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Sega Reports Q1 Loss As The Conduit Sells 150,000
by Kris Graft [PC, Console/PC]
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July 31, 2009
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Tokyo-based Sonic the Hedgehog house Sega Sammy reported a year-on-year decline in sales and a net loss for its first fiscal quarter ended in June. The publisher also revealed official sales figures for High Voltage Games' Wii-exclusive shooter The Conduit to retailers.
Sega reported net sales of ¥60.46 billion ($638.44 million), a 19 percent decrease from the same quarter a year ago. Net loss was ¥10.29 billion ($108.66 million) compared to net loss of ¥10.53 billion yen ($111.19 million) a year prior.
The company said it sold 150,000 copies of The Conduit during the quarter in the US and Europe. As the game didn't release in European territories until July -- after the April-June earnings period -- this figure presumably refers to the amount of copies sold to retail, not sell-through to the consumer. We've contacted Sega to confirm the company's recording policy.
The Conduit released at the end of the period on June 23 in the US, and on July 10 in the UK and July 16 in Australia.
Edge Online reported earlier this month that the NPD Group recorded 72,000 in sales for The Conduit in the US during June, when the game was on shelves for about a week.
Sega also said that it sold 790,000 copies of Virtua Tennis 2009 across PlayStation 3, Xbox 360, Wii, and PC in the US and Europe.
Out of all platforms during the quarter, Sega sold the most software units on Nintendo Wii, with 550,000 units sold on the console. The company sold 310,000 units on the PS3, and 200,000 on Xbox 360 during the quarter.
In fiscal Q1, Sega said it sold 2.65 million software units total worldwide, down 61.5 percent, with Europe being its biggest market for the period. Sega's goal is to sell 29.7 million software units this fiscal year. Net sales in Sega's home video game business specifically were down 41 percent year-on-year to ¥18 billion ($190.07 million), while operating loss in the division was ¥5 billion ($52.8 million).
"In the home video game software industry, growth in demand for software has leveled off in Japan and North America, due to the popularization of game platforms. Nevertheless, demand remains relatively firm in Europe," Sega said.
Sega Sammy's major businesses also include the sale of pachislot machines, a segment that brought in ¥19.68 billion yen ($207.87 million), more than the home video game business. Like many companies recently reporting deflated earnings and sales, Sega noted a weak global economic environment that is negatively impacting its business.
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They sold more games on the Wii, then on the 360 and PS3 combined. I don't think that Wii sales are the biggest concern for Sega at the moment.
I purchased The Conduit, and I enjoy it a lot. Nothing beats point-and-shoot controls for a shooting game. I hope Sega continues to deliver more of these kinds of games that utilize the Wii controls to reinvent hardcore genres with more natural user-friendly interfaces. The numbers are low now, but hopefully they'll get better.
This tells me that party, fitness and Nintendo sequel andNintendo platformers are the only thing that the Wii base is willing to support.
Which is really sad. What I wish that Sega had done with the Conduit was to have released it as a multiplatform title. Yes, yes I know it was optimized for the Wii, but it is a solid game, it would do well on the 360 and PS3. This would have really helped Sega.
Nintendo needs to come up with a game plan for it's third party producers or face the slow death of the Wii. I know, nobody thinks that is possible (either).
ll_Have_Trouble_The_Wii_and_Hardcore_Games.php
Ian that article was great. I don't think the graphics hold back the Wii nearly as much as the inane multi-player system does.
Nintendo doesn't have to come up with a game plan for third parties either - that's the most ridiculous thing I've ever heard. Nintendo is the ONLY company that can keep their system afloat all by themselves. Third parties need to learn how to crack the Wii - like EA, Activision, and Capcom have. Each of them have million selling software on the Wii.
As for Sega Sammy, they do have issues, but I believe they are working on it. Capcom recently hit gold with the steady releases of popular sequels from past hits, Sega has a good stable, but they have to make sure the sequels, spinoffs or whatever they drop are good enough to please old fans rather then constantly trying to branch out beyond the original audience.
Although I can say the best sequel/spin off of a major Sega property in years has to be House of the Dead: Overkill.
Nintendo's not gonna go to bat for Conduit like Sony would for InFamous anyway, Sega's on their own - and that's how they always have operated, to the beat of their own drummer. Like any other gamer worth his salt, I am a Sega fanboy thru and thru but I question their long-term console goals if they don't just keep filling out with more big-selling Sonic titles (which the fanboys detest, but earns the $$$). They just need to bite it and make a kiddy Sonic Guitar Game..
www.HeadcaseGames.com
You wrote
"Considering the Wii install base, the sales are poor. I still do not see Nintendo doing any promotion of 3rd party games to support these brave publishers. "
The Wii install base is around as big as the XBox360 and PS3 install base combined, still Sega is selling more games for the Wii than for the PS3 and XBox360 combined, so where is the problem with Wii sales?
