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[JABEE]

Also, I didn't expect the Switch to do this well. I think once you use the device, the concept and the design are home runs out of the gate.

Something I think is under appreciated about consoles is usability.

That is what separated the NES from the competition or the failures before it came out.

That is part of the reason the Wii was a runaway success.

The Switch is now benefitting from the presentation of the device. It's fun to use and it doesn't look like a Fisher Price toy like the Wii U.

 

[Bitch Pudding]

Looks like rounded numbers from VG Chartz:

https://web.archive.org/web/20160909195248/http://www.********.com/analysis/platform_totals/

Replace the asterisks with VG Chartz (no space in between)

Man, you cannot even trust sales numbers presented during an official MS event anymore...

 

[geordiemp]

No. PS4 was successful because the general public and market as a whole were interested enough to buy it. It was what they wanted at the right price at the right time. It wasn't 'core PS fans', where were 18 million 'core PS fans' when PS3 and Vita spluttered out of the gate in their first years? They were buying Wii and 360 because the market wanted them better.

If you go back and read some of the Ps4 interviews with Sony, they were surprised how many 360 owners proportionally they were getting (seen by TLOU Ps4 etc). I suppose 18 m is high enough rate to see MAJOR cross over and broad appeal...

Is 5 million high enough to see major cross over at 6 months ? I guess it is then, roll on 100 million.

In UK Switch with game is over £ 300, more expensive than Ps4 and Xb1, its not in kid impulse buy territory like a £ 130 3DS. I think it needs a price cut in second year.

 

[JABEE]

I also don't think Xbox One X is something that will change the story for Xbox.

At $500, it's not a market share builder.

The Xbox One S and deals associated with it will drive the holiday season at $250.

The PS4 Pro share of the overall PS4 sales pie was 1 in every 5 PS4 consoles sold.

This was with a $100 price difference at launch with the PS4 Slim.

Xbox One X will be launching against bundles at a $250 price difference.

I can't see it changing anything. It looks like its a cool device and I will be checking out the announcement today to preorder, but I don't see it.

 

[Goalus]

Were you the guy in Nokia board meetings disparaging the smart phone craze?

Nokia's userbase and revenue numbers constantly rose during the smartphone craze?

 

[notaskwid]

Nokia's userbase and revenue numbers constantly rose during the smartphone craze?

Look where it got them to.

 

[wapplew]

I also don't think Xbox One X is something that will change the story for Xbox.
I can't see it changing anything. It looks like its a cool device and I will be checking out the announcement today to preorder, but I don't see it.

It changed the narrative when it's come to power talk.
They want us conveniently forget Xbox one when we talk about console power and performance.
That could play a big part next gen.

 

[gundamkyoukai]

No. PS4 was successful because the general public and market as a whole were interested enough to buy it. It was what they wanted at the right price at the right time. It wasn't 'core PS fans', where were 18 million 'core PS fans' when PS3 and Vita spluttered out of the gate in their first years? They were buying Wii and 360 because the market wanted them better.

Some of the core PS fans did not get to buy the PS3 until it arrive in EU .
If you are talking about USA yes that market wanted 360 more if you talking EU that is different story .
People seem to forget PS3 was selling just as good as 360 WW .

It changed the narrative when it's come to power talk.
They want us conveniently forget Xbox one when we talk about console power and performance.
That could play a big part next gen.

How is that going to play a big part in next gen if Sony brings out there next system before MS does .

 

[Goalus]

Look where it got them to.

I didn't check but I highly doubt those numbers were rising once smartphones had started to become popular. The sentence above ends with a question mark.

 

[ggx2ac]

I can't believe I actually Google searched 'honeymoon period for gaming consoles' to see whether it was a regularly used term for determining sales trajectory of a console launch and what percentage of hardcore fans buy said console.

It reminds me of 'X owners are starving for games'. Instead of people finding out why a console is selling the way it is or with regards to software, it gets hand-waved away by buzzwords or memes that have no basis.

After launch, it was the "casuals" that were buying the Wii in droves.

Now it's the "hardcore" that are buying the Switch in droves.

...The stupid shit I read sometimes on this forum.

