gain? I'd imagine stuff like this plays a factor too.

I reckon details will remain hidden for the foreseeable future. It would be great if the market operated more like Japan where the data is much more available and transparent but it's just not at the moment.

 

[spekkeh]

Boggles my mind that Xbox One sales DOUBLED and still couldn't come close to the PS4.

Boggles my mind that Xbox One sales DOUBLED with no games released.

https://www.youtube.com/watch?v=UPatfgoNBRo

 

[QaaQer]

Anyone who plays games is a gamer...

There doesn't need to be any insinuation of people who bought the Wii not being "real" gamers by suggesting that segmentation of the market provides a better view of what's happening.

I skydived once, but I wouldn't call myself a skydiver. It is possible a fair number of people bought wiis because they wanted the experience, not because they actually like videogames.

I think there is a tendency here to over-think these things. Most people do not devote a whole lot of thought to buying recreational stuff under a few hundred dollars. If something looks fun and/or interesting and/or new to a person, you've just made a sale. That's what Ninty hit on with wii and to a lesser extent the DS; and that is what they were aiming for with the wii u and 3ds.

The problem for Nintendo in coming up with the next new/interesting/fun thing is that they have a very tight budget wrt hardware. Having a BOM <$200 precludes a lot of interesting stuff like VR.

What other tech is there that is both new/interesting/fun and fits in with the <$200 BOM? Sony's answer this gen was "beats the hell out of us" and they just made a game console. MS's answer was "Kinect dammit".

 

[Opiate]

TBH this is something of a strawman argument. Anyone who plays games is a gamer, but the Wii was serving a variety of demographic groups that weren't previously a huge part of the console space.

There doesn't need to be any insinuation of people who bought the Wii not being "real" gamers by suggesting that segmentation of the market provides a better view of what's happening. That segmentation should probably also be applied to the other console ecosystems though, I suppose. From there, we can see which publishers for instance will be materially impacted by the contraction in the console space.

For instance, EA's revenue from Nintendo systems hasn't been substantial for a long time now, from memory.

Responding to as many as I can sequentially here:

I don't think it's a strawman argument (obviously), I think it's an explicit suggestion of motivations. That is, I think many people want to sort of quarantine the Wii because they aren't really very fond of it.

There is an old quotation from the 1up show (now gone) that always struck me as central to this conversation. Quoting directly from Ryan O'Donnel, the director of the show:

I'm a hardcore gamer. I don't care about the non-hardcore gamers. I used to think I did, I used to think I wanted to expand the market, but Nintendo has proved to me that that's not what I want. I want game companies to be making games for me in the genres that I like.

I think a lot of people think this way, and that it colors their perception of the market as a consequence. Instead of being a strawman, I'm suggesting I can infer what the poster's subconscious motivations are. Always a tricky thing -- no question about that -- and not something I do lightly.

 

[Opiate]

Dismissing the Wii is inaccurate, certainly, but pretending it wasn't unusual is willful ignorance.

The Wii absolutely was unusual, but the manner in which it was unusual is important to discuss. I am suggesting that it was an early frontrunner in a burgeoning market segement; others are suggesting it was an anomaly which can be safely ignored.

Every article celebrating the Wii's success was mostly focused on how wide a demographic it reached, and cited that as the reason for its success. Nintendo bragged about it. Their competition copied them to try and reach that demographic.

But now, they've all stopped putting any real effort into selling to that demographic.

Mostly because they've been thoroughly beaten. If you think Sony (or Microsoft or Nintendo) wouldn't love to have those gamers on board -- a fast growing, highly profitable market segment -- you're not thinking clearly. The problem isn't that nobody wants this broad demographic anymore, the problem is that Apple and Google are just smarter, better companies who are better positioned to meet their needs. Similarly, it isn't that Take 2 wouldn't love to have women and adult professionals buy their games, it's just that they're not very good at it compared to Rovio or Supercell.

That wasn't the only demographic that the Wii sold to, which is why it can't be entirely dismissed. But it couldn't possibly be clearer that the Wii was an anomaly.

Again, this rests on the assumption that the home console market is a neatly quarantined market that has no crossover with other parts of the gaming industry. You had suggested earlier (in another reply to me) that this discussion is about home consoles and portables: that is explicitly incorrect. It's about the gaming market, in which PC, mobile, and social gaming all reside, not just home consoles and portables.

 

[spekkeh]

With Wii U doing better, it kind of looks like they may reach Gamecube numbers after all, or is that crazy talk?

 

[Coulomb_Barrier]

Another thing to look at is Hardware vs. Software:



As you can see, so far this year software revenue is almost equal to hardware revenue. Software is doing terrible. Hardware increased in 2013 over 2012 thanks to the PS4 and XB1 launch, which added 700+million in revenue YOY in November and December compared to 2012. Hardware will increase in 2014 over 2013. Software is just worrying.

The current Software:Hardware ratio is 1.05:1
The average yearly ratio since 2006 is 1.4:1
The average Jan.-July ratio is 1.7:1 !!!!

