Consoleation Opinion: Endgame

Think about this for a moment:

You’ve already paid hundreds of dollars for your Xbox 360 or PlayStation 3. You’re paying $60 apiece for games for your console(s). If you’re an Xbox 360 owner, you may be paying as much as $50 annually for online play (by way of Xbox LIVE). You’re paying a certain amount of money per month to your internet service provider in order to have the ability to get online to either play games, download them, or patch existing games in your library. Just these factors alone likely put this hobby into costing over $1,000 in the first year of owning a console alone, between buying the console, games, accessories, and monthly internet fees. Some people pay more.

Now, if Michael Pachter‘s latest money-grabbing idea gains traction, internet fees might not be the only monthly fees that you’ll be paying.

Pachter predicts that Electronic Arts will ditch their recently-launched Online Pass program and instead charge a monthly fee to play all EA Sports titles online. Furthermore he continues to blame free multiplayer for decreased game sales and believes that “…purchasers just have to accept online multiplayer is going subscription.” He even says that both new and used game sales are being “cannibalized” by free multiplayer.

This move would mean that anyone who purchases EA Sports titles– new purchasers and preowned purchasers– would have to pay the subscription fee in order to utilize any of their online services for games. For golf games, it means more money for GamerNet, which was quite addictive. For Madden and NCAA Football, it means you’ll have to pay for those online leagues and franchises. For the great NHL games, it basically transforms the highly touted EASHL into a subscription-only format that will instantly lose players. It’s a big risk, should EA actually be considering this move. What precedent would EA have? Sports games are not MMOs. Roster updates are not equivalent to the content updates that World of Warcraft gets. Charging ALL consumers for online play is going to ruffle more than a few feathers, plus it’s double jeopardy for Xbox 360 owners who are already paying between $35-$50 per year to play online games.

This milking of the console gaming consumer base is reaching pathetic proportions. Before this generation came to pass, with the promise of better graphics, “expanding game experiences” with downloadable content (which is also a major problem), a whole bunch of other bells and whistles, we knew what we were getting when we bought a game. There was nothing held for ransom. Cheat codes or Easter Eggs unlocked extra levels or costumes which were already on the disc… but now we have to pay for all of those, even when they’re still on the disc. We never had to pay any more for the apparent privilege of multiplayer functionality– unless it was an Xbox game and you were playing online. We’re asked, as consumers, to pay for this and pay for that, but we’ve already given millions of dollars to these greedy publishers who are the sole reason why development budgets are so high in the first place, causing them to cry poor. What we pay is not enough, though. It’s never enough. Not anymore.

Holding online multiplayer completely for ransom marks the continuation of the industry’s descent down a very slippery slope. What will we see locked away in our next $60 purchase? Three “bonus” levels, which were originally part of the game, will now be sold as DLC unlock keys? Will we see difficulty settings locked away for DLC? Think about that; if a game is too hard for less-skilled players, why not charge a dollar or two for Easy Mode? Don’t think it hasn’t been thought about. What about endings? Oh, can you imagine having to pay to see the ending that you worked so hard to achieve? Locked endings are coming for pre-owned buyers, at least… and nothing says that new game buyers won’t see it with this precedent, either.

There used to be a point in time when a piece like this one would be dismissed as ludicrous. The industry would never think to do things like this. Things had been so good for so long that there was seemingly no need for any kind of adjustment. Now that the bubble has burst, the inevitable finger-pointing and damage control has been ongoing for some time, and the finger of blame seems to go everywhere else but to the industry itself. Consumers are buying too many used games. Consumers (allegedly) want big-budget games. Consumers rent too many games. Consumers shouldn’t get to play online for free because it costs us (very little) money. It’s always convenient to blame everyone and everything else while taking absolutely no responsibility for your own role in the downturn. There’s certainly no way that consumers are buying fewer new games because they’re more expensive, contain less content, carry hidden fees, and just might not be any good. Too many games are coming out at prices that are too high for consumers to afford in this economy, and the glut is leading to a lot of games (and accessories) being left on the shelf.

With all of these blog entries and despite my passion on this topic, I can’t see a resolution on the horizon. The industry seems pretty set in its path of raising prices, cutting content, and attempting to fleece its userbase. Fortunately for them, consumers don’t see to have reached their limits yet. When they do– note that I’m not using the conditional “if”– that will spell the endgame for the industry as we have known it for the last 15 years in terms of popularity and volume of sales. Sadly, I think that’s the only way that the console gaming industry will understand that it was the cause of its own downfall.

