One of the cherished traditions for people in and around the North American videogame industry is the mid-to-late month release of the previous month's sales figures for both hardware and software. Much like Hollywood with the weekend box office or the music industry with SoundScan, this data, compiled by the Port Washington, NY-based NPD Group, is the subject of much scrutiny, speculation and analysis as everyone tries to figure out What It All Means. For the month of July 2007, the numbers are as follows:

Hardware

1. Wii: 425,000
2. Nintendo DS: 405,000
3. PlayStation 2: 222,000
4. PlayStation Portable: 214,000
5. Xbox 360: 170,000
6. Playstation 3: 159,000
7. Game Boy Advance: 87,000

Software

1. NCAA Football 08
   Electronic Arts
   Xbox 360
   397,000
2. Guitar Hero Encore: Rocks The 80s
   Activision
   PlayStation 2
   339,000
3. Wii Play with Remote
   Nintendo
   Wii
   278,000
4. NCAA Football 08
   Electronic Arts
   PlayStation 2
   236,000
5. Mario Party 8
   Nintendo
   Wii
   177,000
6. NCAA Football 08
   Electronic Arts
   Playstation 3
   156,000
7. Pokemon Diamond
   Nintendo
   DS
   144,000
8. Transformers: The Game
   Activision
   PlayStation 2
   143,000
9. Guitar Hero 2 with Guitar
   Activision
   PlayStation 2
   138,000
10. Guitar Hero 2 with Guitar
    Activision
    Xbox 360
    108,000

Having engaged in many phone, email and IM back-and-forths with various people over the NPDs, as they're generally referred to, we've decided to bring some of those often unheard discussions to light with our occasional feature, Monday Morning Quarterback. Our returning opponent is the Game Head himself, Geoff Keighley, pitting his BlackBerry-fueled insights against our Palm-enabled observations. We hope that you'll enjoy the discussion. (Please note that the first two entries were written before the numbers were released; also a more comprehensive assortment of sales charts can be found at the end of this post.)

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To: Geoff Keighley

Fr: N'Gai Croal

Date: Aug 23, 2007

Re: So much news, so little time

Geoff,

Before we begin, a few housekeeping duties. First, I want to apologize to our loyal readers for the delay in putting together a second installment, which has been entirely my fault. I could use any number of excuses, but I'll just say that I'm committed to doing a better job of making this a regular series; I'm glad that you're still on board; and if all goes according to plan, we may have some very special guest QBs joining us in the future. And with that, it's time to kick things off.

A lot has happened since the debut of Monday Morning Quarterback three months ago. Electronic Arts CEO John Riccitiello reorganized the company into four silos--EA Sports, EA Games, EA Sims and EA Casual--and hired former Activision exec Kathy Vrabeck to run the newly-formed casual division. Microsoft finally 'fessed up (somewhat) to the Red Ring of Death flaws, and took a $1.15 billion hit to cover the costs of an extended warranty and additional repairs to existing Xbox 360s. Sony Computer Entertainment America announced a $100 price cut for the Playstation 3, then stepped all over its own messaging during the E3 2007 Media & Business Summit (aka the new Min-E3) as conflicting messages came from SCE overlord Kaz Hirai and SCE Europe chief David Reeves. At E3, Microsoft introduced Scene It? and the Buzz!-like game show controllers; Nintendo debuted the Wii Balance Board and Wii Fit; Sony showed the is-it-really-redesigned PSP and some compelling Playstation Network games.

(Pause to catch my breath.)

But the biggest news of all came after E3, with Peter Moore leaving Xbox to run EA Sports; former EA studio boss Don Mattrick ascending to head Xbox; and Hideo Kojima finally showing a playable demonstration of Metal Gear Solid 4: Guns of the Patriots, to the rapturous delight of Sony fanboys around the world. Silicon Knights, one of a slew of licensees of Epic Games' Unreal Engine middleware, sued Epic for using "the fees from those licenses to launch its own game to widespread commercial success while simultaneously sabotaging efforts by Silicon Knights and others to develop their own video games;" licensees of Epic's Unreal Engine middleware. Epic subsequently counter-sued, declaring that Silicon Knights was attempting to "unlawfully enrich itself at the expense of Epic Games." Grand Theft Auto IV was delayed until next spring. Word has it that worldwide Wii sales should pass those of Xbox 360 in September; while the Mercury News' Dean Takahashi has just reported that 360s with the smaller 65-nanometer CPUs are already making their way from China to the United States. Did I leave anything out?

Like you, I'm looking forward to checking out the July NPDs. If the analysts are right, we may finally have something new to talk about, with PS3 sales passing those of Xbox 360 due to last month's price cut on the 60 gigabyte PS3 and Microsoft's acknowledgment--finally!--of unspecified serious flaws in the 360's original design. If they're wrong and the sales simply mirror June's, what more will we have to say than that the DS is still kicking ass; the Wii is still taking names; the 360 is still muddling along with sub-200k monthly sales figures that don't portend long-term dominance; the PS2 is still showing few signs of slowing down as it heads into its seventh holiday; PSP hardware looks as though the benefits of its three-month-old price cut will be permanent, but PSP software still can't buy its way onto the Top 20 list; and the PS3, like a pole vaulter who's botched the plant and the take-off, still can't clear the pitifully low bar of 100k units sold, even in a five-week reporting period? It's as though we all fell asleep in front of the TV set months ago, woke up, and found that we were still watching the same crime movie mashup: "Ocean's Eleven" (Nintendo)-meets-"The Godfather: Part III" (Microsoft)-meets "Small Time Crooks" (Sony.)

