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Armchair Analysis Extra: Nintendo vs. The (Third-Party) World

After lots of speculation about Madden NFL 25 not seeing a Wii U release, Electronic Arts confirmed it via a recent statement (courtesy of Nintendo World Report):

“We will not be releasing a Wii U version of Madden NFL in 2013. However, we have a strong partnership with Nintendo and will continue to evaluate opportunities for delivering additional Madden NFL products for Nintendo fans in the future.”

Let’s get the hyperbole out of the way first. Not having a Madden game in 2013 will not kill the Wii U. It’s instinctive to think that a lack of EA presence on the platform could be akin to a kiss of death, similar to what we saw with EA spurning SEGA and the Dreamcast. This is a different animal, I think. Yes, the lack of sports games will hurt attempts to position the Wii U as a primary console. There’s a pretty large base of consumers who buys sports games, and not having the most popular sports IP in the United States on the Wii U platform diminishes its sales potential. This doesn’t mean that the Wii U is finished, however. Nintendo still has its stable of strong IP to draw from that can’t be played anywhere else. It’s similar to what we saw back in 1999 and 2000 but Nintendo’s IP stable is stronger. If EA doesn’t come back to Nintendo, perhaps circumstances regarding some sports licenses will change… such as the current exclusivity deal between the NFL and EA. We’ll have to wait and see on that.

No Madden for (Wii) U! One year! NEXT!

No Madden for (Wii) U! At least one year! NEXT!

While Wii U will battle on, it’s undeniable that losing Madden for a year– combined with no NHL game, no NCAA football game, no PGA game, and no MLB game for this first full calendar year for the new platform on the market– is a painful loss. There also isn’t any assurance that FIFA will see a Wii U release. That would mean that only the NBA would see a Wii U game. Perhaps sports games don’t sell on Nintendo platforms, but when you’re trying to establish sales momentum ahead of competition from Sony and Microsoft and with the likelihood that both new consoles will see at least a Madden game this year (if not also an NHL game), that’s a considerable disadvantage. For sports game consumers looking to upgrade early, the Wii U simply isn’t an option without support. It’s one thing for the games to sell quietly; it’s another for the games to not even be there as a potential lower-priority selling point. I understand the claims from Nintendo supporters that “nobody” (read: very few) buys Nintendo systems for sports games, but not being one of the platforms that a multi million-selling game is going to be on is viewed as a negative by many. Like them or not, sports games are a very important cog in the video game economy.

I understand the cries of “Not fair!” and “EA sucks!” from Nintendo supporters. The rather quick dissolution of the “strong partnership” that EA and Nintendo reportedly had not too long ago is certainly suspect. Perhaps there’s something to the theory about EA’s pitch to Nintendo regarding Origin going south killed that relationship, but there are other factors to consider. Unit sales for the Wii U platform are historically low, tracking the lowest in the first six months at retail since the Nintendo 64 some 17 years ago. Could EA make a return on its investment to port its games over to the Wii U since the install base is so low and since sales of most third-party games on the platform are terrible? Given that EA is trying to scale back projects and save money, perhaps this wasn’t as “personal” a decision as some see it and it’s more of a business decision based on success potential. I think that’s a plausible scenario, but unless the truth comes out from EA brass (which I doubt), we’ll probably never know for certain.

I do think that there’s some culpability on Nintendo’s end here, too. Nintendo’s struggles with third-party relations are worsening, and this apparent divorce with EA is the biggest loss yet. What have Satoru Iwata and his staff been doing to keep EA engaged, if anything? Why isn’t Nintendo reaching into its war chest to make it worth EA’s while to keep supporting its platforms with games? Where has Take-Two been? Where is Konami’s Wii U support? Why didn’t Tomb Raider make it? There are lots of questions and no answers from Nintendo brass, aside from the now-popular Internet meme of “Please understand.”

At some point, Nintendo has to make a decision about third-party relations. Nintendo, at this point, has few allies in the ranks. Ubisoft is still supporting Wii U, but the concession of Rayman Legends moving from exclusive to multiplatform and seeing a significant delay was a blow. Capcom is there to some extent. There’s some question as to Activision’s trust in Wii U, with an air of uncertainty regarding a version of the newest Call of Duty game for the platform. Early reveal notes pointed to releases for the Xbox 360, PlayStation 3, and PC; however, the Wii U was not mentioned on the list of platforms and retailers are not taking reservations for a Wii U version. I even witnessed a Call of Duty: Ghosts preorder for Wii U get turned away as the customer was told that the game isn’t coming. We don’t know whether it’s coming or not. Some claim it is, but Activision has been coy with its answers to questions about the situation. That absence is not helping Wii U’s perception to customers. If Wii U doesn’t have sports games and (at this point) doesn’t have Call of Duty, there’s no real impetus for people to sink $350 into the platform unless they’re Nintendo diehards. “Old” platforms like Xbox 360 and PlayStation 3 are getting it. It’s a safe bet that the new Xbox is getting it. It’s likely that the PlayStation 4 is getting it. Those last two platforms are fine in not yet being confirmed. The new Xbox isn’t even revealed yet (but will be on May 21st, when the first full reveal of Call of Duty: Ghosts will be shared during the event), and we know the PS4 exists but don’t have many details yet. Compare that to the Wii U, which has been on the market since last November and can be purchased right now. No Call of Duty? No Madden? Possibly no FIFA? Those are perception problems and point to weakness in the Wii U’s software catalog. Again, where is Nintendo in this? Is there not enough clout for Nintendo to get Activision to show its hand a bit?

