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Friday, March 16, 2007

NPD Out - Let's Take Stock

In the month of February 2007, there were 335,000 Wii consoles bought, 228,000 units of Microsoft’s Xbox 360 were purchased, while Sony’s PlayStation 3 (PS3) came a close third with the sale of 127,000 units.

PlayStation 2 sold 295,000 units and the PlayStation Portable sold 176,000, markedly behind the DS, which had a sell-through of 485,000 units. Together, Nintendo systems represented 54 percent of all hardware sales in February, more than those of all other manufacturers combined.
-- Nintendo Wii Game Console tops US NPD Sales for February 2007

I think calling 127k a "close third" to 228k being a little kind. But let's break it down by the companies.

Nintendo has the kind of problems most companies dream about. They don't have enough hardware to meet demand. Fans are hotly anticipating the arrival of big titles like Metroid. Right now - they are the darling of the media.

Between the DS and the Wii - I think all bets are off with what will happen with Nintendo. If anyone has the ability to take the crown from the PlayStation 2 as the next truly commonplace console ... they appear prepped to do so. That said - there's a small laundry lists of concerns:

- The Wii still hasn't managed to attract the same kind of franchise titles that the 360 and PS3 enjoy. Grand Theft Auto, Unreal Tournament, etc. - are no shows on the console. This does show some uptick from the GameCube though, with titles like Medal of Honor and Scarface, and Wii owners should be hoping that the studios will be following the numbers.

- No online features until later this year means that Nintendo won't have anything to directly compare to the mature and robust Xbox Live and nothing to steal any media thunder from Sony Home.

- On the DS side of things - I'm honestly a bit disappointed in the titles of late. Yeah, Elite Beat Agents and Hotel Dusk are fun ... but I don't see anything that is going to get me nearly as jazzed as Animal Crossing or Metroid: Hunters.

Nintendo needs to ramp up manufacturing before their media halo wears off. They also need a summer title that will help make their hardware shine.

I think we can call it - the media honeymoon for the 360 is just about dead. The headstart is no more and the 360 is now in the thick of it. About this time last year the supply glut was starving 360 sales (I can't find the numbers, but they were probably about what the PlayStation 3 is now) but after the supply was raised ... sales have remained relatively stable.

The question Microsoft should be asking themselves is ... why is a new console with a small library and no online multiplayer beating the tar out of theirs?

I think that answer is simple - HDTV. I'm guessing the HD-DVD accessory sales for the 360 are still pretty miserable. 360's are currently the plaything of early adopters who have are or getting an HDTV and there still just aren't that many of them.

By comparison, the Wii costs almost half as much and plays on every television in the world. Looking at it this way - are we really surprised Nintendo is taking the spoils right now?

Hardware-wise, the 360 is too expensive for SDTV owners to consider seriously and it's lacking in features compared to the PS3 for HDTV owners. Pretty soon, MS might face a crunch between the two. HDTV owners want HDMI. They want high-def. And they don't want to buy an extra drive for it.

I wouldn't be surprised if Microsoft splits the 360 line into two new SKUs. One a low end machine which closely resemebles the current Core with perhaps the addition of a 20GB HD and a slight price reduction (or, more likely, a better bundle). The second a higher end box with HDMI, a larger HD and HD-DVD built-in. The lower end would be upgradeable to the higher end, minus the HDMI.

Finally, I'd like to see Microsoft announce a 480 requirement for all games. If they did that, SDTV owners wouldn't be reluctant to buy a lower end model and then upgrade when they go HDTV later this year or early next.

Sony is a bit of chaos right now.

127,000 units would seem to be running short from just about anyone's business plan. Where Microsoft has burned through their headstart, Sony is playing catch-up with itself. It only now announced solid details about their online strategy and showed off some gameplay you can't get on the PlayStation 2.

Sony isn't going to get a serious uptick in sales for March because nothing has changed February to March. And let's face it - a Second Life style online lobby and a physics playground is not going to add the 100k to the figures anytime soon to make the PS3 sales resemble the 360. The GDC announcements were a great first step for Sony, but they need to keep a full court press on features through the summer.

Upscaling DVD's should be paramount since that's a serious impediment to early adopters wanting to use the PlayStation 3 as a centerpiece for their living room. Blu-Ray is showing some signs of life, but until it has some market saturation ... people will be digging out their DVD libraries. Who wants to spend $600 on a machine that won't play their DVD's correctly on their big new fancy HDTV?

Since Sony won't be able to garner exclusives until they can meet the capacity required - they should be focusing on features which they can deliver quickly. Movies, music, downloadable games, etc. If they wait till June to roll this kind of stuff out with Home ... they'll be eating dirt all summer long when it comes to sales.

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