So while I'm curious to hear your thoughts about what the July sales charts--and the first half of 2007 sales--mean for the big three, I'm even more interested to get your take on the implications for third-party publishers. The New York Times ran a piece last month about publishers shifting resources to the Wii, in some cases, away from the PS3; do you see that becoming a trend, or are publishers effectively trapped on a forced march with the PS3 because there aren't enough 360s on the market to make up their projections on those big-budget HD games? The Los Angeles Times published a story about how Activision broke EA's stranglehold on the title of top third-party publisher for the first half of the year, thanks in no small part to Guitar Hero on both PS2 and 360. I don't expect Activision to hold onto that crown for long, not with NCAA Football, Madden NFL 08 and Need for Speed ProStreet coming out, but is EA's Skate a deliberate attempt to do to Activision's Tony Hawk what Activision's Call of Duty did to EA's Medal of Honor and is poised to do to EA's Battlefield series?

Ubisoft's Splinter Cell slipped into 2008; does that clear some room to operate for EA's still-finding-its-sea-legs Army of Two? And more importantly, given the Internet-melting response to Konami's real-time demo of Metal Gear Solid 4--which is scheduled to ship in 2008--is Sam Fisher being sent to die from a Metacritic perspective? Finally, are investors getting irrationally exuberant about the sales potential of Irrational Games'--sorry, 2K Boston/2K Australia's--BioShock? Sure, it's currently the second best-reviewed game of all time on Game Rankings, but with just five weeks on store shelves before Halo 3 drops a power drain on the 360's fanbase, and nowhere near the same marketing blitz, can BioShock stay afloat? Or is it doomed to sink like so many next-gen titles after a strong debut?

What say you?

Cheers,

N'Gai

***

To: N'Gai Croal

Fr: Geoff Keighley

Date: Aug 23, 2007

Re: Second Place? Or First Loser?

N'Gai,

We should take three months off from Monday Morning Quarterback more often! In fact I'll take a three month vacation so I can come back and feel like I haven't missed a beat by reading your exhaustive and on the money precis on the past 90 days in gaming. I'm loving it! Well, except for the part where you omitted Jack Tretton's announcement that Rockstar is building an exclusive new franchise for the PS3....

Seriously, I'm excited to continue this dialogue. And no apologies necessary. We've all been busy--and, I'm happy to report, busy as of late playing some great games like Bioshock, Metroid Prime 3, and the Call of Duty 4 multiplayer beta.

Right now I'm on a plane flying to Boston from Los Angeles, which gives me the perfect opportunity to respond to your email. Like you, I eagerly await the NPD numbers for July. Michael Pachter certainly stirred the pot a bit last week when he "predicted" (or should I say "speculated"?) that the PS3, fueled by that price "adjustment," might outsell the Xbox 360 in July. But it ain't gonna outsell the Wii. And to that I say, isn't second place still the first loser?

I don't mean to be overly harsh, but Microsoft and Sony have to be concerned. I'm also not sure the July numbers will give us much insight into the future. Yes we'll be able to read a little bit into the elasticity of demand for the PS3, but I honestly think the July numbers are more like throat clearing before the big holiday push.

In fact I'd move that the two most disruptive events in July weren't related to E3 or the NPD sales. To me the biggest headlines were the delay of GTA IV until the Spring of 2008 (okay, that technically happened in very early August), and Microsoft's announcement of Xbox 360 warranty extension. (Notice how I spun that so positively? My parting gift to you, Petah!). So, if you don't mind, I'm going to frame my response to your email around those two issues.

First, let's talk GTA IV. I guess I've never really spoken about it publicly before, but for a number of months I'd been hearing from sources inside and outside of Rockstar that the game's development was running behind schedule. It's fair to point out that this is the first time Rockstar has ever tried to ship a GTA game on multiple platforms, as well as the first time Rockstar has made a GTA open world game on its own technology. At E3 I spent a lot of time talking to executives about a potential GTA slippage and no one was denying it. One of the biggest names in the industry told me, under cone of silence, that he had recently heard that Take-Two would either be forced to "split ship the game" (shipping the Xbox 360 this fall, and the PS3 version next year) or delay both versions until 2008. For whatever reason Rockstar decided on the latter option.

But no matter the reasons for the delay, let's assess the impact. The night before Take-Two's surprise announcement, I was out to drinks with a high-ranking official in the business. We were discussing the lackluster Xbox 360 sales so far and this executive said that they thought GTA was going to be the game changer that kickstarts 360 sales perhaps even moreso than Halo 3. GTA IV would have also been a major boost for the PS3.

