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Forums - Sales Discussion - Analysis: How Xbox 360 And Kinect Nearly Toppled Wii In 2010

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Squilliam said:

Based on feedback from a developer I know with access to industry publisher data. Live >> PSN >> Wii in terms of downloadable sales numbers and revenue.

I believe VGC did publish some revenue numbers for WiiWare&VC quoting FADE LLC, and it was around $120M in 2009, XBLA landed somewhere under that mark if my memory serves me right. I'm not sure how it was calculated so you may twist info the way that puts XBLA above WiiWare&VC (e.g. include Live Gold subscriptions into revenue), or the situation might have changed for the last year, but I'm sure it doesn't look like "Live>>PSN>>Wii", closer to "WW&VC~XBLA>PSN" I think.

BTW "feedback from developers" is what's called an anecdotal argument unless you make a poll with rightly chosen sample.



mai said:

Squilliam said:

 Based on feedback from a developer I know with access to industry publisher data. Live >> PSN >> Wii in terms of downloadable sales numbers and revenue.

I believe VGC did publish some revenue numbers for WiiWare&VC quoting FADE LLC, and it was around $120M in 2009, XBLA landed somewhere under that mark if my memory serves me right. I'm not sure how it was calculated so you may twist info the way that puts XBLA above WiiWare&VC (e.g. include Live Gold subscriptions into revenue), or the situation might have changed for the last year, but I'm sure it doesn't look like "Live>>PSN>>Wii", closer to "WW&VC~XBLA>PSN" I think.

BTW "feedback from developers" is what's called an anecdotal argument unless you make a poll with rightly chosen sample.

'According to Activision CEO Bobby Kotick, Xbox Live is the only online gaming business outside of World of Warcraft that generates "substantial money."'

http://au.xbox360.gamespy.com/articles/110/1104553p1.html

"Microsoft says about half the service’s 25 million users paid an annual fee to play games online like “Call of Duty: Modern Warfare 2” in the year ended June 30. That would be about $600 million. Sales of products like movie and TV show downloads topped subscription revenue for the first time, Dennis Durkin, Xbox’s chief operating officer, said in an e-mail.

The remarks suggest the business generated more than $1.2 billion in sales last year, exceeding analysts’ estimates. Success in online gaming is crucial for Microsoft because the other products in this unit include the barely profitable Xbox game console and mobile-phone software that’s losing ground to Apple Inc. and Google Inc."

http://www.businessweek.com/news/2010-07-07/microsoft-xbox-live-sales-probably-topped-1-billion.html

That proves that the Xbox Live service is on top.

Then you have: http://gamrfeed.vgchartz.com/story/7152/wiiware-grows-30-in-2009-revenue-reaches-60-million/

Which is 60M plus 60M for VC. Even if you argue that it increased 50% YOY since them that still leaves overall revenue quite far below Xbox Live.

Then you have Sony:

"Sony boss, Kaz Hirai talked about PSN revenue recently, which is something that rarely gets discussed. Microsoft rarely talks about revenue from its Xbox Live service normally as well. However, Dennis Durkin, Microsoft COO indicated that in 2009 for the first time XBL revenue crept past $1 billion.

According to Reuters, Hirai revealed that revenue for PSN this year was around $870 million. He stated that revenue “nearly doubled” from last year where it was approximately $434 million"

http://gamer.blorge.com/2010/12/25/sony-playstation-network-service-revenue-approaching-1-billion/

So yes I am quite comfortable saying Live >> PSN >> Wii







Tease.

^Here we go, an online fee (and dozens of other things while WW & VC are offering games only, even DLC offerings are limited on Wii).  Just like I've said you may twist it that way and you'll be absoulutely right - revenue is quite bigger - and publishers may find it more lucrative.

I lost this one, or rather I was driven away by non-essential info, but let's get to your initial point "Wii users perhaps don't typically buy much software...", which is no way proffed by bigger revenue streams in downloadable sector since serivces are quite different at monetizing content and offer a hell lot of other things not even gaming related, while retail games sales are giving us entirely different picture and it was quite possible assumption that tie-ratio of downloadable games on Wii compare favorably with other platforms as well.



mai said:

^Here we go, an online fee (and dozens of other things while WW & VC are offering games only, even DLC offerings are limited on Wii).  Just like I've said you may twist it that way and you'll be absoulutely right - revenue is quite bigger - and publishers may find it more lucrative.

