The Real War is between Wii and the HD consoles

[theRepublic]

freedquaker said:

theRepublic said:

freedquaker said:

Alterego-X said:

freedquaker said:
Now that PS3 has seen a drop in its price and the new slim model, we would expect the sales of its competitors to fall, right? And the higher competition the more they should fall. Well, when we look at the sales figures of 360 and Wii, we do see a drastic decrease in wii sales 

We do? 

http://vgchartz.com/hwcomps.php 

 

 

Nope, sorry but we don't. 

Yes we do! Have you ever seen Wii market share this low? PS3 outsells wii everywhere nowadays, this is unprecedented.

This gave me the info I needed.  You performed a correlation analysis based on the percentage market share for each month, instead of the raw numbers.  That does not tell us who is in competition.  Take July to August 08 for instance.  The Wii actually sold more in August, but lost market share because the 360 and PS3 were both up.  Doing the analysis by percentage like you did makes the Wii look like it lost sales to the 360 and PS3, but in actuality, this is not the case.

Doing the analysis with just the raw numbers gives a much different picture:

Wii vs 360 = 0.954
Wii vs PS3 = 0.880
360 vs PS3 = 0.862

What this tells me is that the sales numbers of these consoles are highly dependent on what time of the year it is.  They all rise in the holidays, and they all fall during the summer.  That is why the correlations are so close to 1.

On initial examination, we can also say that those consoles with the lowest correlations are in the most competition.  That would be the 360 vs PS3, and Wii vs PS3.  For whatever reason, the Wii vs 360 does not seem to be as in as much competition.

Given that these numbers are so close, a closer examination is probably in order.  Possibly going week by week.

EDIT:  I gave this a little more thought, and here is what I came up with.  The big problem is that the holidays skew the correlation towards time, instead of the competition.  One way to make this more relevant would be to just eliminate the holidays from the analysis.  Another way to do this would be to take smaller chunks of data.  An example could be using the weekly data over a three month period of interest (like around the time of a price cut, although you have to be careful the cut is not around the holidays).

 

Actually its the raw numbers which are misleading due to very many reasons.

Your console might see a continous increase over the years but this doesn't mean much as long as its market share is not improving.

And I dont understand you can't see the fact that 360 is quite stable recently with similar numbers, so not so affected by the debut of the ps3 slim although wii plummeted in sales, delivering one of the worst performances in its history! I dont have time to cite, but you can find various stuff even on this website hinting to that. Clearly Ps3 stole much more from wii, rather than 360.

(Broke up your reply to make responding to it easier.  Each paragraph is responded in order.)

Correlation was never meant to be used with percentages.  Correlation indicates the strength and direction of a linear relationship between two random variables.  The raw data can be used as random variables, but market share percentage cannot.  The reason for that is because market share percentage is directly dependent on the sales of the other consoles.

Let's do a simple example.  Imagine there are only two consoles.  Console A's sales are increasing over time.  Console B's sales are increasing over time at an even faster rate.  In this scenario, Console B's market share is growing and Console A's market share is shrinking.  The correct correlation (based on the raw data) would give a positive result because both numbers are increasing over time.  The incorrect use of correlation (based on market share percentage) will give a negative number because one number is increasing and one number is decreasing. (EDIT: With only two consoles, the correlation by market share percentage will always be -1.  It is obvious that is wrong.)

Look at this graph http://vgchartz.com/hwcomps.php.  The bump at 8/2/09 is from the release of Monster Hunter 3 in Japan.  Look before and after that bump.  The sales of the Wii are flat.  The Wii did NOT 'plummet' in sales.  The 360 is NOT 'stable' either.  It has actually increased in sales because one model of the 360 had its own smaller price cut.  In other words, the PS3 sales were NOT stolen from either the Wii or the 360 in this case.