So it's been surprising to read all this analysis which focuses on how the GTA IV delay is great news for other publishers because gamers will have more available dollars. That assumes these gamers already have a next-gen system. Clearly the numbers show that a lot of PS2 owners haven't yet upgraded. I think they might have done it for GTA IV. But are they going to do it for Army of Two? C'mon! GTA IV may be the gatekeeper to the next gen.

Without GTA the PS3 is going to struggle this holiday season, especially given the middling reviews of Lair and Heavenly Sword. Ratchet and Uncharted should fare better, but Killzone 2, Metal Gear Solid 4 and LittleBigPlanet can't come soon enough. I think the price "adjustment" will help Sony, but if we don't see at least a doubling of sales in July (north of 150,000) we'll know the problem isn't just price--it's also a lack of compelling software.

Let's turn more directly to the 360. I have to say that I've played my 360 more these past two weeks than I ever have before. Bioshock is phenomenal and I'm betting it will have a huge first month, right behind Madden. I agree it may not ultimately be a top five game this year, but the 360 audience is hardcore and will eat it up. But will the lack of multiplayer will hurt the game's sales? Do you think it can sell more than a half million in its first month? (Keeping in mind that Gears did a million last November with a smaller installed base). I think it's possible. Add in the Call of Duty 4 multiplayer beta, Madden 08, demos like Stranglehold and Beautiful Katarmari, and the release of Halo 3 in a month and I have to say that the 360 is really rocking from a software perspective. But you know what? I'm still anticipating somewhat middle-of-the-road 360 sales for August, even with the price cut. 250,000 units? Maybe.

Perhaps the announcement of the "warranty extension" has caused some consumers to wait and see. Clearly there is confusion in the market. And who can blame the consumer? Microsoft now has eight different SKUs out there when you consider the new HDMI-enabled versions of the Core and Pro, the white 360 Elite, and the forthcoming "Arcade" rebrand of the Core. Oh and wait, I almost forgot the Halo special edition Premium. But does that come with an HDMI connection or not? Oh, and then there are the new 65nm Falcon 360s coming soon, so that could mean 11 different SKUs! Even I'm starting to get lost and I study this stuff every day.

I guess we will really know by the end of September if the 360 is going to hit a tipping point this year or not. Many third party publishers are certainly hopeful. And given the lineup of games the 360 really should hit its stride, don't you think? But for some reason I'm still a bit skeptical. The runaway success of the Wii causes pause, as does the simple fact that I'm beginning to worry that many gamers may have given up on console gaming because it's getting too expensive or they don't yet have an HDTV. If the market starts to contract almost everyone is in trouble. Well, everyone but Nintendo that is.

Here's my current thinking on Nintendo: We know Reggie & Co. has a lineup of three hardcore games for the holidays--Metroid, Mario and Super Smash Bros. But given that games like Mario Party and Wii Play outsold Zelda, are these really the right games for the Wii audience? What do you think? Should Nintendo have focused more on shipping Wii Sports 2 or Wii Health this year in the U.S. instead of delivering another Smash Brothers? I'm beginning to wonder why Nintendo's lineup looks like a hardcore gamer's dream but a casual Wii consumer's nightmare?

I guess that leaves it up to the third party to deliver on the Wii? As you mentioned it seems the casual games revolution is in full swing, and publishers are buying Wii development kits at a dizzying pace to try and soften the blow of slow sales for the PS3 and 360. (As an aside, it would be interesting to actually get a line graph from Nintendo of the number of development kits sold to third parties over the past 18 months. My bet is that there's been a huge spike post-launch, which is unusual for a console).

I'm intrigued by some third party offerings for the Wii, but have you seen anything that you think will resonate with the Wii Play and Wii Sports crowd? EA better hurry up with that Monopoly game. And I bet they will, as they move resources off the PS3 and cautiously plow full steam ahead on the 360, hoping it hits its tipping point soon.

I'm about to land so I should end this missive. Soon my Blackberry will be filled with the NPD numbers and we'll see if Sony crosses the 150,000 barrier and if the Xbox can creep about 200,000 again. And what about the top selling game of the month? I'm pretty sure it will be NCAA Football but I'm struggling to even think of what the second best selling title will be. If it's Wii Play I may just have to hang up my Gamercard for good.

Geoff

***

To: Geoff Keighley

Fr: N'Gai Croal

Date: Aug 24, 2007

Re: It Still Prints Money!

Geoff,

Now that I've had a chance to look at the NPDs, here are the first things that jumped out at me:

1. Our mutual friend, Michael "Pach Attack" Pachter, guessed wrong on PS3's sales outstripping the 360's. The PS3 sold 159,000 units, a significant improvement over the previous month's 98,000, but still well short of the 200,000 console mark--the videogame market's equivalent of a gentleman's C. Microsoft didn't beat Sony by much, with 170,000 units sold, but considering the company's pre-E3 acknowledgment of the 360's significant design problems, this slim margin of victory has to be considered a minor triumph. To continue our pigskin analogy, football is a game of inches, and in the Sony-Microsoft matchup, does it really matter whether Xbox 360 uses a long bomb or a quarterback sneak so long as it scores yet another touchdown?