The Ghosts may be real, but is the Wii U version also a reality or just an illusion?

The Ghosts may be real, but is the Wii U version also a reality or just an illusion?

In the worst case scenario, we will find out if Nintendo fans are right about first-party software being all that Wii U needs to thrive. I don’t believe that to be a good scenario for Nintendo– or, at least, one with a positive outcome. SEGA also had a fairly strong first-party lineup, complete with sports games, RPGs, arcade games, adventure games, and more. SEGA was unable to weather the third-party drought after a strong launch lineup and a solid & steady first-party release slate. Key third-party support is very important to the overall success of a platform, and without it, a very long and uphill battle awaits for Nintendo as its competition gets assault plans ready.

I’ll be very interested to see while attending E3 just what Nintendo’s strategy is. The leaders at Nintendo are not dumb and I’m sure that there will be a plan of attack. I just hope that it’s a good one.

3DSasterbacle

July 26, 2011 1 comment

Four months into the 3DS regime, Nintendo looks like it’s stumbled out of the starting gate like someone had tied its shoes together. Few people are buying, new games are rare finds, and a new trend towards penalizing consumers who don’t buy new games are just a few of the issues that the 3DS already faces. Perhaps it’s a bit early to be judgmental, but there are problems that really shouldn’t be explained away due to the newness of the platform.

For starters, let’s look at that $250 price tag. That’s pretty steep. It’s the most expensive portable platform in Nintendo’s history and is over $100 more than its highly successful Wii console right now. In fact, that price is exactly what consumers paid for the Wii nearly 5 years ago. Back then, Nintendo was competing with platforms that were $400+, so buying a Wii was a more frugal proposition than splurging on the Xbox 360 or the exorbitant PlayStation 3 platform. The playing field has changed considerably since then. It’s possible to buy an Xbox 360 for as little as $200 now (although it comes without a hard drive) and the PlayStation 3 is only $50 more than the 3DS while doing many of the same things. $250 is also 47% more expensive than the DSi at launch and 32% pricier than the DSi XL, which debuted a year ago. Granted, the 3DS is a brand new platform instead of DS revisions that we had seen each of the last two years, but sticker shock is still sticker shock to the average consumer. 3D without glasses is nice, but for $250? It’s a debatable point.

Lack of games is another issue. Yes, it’s only been four months, but the list of games continues to be short. What are the must-own games for the 3DS? You can argue Super Street Fighter IV, which was a launch title. Many will counter with The Legend of Zelda: Ocarina of Time 3D, which is not exactly new or groundbreaking. After that… well… it gets sparse. Several titles have seen delays, and there have been weeks at a time with no new games to offer on the 3DS platform at all. The 3DS eShop finally opened in June, over two months after the 3DS launched, but the games offered are mainly DSi downloads. Virtual Console games had been added consistently until an empty slot last week, which immediately conjures up bad memories of how Nintendo handled the Virtual Console on the Wii. It’s only one empty week so far, but an empty week only 6 weeks in to the eShop lifespan raises eyebrows. Some have tried to deflect concern by pointing out that Nintendo had offered more than one game in weeks past, but this isn’t a quota problem– it’s a consistency issue, which Nintendo hasn’t proven that it can manage effectively. As for the Virtual Console games themselves, they’ve been wildly inconsistent– Link’s Awakening and Donkey Kong are at the high end of the quality chart while Tennis and Baseball are just awful.

Staying on the topic of games, we’ve been starting to see a decrease in confidence from third-party publishers regarding the 3DS platform. Delays and cancellations are beginning to grow. UbiSoft cancelled its Assassin’s Creed project for 3DS. Capcom recently pulled the plug on Mega Man Legends 3. SEGA delayed Crush 3D and Shinobi and cited poor sales as a factor. Metal Gear Solid: Snake Eater 3D now looks to be facing a delay into 2012. Although Nintendo is promising to fill the gaps with Star Fox 3D, Mario Kart 3D, Kid Icarus: Uprising, and Super Mario 3D, the company is repeating history by having to rely on sales of its own software to succeed. While we saw what looked to be considerable third-party interest at E3 back in 2010 when the 3DS was introduced, that level of interest appears to be waning. It’s not too late for this to change, but sales of the hardware likely need to accelerate for third-party publishers to resume interest.

