Forums - Sales Discussion - Why claims of eighth-gen "doom"/"domination" are premature. *long post*

("TL;DR" warning: This is a long post, ten paragraphs and a dozen charts in total.)

(NOTE: For added clarification, the focus of this post is more about extrapolating actual longer-term numbers based either on A) comparisons of sales early in a system's life with sales in the same period of another systems life and/or B) assuming "business as usual" scenarios where growth rates are constant. It is not meant to be interpreted as saying more general predictions of relative rank cannot be reasonably made.)

A common thread in conversations regarding hardware sales is the tendency of people to compare one system to another previous system. It often goes along the lines of "System A is selling at x% of what System B was selling at this point after launch." For example, if after a few weeks after launch, or six months or a year, "System A" was selling at, say 80% of what "System B" was, lots of people would immediately start crying "Doom!", especially if System B didn't perform very strongly itself. Conversely, if System A was selling well above what System B was in the the same timeframe, you'll likely hear lots of cries of "Domination!", especially if System B sold quite well.

Right now, much of the "Doom" centers on the Wii U and, to a lesser extent, the XBO's performance outside the U.S., while "Domination" seems to the order of the day for the PS4. While a casual observer might feel justified in claiming that the Wii U is doomed to sell less than the GameCube based simply on observing the system's abysmal performance for most of 2013, or in claiming that the 3DS has already peaked, or in claiming the XBO may or may not be the sales leader in the U.S. based on launch sales or weekly sales, or in claiming that interest in the eighth generation is not high in Europe because sales aren't as high as in America or because post-Christmas sales might not be that much up over the previous generation as they were last year, or in assuming that both the PS4 will become the best-selling system ever with the XBO not too far behind based on their record launch holiday sales. None of this is anything new, as early in the seventh generation some believed that the PS3 would, at least in America, be "the next GameCube" because it was trailing behind the GC for two years straight, while others felt the Wii could have beaten out the PS2 because it was actually selling more units and growing at a faster rate than the PS2 did early in its life. But whether it's a few weeks or a whole year, it's always "Too early to call" in regards to longer term sales. Let's take a look at some graphs to see concrete examples of why it's too early to call. To start off, here's how all the major systems from the past three generations have performed during their launch holidays (note: PS4 and XBO sales are VGC estimates, while everything else is NPD):

As we see, the PS4 and XBO had record launches in America, while before then the record holders were the Xbox and the GameCube. Meanwhile, the 360 had the worst launch of any system. Even the PS3 had a better launch, and the Wii U had a better launch than either of them and was only two million behind the Wii. The Wii's launch was almost identical to the PS2's. Of course, it doesn't take a genius to know that these early sales figures were hardly reflective of how these systems would perform relative to each other in the longer term. Here's how they were looking just six months later (excluding the PS4 and XBO, of course):

We're already seeing big differences here. The 360 more than tripled its sales, while the PS3 had slower growth, having just over doubled its sales. However, both are lagging behind any sixth-gen system. The Wii U is now lagging behind everyone else. Mainly due to lack of sufficient software to drive sales, sales grew by only about 33%. Finally, the Wii is slightly ahead of the PS2. Still, we're not seeing anything reflective of how any of the sixth- and seventh-gen system were performing against each other, and they all added noticeably different numbers to their lifetime tallies. Now here's where they were sitting after another six months (note: the Wii U's figure is the VGC estimate due to incomplete NPD data):

The PS3 is narrowing the gap between itself at the GameCube, though incidentally its LTD sales remained roughly proportional to that of the 360 compared to sales from six months earlier (this will change). The 360 is now only 100k behind its predecessor. The Wii is still slightly ahead of the PS2. Finally, while it has improved somewhat, after the first three quarters of 2013 being so terrible the Wii U is still lagging far behind everyone else. But again, even after a full year, these numbers aren't indicative of future sales relative to each other. Here's annual sales for the sixth and seventh generations, followed by cumulative LTD sales for both (notes: due to incomplete NPD data, the line for the Wii and PS3 in the cumulative graph uses VGG data for 2012 and 2013; I have yet to update the annual charts past 2011, which was the last year complete NPD data was available for all three seventh-gen systems):

The Xbox widened the gap between itself and the GameCube sharply in 2004 thanks mainly to the hugely successful Halo 2. The PS3 grew from 2007 to 2009 while the 360 remained flat. As a result, the PS3 was rapidly closing in on the 360's LTD sales, and the launch-aligned gap between the two narrowed proportionally speaking. But in 2010 the 360 started to pull away sharply, and now the 360 has passed even the Wii and is closing in on the PS2. Still, the PS3 maintained steady growth and while it stayed roughly proportional to the GameCube after two full calendar years on the market, it finally broke away after that due to the GC having peaked in 2003 and selling only as much in 2004 as it did in 2002. Thus ended the "PS3 is the next GameCube" claims. The Wii widened the gap between itself and the PS2 for several years, but then the gap started to narrow and then closed entirely, and now it has no chance of passing the PS2.