Still, like Pachter, I was somewhat surprised that there wasn't a bigger hit to Xbox 360 sales from the hardware flaws. I've gone on record as saying that Microsoft took far too long to disclose the problems and still hasn't given consumers enough facts to make a truly informed decision about if and when to buy a 360. Yet weekly sales actually increased month-over-month: 198,000 Xbox 360s were sold during June's five-week reporting period, or 39,600 units per week, compared to 170,000 Xbox 360s during July's four-week reporting period, for 42,500 units per week.

Clearly, Microsoft did the right thing to ignore my advice. Either a) its original strategy to launch ahead of PS3 with cheaper components and lower retail prices was correct; b) consumers are either still largely unaware of the problem; c) savvier gamers are willing to risk the tender mercies of Microsoft customer service in order to get their hands on its software lineup; or d) to paraphrase P.T. Barnum, there's a sucker born every minute and 360 to take him.

2. The Wii is officially a monster—it's now even outselling the cheaper DS. To move 425,000 units during July is something we haven't seen since 2002, when the PS2 pulled it off, but the PS2 was $50 cheaper at that point. Report card-wise, that puts the Wii into A+ territory. No wonder Microsoft was reduced to emphasizing the strength of third-party software sales on 360 vs. Wii during its E3 press conference. Those folks are reading the same tea leaves we are, and if the unofficial reports from certain Web sites are correct (edit: he likely means our press release and the Neogaf cross over thread), global hardware sales for Wii have surpassed those of Xbox 360. Microsoft may be able to regain the lead with Halo 3, but with Super Mario Galaxy and Super Smash Bros on the way, followed by Wii Fit—Japan gets it by yearend; North America and Europe in 2008—I expect the Wii blow past 360 for good.

Nintendo, like Microsoft, is also smartly ignoring my complaints. I zinged them for their lack of new IP announcements at E3, particularly those aimed at core gamers. Yet I have colleagues--all non-gamers, I must add--coming up to me and asking me for the best way to get their hands on one as a holiday gift; wondering whether they should wait until the holidays to jump in (uh, no) or try to buy one as soon as they can find one (hell, yes.) So it would seem as though Nintendo's decision to focus on titles with non-gamer appeal like Wii Fit rather than hardcore curiosities like the is-it-still-in-development Project H.A.M.M.E.R. was the right call.

What's interesting is that a lot of our cohorts in the gaming press--an admittedly unrepresentative sample--aren't playing their Wiis much. Unless they have friends come to visit, they're pretty much forsaking their Wiis for Xbox 360, DS and some Playstation Network from time to time. Wii fans regularly complain that enthusiast outlets--most notably, the gang over at Ziff-Davis' 1UP Yours podcast--are paying insufficient attention to their console of choice, and in fact spend too much time mocking the Wii for what it's not (its lack of HD graphics; the fact that it's become a dumping ground for mini-games; the trend towards porting PSP games to Wii) rather than applauding what it is: a refreshing change from the way games used to be, which is attracting new people to this hobby. But with Guitar Hero III, Rock Band and SingStar PS3 coming this holiday--and, as you point out, a bizarre lack of new games to capitalize on the Wii Sports phenomenon (sorry, EA, but jamming those controls into your pro sports titles doesn't really count)--I wonder how many of us in the media will be playing Wii Sports and Wii Play when friends come to visit.

All this portends a sharp divergence between the people who faithfully cover games and the next-gen console with the most momentum, making the gaming press increasingly out of touch with what's really going on in the world. Has Game Informer put a Wii title on the cover since Red Steel? Has EGM put any Wii titles on its cover? I don't know for sure, but the bulk of the covers I see are for games that are leading on Xbox 360 and shipping simultaneously (cough, cough) for PS3. Wii games are relegated to cover lines or the guts of the mags. I don't think any of this is cause for Nintendo to be concerned, but I do wonder when the coverage is going to reflect the sales charts, if at all.

3. Just because the DS is being (barely) outstripped by its younger brother doesn't mean that it's falling off. I'm sure publishers are looking at the DS' top ten, where only five of the titles came from Nintendo, as a hopeful harbinger for where the Wii will be next year (currently 6 of the top ten coming from Nintendo.) Look closer and you'll see at least one troubling sign: none of the top ten DS titles are original IPs. They're all either brand extensions—Pokemon (2), Mario (2) and Animal Crossing (1)—or licenses—Transformers, Hannah Montana, Harry Potter. For a handheld as innovative as the DS, it's a shame that more original games aren't being produced to support it.

4. The PSP's now months old price cut continues to put it in solid, if not spectacular stead, with 222,000 units sold. But why is it that four of its top ten titles debuted in 2005, another two in 2006, and just four were introduced in 2007? Sony continues to move decent amounts of hardware, but the commensurate amount of software isn't being sold, giving developers little incentive to make games that take advantage of what the PSP can do.