A new and unsettling trend is starting to appear in third-party 3DS software, too. Permasaves– which are single save files that cannot be erased or rest– are starting to infect these releases. Pro Evolution Soccer 2011 3D and Super Monkey Ball 3D first introduced this trend, but criticism exploded when Resident Evil: The Mercenaries 3D also had a similar “feature”. As I recently mentioned, Capcom has repeatedly tried to explain that the move wasn’t a direct assault on the used or rental game markets, but I’m sure that they’re not all that broken up to find that games with permasaves tend to have lower resale values, either. Namco‘s Pac-Man & Galaga Dimensions title for the 3DS also sports the permasave feature. Once you set a high score, that’s it. There are no high score tables to compare to. Worse yet, there are minor achievements to be unlocked while playing the game. Want to go back and earn them again, or share with a friend or family member? Tough break. Renting the game or buying used practically guarantees that users will miss out on unlocking much of anything themselves. Buy new, or deal with it. Indeed, the industry wishes to punish those who don’t buy new. Welcome to today’s video game industry.

As I mentioned, it may be a bit too soon to be critical of Nintendo and the 3DS at this point, but early adopters have definitely been on the short end of the stick here. With the potential for some territories to drop the price of the unit below $200 so soon after launch, it calls into question the value of the hardware that some paid so much for. After going through so many launches in its history, how does Nintendo not have a decent library of games set up for release? Why are the Mario games so tardy, given that the Mario IP is the biggest driver of sales? What took so long for the eShop to become available, and where are the games that aren’t DSi offerings? Where are the games that aren’t remakes, even if they are in familiar IPs? These are questions that should have been addressed and that Nintendo should have been better prepared for back in April… not as we roll into August. if the price does drop to $200 before the end of the calendar year, what will that say to early adopters for the Wii U and it’s likely price tag of $350+? Disappointing consumers who adopt early doesn’t bode well for future platform releases.

The good news is that it’s not too late for Nintendo to get up, re-tie those laces, and get back in the race. Getting quality software to retail and working with third-party publishers to try and fill the pipeline will be a major goal for Nintendo to achieve as we prepare for Q3/Q4. Generating consistency in downloadable software and video releases will also be important. These issues must be addressed now, because Nintendo is losing market share to Apple and Android gradually and Sony’s PlayStation Vita is waiting in the wings. If the 3DS continues to stumble into Q4, the race between Sony and Nintendo could be closer than anyone might have predicted.

It’s only been four months, but it’s time for Nintendo to start running. NOW.

E3: Bringing the “A” game

May 26, 2011 1 comment

Looking at the calendar, we’re less than two weeks away from what will be one of the most important E3 events in recent memory when it comes to what I call the Hardware Trinity– that is Nintendo, Sony, and Microsoft. Each of the three companies have issues to address. Nintendo is facing lackluster 3DS hardware sales and the lame-duck status of the Wii until its new platform is launched. Sony has to deal with the aftereffects of one of the largest online security breaches in history and major losses in the last year. Microsoft may seem bulletproof, but the stagnant nature of the Kinect sensor and a slow trickle of software for it call into question the viability of the technology.

Here are some expectations as to what each company will deliver in their press events in order for each to bring its “A” game (in order of occurrence):

Microsoft:

At first glance, Microsoft should be able to break out of the gate at 9am on the morning of June 6th with guns blazing. I’m fairly certain that Call of Duty: Modern Warfare 3 will be one of the first things shown. Microsoft is going to work with Activision to push Modern Warfare 3 very hard for the next 5 months, and Activision should be more than happy to take the stage for the company that’s currently got all of the sales momentum going for it. Obviously, Gears of War 3 will play a major role in the press event as well. There will be other “core” games shown; I believe that Microsoft learned its lesson after last year’s event skewed almost exclusively away from the “core” crowd and felt eerily similar to Nintendo’s 2008 E3 presser that felt almost one-sided (Vitality Sensor, anyone?). No Halo presence at E3, despite the importance of the IP to Microsoft, doesn’t seem likely. The question is… in what form will we hear about it? New game? HD remake of the original? We will see.

The one thing that Microsoft must do is to re-ignite interest in the Kinect sensor. More games are needed– and more quality games are needed, to be more specific. Games that come off as Wii ports are not going to hold anyone’s interest, especially when you consider that the Wii is almost at the end of its lifespan. More original software, including games that are going to interest more than just the passing game player, has to not only be announced… but shown and available for demonstration. It’s true that Microsoft wisely marketed the Kinect and it sold a ton of units; however, what was the last genuine killer app for it? Dance Central is now 6 months old, as is Kinect Sports. As time marches on and new games continue to appear at a snail’s pace, the relevance of Kinect will gradually ebb. Consumer confidence and excitement in the Kinect peripheral must be restored, and quickly.

