NPD: Behind the Numbers, October 2009
November 16, 2009 Page 4 of 5
When Nintendo last announced consumer sales of the Nintendo DSi at the end of July, the total installed base was 2.0 million systems. In August and September no data was available, but according to data provided exclusively to Gamasutra the average price of all Nintendo DS systems sold in October 2009 was $150.
In the absence of retailer promotions, that suggests a 50/50 split between Nintendo DS Lite hardware (priced at $130) and Nintendo DSi hardware (priced at $170).
This is completely in line with the trend through July. For the first four months after the DSi launched its share of Nintendo DS hardware sales dropped steadily from 80% down to 54%. Thus we feel confident that the Nintendo DSi now accounts for approximately 50% of all DS systems sold in October.
Given these figures, we estimate that the Nintendo DSi has reached an installed base of nearly 2.8 million systems in the United States.
That's an immensely strong showing for seven months into a launch, and the only system launches which are stronger included November and December – a benefit that the Nintendo DSi is just now experiencing. (Results of November sales will be available in about one month's time.)
Here's a full graph of year to date U.S. hardware sales in millions:
In fact, were we to break our Nintendo DSi estimate out separately, it would be the third best-selling platform of 2009 behind the Wii and Nintendo DS Lite and just ahead of the Xbox 360.
Should the current Nintendo DSi sales trend continue and should the Nintendo DS platform overall perform approximately as it did in 2008, then the Nintendo DSi could have an installed hardware base of around 5 million systems by the end of 2009. With a large enough installed base, Nintendo and third parties will move more overtly toward DSi-specific software in the near future.
Full Year Outlook: Down, Down, Down
According to Anita Frazier, analyst for the NPD Group, the Xbox 360 was the dominant platform during October 2009 with hardware, software, and accessories totaling around $290 million. Just behind Microsoft's console was the PlayStation 3 with a significant $279 million in revenue.
Using history as a guide and other estimates, we used these figures to estimate the distribution of October's revenue among the big three – Nintendo, Sony, and Microsoft. When revenue from Sony's PSP and PS2 are added, we estimate that its total share of the market grows to 35% or about $374 million.
Nintendo's claims the biggest share at 38%, or over $400 million. For all of 2008 we estimated that Nintendo's platforms generated over half of the industry's revenue. The company itself went on to claim that 99% of the American videogame market growth in 2008 was due to Nintendo platforms.
Consider Nintendo's flat software unit sales for the year, the declining average price of software, weaker Wii hardware sales, and the effect of the Wii price cut. Together these factors suggest that a significant part of the decline of the market in 2009 could well be due to just Nintendo's shortfalls.
We clearly can't put all the market's present difficulties should be laid at the feet on Nintendo, but when one company accounts for half of the revenue in an industry for a whole year, that company's fortunes the next year will likely determine much of the direction of the market.
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