I lost this one, or rather I was driven away by non-essential info, but let's get to your initial point "Wii users perhaps don't typically buy much software...", which is no way proffed by bigger revenue streams in downloadable sector since serivces are quite different at monetizing content and offer a hell lot of other things not even gaming related, while retail games sales are giving us entirely different picture and it was quite possible assumption that tie-ratio of downloadable games on Wii compare favorably with other platforms as well.

I have to agree with you... My family doesn't use the Wii downloads, but i was talking to my nephew during the holidays and he mentioned that he wished that he had gotten Wii gift cards.  He(he is 10yrs old) went on to tell me that he discovered all of the old Nintendo titles available for download and has downloaded "dozens" of them.  Of course, this is a very narrow example, but he said that he had gotten the idea from friends at school.  So, assuming that Nintendo isn't making many sales from online is inaccurate.   Besides, quoting total revenue that includes a monthly subscription cost is also bogus info.  If you look at the sheer size of the install base for the Wii, even if a small amount of those people use/purchase content online, you have a large # of uncounted sales. 



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mai said:

^Here we go, an online fee (and dozens of other things while WW & VC are offering games only, even DLC offerings are limited on Wii).  Just like I've said you may twist it that way and you'll be absoulutely right - revenue is quite bigger - and publishers may find it more lucrative.

I lost this one, or rather I was driven away by non-essential info, but let's get to your initial point "Wii users perhaps don't typically buy much software...", which is no way proffed by bigger revenue streams in downloadable sector since serivces are quite different at monetizing content and offer a hell lot of other things not even gaming related, while retail games sales are giving us entirely different picture and it was quite possible assumption that tie-ratio of downloadable games on Wii compare favorably with other platforms as well.

~$150M in 2009 vs >$600M non subscription revenue on Xbox Live financial year 2010 and >$800M revenue on PSN for calendar year 2010. Even if the game revenue is a fraction of those totals, that fraction is extremely likely to be larger than Wiiware and VC combined. It is completely foolish to argue that this revenue is irrelevant or that physical retail tie ratio is the entirety of the whole story without considering retail revenue and online revenue to complete the picture.

I never argued that Wii users don't buy much software, I said they didn't buy as much software because it was likely that their values in purchasing software on average are different to Xbox 360 and PS3 users on average.



Tease.

Squilliam said:
mai said:

^Here we go, an online fee (and dozens of other things while WW & VC are offering games only, even DLC offerings are limited on Wii).  Just like I've said you may twist it that way and you'll be absoulutely right - revenue is quite bigger - and publishers may find it more lucrative.

I lost this one, or rather I was driven away by non-essential info, but let's get to your initial point "Wii users perhaps don't typically buy much software...", which is no way proffed by bigger revenue streams in downloadable sector since serivces are quite different at monetizing content and offer a hell lot of other things not even gaming related, while retail games sales are giving us entirely different picture and it was quite possible assumption that tie-ratio of downloadable games on Wii compare favorably with other platforms as well.

~$150M in 2009 vs >$600M non subscription revenue on Xbox Live financial year 2010 and >$800M revenue on PSN for calendar year 2010. Even if the game revenue is a fraction of those totals, that fraction is extremely likely to be larger than Wiiware and VC combined. It is completely foolish to argue that this revenue is irrelevant or that physical retail tie ratio is the entirety of the whole story without considering retail revenue and online revenue to complete the picture.

I never argued that Wii users don't buy much software, I said they didn't buy as much software because it was likely that their values in purchasing software on average are different to Xbox 360 and PS3 users on average.

"I said they didn't buy as much software because it was likely that their values in purchasing software on average are different to Xbox 360 and PS3 users on average. "

 

I agree...  If you look at the average sell price of most titles for the Wii, it is at least $10 lower if not $20-30.  That alone will change the total revenue #'s.  But, if you are really talking about the number of units sold, it would generally cause the buyer to make more purchases because of the lower prices.  People generally have a plan of how much $ they want to spend on gaming or other things they do and will spend that amount or more when they shop.   This effect hasn't really happened as much for the Wii, because a large number of the install base are casual gamers who don't play as frequently and don't tire of their games so fast.