Software does better compared to hardware throughout the year compared to the holiday season. This year is the lowest on record for the Jan-July period since 2006 (that's how far my data goes). However, 2007 has a rather low software-hardware ratio with a 1.2:1. 2007 was also a transition year much like 2014. Hopefully software sales start to improve for the remainder of the year.

Now the question to be asked is why is software revenues so low this year? Less releases? Less interest? Less quality of titles?

How many times. Digital sales/revenue is not tracked by NPD.

Year-on-year digital is growing hugely, EA even expects digital revenues to overtake retail in just 2 years. Of course, retail sales and retail sale tie ratios (which is a rather anachronistic way of looking at things in the digital DL world we live in today) are naturally going to decrease each year. The decline will accelerate year to year going forward.

Tie ratios (which again is rather irrelevent) are naturally declining but does that mean people are buying less games? No, because everything bought digitally is obviously not tracked. This gen I've downloaded countless titles but apparently my 'tie ratio' is way down.

 

[StevieP]

How many times. Digital sales/revenue is not tracked by NPD.

Year-on-year digital is growing hugely, EA even expects digital revenues to overtake retail in just 2 years. Of course, retail sales and retail sale tie ratios (which is a rather anachronistic way of looking at things in the digital DL world we live in today) are naturally going to decrease each year. The decline will accelerate year to year going forward.

Tie ratios (which again is rather irrelevent) are naturally declining but does that mean people are buying less games? No, because everything bought digitally is obviously not tracked. This gen I've downloaded countless titles but apparently my 'tie ratio' is way down.

Digital is being tracked, according to NPD

 

[Coulomb_Barrier]

Digital is being tracked, according to NPD

Since when though? I heard it isn't tracked from members here as recently as a few days ago.

EDIT: NPD don't track digital, and certainly digital figures aren't included in that chart the poster made.

EDIT 2: NPD have been tracking digital since 2010 in quarterly total industry spend figures. Afaik, this digital revenue is not included in their monthly NPD reports which we are discussing here.

http://www.gamesindustry.biz/articles/2013-07-02-npd-preparing-to-track-digital-sales-this-year

 

[stryke]

With Wii U doing better, it kind of looks like they may reach Gamecube numbers after all, or is that crazy talk?

Sure, if they can cut to $49 this holiday.

Alright guys you are in for a treat. I extended this graph for the full second year into the next Christmas, so we now are comparing 2014 with 1998, 2003, and 2008 (and 1993). So now we can see Nintendo's performance in their second full year.
It's alotta work getting those best seller titles lined up properly.

*click to enlarge

 

[spekkeh]

Sure, if they can cut to $49 this holiday.

Oh yeah crazy talk. Wow at the Holiday sales for Nintendo consoles.

 

[shinra-bansho]

I skydived once, but I wouldn't call myself a skydiver.

The implication you're making is that these people are no longer playing games, which they are just via other avenues. I'd actually go further and suggest some of this audience was already playing games to a degree via other avenues prior to the Wii as well.

Responding to as many as I can sequentially here:

I don't think it's a strawman argument (obviously), I think it's an explicit suggestion of motivations. That is, I think many people want to sort of quarantine the Wii because they aren't really very fond of it.

There is an old quotation from the 1up show (now gone) that always struck me as central to this conversation. Quoting directly from Ryan O'Donnel, the director of the show:

I think a lot of people think this way, and that it colors their perception of the market as a consequence. Instead of being a strawman, I'm suggesting I can infer what the poster's subconscious motivations are. Always a tricky thing -- no question about that -- and not something I do lightly.

In some threads, perhaps that's suggestion of motivation rings true. This is a monthly sales thread, however, and more broadly a thread discussing the console gaming physical retail market, and there are clearly stated reasons for why exclusion of that data from analysis of the state of the [console] gaming industry can provide a more meaningful picture of that state. All of which has nothing to do with liking or not liking the Wii.

 

[Opiate]

In some threads, perhaps that's suggestion of motivation rings true. This is a monthly sales thread, however, and more broadly a thread discussing the console gaming physical retail market, and there are clearly stated reasons for why exclusion of that data from analysis of the state of the [console] gaming industry can provide a more meaningful picture of that state. All of which has nothing to do with liking or not liking the Wii.

I'm saying those reasons are not rational, and that lacking any rational explanation, my suggested motivation makes more sense. I certainly could be wrong, of course; that's always a danger when inferring the motivations of another human being.

 

[shinra-bansho]

I'm saying those reasons are not rational, and that lacking any rational explanation, my suggested motivation makes more sense. I certainly could be wrong, of course; that's always a danger when inferring the motivations of another human being.

You find market segmentation irrational?

 

[Opiate]

You find market segmentation irrational?

Absolute market segmentation? Yes.

This suggestion has implications: for example, that the consumers who purchased the Wii have left the market. That would be a fad and could very reasonably be described as exceptional (as in an exception which could be ignored or discounted). But this perspective only makes sense if you view the home console market as a neatly quarantined market segment that is not competing with other market segments in any way.

