[vc_row][vc_column][vc_column_text]With the release of December sales data, we can finally close the book on 2012. It was a tale of contraction and disappointment, as each month of 2012 finished in the red and the streak of consecutive negative YOY months extended to 13. Hardware sales, despite newer platforms like Wii U and Vita, dipped 20% versus last year. Packaged/physical software sales slumped 26% in the console/handheld sector. Accessory sales were down 14%. In total, retail sales plunged 22%.
At this point, analysis of these numbers is much like a broken record. This anomalously long console generation continues to decelerate. The best period of sales has long since passed, and we’re in a lame duck state until Microsoft and Sony release their new platforms and we’re able to better evaluate whether contraction will continue or if sales can turn around in earnest. The Wii U has failed to impress early on, and until silence breaks regarding what games are on the horizon, there isn’t much reason to believe that sales trends will do anything but decline as we roll into 2013.
Let’s get to the specifics:
The Xbox 360 moved 1.4 million units in December, which was good enough for yet another first-place finish and a clean sweep at the top for the entire year. There are a couple of different ways to look at this data. The positive explanation is that moving 1.4 million units in the seventh December of the 360’s lifespan is fairly impressive. Only one other platform broke one million units in December. Sales were fueled by Call of Duty: Black Ops II, Halo 4, and Madden NFL 13. On the negative side, sales were down more than 17% versus a year ago and it marks the second straight December in the red for Microsoft. It can also be argued that the price point for the 360 remains too high for such dated hardware and this is keeping some potential sales from being made.
A permanent price cut is likely for 2013, though it’s too early to say when. All in all, though, Microsoft came out of December as the winner, and that’s a positive for them. It’s worth noting that the Xbox 360 finished 2012 selling 27% fewer units than 2011. That’s a significant drop.
The 3DS was the other platform to break a million, moving 1.25 million units in December. Considering that the lineup of new games for the fourth quarter was weak, this is a very good number. It’s a good rebound from a rather quiet November and, with what appears to be a better slate of games on the horizon, the next 12 months look decent for Nintendo’s handheld. It is worth noting, though, that 2012 was not impressive for 3DS overall. Sales were down from 2011 by 10%, and that’s with two extra months of sales reporting. Ideally, you want to see growth in the first full year instead of contraction, as we saw here. It’s apparent that 3DS isn’t as strong in the United States as it is in Japan, but there are reasons for that. The weak software slate that we saw in the last quarter of 2012 was a continuation of what we had seen all year long, as opposed to a pretty strong slate of releases in Japan. In addition, the booming popularity of the mobile market hurts growth potential a bit.
Neither of these things will “kill” the 3DS; it still has decent sales potential moving forward as long as new and compelling games are produced for it – especially coming from Nintendo internally. There is, however, a cap on how big the 3DS will get. Expecting it to top the DS line of handhelds in terms of units sold is unrealistic at best.
The PlayStation 3 finished its worst year of sales since 2007 with a whimper, moving somewhere near 600,000 units in December according to leaked data from a trusted source and selling just over 3.4 million units for the year. Questionable business decisions in 2012 hurt the console, especially in the last three months of the year. Deciding not to drop the console’s price and instead raising it backfired, despite the inclusion of Uncharted 3 in the pricier new bundle. In addition, relying on PlayStation All-Stars Battle Royale and Wonderbook – two games that bombed spectacularly at retail – to sell consoles was a poor move. It can be argued that the holiday season was a sacrifice to allow more development time for big exclusives like The Last of Us and God of War: Ascension in the first quarter of this year.
If it was a sacrifice, it proved to be a painful one this holiday season. We’ll have to wait and see if it pays off in the longterm with stronger numbers over the next few months.
The Wii (475,000 units) and the DS (470,000 units) outpaced Nintendo’s newest platform, the Wii U. The Wii U managed 460,000 units in December and 890,000 total in its first six weeks. It’s too early to use this data to damn or praise the platform going forward, but there’s nothing at all impressive about what the Wii U did in its first full month on store shelves. High price, few exclusives, and a fair amount of consumer confusion as to what Wii U is all played probable roles in the somewhat disappointing early showing. Nintendo has work to do in 2013 to move things forward. The company is still holding many of its cards close to its vest when it comes to revealing what games are coming for the new platform. The upcoming release slate is pretty slim, with only 12 games on GameStop’s “Coming Soon” list. Of course, there are likely more games than that coming, but questions of what and when are valid and need answers… and soon. Nintendo has the spotlight when it comes to having the newst hardware on the block, but that spotlight is ready to move to Microsoft and Sony when (or if) they announce their new platforms later this year.