 

[Bastables]

Nokia's userbase and revenue numbers constantly rose during the smartphone craze?

It took Nokia 4 years to react, they ignored the erosion of their marketshare. By the time they rejected android as an os and went in with MS their user base had been swamped by android and Ios. (Driven by a former MS business exec Eslop).
I guess Nokia should have changed their reporting to increasing window mobile users and ignore other competitors swamping them.

 

[wapplew]

How is that going to play a big part in next gen if Sony brings out there next system before MS does .

If they don't make Xbox one X, the Xbox is weaker narrative will carry into next gen. They change it with one X.

 

[gundamkyoukai]

If they don't make Xbox one X, the Xbox is weaker narrative will carry into next gen. They change it with one X.

That won't really matter when PS5 more powerful than XB1X and if they take to long to bring out there next system .

 

[jaina]

yeah, why would Microsoft and Sony release a new console with a big power jump in the same month ever again?

 

[Goalus]

It took Nokia 4 years to react, they ignored the erosion of their marketshare. By the time they rejected android as an os and went in with MS their user base had been swamped by android and Ios. (Driven by a former MS business exec Eslop).
I guess Nokia should have changed their reporting to increasing window mobile users and ignore other competitors swamping them.

MS must be lucky then because they already reacted when Xbox 360 BC, Play Anywhere and the development of Xbone X were greenlit.

Even Nokia could have achieved a turnaround after they went with Windows Phone. In that case it was MS's fault, however, for not pushing the system hard enough, and a huge part of the failure can be attributed to the fact that Steve Ballmer simply wasn't a good CEO. When Satya took over, it was simply too late. Even the acquisition of Nokia by MS could have worked out, had it been carefully planned and not been performed in a knee-jerk fashion.

 

[wapplew]

That won't really matter when PS5 more powerful than XB1X and if they take to long to bring out there next system .

It show MS still want to fight in the market.
So when PS5 come out, some people will hold off and see what MS have to offer before they jump straight into Sony system.
The only argument against MS leaving console business is them releasing Xbox one X soon.
That's what Xbox one X trying to change, not turning tide but stop customer leaving their eco system and be ready for next gen.

 

[Bastables]

MS must be lucky then because they already reacted when Xbox 360 BC, Play Anywhere and the development of Xbone X were greenlit.

Even Nokia could have achieved a turnaround after they went with Windows Phone. In that case it was MS's fault, however, for not pushing the system hard enough, and a huge part of the failure can be attributed to the fact that Steve Ballmer simply wasn't a good CEO. When Satya took over, it was simply too late. Even the acquisition of Nokia by MS could have worked out, had it been carefully planned and not been performed in a knee-jerk fashion.

How's BC play anywhere and X working out? That's rhetorical as we all know they've been losing market share in their no 1 markets.

 

[JakR]

It show MS still want to fight in the market.
So when PS5 come out, some people will hold off and see what MS have to offer before they jump straight into Sony system.
The only argument against MS leaving console business is them releasing Xbox one X soon.
That's what Xbox one X trying to change, not turning tide but stop customer leaving their eco system and be ready for next gen.

Do they want to fight?

Of course they are holding in the best case theur current customers and who knows how the next gen consoles will play out, but MS needs to do more than service after service. They need content and they need trust from customers to buy into their ecosystem.

The question is how MS wants to come back, when Sony does not stop to deliver their 1st party output and 3rd party deals.

MS should have been the one with Destiny and Star Wars deal coming from the 360 years, but they completely missed the mark.

It can be better running gen next time for MS, but they have to work really really hard to make it happen.

 

[gundamkyoukai]

It show MS still want to fight in the market.
So when PS5 come out, some people will hold off and see what MS have to offer before they jump straight into Sony system.
The only argument against MS leaving console business is them releasing Xbox one X soon.
That's what Xbox one X trying to change, not turning tide but stop customer leaving their eco system and be ready for next gen.

The question would be if those people were going to do that anyway and wait for MS .
MS still have there fans which is why they bringing out XB1X in the first place.
If XB1X hardly sell i really don't see how that going to help them next gen .
Keep people in there ecosystem yes but not help them next gen .

 

[Majmun]

Sony having Star Wars, Destiny II and COD deals is just nuts.