From the perspective of someone who views the console market segment as an entirely isolated world, the customers who purchased the Wii simply disappeared in the ether; from the perspective of someone who views these market segments as significantly overlapping, they just migrated to platforms which better suit their needs.

Here's another way to frame it: did the customers who bought the Wii simply get bored and leave, or did they find a product they liked even better than the Wii? As another example, are the lower sales of the PS3 a sign that the system was a "fad?" Of course not: the customers who were buying PS3s (and PS3 games) are now instead buying PS4s, because that system now better serves their needs. Similarly, the customers who were buying Wiis did not simply leave, they just started buying iPhones and tablets and browser games instead, because those better serve their needs.

The way the discussion is framed has significant implications for how you view the market overall and the Wii specifically.

 

[Brashnir]

Now the question to be asked is why is software revenues so low this year? Less releases? Less interest? Less quality of titles?

As a person who owns a PS4 and not a single game for it:

Because the software fucking sucks.

 

[ksamedi]

Absolute market segmentation? Yes.

This suggestion has implications: for example, that the consumers who purchased the Wii have left the market. That would be a fad and could very reasonably be described as exceptional (as in an exception which could be ignored or discounted). But this perspective only makes sense if you view the home console market as a neatly quarantined market segment that is not competing with other market segments in any way.

From the perspective of someone who views the console market segment as an entirely isolated world, the customers who purchased the Wii simply disappeared in the ether; from the perspective of someone who views these market segments as significantly overlapping, they just migrated to platforms which better suit their needs.

Here's another way to frame it: did the customers who bought the Wii simply get bored and leave, or did they find a product they liked even better than the Wii? As another example, are the lower sales of the PS3 a sign that the system was a "fad?" Of course not: the customers who were buying PS3s (and PS3 games) are now instead buying PS4s, because that system now better serves their needs. Similarly, the customers who were buying Wiis did not simply leave, they just started buying iPhones and tablets and browser games instead, because those better serve their needs.

The way the discussion is framed has significant implications for how you view the market overall and the Wii specifically.

I agree with this. The Wii was probably also not an one off event. If a new console can serve the needs of these same customers, it will certainly happen again and I think the NES did pretty much the same thing only in a different time period with different technology.

 

[shinra-bansho]

You seem to be referring to a different segmentation. Namely of a home console market in isolation from the wider industry. The discussion in the thread centers on the state of the console market... because it's an NPD thread.

That isn't the segmentation that necessary leads to exclusion of the Wii when trying to assess the console market.

What I'm referring to is consumer segmentation based on demographic factors, common value drivers, etc. That is what leads to the view of the Wii as anomaly and/or observation of the state of the console industry being more meaningful when excluded. It sold to different demographics, with very different software, very different needs, different value drivers.

You're right, that customer segment has found an avenue that better meets their needs and provides superior consumer value. And no one is denying a contraction has occurred from the expansion those customers brought.

Tl;dr version, the console market temporarily served those consumer segments' entertainment needs very well with the Wii. However, as other avenues now provide superior value to those segments; that expansion has reverted. Removal of the Wii can serve to better provide a view of the base market underlying that temporary expansion.

Also, it's been discussed before that obviously wholesale removal also doesn't provide an accurate picture as some degree of the Wii userbase. On that I agree, however, the data needed isn't available as far as I'm aware.

 

[Opiate]

You seem to be referring to a different segmentation. Namely of a home console market in isolation from the wider industry. The discussion in the thread centers on the state of the console market... because it's an NPD thread.

NPD covers all games, not just home consoles. They cover PC games, portable games, and mobile games. I think you may have gotten the impression that NPD was about home consoles because home consoles are hugely disproportionately reliant on retail for distribution, while most other gaming platforms (particularly PC and mobile) are distributed digitally, and are thus much harder for NPD to track.

It doesn't mean they aren't trying or don't want to, mind you. Handheld games do show up in the charts. PC games have also done so (such as Diablo 3 as an exclusive most recently, and others as multiplatform titles). NPD has made it clear they're trying to cover everything, but currently their methods for tracking digital software are very poor.

I think this might explain our different perspectives here. If NPD was exclusively a discussion about home consoles, I could imagine a more console-specific discussion.

 

[donny2112]

Does it add Xbox 360's first month to PS3's first month and compares this to November 2013 (and continuing that for the months thereafter)?

Yes.

Edit:
Also, Wii's user demographics were not consistent throughout its life. The early userbase was much more core-oriented, but as the years passed and those users were not catered to, they tended to leave. Userbases always get more mainstream as they grow significantly, but in Wii's case, much of the early core probably left after the first couple of years due to the release landscape on the system, which is probably less usual for a supposed market-leading system.

 

[Liabe Brave]

If the video game industry was shrinking, that would suggest the Wii was an anomaly. But it's not; the market the Wii helped create is still growing rapidly. The home console market specifically is shrinking, but not gaming broadly.

The Wii gamers are still in the market. They are just mobile gamers now. Gaming as a whole is growing. The growth is just not in the home console market.