So while companies like BioWare and id software are being drawn to the DS' massive installed base with Sonic RPG and Orcs & Elves, Sony is going to have to take a page from Nintendo's book, circa Gamecube, and rely on itself alone to deliver the games that will liberate dollars from wallets. Bringing God of War to PSP, along with sequels to Syphon Filter and SOCOM, is a good start, but we're going to need to see more compelling original IP as well. Because while the PSP Slim and Lite will further goose hardware sales, it's useless if meaningful amounts of software can't start being sold on a regular basis.

5. I generally don't have much to say about accessories, but there were a couple of points worth looking at. One, the Wii's dominance at retail is reflected in its nunchuck and remote sales. Two, PS2's continued excellence is manifested in sales of memory cards, but not in additional controllers; are PS2 newbies playing alone, or is it just evidence of a more price-sensitive consumer? Finally, while there are now Xbox 360 controllers among the top ten accessories sold, the 1600 Live Points Card came in at number five, which suggests the importance of Xbox Live as well as an appetite for downloadable content.

Those are my thoughts. What are yours?

Cheers,

N'Gai

P.S. How could I have forgotten the news you broke on Game Head about Sony and Rockstar's agreement to partner on a PS3 exclusive title? Perhaps I was subconsciously jealous of your scoop!

P.P.S. Wii Play was number 3. Your gamercard is safe.

***

To: N'Gai Croal

Fr: Geoff Keighley

Date: Aug 26, 2007

Re: By The Numbers

N'Gai,

The Wii really is a monster! To post 400,000+ sales in July is a tremendous achievement for Nintendo and proof that the "Wii is a gimmick" argument is officially dead. It's also a clarion call to third party publishers that they better get their Wii strategy in order, pronto. It must be embarrassing to EA that Harry Potter for the Wii just squeaked into [the Wii's] top 10 in July and was outsold by The Bigs from Take 2. I wonder when a third party publisher will release a #1 selling Wii game? Something to consider: Could Guitar Hero 3 for the Wii become the monster third party hit for the holidays?

Until third parties figure out a better Wii strategy, they will be caught in a precarious position. Let's use EA's NCAA football game, the #1 title of the month, as an example. This year the 360 version sold almost 400,000 units, up from 333,000 units last year. That's respectable growth. But the PS2 version dropped from 490,000 units last year to 236,000 this year. Without a Wii version, the PS3 sales of 156,000 (which obviously didn't exist last July) don't make up the difference. EA may have overcharged for the PS2 SKU this year ($49 when it should have been $39), but could there be a bigger issue at hand? Are PS2 gamers moving to the Wii? Or worse, are the PS2 gamers leaving the market as active consumers? They aren't buying PS2 games anymore and they aren't upgrading to new boxes either.

If that is indeed the case, the Wii becomes even more vital as a lifeline for third parties. As of now, no one has cracked the code on what makes a hit Wii game. Will EA do it with Boogie? I'm thinking not. When--not if--Wii sales do eclipse the 360 worldwide, third parties must figure out how to deliver hits on the Wii. They can no longer use the excuse that "Only first party games sell on Nintendo platforms." Maybe EA's SmartyPants trivia game or Rayman Raving Rabbids 2 will break through. But you have to believe that the Wii sales are causing some sleepless nights for third party execs.

Regarding the Xbox 360, the system seems to have hit a wall. It's down 15 percent from June and off a stunning 18 percent from the same period a year ago. With all the excitement around this holiday season on the 360 these trends are troubling. That said, I wasn't expecting the big drop in sales you were from the "warranty extension" announcement. My impression is that consumers feel like they will be taken care of if there's a problem. Plus, if you want to play cutting edge HD games at a reasonable price the 360 is really the only choice right now.

What kind of impact will the price drop have on 360 sales? I'll go on record saying that I think the August sales will be less of a bump than many analysts expect. I doubt 360 even hits 300,000 in sales for August. Come September, will the release of Halo 3 be the disruptive event that Gears of War wasn't? Halo 3 will get a lot of Xbox 1 owners to finally upgrade to 360, but that's a finite pool of customers. More importantly, what is Microsoft doing to sway a potential Wii owner toward the 360? Scene It? isn't going to do it. I think Microsoft has a serious issue on its hands and has thus far failed at turning 360 into a more mainstream system than the first Xbox.

As for PS3, the sales bump is reasonable but not a game changer. Sony has a lot of ground to pick up, and unfortunately I don't see another price cut coming anytime soon to further stoke the sales numbers. We've been saying it for a few months, but more and more it looks like Sony will have to wait until 2008 to get a shot at hitting #1 on the monthly charts. That's okay if the 360 still continues to post moderate numbers (i.e. maxing out at a million a month in November), but problematic if Halo 3's release ignites the 360 market. On the PSP I agree with your assessment that Sony needs more first party software. I hope we will see more PSN games ported/available on PSP. Already we've heard about Calling all Cars and Echochrome, but where is Pixel Junk Racers or even Blast Factor (admittedly difficult with only one analog)?