If Nintendo cannot take advantage of this time and convince consumers to buy in before the competition is able to wrest away potential interest, it’s potentially going to be extremely challenging for Nintendo to find big success with Wii U. This is a story that will be worth watching as 2013 unfolds.
As has been the case for most of 2012, Sony’s PS Vita found itself in the basement for unit sales, managing close to 250,000 units according to reports. Although sales were certainly better for Vita in November and December, the 3DS came close to selling in one month (December) what Vita sold in all of 2012. Sony has some decisions to make regarding the Vita in 2013. A price drop is the first likely move, but memory card pricing is still a problem and then there’s a case of where the games are going to come from. Sony isn’t Nintendo, so manufacturing successful first-party games to keep the Vita platform relevant isn’t a given. Sony’s success in the past has come courtesy of a strong third-party lineup combined with a few key first-party efforts. If the Vita has to rely on first-party games for the most part, especially as developers turn to the next generation, there are going to be more signs of trouble ahead. I don’t think that Sony will pull the plug outright on the Vita in 2013, but it is clear that there are things which must be done to keep the handheld from sinking into obscurity and scaring retailers away from carrying it.
From this month forward, I will no longer be offering detailed analysis on software sales. With so much uncertainty regarding digital versus physical sales, trying to make sense of trends and data is an exercise in futility. Hardware sales are always physical and mostly accounted for via NPD. Software sales are not, with many sales unaccounted for. As it stands now, it’s difficult enough to obtain hardware sales data; software data simply doesn’t exist in such a way that I can do anything other than to share what the assumed Top 10 list is.
2013 has a lot of questions to be answered. When will the industry’s losing streak end? Will we see new platforms from Microsoft and/or Sony this year, and, if so, how much will they cost? Will a stronger software lineup, including Animal Crossing and Pokemon, push the 3DS into stronger territory? What does Nintendo have in store for the Wii U? Will Sony make moves to save the Vita? How much longer will Microsoft reign in the top spot? It’ll be an interesting year in many respects, and I’m looking forward to finding the answers to these and many other questions as we roll on.
NPD’s Top Hardware Sales in December (Units Sold, Rounded YOY):
01. Xbox 360 (1,400,000 units; -18%)
02. 3DS (1,250,000 units; -22%)
03. PlayStation 3 (~600,000 units; -37%)
04. Wii (475,000 units; -55%)
05. DS (470,000 units; -25%)
06. Wii U (460,000 units; N/A)
07. Vita (~250,000 units; N/A)
NPD’s Top Ten Software Sales in December (Platforms by sales amount):
01. Call of Duty: Black Ops II (360, PS3, Wii U, PC)
02. Just Dance 4 (Wii, 360, Wii U, PS3)
03. Halo 4 (360)
04. Assassin’s Creed III (360, PS3, PC, Wii U)
05. Madden NFL 13 (360, PS3, Wii, Vita, Wii U)
06. Far Cry 3 (360, PS3, PC)
07. NBA 2K13 (360, PS3, Wii, Wii U, PSP, PC)
08. Skylanders Giants (Wii, 360, PS3, 3DS, Wii U)
09. New Super Mario Bros. 2 (3DS)
10. FIFA Soccer 13 (360, PS3, Wii, Vita, Wii U, 3DS, PSP)
Physical/Packaged Software Rankings for 2012 (Platforms by sales amount):
01. Call of Duty: Black Ops II (360, PS3, PC, Wii U)
02. Madden NFL 13 (360, PS3, Wii, Vita, Wii U)
03. Halo 4 (360)
04. Assassin’s Creed III (360, PS3, PC, Wii U)
05. Just Dance 4 (Wii, 360, Wii U, PS3)
06. NBA 2K13 (360, PS3, Wii, PSP, Wii U, PC)
07. Borderlands 2 (360, PS3, PC)
08. Call of Duty: Modern Warfare 3 (360, PS3, Wii, PC)
09. LEGO Batman 2: DC Super Heroes (Wii, 360, NDS, PS3, 3DS, Vita, PC)
10. FIFA Soccer 13 (360, PS3, Wii, Vita, 3DS, Wii U, PSP)