One last thing to be on the lookout for is some kind of new hardware announcement. Rumors have been flying lately, ranging from a full-on successor to the Xbox 360 to another Xbox 360 hardware revision that adds 3D support. While the exact nature of the rumors has been scattered, the theme has been the same. The other thing that has me leaning in the direction of some sort of new hardware announcement is the extremely limited attendance list for the press event. This makes me think that something big is going to go down that Monday morning, and it wouldn’t shock me at all if it was hardware-related. Stay tuned.

Sony:

To say that Sony has had a rough past six weeks or so is an understatement. Granted, PlayStation 3 hardware sales for April were promising– thanks to Mortal Kombat, Portal 2, and SOCOM 4– but having no online network for nearly a month and still being without the PlayStation Store (and its associated revenue) is damaging on many levels. Sony has become an easy target for the press and has spawned doubt from its userbase. Sony is hoping that its showing at E3 will wipe the slate clean and set focus on games. There will almost certainly be a segment of the press event that serves as an apology for what happened, but will quickly move forward from that… and it’s the right move.

I’m still expecting a $50 price drop for at least the 160GB PlayStation 3 SKU. Some believe that Sony can’t afford it after recent events, but I think it’s a necessity. The PS3 platform– despite its quality software exclusives and free-to-play online service– needs a kickstart to renew consumer confidence and enthusiasm. I’m not sure that other SKUs will follow suit, but I’ve been calling for this drop over the last few months and E3 is the perfect backdrop for price cut announcements.

The press event should revolve around three main topics: PSN, PS3 software (especially exclusives), and NGP. I’m not sure of the order, but all three of these are major facets of Sony’s business plan for the rest of 2011 and beyond. Sony will rally behind the re-opening of the PlayStation Store with news of some kind of exclusives there. PlayStation 3 retail software exclusives, like Twisted Metal, Uncharted 3, Resistance 3, and others, will be talked up and demonstrated or shown. As for NGP, there are lots of variables at play. Release date, pricing, and launch software are all likely to be covered. Price is the variable that concerns me the most; if the 3DS is struggling at $250, it stands to reason that a $300 NGP will do the same in a challenging economy… even if the software lineup is good. Despite my concerns, I think that $300 to as much as $350 is where the NGP will launch. Timing is less certain to me. Will Sony have enough software in the chute to realistically launch this year? I’m not sure. My gut is leaning towards an NGP  launch in 2012, but I will not be shocked if a late November/early December launch window is announced.

Nintendo:

After the incredible runs of success that the Wii and legacy DS platforms had, saying that Nintendo is “in trouble” is a silly statement; however, Nintendo is now facing a period of uncertainty that hasn’t been seen in some time. The Wii lovefest is over, even in the face of price cuts for hardware and software. The 3DS has stumbled after a quick start. As we await the unveiling of Nintendo’s next platform, what the company announces for the next 6 months will be very important. Will more titles be added to Nintendo’s budget line of Wii software? Will Nintendo announce price drops for the DSi platforms? Where are the 3DS games that will convince consumers to part with $250, which amounts to being the most expensive Nintendo portable in the company’s history?

What Nintendo announces for specifics when it comes to its new console will be incredibly important. At this point, I am predicting that the price will be at least $300. In fact, my prediction is $349.99 for the hardware. This would be a gamble in several respects. For starters, it would be the most expensive hardware that Nintendo has ever released. It would also, despite being the newest console on the block, be the most expensive one on the market. Perhaps the power of the hardware will justify the price, but anything over $300 is unprecedented for Nintendo. As for the launch date, 2011 doesn’t seem likely at this point. March 2012 seems to be the earliest launch date for the hardware, but that’s atypical of Nintendo’s console launch strategy. Many of Nintendo’s consoles have launched either late Q3 or sometime in Q4. If Nintendo sticks to that schedule, 2012 could be far too late given that the Wii continues to sink in hardware sales with each passing month. Even a title like The Legend of Zelda: Skyward Sword isn’t a definite system-seller for a console that’s clearly on its way out… but more on that shortly. As with the NGP, I won’t be shocked if Nintendo’s new console hits this November… but I don’t see it happening. Launch software is anyone’s guess.

While it’s certainly way too early to dismiss the 3DS platform, it’s painfully obvious that Nintendo is going to need to take a fair amount of time during its press event to show the audience that new software is coming– and soon. Yes, Ocarina of Time is coming in a few short weeks. More remakes are following, too. And then? Aside from the Resident Evil and Metal Gear Solid IPs, what else do we have? A new Mario game is certainly important, and Kid Icarus will likely wow the crowd (again), but the real problem is consistency. The conveyor belt of new releases needs to be running more consistently to fire interest. I think that this will happen, but Nintendo must hammer this point home and show a stronger commitment to the platform than it has so far.