I think the key thing to consider is the fairly lackluster year for Nintendo software vs a major technology add-on for Microsoft. I can honestly say that there may be only 2-3 games that came out this year for the Wii that appealed to me at all, whereas the 360 had several good games released this year PLUS Kinect.

What will be the key thing for 2011 is how well Kinect continues to sell/increase userbase vs Nintendo's Wii releases for 2011. Factoring a new Zelda game is a major difference, as it pretty much shakes up the ant farm and gets more people to buy Nintendo consoles. Whereas Twillight Princess gave the option for some GameCube holdouts, Zelda fans will HAVE to play this one on the Wii. Should prove an interesting battle.

According to the chart in the OP, it's also interesting to note that the PS3 remains unchanged YoY, which is both good and bad. Good because it's not losing sales, but bad because its not gaining on either of the other systems - in the Americas of course. We know the Japanese circuit is different.

 



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Raze said:

I think the key thing to consider is the fairly lackluster year for Nintendo software vs a major technology add-on for Microsoft. I can honestly say that there may be only 2-3 games that came out this year for the Wii that appealed to me at all, whereas the 360 had several good games released this year PLUS Kinect.

What will be the key thing for 2011 is how well Kinect continues to sell/increase userbase vs Nintendo's Wii releases for 2011. Factoring a new Zelda game is a major difference, as it pretty much shakes up the ant farm and gets more people to buy Nintendo consoles. Whereas Twillight Princess gave the option for some GameCube holdouts, Zelda fans will HAVE to play this one on the Wii. Should prove an interesting battle.

According to the chart in the OP, it's also interesting to note that the PS3 remains unchanged YoY, which is both good and bad. Good because it's not losing sales, but bad because its not gaining on either of the other systems - in the Americas of course. We know the Japanese circuit is different.

 

As i continue to look at the Wii sales, i find it hard to believe that the software is selling the systems.  I guess to me, that people are still buying it because in general, the public are all lemmings.  They just seem to buy what the think that everyone else is buying.  I agree that if the Kinect continues to gain awareness as the "cool" thing to buy, the Wii sales will ultimately see a very strong downward trend later in the year(especially in the US).  But, maybe Nintendo has a plan to release something later in the year to surprise us all?  Kind of doubt it...



landguy1 said:
Raze said:

I think the key thing to consider is the fairly lackluster year for Nintendo software vs a major technology add-on for Microsoft. I can honestly say that there may be only 2-3 games that came out this year for the Wii that appealed to me at all, whereas the 360 had several good games released this year PLUS Kinect.

What will be the key thing for 2011 is how well Kinect continues to sell/increase userbase vs Nintendo's Wii releases for 2011. Factoring a new Zelda game is a major difference, as it pretty much shakes up the ant farm and gets more people to buy Nintendo consoles. Whereas Twillight Princess gave the option for some GameCube holdouts, Zelda fans will HAVE to play this one on the Wii. Should prove an interesting battle.

According to the chart in the OP, it's also interesting to note that the PS3 remains unchanged YoY, which is both good and bad. Good because it's not losing sales, but bad because its not gaining on either of the other systems - in the Americas of course. We know the Japanese circuit is different.

 

As i continue to look at the Wii sales, i find it hard to believe that the software is selling the systems.  I guess to me, that people are still buying it because in general, the public are all lemmings.  They just seem to buy what the think that everyone else is buying.  I agree that if the Kinect continues to gain awareness as the "cool" thing to buy, the Wii sales will ultimately see a very strong downward trend later in the year(especially in the US).  But, maybe Nintendo has a plan to release something later in the year to surprise us all?  Kind of doubt it...

It's been how many years and people still think Wii sells on lemming status alone?  Games, man.  People are obviously buying the software so hwo can they not be a factor?  if they didn't like the software, the attach rate would plummet and it hasn't.

And of course it's supposed to drop of this summer really bad.  Just like it was supposed to drop off realy bad every summer since summer 2007.



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