It has been several months since we
examined the hardware market in the detail, and there are many trends
worth examining in that segment.
There are currently 10 different
major hardware models on the market across six platforms, and for the
first time we wish to provide a one-month snapshot of how we believe
each model is selling relative to all the others.
Before showing our estimates, however,
we wish to make a few points clear. First, the NPD Group does not
provide the level of detail that we are attempting to extrapolate
Second, we decline to consider the effect of retailer
promotions on pricing, and use only the standard prices set by the
Finally, we have made what we feel are reasonable
assumptions about the PSP market to arrive at our PSP Go sales
With that said, based on pricing data
provided to us by the NPD Group, the figure below shows what we
believe is an approximate breakdown of hardware model sales for the
month of February 2010.
There are several notable points on
this graph, but we'll start with the one we find most interesting:
the PSP Go. By our estimation, between 6,000 and 10,000 PSP Go systems
were sold in February 2010.
According to official data, the average
price across both PSP models in February 2010 was only $185. The
PSP-3000 is currently available both in a standalone package for $170
and in bundles for $200. The standard PSP Go is priced at $250. Given
the three configurations, it is difficult at best to gauge how much
each system contributes to the average price but some modeling
provides a bit of insight.
For example, given the standard prices,
it is effectively impossible for the core $170 package to account for
less than 50% of PSP hardware sales. In fact, between 50% and 80% of
all PSP systems sold in February were this base model.
The same model reveals that 0% – 50%
of all PSP systems sold in February were hardware bundles, priced at
$200. The remaining were PSP Go systems.
According to figures provided to us in
late 2007, it appears that consumers have often found the PSP
hardware bundles quite attractive, with those models even outselling
the core system in some months. For this reason, we believe that
bundles accounted for 40% – 45% of all PSP system sales in February
Consequently, the model shows that the PSP Go would account for
between 5% – 10% of all PSP systems that month. Again, we stress
that this is an educated guess based on some hard data and some
experience, and would welcome the release of harder figures from
With PSP Go sales this low, and the
PSP-3000 itself demonstrating historically weak sales, we feel even
more confident in our conclusions from last month: Sony will replace
the PSP with a successor platform, possible announcing its intentions
sometime in 2010. Beyond that, we expect the PSP Go to experience a
slow death at retail.
As for Sony's other modern system, the
PlayStation 3, the average price provided by the NPD Group reveals
that approximately two $300 models (with a 120GB hard drive) were
sold for each $350 model (with a 250GB hard drive). Sony has claimed
hardware shortages, and ironically that is good news in light of our
If the $300 PS3 is outselling each of
the $200 Xbox 360 Arcade and the $300 Xbox 360 Elite, as our
estimates suggest, then that means that Sony has successfully made
its case to the consumer for the price/value ratio of its system.
This doesn't mean that it's beating the Xbox 360 – Microsoft's two
models are still collectively outselling the PS3 – but rather that
consumers have embraced Sony's system alongside Microsoft's.
In fact, we would argue that
Microsoft's Xbox 360 itself is doing quite well for a system in its
fifth year. The company has increased sales each February since the
system's launch, and the strong software offerings this year –
including a new Halo title – should help propel the platform
through the rest of 2010.
We remain dubious on whether Microsoft's
Project Natal will actually lift and sustain the platform
significantly, but are open to the possibility that the motion
controls along with a $50 price cut might welcome more casual players
into Microsoft's fold.
According to the average prices
provided by the NPD Group, we estimate that the Nintendo DSi still
accounts for about 50% of all Nintendo DS sales. That represents no
change from the
situation in October 2009, when we last got a read on DSi sales.
We expect that the installed base for the Nintendo DSi now stands in
the neighborhood of 5.8 million units or around 15% of the total
Nintendo DS hardware base.
This is the last month in which
Nintendo DS sales will be this easy to interpret. On 28 March
Nintendo will launch the Nintendo DSi XL at a price of $190. Should
that revision be even half as successful as the Nintendo DSi, the
average price of Nintendo DS systems being sold in the U.S. will
probably have risen by mid-year, an amazing feat for a platform now
in its sixth year.