The bolded seems like an unsupported assertion. What evidence is there that Wii owners are now lifelong game players, specifically because of the Wii? Note that it's not at all enough to say that many ex-Wii owners now have smartphones and play games on them. Any two large samples of the population will overlap. You're both positing a causal link beyond that. But the smartphone explosion was going to happen regardless of whether the Wii ever existed. I simply don't believe Candy Crush etc. would've been far less popular without Wii.

Furthermore, I'd strongly doubt that the owners of Xbox and Playstation hardware own smartphones in lower proportion than owners of Wii. Yet they haven't left the console segment behind, whereas the Wii got abandoned by its users. (A pattern that very much invites the "fad" label.) So the hidden premise now is "Wii taught lots of new people to love games...and it also taught them to abandon console games." How is Wii supposed to have imparted that lesson?

On a larger view, I'm also not sure that lauding the mobile segment for high growth is very instructive for the market as a whole. Yes, if you put your product on a platform with an immense installed base, and you then make the vast majority of that product free, you'll move a lot of widgets. (This is also why PC gaming is growing stronger.)

Yes, we can describe the market changes smartphones have engendered, but I'm wary of attempts to prescribe based on them. Opiate's opinion that console makers should've launched $150 android boxes in order to see massive growth seems dubiously optimistic to me.

 

[shinra-bansho]

I'm fully aware NPD cover more than just the physical retail home and handheld gaming markets. They cover automotive and cosmetics too. I thought my meaning in saying it's an NPD thread was pretty clear. It's an NPD thread on the boxed retail monthly dedicated gaming hardware sales and boxed retail software. Ergo, the focus of the discussion centers on that part of the market. But again, that isn't the segmentation that would lead one to consider the Wii an anomalous expansion and contraction.

 

[Opiate]

The bolded seems like an unsupported assertion. What evidence is there that Wii owners are now lifelong game players, specifically because of the Wii? Note that it's not at all enough to say that many ex-Wii owners now have smartphones and play games on them. Any two large samples of the population will overlap. You're both positing a causal link beyond that. But the smartphone explosion was going to happen regardless of whether the Wii ever existed. I simply don't believe Candy Crush etc. would've been far less popular without Wii.

In a broad sense you can never "prove" any of this: maybe the PS4 audience is comprised of 90% new gamers who never owned a console before. Outside of getting someone to fund studies, we operate on assumptions of this nature for every single platform in existence.

Speaking demographically, though, these assumptions become much easier to make (for both Playstation and iOS). The Playstation audience is made up primarily of 16-35 males, and that has been true for well over a decade now; every demographic study we see shows that the audience is hugely disproportionately male. The market still sees churn (as people grow up and leave the console market, for instance, or grow up and enter it in their teenage years), but the demographics for the product have been stable.

Similarly, Wii and iOS share a broader demographic that includes women, male professionals, young children, and the elderly. Does this prove they are the exact same people? Definitely not. What can be reasonably inferred, however, is that we're dealing with the same demographics.

On a larger view, I'm also not sure that lauding the mobile segment for high growth is very instructive for the market as a whole. Yes, if you put your product on a platform with an immense installed base, and you then make the vast majority of that product free, you'll move a lot of widgets. (This is also why PC gaming is growing stronger.)

Essentially what you're suggesting is that home consoles are at a structural disadvantage for the new markets. I don't necessarily disagree, but there's nothing stopping a home console from selling 300M+ units except for how they're currently designed.

Yes, we can describe the market changes smartphones have engendered, but I'm wary of attempts to prescribe based on them. Opiate's opinion that console makers should've launched $150 android boxes in order to see massive growth seems dubiously optimistic to me.

So what would your action be, instead? If you were a console maker watching these newer platforms grow massively and take virtually all the growth and profit you used to experience, how would you respond? Would you learn no lessons from these new competitors?

 

[LOCK]

How many times. Digital sales/revenue is not tracked by NPD.

Year-on-year digital is growing hugely, EA even expects digital revenues to overtake retail in just 2 years. Of course, retail sales and retail sale tie ratios (which is a rather anachronistic way of looking at things in the digital DL world we live in today) are naturally going to decrease each year. The decline will accelerate year to year going forward.

Tie ratios (which again is rather irrelevent) are naturally declining but does that mean people are buying less games? No, because everything bought digitally is obviously not tracked. This gen I've downloaded countless titles but apparently my 'tie ratio' is way down.

Some clarification, these revenue figures are for video game hardware and software only, which includes PC and mobile when available. Those PC and mobile sales are negligible though.

NPD does release a revised yearly report that includes digital estimates, used, new, and other market sources of revenue. If we include all of that last year hit around 16b. The chart would look practically the same if we add digital sales, a continued decline.

 

[heidern]

Just because the people that bought a Wii now own smartphones does not mean that there is a causal link between the two. Even if those smartphone owners play games on those devices it does not mean there is a causal link between that and the decline from Wii to Wii U.