So many people will rather buy a Ps4(pro) with any of those games bundled for ~$250/~$399 than a barebone Xbox One X at $499

Xbox One S is the console MS should bet the most on. It's the console that should do well competing with the Ps4 Slim and Pro

Xbox One X has no chance.

 

[Goalus]

How's BC play anywhere and X working out? That's rhetorical as we all know they've been losing market share in their no 1 markets.

BC adds a constant stream of games to their ecosystem without the need to develop them first. This will make offers like Game Pass more attractive and earns them a lot of goodwill. If it hasn't already paid of, it definitely will in the long term.

Play Anywhere will push the Windows Store in the long term and is one reason why declining Xbox hardware sales do not necessarily have to be a bad thing, if people buy the games on PC instead.

Xbox One X lays the foundation of a long-term platform strategy of interoperability and compatibility. At the same time it will please power users and also assures that Xbox is here to stay. Larger investments in software projects become possible because no generational transition can piss on their parade.

 

[Bitch Pudding]

Xbox One X has no chance.

Hm, XOX will do fine amongst its target audience, probably even better than PS4 Pro when it launched.

What I don't think is that it will be some kind of game changer or a platform churn driver. Best case scenario is that it will enhance Xbox' mindshare within the next 3-4 years.

 

[Aostia]

Happy for Nintendo comeback

 

[wapplew]

The question would be if those people were going to do that anyway and wait for MS .
MS still have there fans which is why they bringing out XB1X in the first place.
If XB1X hardly sell i really don't see how that going to help them next gen .
Keep people in there ecosystem yes but not help them next gen .

It definitely help, just imagine how dire it is this year for Xbox one without Xbox one X coming.
One X, BC, service features, all lay the groundwork for next gen, customers will expect MS deliver the same quality on that front next gen just like Sony fans expect PS5 to have great first party support.
They both building toward next gen with different approach.

 

[Bastables]

BC adds a constant stream of games to their ecosystem without the need to develop them first. This will make offers like Game Pass more attractive and earns them a lot of goodwill. If it hasn't already paid of, it definitely will in the long term.

Play Anywhere will push the Windows Store in the long term and is one reason why declining Xbox hardware sales do not necessarily have to be a bad thing, if people buy the games on PC instead.

Xbox One X lays the foundation of a long-term platform strategy of interoperability and compatibility. At the same time it will please power users and also assures that Xbox is here to stay. Larger investments in software projects become possible because no generational transition can piss on their parade.

It's nice to have mission statements.

 

[r3ddvil]

I think there are many metrics to determine success.

-Amount of consoles sold
-amount of profit made
-amount of revenue made
-comparison to previous performance
-comparison to oppositions performance
-Consuler engagement and retention
-how does it stack up to the goals of the manufacturer
-what impact it has on the brand going forward

IMO the xbone is either a disappointment or an outright failure by all of these metrics and I'm certain MS wanted and expected better from all of them. They went from selling 85-90 million and seeing huge growth in the market to the point where they were almost the market leader.

Now they're going to struggle to sell even 50 million and won't even come close to half of their main competition. Their major 1st party brands have gone backwards and they're no longer the default for 3rd parties.

I'm pretty sure MS aren't in this market to eek out a decent install base. I'm also sure they don't invest billions just to get back a meek amount of profit.

The worst part is going forward. Right now the PS4 is a steam train running away with this gen and they are perfectly poised to continue that domination going forward. Their 1st party is stronger than ever and they essentially have all 3rd party support on board. So whilst xbone might not be a monumental failure on the level of the wii U or dreamcast it has left MS in a difficult place going forward.

You are 100% correct in your analysis of what defines success. A company may even accept financial losses if their target is market penetration. Which was Microsofts goal with the OG xbox, and they were successful (in the USA and UK) with the 360 in expanding that, and the brand.

Lack of compelling exclusives and resurgence of PC gaming are probably the biggest factors. It seems interesting to recall that as Microsoft gained strength in the console space, it coincided with a decline in PC gaming, and as PC gaming picked back up, Microsoft has faltered. Is Xbox and PC gaming success mutually exclusive?