150k is 75% of all PS3 games that Sega sold during the whole quarter. This means it is pretty sure, that in one month Sega will have sold more copies of the conduit then of all PS3 games combined in the second quarter. Did anybody really expect the game to do better?
Why nobody blames the american Playstation owners for not buying enough Yakuza games on the PS2? This lead to Segas decision to not publish Yakuza 3 outside Japan at all. Of course that doesn't fit well enough into the picture of the PS3 owner as a mature hardcore gamer.
My guess is that Yakuza 3 had much higher production costs then The Conduit and it sold fewer copies, so it seems to me much more profitable to make Wii games than to make PS3 games.
kudo's on high voltage for the fully customizable controls-the 1st thimg i did was set up my own custom layout. As for hardcore i own :okami,overkill,conduit,madworld and the re shooter. I'm watching:extraction,red steel 2-i expect it to come with and without motion plus and the new re shooter.
Red steel 1 was a launch game so i give it some slack for the always rush job but rs2 will be judged harshly if not up to or better than metroid or conduit play control standards. I did hear rs2 has a control scheme and whether you like or hate it that's what you're stuck with making the conduit with nearly
infinate options a better play...notice i didn't say better game because given the motion plus support
alone will be more accurate but my beef is when i can't set it up how i want.
I've had my 360 pads modded so the l stick=r stick and the d-pad=face buttons simply finished the southpaw control setting offered in most modern games and have fully customizable ps2 and 3 pads+i prefer inverted aim on a gamepad but wii i can deal with up=up and down=down.
I even have a saturn ps2 pad+a ps2-ps3 adapter+a ps3-360 adapter so i can use a true saturn pad
on anything i want ps one,2,3 or 360. The only problem with a playstation pad on 360 is neither the adapter or pad have a headphone jack so i couldn't talk to my friends but i'm still working on circumventing that problem.
Currently i'm working on getting a game art and animation degree but what i'm really after is bringing my expierience with perfecting controls to ALL gamers.
The problems are of course: 1) if you are a shooter fan, you don't have a Wii for shooters. You want one, you really do because the pointing mechanic of the Wiimote (NOT Motion controls... big point to get here) seem awesome, but 2) The Wii can't do the graphics and physics you want anyhow. So even if it comes it 3) won't compare to the other systems offerings.
This all leads back to the real problem, the hardcore don't love the Wii for hardcore games... it has been 3 years now and no there isn't a market there. Time to move on developers.
I wonder when we will get a pointer mechanic for the other consoles and leave this motion control stuff in the dust already.
As far as I see it, developers tend to develop games for the best selling console, cause this is where they can sell games and earn a living. Developers and publishing companies are interested in selling games to as many people as possible, not to a specific type of gamer. And by the way, the hardcore loves to PS3 for hardcore games, but that didn't protect Fator5's Lair from being a complete flop and it surely didn't protect Factor5 from bankruptcy. Same goes for The Darkness on the XBox360.
If I look at the sold consoles in this generation, it may be the case that hardcore doesn't love the PS3 and the XBox360 either, cause hardcore doesn't seem to buy enough consoles.
The Conduit since it first reared its head last April: according to those figures, the conspiracy-infused FPS sold under 72,000 copies between its June 23 launch and the NPD cutoff date of July 4, placing it at number 25 on the U.S. top sellers list. So I 'believe' the 150k is for a month. I am guessing the first week sales was actually 50k...which is pathetic.
infamous (PS3 exclusive) first week sales were 175k. That is not bad considering its install base.
Every hardcore gamer on the PS3 seems to have bought the game in the first weeks, and that greatly damaged sales for other hardcore gamer titles on the PS3 like Prototype and Red Faction: Guerilla, while the 360 versions can make it to the Top 20, the PS3 versions don't.
This clearly shows to me that big first party titles on the PS3 are cannibalizing 3rd party titles much more then on the Wii.
From that point of view 175k doesn't seem so much to me,
And the sales for Infamous rapidly dropped, in the whole month the game sold 192k units, according to the NPD charts.
By the way Tiger Woods PGA Tour 10 for the Wii, hardly a casual gamer title, sold 270k units in the same month.
You can't always take the installed userbase and break it down to the sold units, you have to take into consideration how much titles are published on a platform in a given time. I don't have numbers, but my guess is there are published nearly twice as much titles for the Wii in every month of the year then for the PS3 and the 360.