Consoleation Opinion: Serious Business

Perhaps I’ve been out of the game review business for too long, or perhaps my life has been so busy that my gaming priorities have been altered… but I can’t help but to look with some disdain at all of the fawning over Limbo. While reviewers are falling over themselves trying to find the right words to convey how amazing a game this (apparently) is and how we all owe it to ourselves to play it, I downloaded the demo and was impressed for about two minutes.

Two.

Sure, Limbo does some interesting things. It’s all black and white, and is visually jarring. Yes, the controls are simple enough: Jump and Action buttons are all a player needs. Reviewers that I highly respect gush about the game’s design, but I wonder sometimes whether they’re masochists because walking blindly into bear traps or having absolutely no clue what to do with a crate in open water because the designers either forgot to or decided not to include any kind of meaningful documentation of hint system to at least walk you through once. No tutorial. Nothing. Can’t figure it out? Sucks to be you.

I’ll admit that my level of patience is no longer what it once was while engaged in gaming, but that’s because I no longer have almost limitless time to spend looking up hints online or asking someone on Twitter how to get through something. Accessibility in game design is not something that developers should have just forgotten about. This isn’t the first time to game design has been flawed enough to drive away casual players; Ninja Gaiden (XBOX) andDevil May Cry 3 (PS2) are two other examples of games where poor game design turns off a fair percentage of players early on. I understand that Limbois supposed to be a three-hour excursion, so the scale of difficulty increase should probably mirror that… but the crate puzzle was enough to make me throw my hands up and say to myself that I was done with this artistic experiment… despite what my friends and writing colleagues may profess.

I sometimes believe that reviewers get so caught up in this never-ending argument over video games being or not being art that when an “artsy” game like Limbo hits, it’s up to them to carry the torch and support it… because it’s art, and that means that interlopers like Roger Ebert get proven wrong right here. Sure, Limbo may be art, but is it fun? Honestly? I don’t think so. Of course, as some people mentioned to me, perhaps all games aren’t meant to be fun. Indeed, even Merriam-Webster defines a game as an “activity engaged in for diversion or amusement.” Personally, if a game isn’t fun to play, I can’t justify spending money on it. It’s like the Demon’s Souls conundrum; I hear that the game is great, but it’s frustratingly difficult– and I can’t see why I would want to spend $30 to be pissed off. Playing games means different things to different people, and I can understand that. Some are tired of the “same old thing” and are looking for something that breaks the mold and is memorable. Some people are tired of the first-persal shooter and sports game dominance that we’ve seen over the last few years. I get that. What I don’t get is how video games are now held to this ridiculous standard where fun is no longer an important trait. In reviewers’ eyes, games now have to be different and difficult to play in order to be any good.

The comparison between Limbo and Deathspank is a good example of this.Limbo is dark, moody, frustrating, and tense… it’s allegedly awesome to just about everyone but me. Conversely, Deathspank is fun (although it is shallow at times) and makes me laugh… but reviewers hate it. It reminds me of why I learned to despise film critics early on in life. The movies that they like are 180 degrees different from most films that I would pay to go see and they pan just about everything that I enjoy. It’s almost as if it’s a crime to go to a movie and laugh at nonsense humor. It all has to have meaning. Why? Life is difficult enough; if I’m going to spend money to sit in a dark room with complete strangers to watch a film for 90-120 minutes, I don’t want to sit there and be all serious. I could be depressed or frustrated enough by being at work, reading a newspaper, or calculating my finances. It’s the same thing with video games for me, as it’s always been. I want to get away from life and be the hero or superstar. I alleviate my life’s frustration by assaulting or shooting pixels or polygons that have no feeling or care. Every so often– usually when playing RPGs of some sort– I can try to take in a deep and traumatic story… but usually the gameplay balances that with some kind of fun interface.

I guess video games, at some point of another, became serious business… and I apparently missed the memo. Having said that, I’m not changing my ways or my thoughts on the matter. I couldn’t care any less about whether video games are or aren’t forms of art. I don’t care what Roger Ebert thinks, because I’ve never agreed with a thing that he’s said and he has absolutely zero influence in this industry. I am perfectly fine with the existence of games like Limbo andFlower as they extend the diversity of titles that are available for everyone to pick and choose from as their individual tastes dictate… but I remain unconvinced that these “artsy” titles have advanced the medium. Reviewers may laud these titles as the saving grace of video games, but if they’re not fun to play, I’m not wasting my money or my time with them anymore.