What Iwata has decided is that the problem was that they didn't put enough effort into those new audiences they captured. Wii Sports/Wii Fit were good as trojan horses whose novelty value got people to open their wallets but with the novelty gone the existing library of Mario/Zelda etc didn't provide enough value to that audience to retain them.

A variant of this lesson was demonstrated by the Gamecube. It had a major 'mature' e exclusive franchise in Resident Evil and perhaps some other games that were conducive to 'mature' audiences like Rogue Leader/EA Sports but they didn't fully cater to that audience and so never made significant inroads with that audience.

So now Iwata has decided to directly target and cater to the Wii Fit/health audience with the QOL. No compromises, no complacent resting on existing libraries that don't target that audience. He has proof that the audience is there and some understanding of it by the experience on the Wii so it is a better target than shooting in the dark for some new audience that you have no knowledge of.

 

[Imru’ al-Qays]

So what would your action be, instead? If you were a console maker watching these newer platforms grow massively and take virtually all the growth and profit you used to experience, how would you respond? Would you learn no lessons from these new competitors?

It remains to be seen whether the mobile market and related platforms are "taking" the console market's growth and profit, any more than the Wii was "taking" the HD twins' growth and profit. Just because an adjacent sector of the market is growing faster than yours doesn't mean that it's taking growth away from you.

Could console makers gamble it all on reaching that fast-growing new-gamer demographic? Absolutely. Both Nintendo and Microsoft, to different degrees, attempted to do that this generation. That strategy is in both instances proving to be a failure. You can attribute that to specific mistakes that both companies made, but really it all boils down to this: making compromises to attract the mobile etc market inevitably alienate the core without necessarily attracting enough new gamers to offset that. Nintendo especially bet it all on the blue ocean, and look at them now. Sony bet it all on the core, and they're doing fine.

Consoles have particular strengths and weaknesses compared to mobile phones. Those strengths and weaknesses will make attracting certain sorts of gamers easier than attracting others. Some sorts of gamers, including a lot of people who are principally mobile phone gamers, will be basically impossible to attract. That's not something the console makers can just wish away.

 

[QaaQer]

In a broad sense you can never "prove" any of this:

I guess that's why these discussions tend to repeat, each arguing from their own preconceived notions and talking past each other.

I cannot prove the wii was primarily a novelty that offered a new intriguing experience that got people excited enough to spend $200 or $300 for a box in the same way that VR is going to get people excited.

Likewise, trying to prove that the wii was attractive primarily as a gaming machine that people bought because they wanted to play videogames targeting women/children/over-35s is equally pointless.

 

[Opiate]

It remains to be seen whether the mobile market and related platforms are "taking" the console market's growth and profit, any more than the Wii was "taking" the HD twins' growth and profit. Just because an adjacent sector of the market is growing faster than yours doesn't mean that it's taking growth away from you.

It sure looks like it is. The "traditional" consoles haven't been meaningfully profitable in a while. Collectively, the PS3/Xbox lost a huge amount of money. Collectively, the PS4/Xbox aren't off to a great start in this regard, either (although not as bad as last generation). Major third parties on consoles have been treading water for quite some time, and the release list for consoles has been steadily shrinking for nearly a decade.

Of course, maybe that's a coincidence. Maybe console profitability began to significantly decline (for both hardware and software) at the exact time that the casual audience took off, on the Wii and later on social sites, browsers, iOS and Android. It's an awfully funny coincidence, if so.

Could console makers gamble it all on reaching that fast-growing new-gamer demographic? Absolutely. Both Nintendo and Microsoft, to different degrees, attempted to do that this generation. That strategy is in both instances proving to be a failure. You can attribute that to specific mistakes that both companies made, but really it all boils down to this: making compromises to attract the mobile etc market inevitably alienates the core without necessarily attracting enough new gamers to offset that. Nintendo especially bet it all on the blue ocean, and look at them now. Sony bet it all on the core, and they're doing fine.

Yes, this generation that appears to have benefitted Sony. Nintendo and Microsoft failed.

Consoles have particular strengths and weaknesses compared to mobile phones. Those strengths and weaknesses will make attracting certain sorts of gamers easier than attracting others. Some sorts of gamers, including a lot of people who are principally mobile phone gamers, will be basically impossible to attract. That's not something the console makers can just wish away.

I'm not sure I can speak to "mobile phone gamers," as that's a vague term and not a demographic, but I would say this: it is self evident that consoles can attract women, attract the elderly, attract children. They've done so very successfully in the past. If they aren't doing that now (and mostly they aren't), it's not because it's impossible, it's because they aren't competent enough to do it.

 

[Miles X]

the edge on what? An exclusive game Titanfall bundle couldn't even beat PS4.

PS4 was doing 370k~ in March, it's now doing 190k~. That's why.

 

[spatenfloot]

No, but I think games like Wild and Tomorrow's Children and No Man's Sky and Rime and Abzu are steps in the right direction, as are games like Below and Cuphead and Ori for Microsoft. It's not going to be one game, or even five or ten games, but a long term, persistent investment that carries on for years to engage players and bring them back into the fold.