But this is all just U.S. sales. What about other regions? While there isn't readily available annual sales data for consoles in Europe prior to the seventh generation (not that I could find, anyway), there is in Japan thanks to Famitsu and Media Create. While it's hard to make any meaningful comparisons of cumulative LTD sales for the PS2 and those for other systems in Japan since the PS2 launched in March instead of during the November-December period, but we can compare the GameCube (September launch, close enough to the holidays), Wii, Wii U, PS3, Xbox, and 360. Here's what we find (note: Due to how trivial sales of Xbox systems are in Japan, I didn't even bother with Xbox sales for most of the charts):

Just like in America, the PS3 languished at sub-GameCube sales for a good while. However, while the GameCube suffered a castastrophic drop in sales in 2004, the PS3 experienced a big bump in 2009 (the launch of the Slim might have had something to do with that, as did the launch of FFXIII, which is still the best-selling PS3 title in Japan), and thus the PS3 rapidly sped ahead of the GC. It also narrowed the gap between itself and the Wii, as while the Wii peaked in 2007 in Japan (vs. 2008 in NA and Europe), the PS3 didn't peak until 2009 and tapered off much more slowly than the Wii did. After a solid launch, the Wii U faced the same big drop-off in sales after the start of 2013 as it did everywhere else, and thus it dropped to and then behind the PS3 in aligned LTD sales. However, it had a much better holiday in 2013 than the PS3 did in 2007, and the gap is narrowing.

As we see, one cannot simply assume that because some system is trending ahead or behind some other system, it must always trend ahead or behind and at the same rate. Sales curves are never the same for any two systems. Even with single systems, sales curves can differ greatly between regions (e.g., the DS peaked in 2006 in Japan, 2008 in Europe, and 2009 in the U.S.), and even within single years in a single region, the shape of the sales curves can vary wildly, with any given week, month, or whole quarters being well above or below the corresponding period in the previous year, while the next week, month, or quarter would trend the opposite way. Week 2 or January or the first quarter might be down over last year, but Week 3 or February or the second quarter might be up over last year. Most projections of long term future sales are often way off the mark. These things unfold a week at a time, and can be influenced by any of a number of things, such as current demand, the ability of supply to meet said demand, whether or not some big game causes a big spike in weekly sales, what the prices of the systems are, how well they're advertised, etc., etc. It's highly unpredictable. That's not to say that it's utterly pointless to make predictions of future sales, and one can make educated guesses based on the aforementioned factors as well as by looking to see if there might be common trends in overall hardware sales (e.g., launch holiday sales and sales in the following quarter tend to be very similar to each other regardless of system or region), but ultimately we're just guessing.

While we can safely assume that the Wii U won't be able to anything remotely similar to NES- or even SNES-level sales, or that the PS4 will likely have a comfortable lead over the competition in Europe, or that the XBO will not perform well in Japan, but it's too early to simply assume "doom" or "domination" and one cannot simply assume that one system's sales curve must necessarily stay anywhere proportional to that of some other system in either the same generation or in a prior generation, even if that other system is from the same product line in the case of the prior one. Never assume "well if it stays business as usual, then doom/domination/good/bad/average/whatever," because it never stays "business as usual." Will the Wii U "pull a PS3" and narrow the gap between itself and that dreaded GameCube sales curve, perhaps getting up to N64-level sales, or will it continue to languish and finish behind the GC, or will it end up right at GC numbers? Will the PS4 and XBO continue to trend ahead of the the PS3 and 360, or the Wii and PS2? Has the 3DS peaked or could it narrow the gap between itself and the DS? Will the Vita ever do remotely as well as the PSP, or is a comeback not possible? We'll just have to wait and see. Still, it's fun to speculate so long as we remember than any and all projections, regardless of who they're from (one's self included), should be taken with a grain of salt, regardless of how dire or how good things are looking for any one system at the present date.