That leaves the future of the Wii, and honestly, there shouldn’t be much of an expectation. Whether it’s due to market saturation or the expiration of a fad, the Wii seems to have run its course at retail… at least in terms of hardware sales. The result of price cuts to $150 remains to be seen, but there were cuts in April and yet the Wii finished behind the Xbox 360 and PlayStation 3. This indicates to me that sales will continue to be flat. Wii Play Motion may sell well, but won’t move hardware. The release of Skyward Sword is still very much up in the air; in fact, I still believe that there’s a better than even chance that the game won’t make it to the Wii at all. Nintendo has promised some Wii news, and absolutely must deliver that news by way of compelling software and not trumpeting more movie-licensed games since that’s about all that can be seen on Coming Soon lists for the platform. If Nintendo isn’t launching its new console this year, the company is in danger of losing consumers to Sony or Microsoft without good reasons to buy or keep the Wii.

The E3 press events set the stage for the actual show. They’re where most of the news and announcements come from. They set the expectation level and get people and press buzzing. Microsoft, Sony, and Nintendo will each have a chance to bring their “A” games. The time for preparation is almost over. Starting on June 6th, we’ll all be keeping score.

Consoleation Crystal Ball: Five E3 Predictions

May 10, 2011 2 comments

Time has been gradually marching along since the news broke that I would be attending this year’s Electronics Entertainment Expo– or E3, as maost of us know it– and I thought that it’s time to start talking about some things that I’m expecting to see happen during what will be one of the most important shows in recent memory. Some of these are already confirmed, and some may be a bit more unexpected. We’ll certainly see how my predictions stack up versus reality when the show actually gets going in early June.

Here we go:

  • PlayStation 3 price cut: I know that I’ve been towing the line on this cut for awhile now, and I want to reiterate that I really do see this happening during Sony’s press conference. I still believe that the price of the 160GB units will drop by $50 to $249.99 and could take effect as soon as that day. In light of recent events regarding the PlayStation Network, Sony will be making some moves to attempt to shore up its public image and win back the favor of consumers. A price cut in this situation, especially with inFamous 2 due to hit stores that same week, makes sense on many levels. I’m still uncertain about how the 320GB units will be affected– if at all– but a move with the 160GB SKU seems more than likely to me.
  • New Call of Duty unveiled during Microsoft press event: Activision and Microsoft have been developing quite the comfortable relationship, and I expect that to continue to grow as Activision rolls out its new Call of Duty project during Microsoft’s press conference. Despite a concentrated effort by Electronic Arts to steal some of Call of Duty‘s thunder with Battlefield 3, this announcement will once again set fans buzzing for weeks as the hype train builds towards a likely November release. The timed DLC exclusivity deal that we saw introduced last year will play a role in the new Call of Duty game as well.
  • NGP for $300/$350 in late Q4: There have been questions as to whether the NGP makes it to North America by the end of the year and about the hardware’s price point. The good news is that I do think that Sony pushes the hardware for a late 2011 release and that Sony really talks it up during its press event. Early buzz on the NGP was quite positive and Sony wants to get it into consumers’ hands sooner rather than later. The bad news is that there’s almost no way that the NGP sells for any less than $300 when it hits stores, and that price point could prove to be a problem… especially if the economy doesn’t show signs of stabilization by September/October. As more 3DS software makes its way into stores, consumers could very well go with Nintendo as the cheaper option (and Nintendo’s better track record in the portable arena). Early adoption crowd could be further limited if Nintendo’s new console sees release late Q1 2012, but that’s a low probability.
  • Mass Effect 3 dated for January 2012 with multiplayer functionality: Don’t worry, Shepard fans. The delay of Mass Effect 3 into 2012 won’t be a long one. There’s precedent to make this prediction; Mass Effect 2 hit on January 26th back in 2010. A late January release provides separation from the flood of Q4 2011 titles and allows wallets to refill a bit after the holiday drain. As for the multiplayer component, Electronic Arts has made it clear that solo-only games don’t fly in their business plan. Expect some sort of multiplayer feature set, at least in terms of co-op, in Mass Effect 3… and learn to accept your new multiplayer overlords.
  • New Nintendo console will be its most expensive ever: If you’re thinking about being one of the first to buy Nintendo’s new console, you had better be prepared to pay up. Expect to hear a price point of $349.99 with $59.99 software price points. As Nintendo rarely takes losses on its hardware, I just cannot see any way that Nintendo can go with a lower console price point. With development costs likely to increase as a result of the more powerful hardware, the more expensive software pricing model makes sense. As for a potential launch date, I can see Nintendo waiting until Q4 2012 in order to sell through Wii inventories and allow development time for a solid slate of launch software. There’s a small chance that the unit arrives at the tail end of Q1, but that’s needlessly risky.
As we get closer to showtime, we’ll look at more potential announcements and we’ll break down the confirmed ones. In the meantime, why not put on your prognostication cap and offer your predictions for E3? Who do you think will have the best press conference? Which company has more to prove? How will the issues with PSN affect the show for Sony and game publishers? Are there any surprises that your intuition tells you we should expect? Leave ‘em in the comments! Let’s see how YOU do!