Consoleation Reaction: Pachter’s Predicament

Like him or hate him, Michael Pachter is the standard against which all analysts are measured for both career analysts and armchair analysts, like myself. It’s certainly great for him to have earned the respect of the industry and to have earned television appearances and internet interviews. I’d be lying if I said that I don’t want to do something like Pachter does, earning a living by predicting and breaking down industry sales numbers and trends. Perhaps, if I did, I could sound the alarm bells a bit louder… as, if Activision follows the direction of Pachter’s latest suggestion and implements a subscription-based program for Call of Duty: Black Ops. I realize that Pachter is in the industry as a business advisor and to help generate revenue, but continuing to try and draw blood from the stones that are console gaming consumers is a move that very well could not only backfire– but also incite a revolt of sorts that could fuel a severe correction or even crash for console gaming that we’ve not seen the likes of in over 25 years. 

Here’s the source that contain’s Pachter’s comments, which stem from yet another sub-par month for software sales. Pachter’s comments are a reaction– or, perhaps, overreaction– to the fact that software sales for June of 2010 were off 15% YOY. He blames Nintendo for bundling two games in with the Wii and also blames clearance software. Let’s stop right here.

I understand that bundling software with Wii can possibly take away from buying new games when consumers first buy a console, but if you look at the Top 20 software titles for June, eight of them are Wii games. That’s 40%. The Wii seems to be moving software just fine, despite the worry about bundling games. Nintendo really has nothing to do with the impending doom and gloom that’s enveloping much of the industry. In fact, Nintendo is doing just fine and could very well carry on with at least limited success during any sort of industry correction. As for clearance games, well… that should be a warning sign in and of itself. Consumers are willing to hold out for better deals and cheaper prices rather than running out and buying games within a launch window. Consumers are more aware of sales cycles than analysts give them credit for; they know that Q3 is prime time for clearances as retailers clear shelf space for the Q4 software deluge. This buying trend speaks to the fact– not fiction, mind you– that software prices are too high for the Xbox 360 and PlayStation 3 platforms. $60 was tolerable before the Great Recession, but now? Not so much. A game has to be damned good and carry strong recommendations from reviewers and other gamers before being considered for a launch window purchase. 

Pachter also seems to lament the strength of multiplayer games and blames them for usurping gaming time and revenue that could be spent on new game purchases. In order to regain some of that revenue, Pachter is calling for a subscription or other revenue-building program for Call of Duty, starting with Black Ops:

We think that it is incumbent upon Activision, with the most popular multiplayer game, to take the first step to address monetization of multiplayer. It is too early to tell whether that will be a monthly subscription, tournament entry fees, microtransaction fees, or a combination of all three, but we expect to see the company take some action by year-end, when Call of Duty: Black Ops launches.

“Monetization of multiplayer” may sound like a good idea if you’re an executive, but the theory shows just how much that the industry has lost touch with consumers and its own history. Multiplayer modes have been a basic component of many video games since their existence began. Pong was for two players. Combat for the Atari 2600 was mutliplayer. Fighting games thrive on multiplayer action. Unless you played in an arcade, where each player had to insert his or her own tokens, multiplayer has always been free. It’s become expected after nearly four decades. Now, as this console generation continues to rewrite the history books and take away things that consumers once took as for granted, multiplayer modes have become the next ransom device. I can now see why publishers have been pushing to add multiplayer in just about every game imaginable… because if you lock it away and charge for it, you’ll probably get some free money out of the deal. 

This “monetization of multiplayer” started with EA’s Online Pass, although it was more targeted at used game consumers. What’s the result? Well, not that anyone can definitively draw the parallel, but Tiger Woods PGA Tour Golf 11 failed to crack the Top 20 chart for May. Is this a coincidence? Could be. UFC 2010 has drastically underperformed, and it too has an Online Pass (of sorts). Now Pachter wants to add fees to and monetize multiplayer for the best-selling IP over the last three years? For real? The Call of Duty franchise is already entering a time of uncertainty. This is not another Modern Warfare game, which really was responsible for catapulting the Call of Duty IP to its stratospheric heights; this is one of the “other” Call of Duty games, by that dev team that nobody really likes. Does Activision want to spring what’s sure to be an overly unpopular business decision on a game that could make or break the IP’s future? 

