Have Sony and Microsoft lost their minds?

[theRepublic]

DaRev said:

theRepublic said:

DaRev said:

 Seriously, what is the point of them brining out new consoles at this point, when considering that PS3 and Xbox 360 seem to be in the prime of their lives?

They are absolutely not in the prime of their lives.  Check this out from TheSource.

http://gamrconnect.vgchartz.com/thread.php?id=152463

Here is what I said later in the thread.  The short answer is that gamers in 2012 are now buying less games per year than they were when the consoles launched.  They both peaked in 2008.  Interested is waining.  It is time to move on.

http://gamrconnect.vgchartz.com/post.php?id=5011079

theRepublic said:

theRepublic said:

Here is the separated analysis everyone was asking for.  I copy and pasted the exact numbers from the charts, so you will notice 2005 looks a little different because of the rounding TheSource did.

	LTD Hardware	Yearly Software	Game Purchase Rate
Year	X360	PS3	X360	PS3	X360	PS3
2005	1,178,267	0	2,849,162	0	2.42	---
2006	7,979,799	1,252,040	25,207,607	2,033,730	3.16	1.62
2007	15,859,351	9,174,095	61,447,450	37,173,227	3.87	4.05
2008	26,772,474	19,378,853	108,909,458	88,788,171	4.07	4.58
2009	36,932,992	32,376,827	107,118,181	96,837,921	2.90	2.99
2010	49,961,079	46,388,642	133,691,251	131,311,968	2.68	2.83
2011	63,769,444	60,507,735	154,713,292	148,409,212	2.43	2.45
2012	74,249,953	72,396,583	143,023,845	135,880,467	1.93	1.88

I guess I will throw in a little of my own analysis.

If you were to graph the game purchase rate against time, it would make a rough bell curve with both
consoles peaking in 2008.  It is pretty amazing how far both consoles dropped in 2009, with both falling
 more than one game in purchase rate.  It was more slow decline in 2010 and 2011, but 2012 brought
another small cliff.  Both fell another half game in 2012.  The Xbox360 has now dropped below its launch
point.  The PS3 has not yet gone that low, but it is close.  I would not be surprised by another 0.5 drop in
purchase rate for 2013.  That would put both consoles well below their rate at launch.  Clearly, that would 
be the time for new consoles.

yeah, but isn't that a bit expected that the first time you buy a console, you would buy at least two games?
I mean I just bout a Wii U and bought 2 games at launch and will buy at least two more before April 2013.
Saturation of the market doesn't mean that the consoles or the games are past their prime, because
many games still sell in the millions today.

So if I'm readng your chart correctly, the fact that Sony was selling 4.5 games when the pS3 was at 19m in 2008,
 doesn't make it more profitable than now its selling 1.8 games with 72m consoles on the market. Doesn't
that say that Sony (and MS) are making more money now on games than they did back in 2008? or am I
reading this wrong?

Yes they sold more software than 2008.  But global software for both the 360 and PS3 is down by 8% from 2011.  We are already on the downslope and the drop is only going to accelerate from here.

The game purchase rate is more a measure of interest level than anything else.  People were most interested in these consoles in 2008.  Your early adopters were still in and interested, and the mass market was in there and buying lots of games.  The interest level has now dropped below what it was when the consoles launched.  The early adopters are all long gone, the mass market doesn't really care much anymore, and now you have the late adopters picking up the console.  The late adopters don't buy much anyway though.  More likely they buy used games.

We are likely to see a similar drop in interest this year (about -0.5).  That would means the average gamer is only picking up about 1.5 games per console for the whole year.  That is a far cry from the 4 or 4.5 we saw in earlier years.  What does that mean for publishers?  The average gamer is probably going to buy what they consider the biggest game of the year, and then maybe one other game.  Likely something with a lot of hype too.  That is a tough pool of customers to sell to when they are buying so few games.  It is much easier to catch a consumer's interest when they are going to buy 4 games in a year.  That means the big titles will be fine, but it will be increasingly difficult to sell the midrange stuff.  That is a very difficult environment for publishers to survive in.  That includes first party publishers, since they need to sell their games too.  The less total games sold, the less licensing fees they get too.  We already had one year of decline and this year will be another.

It is time to move on.