Consoleation Reaction: December 2010 Console Gaming Sales Data

January 14, 2011 3 comments

Although I’ll be doing a more in-depth analysis of sales numbers over at Gaming Nexus in the next day or two, I wanted to log some quick reactions to the hardware sales numbers that I’ve been seeing across the web that were released recently.

First, here are the numbers for December, as I’ve seen them:

  1. Nintendo DS:  2,500,000 units sold
  2. Nintendo Wii:  2,360,000 units sold
  3. Xbox 360 :  1,860,000 units sold
  4. PlayStation 3: 1,210,000 units sold

These results fall into line with what I expected, for the most part. Microsoft admitted that supply constraints hurt them in December, which I anticipated would happen. Nintendo managed to capitalize on this and come away 500,000 units ahead. Sony, meanwhile, managed to post a decent number of PS3 sales… but was still over a million units behind the leader.

Microsoft should be happy with its results overall. The Xbox 360 was the only console to sell more units in 2010 than in 2009, which is more impressive when you consider how much effect that lingering recessionary effects have had on the economy. It’s no secret that Kinect has been huge for Microsoft in Q4, bolstered by strong marketing and word of mouth. You have to wonder what might have been possible if Microsoft hadn’t run into supply issues in December. I still think that the Wii would have won out, but the final tally would have been a lot closer between the two. It’s clear that, although Wii still outsold the Xbox 360 overall in 2010, momentum is on Microsoft’s side heading into 2011. Without the “newness” factor for hardware like the slimmer Xbox 360 and the Kinect, Microsoft will be challenged to deliver a varied and strong software lineup to stay in the driver’s seat.

Nintendo righted the Wii ship a little with decent December in terms of sales. Comparatively speaking, however, Nintendo’s victory was hollow when you notice that Wii sales were down a whopping 38% YOY. Put that number next to a 42% increase YOY for the Xbox 360 and you can argue that Nintendo wasn’t a winner at all. What surprised me about Nintendo’s performance is that Super Mario All-Stars didn’t seem to be a factor. The best selling Wii game, which ranked 2nd overall for December, was Just Dance 2. Donkey Kong Country Returns ranked 5th, and Epic Mickey finished in a respectable 6th place, moving over 1.3 million units. January looks to be challenging for Nintendo and the Wii as there no significant software is slated for release on the platform in January. Conversely, the Xbox 360 and PlayStation 3 each have pretty big releases this month. It’s not only possible for the Xbox 360 to pull back out in front this month, but the PlayStation 3 could surprise.

Speaking of the PlayStation 3, the good news is that over 1.2 million units were sold. The bad news is that the PlayStation 3 still finished dead last in overall sales. Gran Turismo 5 did move over 550,000 units, but that number is underwhelming when you consider the time of year that the game was released. The best thing for Sony to do now is forget about 2010 and focus on the year at hand. If all of the first-party titles on Sony’s slate for 2011 actually make their deadlines, this could be a bit of a comeback year. Killzone 3 and MLB 11 look good in Q1, and then Resistance 3 and Uncharted 3 should hit it big in Q4. I still believe that a price drop sometime in 2011 is going to be key for Sony to make any kind of competitive move against Microsoft and Nintendo… but we’ll see if that actually comes to fruition.

December was another great month for Call of Duty: Black Ops, which was the best-selling game of 2010 despite being available for only 52 days. With the first map pack due on February 1st, look for sales to stay steady or slightly increase this month– especially late. Just Dance 2 and Assassin’s Creed: Brotherhood also continued to sell extremely well, and I expect that trend to continue this month, although I do expect numbers to decrease at least slightly. The software sales chart had three Wii exclusives on it, which was most likely a good reason why Nintendo wound up back on top with the Wii. I think that Just Dance 2 will keep selling well, but the longevity of Donkey Kong Country Returns and Epic Mickey is far less certain. Epic Mickey‘s strong sales bode well, I think, for January’s results as I expect one more Top 10 finish.

Look for a full-on analysis of December’s sales figures and my outlook for this month over at Gaming Nexus soon. In the meantime, feel free to react and comment below. Who do you like to be on top this month? Can Sony turn things around with Little Big Planet 2 and Mass Effect 2? Can Microsoft maintain their momentum? I’d love to hear your take.

 

Consoleation Crystal Ball: Five Predictions for 2011

January 5, 2011 8 comments

2011 has the potential to be a big year for video games. We’re weeks away from seeing the 3DS hit retail, motion control technology for the PlayStation 3 and Xbox 360 will continue to mature, and there’s going to be plenty of software just waiting to be bought. Before the year really gets into high gear, I’m going to log five predictions here about some events that I think will happen. These are mainly hunches that I have and none of these have been confirmed to be true or false as of this writing, so we can see at the end of the year just how right– or how crazy– I turn out.