The only part I disagree with is the assumption that Sony's strength is assured in the next round, assuming the hardware refreshes going forward have a hard cutoff in software support. I expect a more incremental Apple style upgrade path of bi-annual revisions for a while. Sony has proven they are very adept at going from success (PS2, PSP) to failure (PS3, Vita, although obviously the PS3 recovered to a certain degree later in the cycle).

 

[SinCityAssassin]

BC adds a constant stream of games to their ecosystem without the need to develop them first. This will make offers like Game Pass more attractive and earns them a lot of goodwill. If it hasn't already paid of, it definitely will in the long term.

Play Anywhere will push the Windows Store in the long term and is one reason why declining Xbox hardware sales do not necessarily have to be a bad thing, if people buy the games on PC instead.

Microsoft is making hardware that's not selling as fast as they want it to.

That will always be a bad thing to them.

 

[Graphics Horse]

DS = 18.79m, 3DS = 26.25m

thanks!

 

[Skittzo0413]

I'm curious to know what happens when the 3DS falls completely off the charts.

Is Nintendo's strategy to merge the home and portable console market and just accept that one will have to die for the other to live?

I don't know how they are making up the difference if instead of selling 3DS and console games/hardware, they are now only selling home consoles?

I wonder if there is a chance they could move into a budget handheld line once 3DS eventually dies or if this is just going to be the way forward.

It's nearing (or past, depending on who you ask) the end of its life and will reach 70 million units sold, so I think Nintendo will be relatively happy with its lifetime performance. The Switch combining handheld and console lines doesn't only cut one hardware revenue stream, it cuts R&D/production costs for the separate hardware and also consolidates and combines software revenue from a generally larger user base.

So basically, they'll be fine with a single hardware line. We may see a cheaper mini Switch several years down the line but I don't expect another new budget 3/2DS or any new handheld line.

Also, I didn't expect the Switch to do this well. I think once you use the device, the concept and the design are home runs out of the gate.

Something I think is under appreciated about consoles is usability.

That is what separated the NES from the competition or the failures before it came out.

That is part of the reason the Wii was a runaway success.

The Switch is now benefitting from the presentation of the device. It's fun to use and it doesn't look like a Fisher Price toy like the Wii U.

Yeah it's been said before but a lot of people (and companies) seem to forget how important convenience can actually be to the mass market. It's why people generally buy laptops or tablets instead of desktops nowadays. Nintendo has been smart to take the convenience factor into consideration when designing most of their hardware, with some obvious exceptions.

 

[ItWasMeantToBe19]

Do we have any PS VR numbers from recently?

 

[LegendofLex]

If they don't make Xbox one X, the Xbox is weaker narrative will carry into next gen. They change it with one X.

This is a really stupid rat race to bother participating in, though, if it means that console prices keep going up and up with minimal added value.

 

[Toni]

Sony having Star Wars, Destiny II and COD deals is just nuts.

So many people will rather buy a Ps4(pro) with any of those games bundled for ~$250/~$399 than a barebone Xbox One X at $499

Xbox One S is the console MS should bet the most on. It's the console that should do well competing with the Ps4 Slim and Pro

Xbox One X has no chance.

Yep.

I said it before and I'll say it again; This is the year the PS4 peaks. With Sony's extreme Black Friday and Christmas deals, I can see them selling more than 20 million PS4's for the whole year.

They will be riding on the Star Wars hype, Destiny 2 hype and Call of Duty November.

It will be the biggest thing ever for them.

Hell they could even have a chance to beat DS and Wii record numbers for November and December.

 

[Colonel Mustard]

Hell they could even have a chance to beat DS and Wii record numbers for November and December.

There aren't enough laughing emojis in the world. No.

The Wii's biggest holiday was December 2009...it did 3.8 million in a single month in the US.

 

[Jaded Alyx]

Hell they could even have a chance to beat DS and Wii record numbers for November and December.

I know you're like, the biggest PS4 cheerleader on the planet and all, but come on. This is sheer crazy talk.

 

[Jarod McChicken]

GameStop praises continued demand for Nintendo Switch and blames lagging Xbox One sales in their last financial results.

