[vc_row][vc_column][vc_column_text]It’s now been twelve months of year-over-year losses for retail video game sales, as November 2012 showed an 11% decline to $2.55 billion dollars from last year’s tallies. All major categories – hardware (-13%), software (-11%), and accessories (-8%) – were down, despite the release of a new hardware platform and new releases in the Halo, Call of Duty, and Mario franchises. At the risk of sounding like a broken record, citing potential factors such as generational fatigue, sales saturation, and a market shift to other forms of entertainment continues. Worse yet, it looks as though the losing streak will continue for at least another month or two before YOY comparisons become more attainable and declines become less prevalent.
While Microsoft and Nintendo shared hardware sales data with the public for November, Sony continued to maintain its code of silence and extrapolations from reliable sources will be used to fill in the blanks whenever they occur.
The Xbox 360 reigned supreme for yet another month and was the only hardware platform to move more than one million units. The final tally of 1,260,000 units was about 26% lower than last year. Analyst expectations were about 1,450,000 units, so this number is a bit on the weaker side. Halo 4 and Call of Duty: Black Ops II were important games for the 360, which celebrated its seventh Black Friday this year. While it’s certainly good news for Microsoft that the Xbox 360 continues to top the sales charts here in the United States, it’s hard to ignore the trend towards weakening sales – and that’s despite some fairly impressive deals and bundles that were available this year, including a $250 bundle with two games and a 250GB hard drive. Microsoft is also facing a very high YOY target for December of more than 1,700,000 units, which likely won’t be met. As long as Microsoft is dominating its competition, though, I don’t expect many moves to be made. I think it’s satisfied with current results and it will take a strong move from Nintendo with Wii U or a PlayStation 3 uprising to see any kind of urgency.
The PlayStation 3 finished in second place for November. Although no raw data was shared, all estimates and extrapolations point to a range of at least 600,000 units sold. This is enough to put the PS3 ahead of the 3DS for total units sold and give the runner-up ribbon to Sony. It’s tough to address anything specific for the PS3 given the lack of firm information, but it’s almost certain that the PS3 moved fewer units than it did in November of 2011. Based on the chatter I’ve heard, my best guess at unit sales falls somewhere in the 725,000-775,000 range, which is a 13-19% decline. That’s the second-best YOY comparison next to legacy Nintendo DS hardware, which actually sold more units this November than last year. Perhaps PS3 bundles helped sales, or at least kept things fairly robust despite a lackluster set of exclusives which failed to sell respectable numbers (PlayStation All-Stars, Wonderbook, Little Big Planet Karting).
The 3DS finished third, selling 540,000 units. This is a 32% plunge compared to a year ago. Without a mainline Mario title to push sales, and having to fight off competition from the cheaper DS and brand new Wii U, the 3DS struggled during Black Friday week and wasn’t able to repeat last year’s strong performance. The 3DS has now posted YOY declines in five straight months and seven of nine months this year, and with a YOY target of more than 1,600,000 units for December, the streak will likely continue. Estimated sales of Paper Mario: Sticker Star were a tepid 166,000 units, as opposed to more than 450,000 units of Super Mario 3D Land last year. Without strong software to back it, the 3DS struggled and will continue to do so in the short term.
Nintendo’s Wii U debuted in fourth place with 425,000 units sold over the span of one week in the reporting period. This isn’t a terrible number, and widespread reports of sellouts seemed to indicate that limited launch supply was a limitation. I tend to think that there was a bit more availability than what analysts have alluded to, but one week is far too soon to gauge with any clarity what to make of consumer demand for the platform. It’s premature to make any real judgment, either that the platform is a big success or a disappointment. I don’t subscribe to spin about “sellouts”; GameStop claimed to have more than 500,000 preorders alone, so either Nintendo short-shipped, GameStop exaggerated, or consumers bailed on the platform before it arrived. I’ll look forward to December’s data – and a full month of sales – before offering more in-depth analysis other than positing that the Wii U launch was decent. That’s it.
The Wii finished in fifth place, a mere 5,000 units behind its successor. The 420,000 tally was a sharp 51% drop from a year ago, but it’s evident that the Wii’s best days are behind it. Nintendo is no longer creating games for the platform and it’s clearly a backlog type of purchase for consumers on a budget or for the few who were late to the Wii party. It’s notable that two of the ten best-selling games for November sold more units for the Wii than other platforms… so consumers are still buying significant releases. We’ll see how much life the Wii has left in it as 2013 goes on. The Wii Mini experiment in Canada bears watching as there’s certainly a chance that Nintendo could bring it to the US next Spring.
