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Analysts Mixed On Holiday Outlook
by Chris Morris [Console/PC, Exclusive, Business]
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November 9, 2011
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Gamers might be celebrating a horn of gaming plenty this holiday season, but it's still up in the air if retailers will be cheering along.
The fourth quarter of 2011 has one of the most impressive lineups of titles in years. And it's off to what seems to be a good start. Gears of War 3 sold 3 million copies in its first week. Battlefield 3 hit 5 million in that time. And the launch of Modern Warfare 3 will top that.
Making any sort of hard prediction about holiday sales trends before Black Friday is a fool's game – and Wall Street analysts who cover the video game industry say that's especially true this year.
Certainly, there will be some tremendous hits, and some surprises. (Few people expected Batman: Arkham City to be in the running for the #3 spot when it was announced.) On the whole, though, most are mixed about how the industry will do by the time we ring in the new year.
"It's a strong release slate, that's very clear," says Colin Sebastian of R.W. Baird. "There will be a good amount of high quality games for the holidays, but I don't think the overall demand for traditional video games is any different than it was six months ago. Seasonally it is, so you'll see a ramp up in sales, but it's still a sluggish market overall."
Billy Pidgeon, senior analyst of M2 Research, is a bit more optimistic.
"It looks very strong," he says. "People who are looking for hardcore games have plenty of choices, and there's a good slate of must-have games this holiday season – and that's going to spur other sales, like hardware and more online sales of the add-ons."
The core gamer is the demographic to watch this year. With so many good titles out – and so many offering rich online experiences, hooking players for longer amounts of time – people won't have time or inclination to buy them all.
In particular, analysts wonder how big a crater the one-two punch of Battlefield 3 and Modern Warfare 3 will leave.
"The number one question in my mind is how much business is left after Battlefield 3 and Call of Duty come and soak up $1.5 billion in sales," says John Taylor of Arcadia. "How much is left for secondary and tertiary titles?"
Barring something truly unforeseen, the year's #1 and #2 top selling slots are sewed up. It's just a matter of what will the other numbers be. The battle for number three seems like a possible three-way fight, with Arkham City, Skyrim, and Assassin's Creed: Revelations duking it out for bragging rights.
After that, notes Taylor, "there are a lot of meaningless numbers".
Pidgeon again takes a more hopeful tone, acknowledging that some titles are bound to be de-emphasized by the dueling shooters, but when the final numbers come in, the bottom lines of the publishers behind them won't look as bad as some fear.
"I think what you're going to have is a lot of blockbusters, but a good slate of other AAA stuff that doesn't rack up huge numbers for each one, but adds up to tens of millions," he says.
This year, more than ever, marketing matters for games. And that, unfortunately, does not bode well for titles, even critically acclaimed ones, that don't have a solid TV budget.
"Marketing budgets definitely help in this environment," says Sebastian. "EA and Activision have a lot of [marketing] muscle [and] smaller publishers, regardless of the quality of their games, are going to struggle. There has to be word of mouth or some other variable to get those games on the same level."
On the hardware front, no one is too optimistic. Many expect the Wii and DS to see a boost, since they're the cheapest on the market and the 3DS will see a lift thanks to assumed retail bundles and promotions. Many fear the surge will be short lived, though – the gaming equivalent of a dead cat bounce.
Even Kinect, which tore up sales charts last year, seems vulnerable. With only a handful of gotta-have titles for the peripheral (the most notable of which is a sequel to last year's must have title), it's going to be tough to grow that business.
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Also, North America sales, which is what these analysts are talking about, are 36.5 million for the Wii, at least half of those went to people to play WiiFit, a group I doubt will consider Link's latest.
So if you had 25% attach rate to the 18 million left, yeah, you might see 4 million units. My honest appraisal though is that you'll see closer to 1/2 that amount -- no matter how many 10s the game gets from reviewers.
I hope to be wrong in that regard, but regardless am very much looking forward to picking up my copy and gold remote ;).
As Russell states, when a zap gun game outsells one of the best franchises ever, we aren't dealing with typical gamers.
The closeness when looked at I suspect comes from the lower price and the attached peripheral. Secondly, Twilight Princess is one of the best selling games of the series. But as mentioned by Mr. Fields, Nintendo's games tend to have legs for their sales. New Super Mario Brother's Wii was on the top ten sales for nearly an entire year after release.
