Hardware Dollar Sales
According to Sony, over $2.5 billion in PlayStation hardware (PSP,
PS2, and PS3) was sold in 2008, or around 32% of all hardware dollars
for the year in the U.S..
With the drop in PlayStation 2 hardware sales and a drop in the
average sale price (ASP) of PlayStation 3 hardware, it is possible that this
dollar figure represents very modest increase from 2007 -- albeit a
drop in percentage of marketshare.
By comparison, Nintendo sold nearly $2.5 billion in Wii hardware
alone during 2008, with another $1.3 billion coming from the Nintendo
DS.
Together, those platforms would account for almost 50% of all
dollars spent on hardware for the year. Moreover, Nintendo hardware
sales brought in at least $1 billion more in 2008 than in 2007.
As detailed in previous months, cuts in Xbox 360 hardware prices
during August have significantly reduced the average sale price for the system.
We
still estimate that the Xbox 360 accounted for more than $1.4 billion
in hardware sales during 2008, and now averages around $275 at retail.
Given that the average sale price for the Xbox 360, lifetime to date through mid-2008, was over
$375, Microsoft appears to have seen higher revenue from hardware in 2007.
Software Unit Sales
According to figures released by Michael Pachter, analyst for
Wedbush Morgan Securities, around 268 million units of console and
handheld software were sold during 2008, up 15% from the prior year.
On average, 8.5 units of software were sold per second in 2008.
Nintendo revealed in a recent press release that 132 million units
of software were sold for its systems during the year, or just over
49% of all software units sold in 2008. Of that 132 million, we
estimate that over 70 million were for the Nintendo Wii, and most of
the remaining 60 million were on the Nintendo DS -- with a million or so
on the Game Boy Advance.
The Wii software tie ratio appears to be
approaching 6.0 games per system. Incidentally, Mr. Pachter noted
that the Wii accounted for 37% of all software dollars in December
2008, surpassing the record set by the PlayStation 2 in December
2003.
Here's a look at the overall game sales by unit totals, split by hardware manufacturer in 2008, as compiled by Gamasutra from the above information:
Interestingly, Microsoft has often touted the Xbox 360 software tie ratio in its
press releases, but declined to do so for December 2008.
While it is
often logically dubious to base a conclusion on a lack of
information, the absence of a comment from Microsoft and the constant
8.1 tie ratio from September through November leads one to suspect
that the system's tie ratio may have remained constant or even
dropped slightly in December.
Assuming that the tie ratio did remain
constant, Microsoft would have sold around 12 million units of
software in December, and in the neighborhood of 48-49 million units
of Xbox 360 software for all of 2008, up from around 41 million units
in 2007.
According to software sales figures from Sony, it appears that
more than 27 million PS3 software units were sold in 2008, or more
than double the 12.5 million PS3 software units we estimate they sold
in 2007.
With approximately 41 million units of software
launch-to-date (LTD), an average 6.0 units of software have been sold
per PlayStation 3 system. The remaining 57 million units of software are primarily for the
PlayStation 2, with some lesser fraction for the PSP.
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It just shows that Nintendo is growing, everyone else? Not so much.
Still waiting for that six-axis minigame collection for $10 more than a controller alone, sony. It's a cash cow and you could use it!!
Microsoft is at an interesting point: they touted the high ratio, but now that their average price is lower it may begin going down as the console base expands. Of course, the fact that they barely maintained positive YoY sales may hit them this year.
This fact does actually matter if you consider the fact that your average consumer who buys a DS would consider going to Toys R Us for one, but the average tech savvy gamer buying a PS3 would likely just buy it on some online site at a discount. I'm not saying NPD sales are a lie, but I question their accuracy in painting a true sales picture these days.
Even though each company spins the numbers to make themselves look good the official company numbers are the ones worth comparing...as long as we can differentiate units shipped vs units sold to consumers.
The most interesting thing I've found from this article is that it seems as PS2 sales continue to drop off, roughly the same rate that they drop is the same rate that PS3 grows. It would be logical to assume that once PS2 is completely dead, say in 2 years from now, those 2.5m/year they are selling of PS2 would convert to PS3s, selling 5+ million PS3s in North America for the next 5-6 years means Sony could eventually pull ahead of the competition. I truly believe the PS3 will have a 10 year cycle if you consider we are just getting into the swing of things on it -- the life cycle feels extremely early on the PS3, whereas I feel that the Wii is very quickly losing its appeal (those it's attracting new gamers, and that is good for the sales -- existing gamers hate the Wii).