Finally, we should respond to a reader question from the last MMQB. The reader wants us to predict if Guitar Hero III will outsell Rock Band this holiday season and which versions will do the best at retail. It looks like Guitar Hero is coming out at the tail end of October versus Rock Band during Thanksgiving week, so comparisons may be hard. Still, my money is on Rock Band eclipsing Guitar Hero sales on 360 and PS3, but I expect Guitar Hero 3 on PS2 to best all other SKUs. There's a chance Guitar Hero for Wii could outsell Rock Band on 360. (Harmonix announced Rock Band for PS2 at Leipzig, but it sounds like it won't be out until 2008). What do you think?

Geoff

***

To: Geoff Keighley

Fr: N'Gai Croal

Date: Aug 27, 2007

Re: Wii Panic

Geoff,

I feel for the people in charge of development at these publishers, because solving the Wii conundrum is not going to be simple. You cited Electronic Arts, whose top brass have told us over and over again that the best time to introduce new IP is early in a console's life cycle. Like Nintendo's Reggie Fils-Aime, however, these execs must have a different definition of "early" than we do. In 17 months, EA has yet to release a new IP for Xbox 360, unless you count Boom Boom Rocket for Xbox Live Arcade (personally, the less said about that title, the better.) Once Army of Two ships later this year, EA will have put out a whopping one new IP for 360 in three holidays. In fairness, it's not as though EA has been a complete slacker; the company has taken the lead in bringing real-time strategy games over from PC to console, and it has new IPs in the works like DICE's le parkour-inspired shooter Mirror's Edge and the System Shock homage Dead Space in the works for 2008. But it's reasonable to say that thus far, EA's been playing it safe on 360 and, by extension, PS3.

Now compare that to the company's strategy on Wii. EA has already released one new IP with the August release of Boogie, with Blocks, EA Playground and SmartyPants on tap for later this year. And so far, all four are exclusive to Wii, which is a testament to Nintendo's success at not only building and maintaining tremendous buzz for Wii, but converting that buzz into actual sales. The question is, how long will these games remain exclusive?

My guess: not long.

When you and I got an early look at Boogie during the Game Developers Conference in March, we both thought it had a ton of potential--clean graphics that still outshine most third party efforts on Wii; slick art direction; a nifty music video editor; and a fresh take on dancing games that had promise--but gameplay-wise, it was still very rough around the edges. Now that it's been released, its Metacritic rating of 62 doesn't bode well. (Maybe EA should have convinced Nintendo to let it throw in a Boogie-themed remote, since that vital accessory turned the even lower-rated Wii Play, with a Metacritic rating of 58, into a smash hit.) So if it doesn't do well, EA may have to port it to PS2, just as Activision did with Tony Hawk's Downhill Jam, where its aesthetic ought to correspond to the tastes of that still-growing installed-base once EA Montreal slaps on dance pad support. The same is true for Blocks, EA Playground and SmartyPants.

Here's the thing: even if Boogie and its fellow Wii exclusives do well, EA has to be thinking about porting those games to PS2, and even PSP, just as the company is already doing with Medal of Honor Heroes for PSP and Wii. It simply isn't in EA's DNA to do platform exclusives, for three major reasons: franchise-building, maximizing revenue, and amortizing its marketing and development budgets over as many SKUs as possible. The PS2 and PSP may not have the same buzz Wii does, but they both have a larger installed base, and there's probably a good deal of overlap between the tastes of early adopters buying into Wii and the late adopters buying into PS2. No way does EA intend to ignore that. Sure, the conventional wisdom states that you have to make owners of Nintendo platforms feel like they're getting an exclusive, otherwise your game won't sell, but that's probably only true of the hardcore Nintendo fanboys, the ones who line up for Zelda and Metroid Prime. The casuals who were brought in by Guitar Hero don't care, nor do the mommy bloggers who are raving about Boogie, nor do the parents and other price-sensitive consumers who would rather spend $129 on a PS2 than $249 on a still-difficult-to-find Wii. So my prediction is that we'll see a lot of these Wii exclusives start appearing on other systems once publishers' rational exuberance about the Wii meets the same return on indifference that has plagued most third party efforts on Nintendo consoles for years.

The other point worth noting about EA's Wii software, as well as that of its Western third party peers, is that they're for the most part going after the same two demographics: children and casuals. But what about the third "C": core gamers? Even when Nintendo points the way with titles like The Legend of Zelda: Twilight Princess and Metroid Prime 3: Corruption, they're all still afraid to challenge the Kyoto kingpin with core games--whether they be brand extensions or original IPs--made specifically for the Wii. You mentioned Harry Potter: why hasn't EA done a deep Zelda-like take on that franchise--or made plans for a Resident Evil 4-style version of the still-unannounced horror game Dead Space? Why hasn't Activision done a Call of Duty spinoff focused on a lone Special Forces officer operating in hostile territory, a la Metroid? Ubisoft deserves credit for Red Steel, but unless I'm mistaken, they've yet to announce another Wii exclusive aimed at core gamers. While I applaud the fact that so many Western third party developers have gotten religion on casual games, there's a core gamer crowd on the Wii that even Nintendo hasn't been regularly serving, yet no-one seems willing to step up to the plate.