I'm certainly not implying that Skyward Sword will crush these other big name titles by holiday, but I am fairly certain that it will be the long term seller that Nintendo is looking to close the Wii's life cycle. I'd even wager that it'll outsell Skyrim by this time next year.
Here's a few sources to corroborate some of what I'm suggesting.
http://www.vgchartz.com/worldtotals.php?name=link%27s+crossbow+traini ng&publishe
r=&console=&genre=&minSales=0&results=50&sort=Total
http://www.vgchartz.com/worldtotals.php?name=twilight+princess&publis her=&consol
e=&genre=&minSales=0&results=50&sort=Total
http://en.wikipedia.org/wiki/Twilight_princess#Reception
oh...and here are the numbers from September of this year thanks to Nintendo Power:
http://www.destructoid.com/nintendo-s-list-of-wii-million-sellers-in- the-us-2126
87.phtml
Link's Crossbow Training 3.47
Legend of Zelda: Twilight Princess 2.82
(that's NA only, but from the investor reports was similar in each region)
Again, nothing I would want brag about, those numbers make me sad, but they speak a story that is true no matter what I may personally think of it.
Regardless here is to 4-10 million Skyward Sword copies, though I expect it will be closer to 2, and that Just Dance 3 will be the best selling Wii game this year (3-5 million units).
This new Zelda, from all reports, certainly seems very worthy of everyone's time :).
Yeah sure, and because "The Wii sold to moms, grandparents and first time gamers who were adults." (Anthony Taylor), New Super Mario Bros. sold 22 million copies Super Smash Bros Brawl 9.5 million copies and Super Mario Galaxy 8.9 million copies. Typical games for "moms, grandparents and first time gamers who were adults".
Don't get me wrong, the Wii had it's fair share of "moms, grandparents and first time gamers", most probably much more, then the other consoles and there's nothing wrong with that, quite the contrary, but reducing the Wii's user base to these people doesn't reflect the reality.
Besides, I don't think Skyward Sword will sell, because no Zelda Game after Ocarina of Time sold especially well, when compared to other Nintendo franchises:
Majora's Mask 3.36 million
Wind Waker 3.07 million
Minish Cap 1 million
Phantom Hourglass 4.13 million
Spirit Tracks 2.6 million
So I think, with declining interest of users in general and a switch to newer Nintendo platforms (3DS) amongst Nintendo fans, they can be happy, if they push 3 million games worldwide during the next year. For NA I would predict just over 1 million copies for europe slightly more, because the Wii is still stronger here and something about 0.5 million for Japan.
Nonetheless I am looking forward playing the new Zelda, even if I still think, Nintendo killed of the Wii way to early.
And I don't need you to quote me, I know what I said. I stated an opinion, based on the people I know: (My sister, father, co-worker and friends) who are first time console buyers, all of whom bought Mario. But they didn't buy and won't buy Zelda. I know your stats say otherwise and I am not refuting them.
I know hardcore gamers also bought the Wii...that's the people who blast it all the time.
But I've still got mine and I can't wait for Zelda.
No two games are the same. I know many hardcore gamers, who simply buy a console for the Nintendo franchises and I know many kids who are first time gamers who grow up with Nintendo franchises and I know many parents, that played Nintendo franchises and now are playing them with their kids, that's what Nintendo is calling making games for the whole "family".
I don't have any stats who buys Mario games, compared to who buys Zelda games, all I have is the Wii User demographics chart, Nintendo publishs regulary and it clearly shows, your subjective view, that the Wii is "sold to moms, grandparents and first time gamers who were adults" has nothing to do with the reality.
The audience for a Mario game is different than a Zelda game, in certain ways.
Kids, moms, EVERYONE loves Mario.
Not everyone loves Zelda. It takes a more dedicated gamer to want to play through such an epic quest. There are exceptions, to be sure, but overall, Mario is more mainstream and Zelda is more for the niche gamer. In my OPINION.
The fact remains, that Twilight Princess sold 4.52 million copies. If a Zelda game sells this much, I think it's very bold to say, that games like Zelda won't be played by Wii owners, the sales numbers are to high for that.
Early adopters were obviously a part of that crowd, so I wonder if the sales will be as high this time around. I hope so.