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NPD: Behind the Numbers, January 2009
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NPD: Behind the Numbers, January 2009

February 15, 2009 Article Start Previous Page 2 of 6 Next

Xbox 360 Growth in 2009

For an idea of how the Xbox 360 will sell through 2009, it is instructive to look at Sony's position at the beginning of last year. The PlayStation 3 enjoyed a wave of sales from late 2007 through early 2008 after shifting the PS3 to a new $400/$500 pricing structure.

Once that wave died down, monthly sales appeared to settle in the range of 45,000 to 60,000 systems per week, up from the 20,000 to 40,000 seen before the new pricing.

Microsoft instituted across-the-board price drops for its Xbox 360 models going through the second half of 2008, and the higher January sales of the Xbox 360 suggest that we will see strong sales for Microsoft's system in 2009, just as we saw for Sony and the PS3 in 2008.

The average rate for the first three quarters of 2008 was just over 50,000 Xbox 360 systems per week, so that should be considered the baseline against which we measure any change in Xbox 360 sales in the coming months.

Dropping Sony Sales

For Sony, it appears that the well has nearly run dry. Not only were sales of its flagship PlayStation 3 down 25% year-on-year in January 2009 -- from 67,000 systems per week to 51,000 systems per week -- but the PlayStation 2 and PlayStation Portable (PSP) also saw declining sales rates of 62% and 25%, respectively.

Jan 2009 Weekly Handheld Sales Rates

While PS2 sales have been weakening for a long time, the drop in PSP sales could be a troubling sign for Sony. The handheld's hardware sales have steadfastly remained strong despite consistently weak software sales.

However, the PSP is still rather expensive and it is possible that dark economic news has made consumers less inclined to spend $170 - $200 on a handheld gaming device. (By comparison, the Nintendo DS retails for $130 alone or $150 and up in bundles.)

The Nintendo DS, like the Wii, enjoyed a strong month coming out of the 2008 holiday season.

Whereas January was the double-screen handheld's weakest month of each of the past two years (48,000 systems per week in 2007 and 63,000 per week in 2008), Nintendo seems to have supply to meet the demand, shifting nearly 128,000 systems per week in January 2009.

If indeed consumers are becoming more price conscious, Nintendo may need to consider pricing carefully when it launches the Nintendo DSi later this year.

Conventional wisdom has so far put the system at $160, comparable to the price of the system in Japan. Keep in mind that the upgraded hardware and strong software library could mitigate perception of the system's value.

Article Start Previous Page 2 of 6 Next

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