The problem with this decision– and Pachter’s overall “sky is falling” rhetoric– is that career analysts aren’t taking into account what’s going on outside of the industry. This recession-plagued economy is the worst that this industry has ever seen. Unemployment isn’t getting better– it’s actually getting worse as benefits cease and people give up on looking for work. Consumer confidence is dipping. Income that was once disposable is now being put into savings or to catch up with bills that are slowly swelling. The bottom line is that the economy isn’t in a good place, and won’t be for at least the foreseeable future. Rather than trying to suck every last cent from the existing consumer base, why doesn’t it make sense to instead lower prices, relax fees, and try to open gaming up to more people? 

Until the industry recognizes and accepts certain economic realities, console gaming is on a collision course with a major correction… one that is, in my estimation, long overdue. During its period of quickest growth, console gaming was all about inclusiveness. Companies wanted everyone to join the party, and made it financially acceptable to do so. Now, the industry is all about exclusiveness and getting consumers to part with money that they no longer have. Continuing down this road will lead to nonchalance among consumers as gaming returns to its fad status rather than maintaining its immense mainstream popularity. Maybe that wouldn’t be so bad, though. Budgets would go down, the industry might shift its focus, and maybe we can pick up the pieces and learn from where we went wrong. 

Consoleation Analysis: June 2010 NPD Sales Numbers

Predicting sales numbers is an inexact science. Sometimes, when your calls are close, you feel like you’re making progress… but then other months stun you with results almost completely opposite of your own calls. For June, sales of hardware were up significantly over the month prior and we saw a mild upset in the rankings… despite my feeling that the increase was going to happen a month later (July). Being bearish with numbers seemed like the safe thing to do, given recent sales trends, and the penetration of new Xbox 360 hardware into retail channels was a wild card. 

Let’s take a look at the raw data, first for hardware:

1. Nintendo DS   – 510,700 units (Prediction: 335,000 units)
2. Xbox 360        - 451,700 units (Prediction: 177,000 units)
3. Nintendo Wii   – 422,500 units (Prediction: 320,000 units)
4. PlayStation 3  - 304,800 units (Prediction: 164,000 units)
5. Sony PSP      - 121,000 units (Prediction: 82,000 units)

And now the software winners:

1. Red Dead Redemption (X360)   – 582,900 units
2. Super Mario Galaxy 2 (Wii)       – 548,400 units
3. Red Dead Redemption (PS3)    - 380,300 units
4. New Super Mario Bros (Wii)      - 200,900 units
5. Just Dance (Wii)                      - 174,800 units
6. Wii Fit Plus (Wii)
7. Toy Story 3 (NDS)
8. UFC 2010: Undisputed (X360)
9. LEGO Harry Potter (Wii)
10. UFC 2010: Undisputed (PS3)
11. Pokemon SoulSilver (NDS)
12. Transformers: Cybertron (X360) – 132,000 units
13. New Super Mario Bros (NDS)
14. Call of Duty: Modern Warfare 2 (X360)
15. 2010 FIFA World Cup (X360)
16. 2010 FIFA World Cup (PS3)
17. Mario Kart (Wii)
18. Pokemon HeartGold (NDS)
19. Toy Story 3 (Wii)
20. Wii Sports Resort (Wii)

Nintendo continues to dominate the hardware sales charts with the Nintendo DS platform. What’s interesting is that, despite the news of the 3DS, sales increased significantly over last month. I do believe that, as I mentioned in my prediction piece, the sales rise is at least partially due to the summer’s traveling season. Having said that, a quick scan of the software chart shows continued strength for the Pokemon games and for New Super Mario Bros. for the DS while there was a strong debut for Toy Story 3 on the platform. I don’t see DS dominance slowing during the rest of Q3 at least… if not into Q4. As for the Wii, although the Xbox 360 nudged by into the #2 slot, the impressive thing here is the software story as five of the top ten games in June were on the Wii platform. While Super Mario Galaxy 2 still lags well behind the Xbox 360 version of Red Dead Redemption in overall sales, the game has still moved impressive numbers for a five-week span. Just Dance continues to impress as it outsold all new titles released in June, and that includes the Transformers and LEGO Harry Potter entries. The Wii should continue to be a strong performer through the rest of 2010, and chances are good that it will resume its #2 ranking in July as the rush to replace legacy Xbox 360 hardware with the new revision gradually ebbs.

