Level Up's 'NPD Quarterback' Take on NPD July

[TheSource]

Here is what I got from the discussion between N'gai and Keighley:

1) Time is running out to knock off Wii dominance in the USA.  In my mind there are a total of 6 key battles in the west:

Nov-Dec 2006 expectations (vs. sales realities):  360 vs. PS3 vs. Wii  (~1.6 million vs. ~700k vs, 1.1 million)

January 2007 (momentum): Wii vs. 360 vs. PS3 (~430k, ~290k, ~245k)

June 2007 (summer doldrums average 5 week rates):  Wii (76k), 360 (~40k), PS3 (~19k)

July 2007 expectations in PS3 60 gig price cut month (vs. sales reality): Wii vs. PS3 vs. 360 (Wii ~ 425k, 360 ~ 170k, PS3 ~ 159k)

August 2007 expectations in 360 multi-price cut month (vs. sales reality):  Wii vs. 360 vs. PS3 (my expectations: Wii ~ 400k to 500k, 360 ~ 220k to 320k, PS3 ~ 100k to 160k)

Nov-Dec 2007 expectations: Wii (2.5-3.5 million), 360 (1.6-2.4 million*), PS3 (1-1.5 million**)

* add 20% to each part of the range total with a further price drop (this would bring 360 very close to mass market)

** add 15% to each part of the range total with a further price drop (this would make PS3 cost what 360 did in 2006)

But in review, Wii has displayed characteristics of a dominant console throught battles 1-4 (though July 2007), while neither PS3 or 360 has.  Even when it was outsold by Xbox 360 in Nov-Dec 2006, Wii outsold 360 by 1.1:0.6 during 'holiday 1' (i.e. 2005 nov-dec for 360, 2006 nov-dec for Wii).  Since January 07', Wii has outsold 360 by 1.5:1 to 2.5:1 in the USA.  Given the pricedrop, I'm expecting Wii to outsell 360 1.5:1 over Nov-Dec 2007(3000k to 2000k).

I also think that while Halo 3 will provide a boost, but if 360 can't make 300k in August (I'd say it is a 50-50 proposition), then Halo 3 probably won't be able to push 360 north of ~360-430k in (five week) September, which means it will probably be in a dead heat, or outsold by Wii even during that month.  October will be similar - probably pretty close between Wii and 360 but I think once November comes along (Galaxy, the holidays, and a number of smaller games), demand for Wii increases across a much larger demographic - and sales will eclipse 360 once again.

For Microsoft to avoid a sweep in the six battles outlined above, I'd say sales on the order of 350k August, 500k Sept, 400k Oct, 700k Nov, 1.6 million Dec would be necessary.  My best forecast has 360 getting outsold every month but one - (flip a coin - it could steal either Sept or Oct), with Wii still selling 400k in Sept (5 week month), and 400k in October (Guitar Hero 3 will be included in the period by NPD's system, and hype will be building).  In terms of ordinary gamer appeal, you have Halo 3 and Galaxy for November to keep demand up, GHIII on both, and complimentary big games - (Nights, Soul Calibur Legends, Mass Effect, Rockband, Call of Duty 4).

Essentially my forecast boils down to this:

Wii August-Dec: All months at least 400k (2 million in December)

360 Augusut-Dec: All months at least 225k (1.4 million in December)

2) Sony's content for 2007 is solid, but is it compelling enough to justify the price when similar games are available for 360?  Exclusives will make the difference to some people.  But how many people buy a system just for new, unproven exclusives?  Those that do, are likely to already have the system...It basically boils down to which lineup looks better to the average consumer in Nov-Dec 2007 (assuming they have $1000 to spend):

Wii for $1000: Wii ($250), Wii Sports (Free), Zelda ($50), Galaxy ($50), Prime ($50), Wii Play ($50), Brawl ($50), 3 extra controllers/3 extra nunchucks ($200), Guitar Hero 3 ($90), 3 other titles ($150) (the other titles would be Fire Emblem, Nights, and Dragon Blade if I ruled the world), tax/virtual console games

PS3 for $1000: PS3 w/ Motorstorm ($600), Resistance ($60), Heaven Sword ($60), Ratchet & Clank ($60), Madden ($60), Haze ($60), tax/controller/PSN stuff

360 for $1000: 360 Elite ($450), Halo 3 ($60), GH2 or GH3 ($90), Madden ($60), Assassin's Creed ($60), Bioshock ($60), Mass Effect ($60), accessories/Live and downloadable content/controllers/tax

To me, the ten biggest console games of 2007 are going to be Wii Play, Guitar Hero 3, Halo 3, Galaxy, Brawl, Bioshock, Madden, Rockband, Assassin's Creed and Ratchet & Clank.  5 are on Wii, 5 are on 360, and 4 are on PS3, so alot will come down to pricing and value perception.

3)  One of the reasons Wii exploded in 2006 is because Nintendo launched it right before Turkey Day - knowing gamers would bring it with them to show Wii Sports to the relatives.  Thanksgiving is coming again.  In theory, the same phenomenon could occur again - since Wii Sports is still included in the package.  Gamers will certaintly be using the thing this Christmas - Brawl alone is probably good for 200 hours of play time.  At the same time, among younger (under ...30?) gamers, 360 and PS3 will make alot of inroads this holiday with the price drops.  It will be interesting to see if they see better sales in early 2008 (January) because of it.

4) Will an explosion of Wii sales result in weaker than expected software sales for 360/PS3/Wii software?  I think the big titles (popular successor games) will be o.k., but alot of smaller stuff - like Dragon Blade/Lair/Blue Dragon/Nights/Drake's Fortune/Mass Effect/Medal of Honor/Zack and Wiki will bomb.  Industry is still going to see record growth/money/profit this year.

5) Press coverage.  Will the mainstream press get sick of the Wii?  Will sites like 1UP and others come around a bit as they realize they are out of touch?  To me, when stuff like Galaxy, Brawl, and Fire Emblem comes out, Wii will see a surge in coverage among our specialist media - coinciding with the continuing mainstream press coverage - which will help it garner ridiculous sales this holiday.  Galaxy will be the one to watch, as it could be symbolic of Nintendo's ascent into the stratosphere, and it could potentially be the game loved by both the 'establishment' (1up/ign/egm/play/mainstream press coverage), and Wii fans/Nintendo devotees.  If Galaxy is largerly ignored, despite being an excellent game, then I would go so far as to say that 1up and the ilk cater only to a niche, rather than the entirety of gaming as they used to.   

That is about it...

- Ciao.