New hardware sales increased 14.8%, led by continued demand for Nintendo Switch. New software sales and pre-owned sales declined 3.4% and 7.5%, respectively, impacted by lagging Xbox One sales.

 

[OrbitalBeard]

Hell they could even have a chance to beat DS and Wii record numbers for November and December.

You think PS4 is going to sell 4 million during one of the holiday months this year?

I don't think you actually realize how big Wii was at its peak in North America.

 

[Gotdatmoney]

Hell they could even have a chance to beat DS and Wii record numbers for November and December.

Ayyyyyh Lmao

 

[Dark Cloud]

GameStop praises continued demand for Nintendo Switch and blames lagging Xbox One sales in their last financial results.

lol Xbox!

 

[Crayon]

Wow Splatoon.

 

[Welfare]

Actually Mat, are there noticeable trends that when a game goes into heavy price drops before the next one in the franchise comes out, it has a positive effect on launch sales for the next game? "Building the franchise" doesn't sound like something that happens because one game drops in price and sells a bit more.

Remind me so we can discuss in a few days? This is a bigger question I have thoughts around and would like to get your take on when the thread quiets down.

Anything on this, Mat?

 

[MatPiscatella]

Anything on this, Mat?

Oh yeah, thanks for reminding me.

So I dug into this a bit.

There's no way to prove out that discounting prior releases in a franchise boosts sales of the new game. Given all of the factors that impact launch sales, many of them unquantifiable, the math simply doesn't let us to get to any confidence one way or the other on this question.

However, sales of the old games are, naturally, boosted by promotional activity in the months leading to a new release in the franchise. These sales lifts can be quite noticeable.

The promotional activity also seems to have at least some positive impact on social, streaming and awareness metrics of the franchise. Then it takes a tiny leap of faith that those metrics rising will positively impact sales of the new game. In any case, those metrics improving certainly shouldn't hurt sales of the new game.

As with almost everything in the games business, the data is a bit inconclusive.

 

[Welfare]

Oh yeah, thanks for reminding me.

So I dug into this a bit.

There's no way to prove out that discounting prior releases in a franchise boosts sales of the new game. Given all of the factors that impact launch sales, many of them unquantifiable, the math simply doesn't let us to get to any confidence one way or the other on this question.

However, sales of the old games are, naturally, boosted by promotional activity in the months leading to a new release in the franchise. These sales lifts can be quite noticeable.

The promotional activity also seems to have at least some positive impact on social, streaming and awareness metrics of the franchise. Then it takes a tiny leap of faith that those metrics rising will positively impact sales of the new game. In any case, those metrics improving certainly shouldn't hurt sales of the new game.

As with almost everything in the games business, the data is a bit inconclusive.

Thanks for the input.

Like I thought, price promotions on old games will boost sales those games sales, but many more factors are at play for when a new game launch happens.

I think now, it matters more about the early and midpoint of a games life cycle than the end or lead up to the new game.

For example, I think Rainbow Six Siege 2 will benefit massively from the fact that R6S was so popular and thriving since the beginning that people who haven't bought the game yet don't need to before R6S 2. Streaming and let's plays already kind of give late buyers or potential hold outs for the sequel enough hype to get the game at launch. Sales promotions on R6S will boost sales for that game, but hype building and anticipation have already happened separate to price promotions at the end of the game's life cycle.

 

[jryi]

Like I thought, price promotions on old games will boost sales those games sales, <...>

Well, the mathematics don't really need to be any more complicated than this. Given that the marginal cost of digital copy of a three-year-old game is close to zero, any revenue is pure profit.

And it's not like old games are cannibalizing sales of new games. Sure, this is anecdotal evidence, but I buy a lot of old shit that I actually never get to play, simply because it's cheap. (And then I buy new games, and seldom get to play those, because backlog.)

I really should stop doing that...

 

[MatPiscatella]

Given that the marginal cost of digital copy of a three-year-old game is close to zero, any revenue is pure profit.

Not entirely true. Still have to pay the royalties. Profit is only slightly better on digital than packaged on catalog, unless one owns the distribution platform, then the profitability is far better digitally.

And it's not like old games are cannibalizing sales of new games.

The data I've looked at suggest this is correct.