Sixth place belonged to the venerable Nintendo DS, which moved 370,000 units for November. While DS hardware is certainly dated, the library of games is vast and relatively inexpensive and the hardware is priced to sell. In addition, the release of Pokemon Black & White 2 last month for the DS injected some life into the platform. The most significant note about sales comparisons for the DS is that it was the only platform to show a positive YOY stat, rising nearly 6% over last year. In a time where we’ve seen largely negative YOY comparisons, it’s a bit of an upset to see the DS buck the trend and post positive figures. I don’t think it’ll last, though, as December’s YOY target is 640,000 units. I think the DS will fall short of that mark, but I do think that the platform will remain viable for at least the next few months.
As has been the case for most of 2012, the Vita brings up the rear. Extrapolations and various sources seem to indicate that Vita managed to cross the 200,000-unit mark in November, fueled by bundles, temporary price drops, and games in the Assassin’s Creed and Call of Duty series. It’s certainly good to see Vita showing signs of life at retail, but 200,000 units in the busiest month of the year combined with lower prices and significant software releases really isn’t that impressive. If anything, it underscores weakened expectations for the platform and a continued lack of enthusiasm from consumers. Sony must do more if the Vita is to be anything but a footnote in video game history. A permanent price cut is all but required, more games that appeal to a wider range of consumers are needed, and Sony needs to look at its pricing schemes for its proprietary memory cards. Even with lower hardware costs, having to add a significant amount of initial spending to have adequate storage space enhances the perception of exorbitance that the Vita carries with it. With fewer releases for December, it will be interesting to see if the Vita can manage to tread above the 200,000-unit plateau; at first blush, I tend to doubt that it can.
I don’t like to talk much about software, because NPD does not track digital sales and this leads to incomplete data with which to conduct appropriate analysis. Digital sales have been steadily increasing as 2012 has worn on, and, while I don’t personally believe that it completely offsets YOY losses in software, it likely makes the gap much narrower. Having said that, I will offer these observations:
Call of Duty: Black Ops II led the pack in terms of both combined SKU sales and individual SKU sales (for the Xbox 360). While there’s been some discussion about lower sales versus Modern Warfare 3 last year, we must bear in mind that Black Ops II did release a week later than Modern Warfare 3 did. A week’s worth of sales potentially could have narrowed or even eliminated the YOY shortfall that we’re seeing now. It’s possible that sales would have ended up a shade lower anyway, as Halo 4 was competing for the same audience on the Xbox 360, leading to a bit of cannibalization. Despite this, we need to wait for sales results in subsequent months to evaluate the potential of “Call of Duty fatigue”.
Just Dance 4 and Skylanders Giants sold more units on the Wii than any other platform. The longevity and popularity of the Just Dance IP is impressive and is certainly a feather in the cap of Ubisoft. Skylanders Giants showed strong growth over the first Skylanders release last year. The Skylanders IP is definitely in a growth phase and Activision is doing all it can to build exposure and keep it in the public eye. Expectations for where Skylanders goes in 2013 will be, if you’ll pardon the pun, “Sky”-high.
I’ll wrap up 2012 in early January when NPD releases this month’s sales data. Will the Xbox 360 run the table and lead every month of the year? How will Wii U fare in its first full month on the market? Can the Vita maintain its momentum? Which games will sell as the holiday season ticks down? There are lots of questions to be answered, and hopefully I’ll have the data to give you those answers next time.
NPD’s Top Hardware Sales in November
01. Microsoft Xbox 360 (1,260,000; -26%)
02. Sony PlayStation 3 (600,000-800,000; at least -11%)
03. Nintendo 3DS (540,000; -32%)
04. Nintendo Wii U (425,000; NEW)
05. Nintendo Wii (420,000; -51%)
06. Nintendo DS (370,000, +6%)
07. PlayStation Vita (>200,000; N/A)
NPD’s Top Ten Combined Software Sales in November
01. Call of Duty: Black Ops II (X360, PS3, PC, Wii U)
02. Halo 4 (X360)
03. Assassin’s Creed III (X360, PS3, Wii U, PC)
04. Just Dance 4 (Wii, X360, Wii U, PS3)
05. Madden NFL 13 (X360, PS3, Wii, Vita, Wii U)
06. Skylanders Giants (Wii, X360, PS3, 3DS, Wii U)
07. Need For Speed: Most Wanted (PS3, X360, Vita, PC)
08. NBA 2K13 (X360, PS3, Wii, PSP, Wii U, PC)
09. WWE 13 (X360, PS3, Wii)
10. FIFA Soccer 13 (X360, PS3, Wii, Vita, 3DS, Wii U, PSP)