Thanks to everyone who bothered slogging through this beast of a post. If you have anything to add, feel free. I might not reply right away, though, because I think I'm done posting for today after this. Time to go eat.



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2014 Predictions (Final 2014 Update)

U.S.
PS4: 4.75M; XBO: 3.5M; Wii U: 1.8M

Global
PS4: 14M; XBO: 5M; Wii U: 4M

The above estimates have an assumed margin of error of ±5%.

Bet with ohmylanta1002: If Wii U LTD sales are less than 15M by Dec. 31, 2015, I win. If they're greater than 15M, he wins. Loser must place proclamation of loss in their sig for one year.

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I am just gonna go based on the title and I think you are correct... I don't understand why some people are saying that the 8th gen is doomed when we have games such as X, FFXV, KH3, TitanFall, Smash Bros and many more coming along the way... People also said that the 3ds was going to fail due to the competition of android and ios devices but its clearly selling... Will it sell as much as the DS? Maybe not but its far from failure

The Wii U is doing really terrible compared to everything. I'm not saying it won't go down in history books, but I just don't expect it to do that amazing. Although they still can probably profit alot, just like the Gamecube era actually profited more than the PS2.

Need a +1 button.

 

 

Great thread!

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QFT. Nothing more needs to be said. Being a launch PS3 owner myself, I can attest that launch doesn't define a console. Lucky for me back then, ps3s had BC and there were still awesome PS2 games like Persona 4 getting released so I didn't feel the pain too much. This may be different for Wii U owners since the wii hasn't had any significant new release in a while itself.

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"WAR is a racket. It always has been.

It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives"---Maj. Gen. Smedley Butler

I believe you are using the PS3 to prove your point a bit to much, its the only console ever to recover so strong from such a slow start. While your numbers are great, WiiU struggles and PS3 ones are not the same and none should expect the U to maybe potentially if the stars align just right to recover like the 3 did.

I see the WiiU going more as the Dreamcast, right now ill be lucky to pull GC numbers and N64 like sales would be a massive success then making a even remotely similar comeback to the PS3 would be a miracle.

Personally WiiUs greatest weakness in Ninty it self, they are foolishly stubborn and in ways plain old ignorant of reality. Sony fixed and made up for their early shortcomings, its been over a year on the market and I see Ninty doing anything of relevance.

As far as PS4 domminance, its pretty much stars aligned just right and its no stopping it, price is just to damn good.  PS brand to strong and Sony got their shit together as if threatened with damnation by the devil if they were to fail.  They got the price games 3rd partys online future(psnow) old and new franchises easy to dev on hardware and most powerfull to boot.  PS4 right now is Scuderia F1 circa 1999, expect total domintaion for next half a decade.



BeElite said:

I believe you are using the PS3 to prove your point a bit to much, its the only console ever to recover so strong from such a slow start. While your numbers are great, WiiU struggles and PS3 ones are not the same and none should expect the U to maybe potentially if the stars align just right to recover like the 3 did.


The OP never actually made any predictions in his topic. It was all just pure fact and numbers. If he made a prediction, he would almost be going back on what his whole topic was about. 



Official Mario Kart 8 Thread:

http://gamrconnect.vgchartz.com/thread.php?id=162055&page=1#

Carl is a Piplup hater and deserves to be punished eternally.

NintendoPie said:
BeElite said:

I believe you are using the PS3 to prove your point a bit to much, its the only console ever to recover so strong from such a slow start. While your numbers are great, WiiU struggles and PS3 ones are not the same and none should expect the U to maybe potentially if the stars align just right to recover like the 3 did.


The OP never actually made any predictions in his topic. It was all just pure fact and numbers. If he made a prediction, he would almost be going back on what his whole topic was about. 

Hes using the PS3 turnaround as a way to prove his point that doom/dommination are premature.

As i said good numbers and yes facts, but i see them lacking relevence as far as current gen.  To me the writing is on the wall, PS3 recovery will not make me doubt wiius failure or PS4 domminance.  

So i say the doom/domminance is not premature no matter how fact those numbers are, its just an honest acceptance of where the market is heading.



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Maybe but we can easily claim that PS4 will dominate X1, that's for sure, obvious, mass lead in europe +Japan, even if in the best scenario for Microsoft X1 beat PS4 in US.

I'll wait for Mario Kart to judge about X1vs Wii U, since Wii U has Japan


Predictions for end of 2014 HW sales:

 PS4: 17m   XB1: 10m    WiiU: 10m   Vita: 10m