Like I thought, price promotions on old games will boost sales those games sales, but many more factors are at play for when a new game launch happens.

Yes. And these promotions might help new game sales. The available data just doesn't allow that to be proven with any confidence.

It's all about making the brand messaging as big and noticeable as possible leading up to a new game launch. I'd consider this type of thing another arrow in the quiver.

 

[hanspampel]

Well, the mathematics don't really need to be any more complicated than this. Given that the marginal cost of digital copy of a three-year-old game is close to zero, any revenue is pure profit.

And it's not like old games are cannibalizing sales of new games. Sure, this is anecdotal evidence, but I buy a lot of old shit that I actually never get to play, simply because it's cheap. (And then I buy new games, and seldom get to play those, because backlog.)

I really should stop doing that...

Yeah when you get older you start to have more money and less time.
You buy more cheap stuff and play less.

Same for me.
And I'm a huge sucker for deals and bargain prices. I can't resist that stuff.

Publisher exploit that. Just like MTX loot boxes

Not entirely true. Still have to pay the royalties. Profit is only slightly better on digital than packaged on catalog, unless one owns the distribution platform, then the profitability is far better digitally.

While tru, that does not factor in inventory risks.
Even some new releases have trouble with this. For backlog sales it's even harder if you're not GTA or Minecraft.

There has to be a reason, why backlog is mostly digital today.
And it's a mixture of that 3 points imho.
Better margin
No inventory risk
Cheap digital sales are more present and noticeable for consumer. They use the platform all the time, but they don't go to a brick an mortar store every day to check on possible deals. New releases tho, get all the attention and marketing. So people know.

That the difference why new packaged is still here, but packaged backlog nearly gone in my opinion.

 

[Thorrgal]

That won't really matter when PS5 more powerful than XB1X and if they take to long to bring out there next system .

And if both consoles come out at the same time both consoles will be equally powerful.

But even if that's not the case power doesn't drive sales, so who cares?

 

[MatPiscatella]

While tru, that does not factor in inventory risks.

There has to be a reason, why backlog is mostly digital today.

The biggest reason for this is that packaged retailers delist games when they fall below a velocity threshold (meaning they bring in no new inventory). Eventually, the copies they have sell through and no more are brought in to replace.

These velocity thresholds are generally pretty high, leaving only the best sellers continuing to get replenishment.

Publishers would happily continue to sell retailers packaged goods if retail would buy them.

So it is an inventory thing. But retailer, not publisher, based.

 

[Josman]

Yes, $500 was a bad choice from a market share standpoint, it'll be competing with a $100 cheaper PS4 Pro for a niche market and the original PS4 will be outselling a more dated XB1S. I don't know how people are spinning it as a good thing.

 

[hanspampel]

The biggest reason for this is that packaged retailers delist games when they fall below a velocity threshold (meaning they bring in no new inventory). Eventually, the copies they have sell through and no more are brought in to replace.

These velocity thresholds are generally pretty high, leaving only the best sellers continuing to get replenishment.

Publishers would happily continue to sell retailers packaged goods if retail would buy them.

So it is an inventory thing. But retailer, not publisher, based.

Yeah. It was not my intention to imply that is something the publisher is forcing. More like something they can't fix, as you said.
But do you think there would still be a treshold on the sale price for packeged software to be worth it and desireable?
Sure publisher would love to still sell backlog titel games for $19.99. But what about some super steep discounts to just $5. Would that still be worth it?
Disks and distribution is cheap, but not free.
One more benefit of digital backlog sales. More flexibility and possibilities.

 

[MatPiscatella]

Sure publisher would love to still sell backlog titel games for $19.99. But what about some super steep discounts to just $5. Would that still be worth it?
One more benefit of digital backlog sales. More flexibility and possibilities.

Yes, one benefit of digital is that royalties are just a percentage, so there is much more flexibility on pricing at the lower ranges.

Disc based royalties are more fixed, so at some point a price can get to where the sale would generate a loss for someone in the value chain.

This is why you don't see super deep discounting to single digit dollar levels on discs, unless there are some crazy clearance situations happening.

But yep, the flexibility of pricing at deep discount levels is a benefit of digital for deep catalog.