Speaking of the Xbox 360, moving over 450,000 units is impressive and comes about a month earlier than I thought it would. I don’t think, however, that these consumers who bought systems in June are expanding Microsoft’s installed userbase. Instead, many of these people are upgrading from their old or broken hardware and hoping that problems don’t occur with this new model. Used game retailers are seeing stocks of legacy Xbox 360 hardware rising while new slim Xbox 360 units fly out the door. Of course, it doesn’t really matter to Microsoft who is buying hardware, as long as it sells… and that’s exactly what happened in June. Being less than 60,000 units off of the #1 spot is impressive, especially in a rebound month like June was for hardware. May’s shining stars for Microsoft in software continued to perform in June, with Red Dead Redemption keeping the top spot for a second straight month and UFC 2010 maintaining its position in the latter half of the Top 10. For July, look for NCAA Football 11 to take a spot in the Top 10 for the 360. 

Now that PlayStation 3 hardware is readily available in retail channels, sales have responded… but Sony’s success comes at a time when Microsoft basically relaunched the 360 and when Mario is moving Wii systems all by himself. This is a month where Sony should be more pleased with increased sales than it should be disappointed that it’s again bringing up the rear with the PS3 and PSP, respectively. I see sales remaining flat or slightly dipping through August, then rising steadily from September through the rest of 2010. Buzz is starting to build for PlayStation Move and for Gran Turismo 5, which looks like Sony’s killer app for Q4. The interesting thing about the software sales chart is that it sets up more like Nintendo versus Sony and Microsoft. Aside from Transformers on the 360, all of the 360 games on the Top 20 chart are complemented by their PlayStation 3 counterparts. We should see more of this in July, as I believe that NCAA Football 11 will have at least some success on the PlayStation 3. As for the PSP, I knew that sales would rise in June– and they did– but what’s interesting to me is that Metal Gear Solid: Peace Walker didn’t crack the Top 20. It’s a good thing that other territories are moving PSP units, because that’s the only reason why banner IPs like Metal Gear and Kingdom Hearts are seeing the light of day on it. I can’t help but to wonder if it would make more sense for Konami and Square-Enix to open up the potential userbase and convert these titles for play on the PlayStation 3, most likely via PSN. I fear that Kingdom Hearts: Birth by Sleep will suffer the same fate of nonchalance that we saw for Peace Walker. 

Looking at the Top 20 software titles for June, there are some conspicuous absences. Blur and Split/Second are both history within a month of their respective retail releases. Alan Wake is also gone. The PlayStation 3 version of War for Cybertron couldn’t even beat out Wii Sports Resort for the #20 spot. As I mentioned just above, Metal Gear Solid: Peace Walker is a big disappointment with no showing on this list at all. Although Michael Pachter still believes that the sky is falling, I have a different view… and that’s coming up in the next Consoleation entry. For July’s chart, be on the lookout for NCAA Football 2010 and for the appearance of LEGO Harry Potter on other platforms than just the Wii. Expect overall software sales to be down YOY once again. 

That’s it for another month. We’ll try the prediction game again right around August 1st as we once again gaze into the Consoleation Crystal Ball and see what July hath wrought. As always, your comments and questions are welcome. 

Consoleation Cataclysm: The End Has Been Nigh

Welcome to the club, Michael Pachter. It’s about time that you got here. 

The scene is bleak, and console gaming is in a period of declining popularity and sales. Indeed, video games are not “recession proof”, and we’re experiencing the inevitable downside to the longer-than-expected gaming boom that the industry enjoyed for many years. While I appreciate that other analysts are finally coming around to the reality that the industry is in trouble, I think that Mr. Pachter is going a bit overboard here. I don’t believe that the industry is so far gone that it can’t recover, and I certainly don’t agree with his assertion that digital distribution is going to save gaming from extinction. 

There are a lot of reasons behind the mess that console gaming is currently in. The economy is precariously balancing between mild recovery and a double-dip recession. Publishers and developers are actively pointing the finger of blame back at the consumer base for weaker-than-expected financial results by punishing them with feature stripping, online passes, DRM, and other nonsense. Gaming consumers are paying more and getting less in return for their money in the meantime, and an active rift is evolving– and expanding– between the industry and consumers. 