"developers tend to develop games for the best selling console, cause this is where they can sell games and earn a living"
Mistake one: Install base != targeted demographic install base. Just because people own the console doesn't mean they will pick up every game available. Chances they will pick up your game above the rest don't go up linearly with the install base either. Seems like install base shouldn't be the driving factor at all...
"Developers and publishing companies are interested in selling games to as many people as possible, not to a specific type of gamer"
Mistake two: You need to define your audience and make that game. That should be rule one. Now if you want to broaden your design to include many different types of gamers that should also be defined up front. Note, the more generic you make it the more fringe demographics you also exclude.
What was the audience for The Conduit? Wii owners that wanted an outstanding FPS that used the controls to their utmost. Unfortunately that audience doesn't exist, either that or the game failed to deliver on one of the points ('outstanding FPS' intentionally left vague)
"If I look at the sold consoles in this generation, it may be the case that hardcore doesn't love the PS3 and the XBox360 either, cause hardcore doesn't seem to buy enough consoles."
Correct. I don't think the audience exists that want to drop $400+ on a console. Or at least the audience isn't big enough. The next console gen should take this into account. Analysts are constantly pointing out the consoles install base is saturated at the current price points... just leaving it out there isn't going to magically create more people that want it. Either price point needs a changing or the features you get with it need to improve (software, features, etc).
Or did they buy it on brand name alone?
"Maybe The Conduit did not filled everyone expectations?"
It definitely didn't live up to many reviewers expectations. Bland, unimaginative I think were the most used terms to describe it.
"Maybe it was overhyped?"
Most definitely. I think the developers painted a huge bulls-eye on their game. There comes a time when developers need to know the appropriate hype to give. Peter Molyneux also suffers from this developer disorder.
"Or maybe we just need to give it some months for it to become a million seller?"
Maybe. I would bet against it though.
"Why does a games have to sell 1M+ on its first month or it is considered a failure?"
With this game, I think because of the hype level. Personally, anything that makes a profit over the investment seems like it should be labeled a success. Unfortunately companies keep that number to themselves mostly and instead talk shear numbers sold. The industry themselves basically created the metric... whether it skewed or not people hold games to that bar for some reason.
Company's can declare something a sucess or dismal failure by the pre-orders which kills whatever energy a game had before it even arrives in stores.
Your thoughts are interesting, I have a different opinion on some of them, you write
"You need to define your audience and make that game. That should be rule one. Now if you want to broaden your design to include many different types of gamers that should also be defined up front. Note, the more generic you make it the more fringe demographics you also exclude."
This is in my opinion the mistake many genres made in the last years, the RTS, Tactical Shooters, Beat'em'Ups, Shmups, RPGs (Western and Eastern) all tried to define the audience first and then made the game. The result were overspecialized games, that only appealed to hardcore fans anymore. Most RTS on the PC are unplayable for anybody not familiar with that genre for the last decade, the same goes for the other genres I mentioned above. Designing a game for a specially defined audience leads in my opinion to extreme Niche-products. This seems logical to me, cause a game for a defined audience is always a game for players who already played previous titles that are similar to the one you are already developing. So, the developer tries to put more and more features in the game, that predecossors didn't had.
"I don't think the audience exists that want to drop $400+ on a console. Or at least the audience isn't big enough."
The 360 is a long time now on the same price level as the Wii, but the Wii worldwide sells better, it is not only a pricing problem with the new consoles, it is a problem of a shrinking number of hardcore gamers worldwide. I don't see a new console generation anytime soon, if there is a new generation sometimes in the future, the Core gamer will be a small, fractured group, that no one will take in consideration any more.
"Just because people own the console doesn't mean they will pick up every game available. Chances they will pick up your game above the rest don't go up linearly with the install base either. Seems like install base shouldn't be the driving factor at all..."
But on any previous generation most games were sold on the platform with the largest installation base and the best selling games also were for the platform with the largest installation base. Needless to say that in every generation the platform with the largest installation base was also the platform with the most titles.
Looks like that isn't the case at all anymore and in fact was probably only applicable last gen because all three systems were about the same hardware and performance levels. This gen that isn't the case. I think that variable isn't being taken into enough consideration this gen, instead people follow the install base instead of the demographics of that install base.
As for the 'define the audience' - I think we agree actually on this. Let me see if I can clarify my side a bit. It is ok to define the audience broadly, but that definition needs to be up front is all I'm saying. RTS as you have said indeed seems to get more and more complex to the level where entry into the genre is very very hard. As such RTS is excluding more than it is keeping.
However, if they defined the audience with less complexity to draw in new people to the RTS genre it will come with disdain from the current RTS crowd as being simple and with no depth. What I think should be done is find a way to make a entry level RTS that advanced users can drill down into for their own depth.