You point about the average tech savvy gamer... I believe most of them have already bought their consoles. That is why Microsoft and Sony are having such a hard time at incrementing their sales at a good step. Now they need to break into the mass market.
I remember having read once that Microsoft was asked whether the NPD numbers were fine with them or not, and they stated that sometimes the numbers are a bit lower, sometimes a bit higher, but that the average was pretty close to their estimations. That says enough I believe.
About your reasoning, I think you didn't read page 3, where the market share for Nintendo consoles went from 37% to 47% in a year, while Sony went from 35% to 30%. You are also not taking into account the fact that the market is getting bigger (at the same point in the consoles life, the Wii has sold more than the PS2), and those new individuals are apparently choosing the Wii. Finally, the PS2 went from 3.9m to 2.5m (a decrement of 1.4m), while PS3 went from 2.6 to 3.5 (an increment of 900k). Following your reasoning, the 500k or around 35% of the PS2 install base chose the Wii.
Regarding whether the PS3 will stay here for 10 years, I just mention something: The next generation will start whenever the first console is released. Analysts are stating a Wii upgrade for 2010 and a new Xbox for 2011. Remember that the 10-year cycle does not mean a new console in 10 years, but rather keeping one alive for that much time. The PlayStation 1 was launched in 1994 and was discontinued on 2006, but the PlayStation 2 was launched on 2000, approximately at half life. The PlayStation 2 was launched in 2000, a ten-year cycle means 2010 is the year it will die, but PS3 was launched on 2006 (and according to the book by the IBM chip designers, it was aimed at 2005, also half life). So, it is not gross to say Sony will try to have a new console by 2011-12. If you were one of those who bought the PS3 during the launch window, you will be buying a new Sony console in around 2-3 years. Just don't expect Sony to put 32 cores and 16gb of memory. It will likely be an upgrade based on an existing platform (much like GC -> Wii), not something revolutionary (and controversial) like the Cell.
"I truly believe the PS3 will have a 10 year cycle if you consider we are just getting into the swing of things on it"... "we are"? ;-)
There is no way Nintendo releases a Wii follow-up system (Wii 2?) in 2010 unless miraculously they start to dramatically lose market share (which seems next to impossible). Consider where Sony was between PS and PS2 where they actually held back PS2 for more than a year so they did not cannibalize their market dominance and that allowed them to continue to print money during that time. For the PS3 they did not have any incentive to be first to market back in 2006 when they were still dominating sales on PS2 (not to mention Blu-Ray standards were still being finalized until very late). I do think they know recognize their mistake of allowing Microsoft a whole year lead.
I see Sony being the first to market with the next Next Gen console system assuming they continue to trail on their flagship console. I imagine Micro$oft will launch their next Next Gen console soon after (neither will want to sacrifice a year lead this time). And for sure both Sony and Microsoft are already working on new input devices that will evolve the game play experience and dramatically reducing complexity in the way that the DS and Wii have done (hopefully in a unique way). More innovation and competition will be good for consumers and the industry as a whole.
I think it will be interesting to see what timing and market strategy Nintendo takes going into the next Next Gen consoles with such a commanding lead and trying to come up with new innovations to top the Wiimote.
Imagine a Wii Slim. After having produced the same console for the last three years, I guess prices have gone down enough to redo it and save some more money.
For future consoles, Microsoft will continue to extract power (I have been stating for a year or so that a future Xbox will use any computer available in the house for processing, sending data to either the computer CPU or GPU for processing when the results aren't visible immediate, like making the CPU process the AI of the citizens of a city the player hasn't reached yet, that Sony will focus on graphics, sounds and storage (graphics and sounds would help drive new sets of TVs and audio systems available, and storage to keep Microsoft and Intel from getting the monopoly on digital distribution), and that Nintendo will continue continue with their "revolution-evolution" cycles (NES -> SNES, GB -> GBC, N64 -> GC, GBA -> GBASP/Micro, DS -> DS[Li], Wii -> WiiHD?).