The good times are over. The ship is sinking, and it’s every man for himself. Nobody wants to fix the problems at hand; it’s all about bottom lines and survival rather than expansion. 

If you’re pinning hopes of recovery for console gaming on digital distribution, like Pachter seems to be, you’re going to be in for a monster disappointment.. .at least here in the United States. Sure, this method of game sales cuts a lot of expenses, like packaging, disc-minting, manual printing, and so on… but with more and more bandwidth caps being put in place and with high-speed internet not performing at consistently high speeds, digital distribution will be more trouble than it’s worth for console gaming consumers. Let’s also not forget that larger hard drives will be a requirement, and that means more of an expense to the consumer on top of paying for more bandwidth. All the while, don’t expect publishers to drop game prices. After all, consumers are more than happy to pay $60 apiece for games, right? 

Like it or not, doing away with the used game market via digital distribution also means that gaming consumers– including many core gaming consumers– will lose a valuable method of counteracting the high cost of gaming. Without the ability to sell or trade games, that leaves consumers with only one option: Pay in full or don’t play at all. When you remove options for payment, you basically shut out a segment of your consumer base… especially when used games and trade-ins have payed in role in the console video game economy for many years. By adopting the digital distribution model, you risk reducing the number of potential consumers rather than expanding that number. Contraction is not healthy in any economy.

If the industry is serious about its survival and about turning around this trend of declining sales, then it has to get back to an expansion state of mind. Make games affordable for everyone. Welcome new users. Take calculated risks with new IPs and balance that with familiar games that don’t try to fix what isn’t broken. 

It’s also worth mentioning that Pachter’s reaction to low sales numbers for titles like Alan Wake, Blur, and Lost Planet 2 in May isn’t quite fair. As I warned earlier, releasing too many good-to-great games within such a small window is going to lead to more losers than winners when it comes to sales figures. Consumers do not have infinite cash flow. $60 per month for one game (which was likely either Red Dead Redemption or Super Mario Galaxy 2) is one thing… but buying 2-3 games in a month commands over well over $100. That’s a lot of money, especially in uncertain economic times. If some of these titles had seen a delay into July or had been better spacing, I honestly believe that sales results would have been a lot different. This “avalanche” of sorts is no different than the crush of releases that we see in the Q4 timeframe… except that Q4 is prime gift-buying season while Q2 and Q3 are for consumers buying for themselves. 

As I have said all along– since 2008– the console video gaming industry is due for some sort of correction, and it’s ongoing. It’s not necessarily catastrophic, but it’s serious enough where it should be setting off red flags and warning bells from analysts to investors and from publishers to designers. Now that we’re all seeing the damage, it’s up to the industry to make the right moves and right the ship before it takes on too much water. It’s not too late. 

It’s never too late, in fact. 

Consoleation Crystal Ball: June 2010 NPD Predictions

Now that we’ve officially closed the book on May 2010, it’s time to take a somewhat belated gaze into the Consoleation Crystal Ball and see what June’s sales numbers will tell us. Aside from a couple of notable new games (Transformers: War for Cybertron and LEGO Harry Potter), the month was pretty quiet on the new products front. Microsoft did unveil their new Xbox 360 hardware revision, but those have been spotty in arriving in retail channels within the first month. We’re coming off another month where being overly bullish in hardware calls led to poor results, so combine that with a relatively weak software market and very little in the way of new hardware to speak of, and the numbers will look disappointing at best. 

Without further delay, here are my predictions for June 2010′s hardware sales:

1. Nintendo DS:  335,000 units
2. Nintendo Wii:  320,000 units
3. Xbox 360:       177,000 units
4. PlayStation 3: 164,000 units
5. Sony PSP:       82,000 units

Breaking things down by company:

Nintendo: The DS and Wii are back to 1-2 this month in my predictions after being too bullish on the Wii in May and overestimating the effect that Super Mario Galaxy 2 would have on Wii sales. I’m a bit concerned that the Wii may be sputtering just a bit; the introduction of the new Wii bundles and the launch of a AAA title in May seemed to do very little to jump-start sales. June may see some residual effects from Super Mario Galaxy 2, as it will be the first full month of release, but I don’t see that being enough of a push to drop the DS from the top spot. Speaking of the DS, it should continue its dominance as family trips and outings will promote portable gaming over at-home gaming. The DS platform has a variety of price points to choose from, including low-cost DS Lite models and higher-end DSi XL models, and I’ve seen interest in the DS continue to be strong first-hand at the retail level. I don’t see anything that will boost DS sales, but I don’t see any reason to significantly lower projections based on recent sales trends. 

