By using this site, you agree to our Privacy Policy and our Terms of Use. Close

Forums - Sales Discussion - The Math of Undertracking

The “Others” numbers are up and seems pretty shocking to some, espacially the wide margin by which the 360 outsold the PS3.

 

“The 360 is Overtracked!” is a common cry of the disappointed PS3 fans. Well, is it really overtracked? Is there a 360 bias in VGChartz? Fortunately we have some correlative data to use in assessing the claim.

 

Microsoft  announced on November 19th that the “XBox 360 sold 7 millions in Europe, up from 5 Millions in June”.

 

http://www.g4tv.com/thefeed/blog/post/691143/Xbox_360_Sells_Seven_Million_In_Europe.html

 

Yes, as usual, these are “shipped numbers” and not “sold to consumers”. Still, since the average channel inventory (i.e. the number of units that sit on the shelves at the retailers) does not fluctuate greatly, it is very reasonable to assume that indeed 2M units were passed to European consumers hands during the period.

 

Going to the VGChartz archives, VGChartz reports the European sales of the 360 in the the relevant period (June 7th – Nov 14th ):

 

 

Console

X360

UK

459,828

France

222,459

Germany

168,401

Spain

207,106

Italy

175,710

Scandinavia

96,181

Other Europe

206,994

 

So together VGChartz reports that the sales of 360 in Europe is 1,536,679 for the period. Significantly under Microsoft’s official numbers of 2M units.

 

The simple math means that VGChartz was actually undertracking the 360 in Europe by 465K units till now and therefore any claim of “overtracking” bias is unfounded.



Prediction made on 11/1/2008:

Q4 2008: 27M xbox LTD, 20M PS3 LTD . 2009 sales: 11M xbox,  9M PS3

Around the Network
ioi said:
Or that there is a lot of stock in place ready for christmas...

No. Not that much. 465K is about what the 360 sold in all of October in “Others”– and this would be just the increase over the regular inventory so altogether it would be about 2 full months of channel inventory. We are talking early November still and the retailers have a long way to go to the busy season. Stocking the shelves and holding so much inventory so early and spending so much capital makes no sense.

Moreover, the discrepancies showed up much earlier – in the September earning release of Microsoft it was apparent that the VGChartz 360 numbers were very off for “Others”.

See: http://www.vgchartz.com/forum/thread.php?id=49090

amirnetz said:

VGC puts the Q3 sales of the 360 sales on 1.85M.  Microsoft reported a for the same Q3 period sales of 2.2M units.

Before I continue, I am anticipating the immidiate claim/excuse of "VGC counts sold to consumers units and Microsoft counts shipped to retailers units so you cannot compare".

BS. I can compare. Unless there is any compelling evidence that the retailers had increased their in-store inventory, we must assume that the amount of in-store inventory is fairly constant with small flactuations and therefore  "Shipped" is pretty much the same as "Sold to consumers".

So after this is settled, we can do the math and see that VGC undertracked the 350 WW by 350K units or about 20%. Not great, not too bad. So it seems.

But there is a problem. a big one. NPD reported for the quarter USA retail sales of 747K for the 360. Adding the customary additional 10% for Canada gives 823K total for the Americas based on NPD. VGC was counting 880K for the same period. Very close and we can split the difference and put total Americas sales at 850K for the quarter.

Japan sales for the same period are at 116K based on VGC/MC.

So together Japan + Americas together are totaling 966K for the period.

So this means that Microsoft sold 2,200K - 996K = 1,204K units in "Others".  This is far above VGC estimates of 854K units in "Others" for the period.

So VGC was undertracking Microsoft in "Others" by over 40% for a full quarter!!!

Just as significant is the fact that "Others" totaled 40% more than "Americas", which is at odds with VGC assertion that Americas and Others are about the same sales volume for the 360.

These big sales of the 360 in others corresponds very well with Microsoft claims of a substantial increase in sales in Europe following the September price cut. 

So you guys were off by about 40% already at the end of september - this is not a Xmas problem.

 

 



Prediction made on 11/1/2008:

Q4 2008: 27M xbox LTD, 20M PS3 LTD . 2009 sales: 11M xbox,  9M PS3

Or they rounded the numbers in their press release...

In any case, your point is valid, the undertracking/overtracking argument is partly desperation.



MS has about 2 million 360s lying around on shelves? Seems like a bit much...how much do they normally have?

P.S. I'm pretty much just posting in here so I can keep tabs on the thread. Sounds interesting.



GOTY Contestants this year: Dead Space 2, Dark Souls, Tales of Graces f. Everything else can suck it.

darconi said:
Or they rounded the numbers in their press release...

They cannot round it up. It is a illegal for a company inflate its business results in public statements. People can go to jail for doing something like that (see Enron).

Remember - this information may used as input for financial analysts and investment brokers as part of their assessment of the Microsoft business. Investment Buy/Sell decision are made based on these inputs. This is why no one will play with these numbers. What Microsoft (and Sony and Nintendo) report in public statements is pretty much exactly what they have in their books.



Prediction made on 11/1/2008:

Q4 2008: 27M xbox LTD, 20M PS3 LTD . 2009 sales: 11M xbox,  9M PS3

Around the Network

Your forgetting that Microsoft includes Australia and New Zealand and other countries for what it calls "Europe" when talking about sales.

As for what console has been overtracked/undertracked -- wait until we get worldwide shipment numbers.



Aprisaiden said:
Your forgetting that Microsoft includes Australia and New Zealand and other countries for what it calls "Europe" when talking about sales.

As for what console has been overtracked/undertracked -- wait until we get worldwide shipment numbers.

No they don't. VGChartz invented "Others" as Europe and any other country that is not in America or Japan.

Microsoft have a very precise and legal definition of Europe that is based on the geographic location of the country. If a country is outside of the European continent then it will not be call Europe. Again, nobody mocks with the numbers - they can go to jail for it. See my post above.

 



Prediction made on 11/1/2008:

Q4 2008: 27M xbox LTD, 20M PS3 LTD . 2009 sales: 11M xbox,  9M PS3

i dont understand for what reason 360 sold that much. black friday isnt here yet, and where well away from christmas.



 

 

 

 

The Math of Undertracking

2 + 2 = 3



Currently playing on PS3: God of War III

Currently playing on Xbox360: Final Fantasy XIII

Currently playing on NDS: Chrono Trigger

ioi said:

Lol, you do realise this is my site, right?

Trust me, any disparity in shipments / sales is due to Microsoft producing and shipping a load of units in the buildup to the holidays - we do study these things

Also, whilst 450k may be the entire October sales in others if you look on the front page you see it sold 230k last week so it is more like 2 weeks sales at the moment, which really isn't a lot.

thanks for clearing that up.