It may be too late to change the trajectory, I'd say it's more likely that is the case. But to me this is the last best chance.

These kinds of games are exactly what we need to offset the "me too" AAA titles. If they are successful, the studios can expand and fill the missing mid tier level of gaming.

 

[Imru’ al-Qays]

It sure looks like it is. The "traditional" consoles haven't been meaningfully profitable in a while. Collectively, the PS3/Xbox lost a huge amount of money. Collectively, the PS4/Xbox aren't off to a great start in this regard, either (although not as bad as last generation). Major third parties on consoles have been treading water for quite some time, and the release list for consoles has been steadily shrinking for nearly a decade.

Of course, maybe that's a coincidence. Maybe console profitability began to significantly decline (for both hardware and software) at the exact time that the casual audience took off, on the Wii and later on social sites, browsers, iOS and Android. It's an awfully funny coincidence, if so.

It's not a coincidence, but it's also not a result of the console market emigrating en masse to the Wii and mobile. Mobile didn't exist in 2006, and what evidence do we have that the Wii was particularly successful at getting PS2/Xbox gamers to buy it as their primary console?

The explanations for declining profits that seem more plausible to me are that publishers couldn't figure out how to keep development costs down during the transition to HD, and that the PS3 (and arguably the 360) launched at bad price points that took too long to drop (during the Great Recession, no less).

I'm not sure I can speak to "mobile phone gamers," as that's a vague term and not a demographic, but I would say this: it is self evident that consoles can attract women, attract the elderly, attract children. They've done so very successfully in the past. If they aren't doing that now (and mostly they aren't), it's not because it's impossible, it's because they aren't competent enough to do it.

Consoles have always been able to attract children. Only one console has ever been able to attract women and the elderly, though, and that's the Wii. The issue isn't so much simply attracting women and the elderly, though: it's attracting them without simultaneously alienating the core. No console has ever been able to do that, certainly not the Wii.

I frankly don't think it's possible to attract significant numbers of gamers outside of the 18-35 age range without alienating the core. Any console aimed at core gamers will be too expensive for the motion bowling and Wii Fit crowd, and any console cheap enough for the motion bowling and Wii Fit crowd will be too underpowered to attract core gamers.

I do think that Sony and Microsoft, but especially devs, could be more competent at attracting women in the 18-35 age range, though, whose media consumption habits don't differ too drastically from men in that age cohort in other respects (the only difference being that men play a lot more console video games). If there were more console games that appealed to young women more young women would buy consoles. We're already seeing some signs of this: Bioware seems to be in the process of figuring out how to get young women to play WRPGs. I imagine this sort of trend will continue. But this is expanding the core to an adjacent demographic, not trying to build a console that appeals to multiple totally disparate demographics simultaneously.

 

[spatenfloot]

The software is the key to attracting women, not the console itself. You just need a broad library of appealing games. It doesn't even alienate the core as long as they still have CoD, AC, etc.

 

[Imru’ al-Qays]

The software is the key to attracting women, not the console itself. You just need a broad library of appealing games. It doesn't even alienate the core as long as they still have CoD, AC, etc.

Yeah, absolutely. And honestly, I think certain AAA franchises (like Assassin's Creed) could attract women pretty easily if they just implemented female player characters. I'd also be interested in seeing what the player demographics of the Tomb Raider reboot were compared to, say, Uncharted: does having a strong and not lasciviously oversexed female lead attract women?

It's very possible to turn young women into core gamers, I think. Much more possible than it would be to turn old people for whom dual analog controllers are profoundly bewildering into core gamers, in any event.

 

[SwiftDeath]

PS4 was doing 370k~ in March, it's now doing 190k~. That's why.

Console | March | July | WoW % Change
PS4     | 371k  | 187k | -37%
XB1     | 311k  | 131k | -47%

It's a flawed comparison anyways considering what was on offer in March compared to July but the numbers don't suggest PS4 is about to fall to second simply because it isn't doing March numbers of all things in the height of the summer

 

[Version 3.0]

Again, this rests on the assumption that the home console market is a neatly quarantined market that has no crossover with other parts of the gaming industry. You had suggested earlier (in another reply to me) that this discussion is about home consoles and portables: that is explicitly incorrect. It's about the gaming market, in which PC, mobile, and social gaming all reside, not just home consoles and portables.

I'm not assuming or arguing that the console market resides in a vacuum. I'm stating the simple truth: this discussion of it does. We don't get NPD data for mobile. We don't get NPD data for the vast majority of PC sales.

If you want to bring mobile into the discussion, then let's see some data. This is an NPD thread - there isn't any. Therefore, by definition, that's off topic. Sure, we mention it - with no data to support any claims, and rampant assumptions. Not very productive.

 

[Aquamarine]

PS4 was doing 370k~ in March, it's now doing 190k~. That's why.

March is a 5-week month. July is a 4-week month.

So you should be comparing 297K to 190K.


And be careful...July is the middle of the year. It's generally quite slow all-around...so a couple of naturally slow months may not be indicative of significant + permanent declines in demand. Wait and see how PS4 handles from September - December.

