The Official November 2010 NPD Thread

[Squilliam]

MaxwellGT2000 said:

Squilliam said:

MaxwellGT2000 said:

Nsanity said:

Edouble24 said:

Nice chart showing revenue for the month. 360 going strong. 

hot damn!

Oh what you can get away with when you say revenue revenue data is quite literally useless to anyone but the publisher/manufacturer and it's only for their titles/products.  It's like this Wii sells 1m software units at 50  while 360 does 1m units at 60, revenue from the Wii title is 50m dollars, the 360 title brings in 60m dollars and therefore a higher % on a pie chart like that, the only problem? If a title like that cost something like 45 million on the 360 and 11.25 million on Wii, after console makers get their cut, you count expenses like production of discs and shipment, the 360 title breaks even, and the Wii game came out making a mint.

The same can be applied to those months PS3 were sold at a loss, they could have the entire pie, Sony still wasn't doing good business.  So yeah revenue charts, in general, are some of the most useless data you could ever be given, only good to fan some console war flames.

Revenue data is NOT useless! Effectively it tells us the magnitude of the market in question or the proportion of revenue going towards a specific console. So a developer looking at Gamasutra will see that they could either develop a Wii game and target ~30% of the revenue available on consoles or they could target the Xbox 360 and PS3 both for a slice of ~70% of the overall market. Beyond this the comparison gets even more skewed given the fact that many Wii games have to rely on licensed I.P. and a lower than $50 price point which means that they have to keep their fixed costs in check because the margins after Nintendo, third party I.P, retail margins, publishing expenses are taken into account are quite small. However on the other hand the margins on the Xbox 360 and PS3 games are much greater and newly developed I.P. can be sold relatively profitably and with higher margins comes the incentive to advertise and market the title because selling additional copies easily justifies advertisement.

 

Are you trying to claim they don't do this on other consoles like literally ALL THE TIME?  I've yet to see regular price drops FYI on Wii, no Players Choice like with Gamecube, and there's so many licensed IPs on PS3 and 360 it isn't funny but all consoles rely on that.  But you talk about lower than MSRP but PS3 and 360 games often get price drops much quicker than Wii titles, I know cause I shop around a lot looking for deals  

The most reasonable argument is the idea that a certain segment has the most money spent towards it, but again you have to look at your profit margins.  As I brought up before games are now bringing in more revenue than the movie biz, doesn't mean anything though cause developers aren't making money, the market as a whole isn't ready for high budget titles even at 60 dollar price tags. 

Plus again I must call into question the credibility of those pie charts as with the SKUs not being broken down to prove their revenue data is correct, are they breaking down revenues based on many of the sales?  Hell I got Red Dead Redemption for 30 dollars when it was normally 60 thats not normal revenues and are these people accounting for that? I find it questionable especially when they say themselves they only patched it together.

On price: Im talking about official price drops rather than special prices or retailer deals. Pachter already spoke of the lower average sale price of Wii titles compared to Xbox 360/PS3 titles which is greater than the 20% difference in the official launch prices from the start of the generation. If you have to hunt around for deals it isn't the same as someone just buying the first one they see. Most people don't shop around, you're just benefiting from price discrimination.

On movies vs games? That tells us nothing, sorry. You penetrate the murky hollywood financial accounting standards and report back to me on the lifecycle revenue of movies vs games. From what I can tell, movies aren't making money apparantly either but for what it is worth the big publishers are in the black.

How would you prove that the data in those pie charts is correct? They are afterall estimates based upon statistical polling techniques amongst others. So long as they are representative to within a few percentage points it really doesn't matter if the Xbox 360 got 46% of revenue or 47 or 45% because the message is the same regardless.

In the end so long as the Xbox 360 and PS3 both have high average unit sales and high margins on average per unit sold it will support a lot of developers. It doesn't matter how much each title costs to make, games like most entertainment mediums tend towards the median being unprofitable with the top few % making the majority of the profits. It doesn't matter whether it is the Wii or the Xbox 360 or the overall entertainment software market, nothing really deviates from this rule. The Wii isn't vastly profitable because development costs are low and the Xbox 360 and PS3 aren't vastly unprofitable because the development costs are high. The market just adjusts to the equilibrium regardless.