I ran this theory past an exec from a major publisher over lunch, and he insisted that the key takeaway from the Wii's explosive start was Wii Sports, not Twilight Princess. (Throw in the performance of Wii Play and Mario Party 8, and it's easy to see why the Wii is drowning in mini-game collections.) But I think he's wrong. Clearly, developers and publishers who have drawn inspiration from Wii Sports are trying to crack the code of the Wii along two axes: gestural controls, because that's what partially distinguishes the Wii from the PS3 and fully differentiates it from Xbox 360; and appealing accessibility. But that worthy yet-narrow focus parallels a mistake that many developers--not to mention journalists like myself--made early on with the DS.

We assumed that a "true" DS game had to make use of all of its features--touch, two screens, D-pad, buttons, microphone, Wi-Fi--rather than isolating one or two features around a specific gameplay experience. Since then, Nintendogs has proved that a game can be built entirely around touch. Brain Age has shown the viability of holding the DS like a book. New Super Mario Brothers demonstrated the appeal of old-school platformers with old-school controls. The DS, in other words, was proven to be a platform that can support a variety of carefully designed and focused experiences. And by the end of this holiday season, with Metroid Prime 3, Super Mario Galaxy and Smash Bros. Brawl, the Wii will have done the same. Yes, those six games I've mentioned all bear the Nintendo logo, which generally elicits a Pavlovian response from Nintendo gamers that third party games rarely do. Still, this can't continue to serve as an excuse for publishers' narrow creative and demographic focus. I don't envy their task given the recent history of Nintendo's five home and portable platforms. But as long as third party publishers keep stereotyping Wii and DS gamers while telling themselves that they're being inventive, their blinkered, tentative, panicked efforts to Nintendo's machines will only further gamers' historic indifference to their offerings.

Finally, thanks for mentioning the reader request we received after our first installment of Monday Morning Quarterback. It came from MTV News reporter Stephen Totilo, who asked us to rank our predicted performance of Rock Band and Guitar Hero III by platform. Here's my take.

Guitar Hero III

1. PlayStation 2
2. Xbox 360
3. Wii
4. DS
5. Playstation 3

Rock Band

1. Xbox 360
2. Playstation 3

For head to head, Guitar Hero III will obviously outsell Rock Band on Xbox 360 and Playstation 3, because Guitar Hero will be cheaper--I'm expecting Rock Band to retail for $199 with one guitar, microphone, drum kit and the game disc--as well as being the more established brand. But having played early versions of both games, I'm forecasting that Rock Band will in the long run surpass Guitar Hero (though the market will certainly support both games for years to come.) As I've told you, Guitar Hero is the game, but Rock Band is the experience—playing this game with three other people is peerlessly entertaining, and it's the best argument I've seen for saving your quarters to buy the biggest flat screen TV you can afford. I predict that the same early adopters whose word-of-mouth turned Guitar Hero into first a cult hit, then a runaway phenomenon, will migrate over to Rock Band. Oh, they'll still buy and play Guitar Hero, but when friends come over, it's Rock Band that they'll haul out to rock out with their controllers out.

Thanks again for tossing the pigskin, and I look forward to doing so again next month.

Cheers,

N'Gai

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I bolded the interesting parts...

Link: http://blog.newsweek.com/blogs/levelup/archive/2007/09/04/monday-morning-quarterback-for-july-2007.aspx

I'll be back later with my thoughts on their correspondence...

It was a long read but it was worth it. One of my favorite points that they brought up was that 3rd party developers need to use all of wii's capabilities to make a successful wii game rather than just take a thing or two and throw it into a game.

 "We assumed that a "true" DS game had to make use of all of its features--touch, two screens, D-pad, buttons, microphone, Wi-Fi--rather than isolating one or two features around a specific gameplay experience. Since then, Nintendogs has proved that a game can be built entirely around touch. Brain Age has shown the viability of holding the DS like a book. New Super Mario Brothers demonstrated the appeal of old-school platformers with old-school controls. The DS, in other words, was proven to be a platform that can support a variety of carefully designed and focused experiences."

I got the opposite out of it.  I think they are saying that if you focus on the parts you are using and do them very well then you don't have to use all the parts.  And I agree with them.  Thats not to say there shouldn't be games that use everything but its not required if the game is just going to suffer if they tack it on last minute.

@Topic:

Good read, a very long read...but a good read none the less.  They echo a lot of the sentiments I have mentioned on this website in regards to the neccessity of 3rd parties to actually put forth some effort.  

Well normally I would write more but I need to head to class, be back later~ 

Look at Mario & Luigi, Partners in Time. Only uses the Two-Screens to make very interesting puzzles.

Good read. I'll get my thoughts together later in the day. There is a lot to comment on.