 

[CosmicQueso]

Console | March | July | WoW % Change
PS4     | 371k  | 187k | -37%
XB1     | 311k  | 131k | -47%

It's a flawed comparison anyways considering what was on offer in March compared to July but the numbers don't suggest PS4 is about to fall to second simply because it isn't doing March numbers of all things in the height of the summer

In years without inventory constraints, July tends to be about 3-4% of annual hardware volume on MS/Sony consoles, March is usually in the neighborhood of 8%.

 

[allan-bh]

And be careful...July is the middle of the year. It's generally quite slow all-around...so a couple of naturally slow months may not be indicative of significant + permanent declines in demand. Wait and see how PS4 handles from September - December.

For a market leader, PS4 sales in last months aren't so good.

 

[donny2112]

I'm not assuming or arguing that the console market resides in a vacuum. I'm stating the simple truth: this discussion of it does. We don't get NPD data for mobile. We don't get NPD data for the vast majority of PC sales.

If you want to bring mobile into the discussion, then let's see some data. This is an NPD thread - there isn't any. Therefore, by definition, that's off topic. Sure, we mention it - with no data to support any claims, and rampant assumptions. Not very productive.

Isn't the discussion about possible causal relationships between an apparent dearth of many former (presumably) Wii owners in the current console environment and places they may have gone? Someone surely has revenue for iOS or something, and we obviously know there's a lot of users/money in that space so some data of some kind exists. To more definitively tie fomer (presumably) Wii users to mobile converts, we'd probably need one of those Nintendo survey graphs showing "Have you played console games in the last year", etc., which they haven't shown for several quarters now in the midst of dealing with the bigger fish of profitability. Therefore, we can only have speculative discussions without final determinations, but we can try to argue reasonable points and point out when counters are not being consistent with themselves (i.e. irrational).

No, it's not very productive, but suppose we gotta do something to pass the time without a bunkum (Loved. Wanted. Needed.) around and NPD shutting down any identified leakers. As long as it's civil (I think it generally has been, so far) and we're not in some kind of loop, arguing the same points around each other, it doesn't seem like a bad way to pass the time. I've enjoyed the discussion, at least.

My 2 cents, anyways.

 

[Liabe Brave]

The Playstation audience is made up primarily of 16-35 males, and that has been true for well over a decade now; every demographic study we see shows that the audience is hugely disproportionately male.

If that's the case, though, PS4 should be capable of hitting those same levels even if Sony don't follow your strategy of trying to recapture the Wii's expanded audience. Given that such a strategy would take them far from their (over decade-long) core competency, why do you think they should try?

So what would your action be, instead? If you were a console maker watching these newer platforms grow massively and take virtually all the growth and profit you used to experience, how would you respond? Would you learn no lessons from these new competitors?

The lesson I would learn is that the huge (and rapidly-growing) market of mobile users places very, very little value on videogames, as evidenced by their preferred pricing: free. Apple and Google have seized their profits on the basis of a staggeringly enormous installed base from which even pennies adds up. You're correct that their vision of this possibility, and their leadership in creating it, is indicative of competent and forward-thinking strategy. If Sony had foreseen this market in 2006 and pursued it instead of releasing the PS3, they might've ascended to capitalist heaven. (Though really, pretty much any strategy would've been vastly superior to releasing the PS3 as it was.)

But Sony didn't do that, and now I think the barrier to entry is too high. Again, profits in mobile are based on very lightly skimming a cut from a giant number of transactions. A putative new Sony device would be starting from zero, and would thus require large cash transfusions until it--maybe--caught traction.

Given all that, what would I do instead? Pretty much what they're already doing: encourage the presence of higher-priced, "premium" small games on their usual hardware. Installed base isn't as much of a factor when your licensing cut is higher. I view this as a "mobile-esque" compromise: lower overall reward, but lower risk since you're staying inside your comfort zone. Sony's increased focus on ecology lock-in with PS+ this gen is another example of how they're trying to adapt approaches that've worked in the mobile space. They're late to the party with all this, of course, but I do think they're trying.

For a market leader, PS4 sales in last months aren't so good.

Well, here goes that merry-go-round. I really think it would be best to wait until November or December to have this discussion. Because currently there's no way to differentiate between the theories that launch demand was abnormal, or that launch supply was abnormal and concentrated first-year demand. The level of holiday demand should give us a much clearer read on whether a wider audience is interested in the new consoles, or the platforms are stuck with a restricted group of core gamers for now.

 

[slapnuts]

PS4 was doing 370k~ in March, it's now doing 190k~. That's why.

Yeah and so was X1, or close to it...and these were still considered launch months, Today's numbers we been seeing are summer numbers that are fairly typical...but no matter how we twist, turn it, sprinkle it with pixies or what ever...PS4's numbers are world wide leading the rest, solid and strong for this time of the year and from this point on should start to rise come the latter months of the year which we are now entering.

