Firstly, i have to agree with most that the US is not necessarily a good benchmark of third party success. It is like using Japan's figures to state that absolutely noone in the world wants the Xbox.


What would be interesting though is to see this chart world wide which is corrected for investment. We are comparing games that cost 4 millions to make to games that cost over 60 million to make and market. i bet the return on investment is higher for most wii games on xbox360 games. And definitely compared to the PS3.

Considering the Wii not only has the biggest fan base, but it is also the cheapest machine to develop, there will be immense pressure from company executives to switch over to the Wii or at least increase focus to the Wii in terms of game development. I believe that exclusive titles for the PS3 and X360 will disappear, with the only ones to come already in development. Why develop for only one when the target market for both consoles is identical and with a 20 percent increase in cost, you could double you revenue. Oh wait, this has happened already.

The Wii on the other had will become the new DS. Hundreds of games, mostly shovelware, with a few absolute gems inbetween, mostly though only slightly profitable, with first party games selling for years on end.

Expanding the lower part of the graph (make it semi-log.) would be helpful. 

But I do think it already shows several points, that we basically knew already. 

First, that most Wii games are successful, since they only need about 150K sales (~$7.5M in overall revenue).  With this being just US, most all Wii games look to have achieved that.  Canada would add 10% more, plus any other WW sales.

X360 games should be successful, since on average they seem to run 300K in sales, (~$18M in overall revenue).  Of course they have the higher development costs and post-production cost (advertising), but if cost controls are maintained, they should be okay.  Based on the  losses coming out of a number of  game companies,  unfortunately,  that doesn't seem to be the case.

Finally, it shows the homogeniality of the X360 vs Wii population.  Meaning that good hardcore FPS, say, has a better chance of selling very well on the X360 versus the Wii.  But more quirky games will do okay on the Wii, especially as its console sales grow.

Although there are probably many games that are profitable at 150,000 sales, I think a better estimate for a break-even point is probably 250,000 ... It may not be that big of a difference but after retailer profit, licencing fees, and marketing costs a publisher/developer (probably) only makes $20 to $40 per game (depending on the price of the game and other factors) which would mean that 250,000 sales would translate to $5 Million to $10 Million.

I found a responce article to MS's attack on Nintendos claim.  I found it very interesting - didn't realize there was such a jump in software sales lately.  I knew it was on the rise but that's an amazing turn-around.

NPD: Wii Third-Party Games Really Do Sell

We now bring you the third-party only chart we promised in addition to data and commentary from NPD. Bottom line: Wii third-party games did indeed outsell the competition.

by James Brightman on Friday, August 08, 2008

We recently posted a story discussing the state of third-party software sales on Wii, which included a chart from Nintendo that inconveniently also lumped in first-party sales. Well, now we've obtained the proper third-party only sales chart (see below), which does bear out what Nintendo of America has been telling us all along: games from third parties are selling on the Wii.

In fact, when GameDaily BIZ contacted The NPD Group for more data, we discovered that for the first 20 months on the market for each console the Wii comparatively sold several million more units of third-party software in the U.S. than either the Xbox 360 or PS3. More specifically, the Wii sold 33 million units of third-party software in its first 20 months, while the Xbox 360 sold 29 million units and the PS3 sold 20 million units.

"I actually think that given the number of comments made from industry executives at E3 (or thereabouts) about how they didn't put enough resources against development of Wii games that the industry has realized that the old adage of 'only first-party games sell on Nintendo systems' is absolutely incorrect. I think you're right that the data will cause a few eyebrows to lift," NPD industry analyst Anita Frazier commented.

So where does the perception that third-party games don't sell on Wii come from? Most likely it stems from the respective sales ratios for the three consoles. While third-party software sales comprise well over 80 percent of total game sales on both the Xbox 360 and PS3, on the Wii that number dips all the way down to 56 percent. On the whole, however, because total Wii software sales are so high, even 50-something percent of a huge chunk yields a larger total for third-party sales. But there's still no doubt that Nintendo's incredible first-party success leaves a smaller part of the Wii software market for third parties to fight over. The key, however, as Nintendo has said, is to expand that market so all can benefit. So far, so good.

UPDATE: Having read our story, Wedbush Morgan analyst Michael Pachter decided to give us his take in an email: "Year-to-date (which I think is more relevant than lifetime), third parties have sold 13.4 million units of software for the Wii and 16.5 million units for the 360. That's NPD, and U.S. only. My guess is that the numbers are much closer to the same if we include Europe, and much higher for Wii if we go worldwide."

No matter how you slice it though, considering that the Xbox 360 had a year's head start on the other platforms, the Wii's third-party sales are quite good.

source: http://www.gamedaily.com/articles/news/npd-wii-thirdparty-games-really-do-sell/

bad graph overall. trying to show something relating 3rd parties not selling or selling on the Wii yet you make two huge mistakes.

1. comparing 360 to it and only show U.S. (Wii is huge success in 2 other huge regions, to ignore them fails. I mean the Wii has a little over 17 million consoles combined in the other 2 regions. The 360 has total 20 million consoles.)

2. comparing with a system that has a whole year of time to sell games. (even if you only showed games that came out after Wii, the userbase for 360 started way higher)