1. Nintendo will announce a new console in 2011 aside from the 3DS, and the Wii is on its way out.

I don’t care how much Reggie Fils-Aime denies it, because it’s becoming more and more evident that the Wii is about to be overrun by the Xbox 360 and potentially the PlayStation 3. The console is approaching its saturation point, and worse for Nintendo, the gap in prices between the Wii and its competition isn’t wide enough to keep consumers buying Wii instead of another console. Looking at the list of upcoming releases for 2011 and beyond, the Wii is looking at less than 30 games for release all year long. Compare that number with 140 for the PlayStation 3 and nearly 120 for the Xbox 360, and red flags should certainly be going up. The Wii is the best-selling console of this generation (so far), so to see such a small number of upcoming titles indicates to me that there’s something going on. Sure, it could be the 3DS, but I’m betting that developers and publishers already know what Nintendo has up its sleeve… and we’ll find out what this new console is at E3, if not before.

2. The Legend of Zelda: Skyward Sword won’t see release this year, and it might not even see a Wii release.

There’s a definite feeling of similarity between the string of delays that we’ve seen for Skyward Sword and what we saw for Twilight Princess back in 2006. My gut is telling me that history could repeat itself here since the Wii is basically a lame-duck platform (much like the Gamecube was back then) and Nintendo would love to have a Zelda game as an ace in the hole for the launch of its new platform. I get the feeling that the tech issues that plagued the demo of Skyward Sword at E3 in 2010 still haunt Shigeru Miyamoto and company, and I think that there’s at least some doubt as to whether the Wii is the best platform for the game. I very well could be wrong with this prediction and we could see Skyward Sword in Q4, in time to strengthen Nintendo’s holiday sales outlook, but I’m not convinced that this will happen. Of course, this would mean a second dose of heartbreak for Zelda fans which just experienced this a generation ago… but wherever Zelda goes, they’ll buy the hardware to play it.

3. The PlayStation 3 will see a price drop either during or before E3.

Not to sound like Michael Pachter here, but this prediction needs to come to fruition if Sony wants to remain competitive. Sales of PlayStation 3 hardware were not that impressive in 2010, and what momentum that Sony had during the second half of 2009 thanks to the hardware revision and lowered pricing faded when Sony was stricken with supply problems during Q1 of last year. Sony has tried other things to get things moving in the right direction, such as bundles, more hard drive space, and a strong alliance with Electronic Arts that has spawned some PS3-exclusive goodies… but stacks of unsold PS3 units remain at retailers everywhere. A price drop of at least $50 will happen in order to jumpstart sales as production costs continue to gradually decline. If this doesn’t happen, it could be another long year for Sony and the PlayStation 3 here in the USA.

4. Consumer interest in motion control technology and 3D gaming will be generally flat in 2011.

I hate to break it to Sony and Microsoft, but the motion control fad isn’t hooking as many consumers as the companies would like. Yes, Microsoft’s marketing blitz for the Kinect fueled strong sales of the motion tech in November and December, but once the newness of Kinect tech dies down, I foresee most consumers just sticking with traditional controls. Sony is taking an interesting approach with its PlayStation Move tech, as they’re keying on its presence in Killzone 3 (slated for a February release), but I don’t see loads of people jumping on the motion bandwagon. Motion presents a different way to interact and play games, but traditional controllers and gameplay types aren’t going anywhere. Same goes for 3D gaming; until 3D television costs come down significantly, I don’t see much more than extreme enthusiast interest in games that utilize stereoscopic 3D… it’s just not practical. Yet.

5. The PSP2 will see release this year and will retail for less than the 3DS.

We all know that the PSP2 exists, but that’s about all we know right now… so that’s where predictions come into play. I believe that the platform will be ready for launch this year, supported by software from Electronic Arts and from Sony’s first-party development arms, and I’m reasonably certain that the MSRP will be somewhere between $200 and $230. That will be less than the 3DS, which is likely to launch somewhere between $250 and $300 come March. What is unclear to me is the potential success of the new platform. Even if my prediction is true and the PSP2 hits for $200, Nintendo will have had a decent head start and there’s no denying that the marketing machine for the 3DS will be formidable. Software will be key, as will the power and feature set of the platform.

There you have it. Feel free to make your own predictions or leave some comments about the ones that I’ve made. I’m thinking that if I nail 4 out of 5 here, I’ll have done all right. In the meantime, here’s to a busy and successful 2011 for video games.

 

Consoleation Crystal Ball: December 2010 Sales Predictions

January 4, 2011 2 comments

Although we’re officially into 2011 now, it’s not quite time to turn the page when it comes to sales numbers as figures for December 2010 should be trickling out over the coming week or two. Here’s a snapshot of what I expect those numbers to indicate:

Hardware Sales:

I expect strong hardware sales numbers from both Nintendo and Microsoft. Based on supply issues for the Xbox 360 in the month of December, I am calling for Nintendo to sweep the top two spots for hardware sales in December with the DS and Wii platforms, respectively. The Nintendo DS continues to sell remarkably well, given a tame slate of software and the impending release of the Nintendo 3DS platform by the end of Q1 ’11. Nintendo DS SKUs are less expensive than their console counterparts and the portability of the devices makes them hits with multiple demographics, especially pre-teen consumers. Wii sales were fueled by a one-two software punch; Just Dance 2 continued its strong sales for the holiday season and demand for the limited Super Mario All-Stars package helped to move consoles. I still believe that the Xbox 360 will wind up being the best overall sales performer for Q4 (and possibly the entire year), but the Wii should close the gap as least somewhat thanks to a strong December.