Microsoft: There’s certainly a lot of interest in the new Xbox 360 hardware revision, coined the “Slim”. Once these new systems get into retail channels, I can see at least a temporary spike in unit sales. This won’t happen in time for June’s numbers, no matter how many Microsoft gave away to the gaming press during E3. It’s also hard to be bullish on a platform that couldn’t move any hardware despite a software release that sold nearly a million units alone such as Red Dead Redemption. It’s possible that the price cuts that followed the unveiling of the Xbox 360 “Slim” will move a few units to bargain-hunters or to users who recently had hardware failures or “red ring” issues, but I see this bump as being minimal, at best. The good news for Microsoft is that 360 sales should begin an upward trend over the next three months starting in July. 

Sony: With PlayStation 3 supply issues now apparently resolved, the problem now is that software is in a bit of a rut for the next couple of months, leading to lackluster interest. Sure, there’s a nice library of games out there covering both exclusive and multiplatform offerings, but there’s got to be something with immediate impact that convinces consumers on the fence to take that leap– and there just isn’t anything right now. As was the case with the Xbox 360, Red Dead Redemption showed that strong software sales don’t necessarily equate to strong hardware sales. Many of those who wanted the game likely already had a console to play it on. I do believe that Sony will have a strong Q4 with the PlayStation 3 platform. As for the PSP, it’s hard to do much worse than 60,000 units in a month… and I believe that Metal Gear Solid: Peace Walker will add numbers in June. I still don’t see enough interest in the PSP platform domestically to make it worthwhile, but worldwide success and an apparent new commitment to PSP success seem to have Sony trying to push the ill-fated portable one more time. 

Turning to software, look for repeat entries on the NPD Top 10 sales chart for Red Dead Redemption and Super Mario Galaxy 2 to go along with a strong debut for Transformers: War for Cybertron and also a potentially decent debut for LEGO Harry Potter, despite its release in the last week of the month. One interesting case to look out for is to see if Pokemon falls completely off of the Top 10 chart. It’s only been about 4 months since release… so could it be that critical mass was achieved early, followed by a rapid decline? You may also want to keep an eye out for the appearance of Blur, which may be fueled by Activision’s release of coupons worth $20 off of the game’s $60 price tag. 

Hopefully, we’re back to a regular release schedule when it comes to NPD data, so when the actual numbers hit, look for a full analysis at that time. For now, please feel free to share your own predictions and observations here. 

 

Consoleation Analysis: May 2010 NPD Sales Numbers

Yes, I know they’re late– but NPD released the results of what was a busy May in terms of sales. It was a month that once again gave rise to the Old West, saw indifference with racing, and disappointed when it came to hardware sales. Let’s look at the raw data (with my original predictions in parenthesis)…

Hardware:

1. Nintendo DS: 383,700 units (Prediction: 527,000 units; Difference: -143,300)
2. Nintendo Wii: 334,800 units (Prediction: 575,000 units; Difference: -240,200)
3. Xbox 360: 194,600 units (Prediction: 280,000 units; Difference: -85,400)
4. PlayStation 3: 154,500 units (Prediction: 228,000 units; Difference: -73,500)
5. Sony PSP: 59,400 units (Prediction: 80,000 units; Difference: -20,600)

Before I break down each of the competitors here, I wanted to comment a bit on the raw data at first glance.

Here’s a tip for all of you other armchair analysts out there: Software doesn’t necessarily move hardware, especially as time goes on in a console generation. I was bullish on the Wii, Xbox 360, and PlayStation 3 because of the strong software that came out in May… but the actual numbers go to show you that, despite a strong slate of games, the hardware is still tougher to move. There are reasons for all of these systems to come in under my projections; the Wii and DS platforms already enjoy strong installed userbase numbers– and the Xbox 360 is also in the same situation, though to a lesser degree. As for the PlayStation 3, hardware was just starting to trickle back into retail channels during the later stages of May and I still believe that sales are due for a bump in June and beyond now that supply is beginning to be replenished with decent numbers.