Edit and this is true for coming X1 numbers. All in all fairness..X1 is doing pretty good at its 399 price. Im curious to see how it does with the Madden bundle as it being a free pack-in. Not sure if PS4 is doing something similar but i think its a smart move for MS.

 

[ZSaberLink]

Yeah and so was X1, or close to it...and these were still considered launch months, Today's numbers we been seeing are summer numbers that are fairly typical...but no matter how we twist, turn it, sprinkle it with pixies or what ever...PS4's numbers are world wide leading the rest, solid and strong for this time of the year and from this point on should start to rise come the latter months of the year which we are now entering.

Edit and this is true for coming X1 numbers. All in all fairness..X1 is doing pretty good at its 399 price. Im curious to see how it does with the Madden bundle as it being a free pack-in. Not sure if PS4 is doing something similar but i think its a smart move for MS.

I'm kind of confused. The XB1's July sales were pretty much the exact same as April despite being $399 (131K in July vs. 115K in April). In the short term, it seemed to have done nothing at all, which probably should worry MSFT.

 

[spatenfloot]

Any analysis of sales is pretty pointless until after the holidays. We won't know until then if the strong demand is sustainable.

 

[Opiate]

If that's the case, though, PS4 should be capable of hitting those same levels even if Sony don't follow your strategy of trying to recapture the Wii's expanded audience. Given that such a strategy would take them far from their (over decade-long) core competency, why do you think they should try?

Because the market they are in has some very serious issues. It's not very profitable being the most important of them.

The lesson I would learn is that the huge (and rapidly-growing) market of mobile users places very, very little value on videogames, as evidenced by their preferred pricing: free.

Does this mean supposedly "core" PC users also don't value games when they play DotA, League of Legends, or Crossfire?

Apple and Google have seized their profits on the basis of a staggeringly enormous installed base from which even pennies adds up. You're correct that their vision of this possibility, and their leadership in creating it, is indicative of competent and forward-thinking strategy. If Sony had foreseen this market in 2006 and pursued it instead of releasing the PS3, they might've ascended to capitalist heaven. (Though really, pretty much any strategy would've been vastly superior to releasing the PS3 as it was.)

But Sony didn't do that, and now I think the barrier to entry is too high. Again, profits in mobile are based on very lightly skimming a cut from a giant number of transactions. A putative new Sony device would be starting from zero, and would thus require large cash transfusions until it--maybe--caught traction.

I think this is definitely possible: maybe it's too late. Nintendo and Microsoft tried, and failed, to seize this market. The problem is that simply giving up on it is disastrous, as there isn't much money in "core" gaming. That path leads either to failure (as costs continue to rise but audience size stagnates) or consumption (as your competitors continue to grow and use the profits to push you out or consume you).

 

[Dire]

Any analysis of sales is pretty pointless until after the holidays. We won't know until then if the strong demand is sustainable.

The problem there is that the apparent trend of increasingly poor sales as of late means that there is an increasingly high probability that we see either an official price drop or at the minimum holiday bundurus with an unprecedented level of price subsidization. That would all make any sort of precise analysis basically impossible. And imprecise analysis is already obvious and easy. The PS4 is doing comparable to previous gens and trending downwards. The XBone/WiiU are doing worse than previous gens and trending downwards.

 

[spatenfloot]

The problem there is that the apparent trend of increasingly poor sales as of late means that there is an increasingly high probability that we see either an official price drop or at the minimum holiday bundurus with an unprecedented level of price subsidization. That would all make any sort of precise analysis basically impossible. And imprecise analysis is already obvious and easy. The PS4 is doing comparable to previous gens and trending downwards. The XBone/WiiU are doing worse than previous gens and trending downwards.

Maybe, but bundles are normal for the holidays so it is not a one time unexpected event. I am pretty sure the ps4 won't have any price drop other than normal retailer discounts.

 

[Imru’ al-Qays]

The problem there is that the apparent trend of increasingly poor sales as of late means that there is an increasingly high probability that we see either an official price drop or at the minimum holiday bundurus with an unprecedented level of price subsidization. That would all make any sort of precise analysis basically impossible. And imprecise analysis is already obvious and easy. The PS4 is doing comparable to previous gens and trending downwards. The XBone/WiiU are doing worse than previous gens and trending downwards.

The Xbone is actually not doing worse than previous second-place consoles, launch-aligned.

Also, "unprecedented level of price subsidization" should be balanced against the fact that the PS4 and Xbone are actually not subsidized much at all compared to previous non-Nintendo consoles.

 

[prag16]

The Xbone is actually not doing worse than previous second-place consoles, launch-aligned.

Also, "unprecedented level of price subsidization" should be balanced against the fact that the PS4 and Xbone are actually not subsidized much at all compared to previous non-Nintendo consoles.

He said trend. He didn't say launch aligned. We'll see what happens.

 

[Imru’ al-Qays]

He said trend. He didn't say launch aligned. We'll see what happens.

He said "The XBone/WiiU are doing worse than previous gens and trending downwards." The last part of the statement is true, but the first is not unless he's using a definition of "doing worse" that would also include the PS4.