Microsoft can thank the hype machine behind the Kinect camera for causing sellouts of Xbox 360 consoles in many locations. While sellouts certainly indicate strong demand, the associated supply woes likely will relegate the Xbox 360 to third place in December. Although Microsoft certainly talked a good game by logging some huge projections for Kinect penetration, I think that the company might not have been logistically prepared for the number of consoles that have been moving in Q4. It’s interesting to note that supply replenishments did start trickling into retail channels just after December 20th, but I fear that the calvary arrived just a little too late for Microsoft to pull out a late sales victory.

Sony is expected to bring up the rear in hardware sales again with the PlayStation 3 and PSP platforms, capping a forgettable holiday hardware sales season. Gran Turismo 5 was pretty much the only draw for the PS3 for the holidays, and any hype or excitement regarding PlayStation Move was tempered by poor availability and the strong presence of Kinect. There was strong demand for standalone PlayStation Move controllers, and the item was among the hardest to find over the holiday season– and that includes Kinect and Xbox 360 250GB units– but PlayStation 3 console hardware was abundant and generally sat on store shelves. As for the PSP, the quick spike in sales in late November and into early December is expected to have tailed off as the month progressed as new software was scarce for the platform.

Here is the list of expected sales rankings for each platform in December 2010:

  1. Nintendo DS
  2. Nintendo Wii
  3. Xbox 360
  4. PlayStation 3
  5. Sony PSP

Software Sales:

Expect to see Call of Duty: Black Ops dominate the software sales chart for a second straight month. In addition to strong word-of-mouth support and solid review scores, multiple retailers discounted the game by $10-$20 during the last two weeks of December which helped to move units. I also expect to see strong numbers from Madden NFL 11, Assassin’s Creed: Brotherhood, and Super Mario All-Stars. Super Mario All-Stars likely sold through over 90% of its one-time allocation to retailers in less than one month’s time, which is evidence that that consumers are not only still excited for the Mario IP– but that a budget-conscious title (4 games for $30) is a force to be reckoned with. Just Dance 2 for the Wii should continue its hot trend, but The Michael Jackson Experience may yield disappointing results as too many games seem to be crowding the Wii dance game genre. Expect a decline for Need for Speed: Hot Pursuit in December, as the title seemed to run out of gas early with consumers and retailers.

2010 Winners and Losers:

Since we’re wrapping up 2010, it’s time to look back and name a few winners and losers for the year that was.

In hardware, your big winner is Microsoft. In a year where it looked like the PlayStation 3 could catch up to the Xbox 360, Microsoft not only outdistanced its HD competition but also pulled ahead of the Wii in successive months in Q4. The new “Slim” hardware revision invigorated sales in the second half of 2010, and the release of the Kinect motion sensor in November added to the platform’s sales momentum. It will be interesting to see how close the overall hardware sales race in 2010 between the Xbox 360 and Nintendo Wii ends up.

Your hardware loser for 2010 is Sony. Poised to make up ground on Microsoft and coming off of building momentum from a price drop in the second half of 2009, supply woes negated a strong software lineup in Q1 and Sony was never able to recover. The release of PlayStation Move looked to stem the tide, but masterful marketing of Kinect by Microsoft and a tepid slate of Move-enabled games kept Move from really being a threat in Q4. Roles seem to have reversed as we roll into 2011, however, as it’s now Microsoft that’s dealing with some supply issues. We’ll see if this year holds a different fate for Sony.

The big software winners for 2010 are Red Dead Redemption and Call of Duty: Black Ops. Both games showcased impressive sales numbers for their respective launch windows. Red Dead Redemption might have been a slightly more impressive performer, given that May was a significant month for software releases, but both games moved millions of units and generated tons of revenue for their respective publishers.

The big software loser for 2010 is Electronic Arts. Sure, there was success in games like Madden NFL 11 and Mass Effect 2, but the cancellation of NBA Elite 11 and less-than-stellar sales of Tiger Woods PGA Tour Golf 11 and NBA Jam landed a black eye on EA Sports. Sales consistency needs to be a target for ERTS in 2011, and the company has reduced the number of software titles to be released in FY ’11 to try and compensate for what was a down year overall for the software giant. Bioshock 2 is an honorable mention in this category, as retailers struggled to unload tons of unsold copies of a game that never came close to matching the success of its predecessor in terms of overall quality or consumer reaction.

Look for in-depth analysis of sales data here as it becomes available in the coming days. As always, reaction and comments are welcome.

 

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