Let’s start with Nintendo, as is almost always the case for these analysis pieces. The Nintendo DS platform ruled the roost again, though its margin of victory over the Wii was fairly narrow. Both in my retail experience and as the charts prove, the demand for Nintendo DS units is still out there. Pokemon is still the strongest IP that the DS has going for it, while titles like New Super Mario Bros., Mario Kart DS, and others have little trouble moving units on the sales floor. Demand for Pokemon is beginning to wane; HeartGold didn’t make the Top 10 in May, while SoulSilver slid down to the #9 spot on the software chart. I don’t expect the demand to completely dry up for Pokemon over the next 3-4 months, but I think that it will continue a slow but gradual slide down the charts. As for the Wii, Super Mario Galaxy 2 moved a respectable 563,900 units in May– not too bad considering that the game had only about 8 days of sales to report. As I expected, New Super Mario Bros. Wii also saw a bump in sales. I think that the problem with the Wii is that numbers appear to be hitting a bit of a ceiling. Despite strong software, many consumers already own a Wii as it approaches its fourth year of release. Even with the new color and free games thrown in, along with a major new release like Super Mario Galaxy 2, there wasn’t a blockbuster consumer response. This could bear watching heading into Q4 if the trend continues for another month or two… and I have a hunch that it will.

To me, it speaks volumes when a game that sells as much as Red Dead Redemption did (945,900 units) had almost no effect on sales of the game’s platform. You can also factor in releases like UFC 2010: Undisputed (221,100 units) and even Alan Wake (which surprisingly charted at #8 in software sales)… and hardware results are still disappointing at best. I’d be worried about sales of the Xbox 360 hardware moving forward, but Microsoft has revitalized interest– at least for now– with the launch of its slimmer and more functional hardware revision. Demand for the “new” Xbox 360 has been hot, and as Microsoft fills retail channels with units, expect to see at least a temporary spike in hardware sales… especially in Q4 to go along with Halo: Reach and Call of Duty: Black Ops. For May, though, the Xbox 360 hardware number is weak and serves as further proof that software doesn’t always fuel hardware sales.

Sony can see the light at the end of the tunnel, despite a miserable May. Both Red Dead Redemption (567,100 units) and UFC Undisputed 2010 (192,300 units) were solid software sellers, but with supply of new PlayStation 3 units still at a trickle for most of the month, there was little hope for a decent push of new hardware. At the local retail level, I have seen interest in PlayStation 3 units rising of late, although supply now seems to be outpacing demand by a bit. I expect sales of the PlayStation 3 to rise somewhat in June and I am still predicting a robust Q4 with a PlayStation Move / Gran Turismo 5 combination that should move units for the last three months of 2010. As for the PSP, sales were barely worth mentioning– again. This could change somewhat and even approach the 100K level in June thanks to Metal Gear Solid: Peace Walker, but if May has taught us anything, it’s the recurring theme of software not necessarily moving hardware.

As for the Top 10 software titles in May:

1. Red Dead Redemption (Xbox 360): 945,900 units
2. Red Dead Redemption (PlayStation 3): 567,100 units
3. Super Mario Galaxy 2 (Nintendo Wii): 563,900 units
4. UFC 2010: Undisputed (Xbox 360): 221,100 units
5. UFC 2010: Undisputed (PlayStation 3): 192,300 units
6. Wii Fit Plus (Nintendo Wii)
7. New Super Mario Bros. Wii (Nintendo Wii)
8. Alan Wake (Xbox 360)
9. Pokemon SoulSilver (Nintendo DS)
10. Skate 3 (Xbox 360)

Note the absence of both racing titles released in May, which were Split/Second and Blur. I hate to say that I told you so, but… I told you so. There just wasn’t enough money left over for consumers to take chances on one or two new racing IPs, especially with only a week between the release of each. Had either Activision or Disney delayed its racer by one month, I believe that the results would have been better. Activision did send out $20 off coupons to select users for Blur in June, so you could see a bump in sales of that game… but I think that Split/Second will be forgotten and left in Blur‘s dust when all is said and done.

June will likely see the hardware malaise continuing, with minor improvement possible for the PlayStation 3 and Xbox 360 platforms. Aside from LEGO Harry Potter, there weren’t any real blockbuster software releases in June, either… so we could be in for seeing more of the same titles that we saw this month, highlighted by Red Dead Redemption and Super Mario Galaxy 2. Look for my June predictions by the end of the long holiday weekend.