All three of these decisions should be made up front though.
Looks like that isn't the case at all anymore and in fact was probably only applicable last gen because all three systems were about the same hardware and performance levels. This gen that isn't the case. I think that variable isn't being taken into enough consideration this gen, instead people follow the install base instead of the demographics of that install base."
I can't follow you, just take a look at the numbers here
http://www.gamasutra.com/view/feature/4083/npd_behind_the_numbers_june_2009.php?
page=2
Since the beginning of 2008 the Wii outsold the 360 and the PS3 in software units.
The Top 5 best selling Wii titles, that were not bundled, are Wii Play 23 million, Wii Fit 22 million, Mario Kart Wii 17 million, Super Smash Bros. Brawl 8.4 million and Super Mario Galaxy 8 million.
The Top 5 best selling XBox360 are Halo3 8 million, Gears of War 5 million, Gears of War 2 5 million, GTA IV 4 million and CoD 4 3.8 million.
The Top 5 best selling PS3 titles are GT5 Prologue 3.3 million, Motor Storm 3.3 million, MGS4 3 million, GTA IV 2.7 million and Uncharted 2.6 million.
(All numbers taken from here:
http://en.wikipedia.org/wiki/Best_selling_video_games#PlayStation_3
Apart from other Wikipedia articles, this one has reliable sources)
So I really don't see were in this console generation the largest install base doesn't mean the best selling games and the largest amount of sold units.
Doing quick numbers you can see CoDWoW did much better NOT on the Wii. But GH did only slightly better on the Wii. RB? Doubled on the X360 above the other 2 platforms.
Examples:
CoD: World at War
X360 - 5.72 million
PS3 - 3.40 million
Wii - 1.21 million
SW:TFU - (Install base didn't seem to matter)
X360: 1.80
Wii: 1.34
PS3: 1.22
GH3: (Example of when install base might seems to matter)
PS2: 4.60
Wii: 4.26
X360: 4.25
PS3: 1.92
Rock Band 2:
X360: 1.66
Wii: 6.3
PS3: 6.3
GH:WT (Good example of when install base seems to matter)
Wii: 3.09
X360: 2.09
PS3: 1.27
to me though it seems like if you are developer install base alone shouldn't be that important. Only Nintendo titles and GH seems to sell better there... Look at the top 20 games for each system and compare 3rd party success rates?... then again that leads us back to the very problem you mentioned earlier, why does success mean +1 million units sold?
Anyhow, interesting conversation, but I still don't see why install base is the number to look at and not targeted demographic install base.
the ability to hide and get more health...rather expected by todays gaming crowd but at least they had health units/full refils in the game.
My layout is: d-pad up-options,down is zoom,while left / right are switch weapon/grenade,a is jump,b is shoot,- is reload,+ is all seeing eye,z is crouch and c is target lock. Lobing grenades is handled by lobbing motion on the numchuck while beat down are forward thrusts with the wiimote.
Whatever rs2 is like i hope this is how it plays because this custom layout imho is the best avaible.
Options aren't vital so they go on up while zoom needs to be in reach so i put it on down and left /right are natural for selecting weapons - makes a great reload and + could be grenade,beat down or special gear. I used the remote to it's fullest potential and no preset was as well defined.
I know all to well default(s) ALWAYS suck-i can do it better if given a custom slot and less than 5 minutes. Then again being a lefty and having to fight an industry for something high voltage makes
available out of the boxhas made me extremely focused on controls so whether left,right legacy as long as it's not keyboard and mouse i know i can lay out a better loadout than the focus groups play on/game ships with. The fight continues.......southpaw always!!
I don't see why we should compare Multiplatform titles, when the discussion was about The Conduit, an exclusive, and the question for which platform developers want to develop games for.
I'm still baffled people keep trying to cram 'M' rated games on the DS and Wii with no reason. At least rockstar realized it was a bust and moved there attempt over to the PSP where it might actually get sales. The reason I say this is the next two games that are coming out of the developers are the conduit will see the same fate. There isn't a big market there, they should make it multiplatform or move on already.
Besides this both of the other platforms are drowning in FPS, good ones, mediocre ones, bad ones. Not every FPS on the 360 and PS3 sells well, very expensive titles like "Tom Clancy's Ghost Recon Advanced Warfighter 2" sold 1 million copies on the 360, "Bioshock" sold 1.5 million copies on the 360. This sounds impressive, but if you take in consideration what the production costs for this games were, it isn't so impressive any more.
I see your point in looking at the demographic install base, but in the end, acutally Software companies are making money with Wii erxclusive titles and are earning losses with 360 and PS3 multi-platform desasters.