I thought that this was the most interesting observation:

What's interesting is that a lot of our cohorts in the gaming press--an admittedly unrepresentative sample--aren't playing their Wiis much. Unless they have friends come to visit, they're pretty much forsaking their Wiis for Xbox 360, DS and some Playstation Network from time to time. Wii fans regularly complain that enthusiast outlets--most notably, the gang over at Ziff-Davis' 1UP Yours podcast--are paying insufficient attention to their console of choice, and in fact spend too much time mocking the Wii for what it's not (its lack of HD graphics; the fact that it's become a dumping ground for mini-games; the trend towards porting PSP games to Wii) rather than applauding what it is: a refreshing change from the way games used to be, which is attracting new people to this hobby. But with Guitar Hero III, Rock Band and SingStar PS3 coming this holiday--and, as you point out, a bizarre lack of new games to capitalize on the Wii Sports phenomenon (sorry, EA, but jamming those controls into your pro sports titles doesn't really count)--I wonder how many of us in the media will be playing Wii Sports and Wii Play when friends come to visit.

All this portends a sharp divergence between the people who faithfully cover games and the next-gen console with the most momentum, making the gaming press increasingly out of touch with what's really going on in the world. Has Game Informer put a Wii title on the cover since Red Steel? Has EGM put any Wii titles on its cover? I don't know for sure, but the bulk of the covers I see are for games that are leading on Xbox 360 and shipping simultaneously (cough, cough) for PS3. Wii games are relegated to cover lines or the guts of the mags. I don't think any of this is cause for Nintendo to be concerned, but I do wonder when the coverage is going to reflect the sales charts, if at all.

Granted, it's something that we've discussed here on these forums a number of times, but still good to see that some of the mainstream press is starting to acknowledge as well. Some of the major gaming websites (especially 1UP) definitely are looking more and more out of touch with what consumers are actually buying and playing. That's not a good sign!

How about the reference to vgchartz in the middle of the article:

Those folks are reading the same tea leaves we are, and if the unofficial reports from certain Web sites are correct, global hardware sales for Wii have surpassed those of Xbox 360.

An oblique reference in passing, to be sure, but TheSource is correct - it can only refer to vgchartz and NeoGAF.

nice, especially about not having to use all the ds features 2 make a good game ...etc.

I agree with most of the posters here. They make some good points about not having to use the wiimote for every game you put on the system. Nintendo already has 2 major games that don't fully use the wiimote and both are/will be smash hits (SPM, SSBB). It's also cool to see some industry people realize that many gaming sites like 1up are becoming unrepresentative of the gaming community as a whole.

What struck me most is why are 3rd parties choosing to attack Nintendo head on with their Wii offerings. Nintendo owns casual gaming, making a casual game on a Nintendo platform is for the most part a money losing proposition. I hope 3rd parties wake up to the ideas Croal was mentioning (Zelda-like Harry Potter, Metroid-like Call of Duty).

Great read, it does sound like the industry is beginning to wake up at long last.

*stands up & claps* 

 as for the rest great read.

thx Source

Here is what I got from the discussion between N'gai and Keighley:

1) Time is running out to knock off Wii dominance in the USA.  In my mind there are a total of 6 key battles in the west:

Nov-Dec 2006 expectations (vs. sales realities):  360 vs. PS3 vs. Wii  (~1.6 million vs. ~700k vs, 1.1 million)

January 2007 (momentum): Wii vs. 360 vs. PS3 (~430k, ~290k, ~245k)

June 2007 (summer doldrums average 5 week rates):  Wii (76k), 360 (~40k), PS3 (~19k)

July 2007 expectations in PS3 60 gig price cut month (vs. sales reality): Wii vs. PS3 vs. 360 (Wii ~ 425k, 360 ~ 170k, PS3 ~ 159k)

August 2007 expectations in 360 multi-price cut month (vs. sales reality):  Wii vs. 360 vs. PS3 (my expectations: Wii ~ 400k to 500k, 360 ~ 220k to 320k, PS3 ~ 100k to 160k)

Nov-Dec 2007 expectations: Wii (2.5-3.5 million), 360 (1.6-2.4 million*), PS3 (1-1.5 million**)

* add 20% to each part of the range total with a further price drop (this would bring 360 very close to mass market)

** add 15% to each part of the range total with a further price drop (this would make PS3 cost what 360 did in 2006)

But in review, Wii has displayed characteristics of a dominant console throught battles 1-4 (though July 2007), while neither PS3 or 360 has.  Even when it was outsold by Xbox 360 in Nov-Dec 2006, Wii outsold 360 by 1.1:0.6 during 'holiday 1' (i.e. 2005 nov-dec for 360, 2006 nov-dec for Wii).  Since January 07', Wii has outsold 360 by 1.5:1 to 2.5:1 in the USA.  Given the pricedrop, I'm expecting Wii to outsell 360 1.5:1 over Nov-Dec 2007(3000k to 2000k).

I also think that while Halo 3 will provide a boost, but if 360 can't make 300k in August (I'd say it is a 50-50 proposition), then Halo 3 probably won't be able to push 360 north of ~360-430k in (five week) September, which means it will probably be in a dead heat, or outsold by Wii even during that month.  October will be similar - probably pretty close between Wii and 360 but I think once November comes along (Galaxy, the holidays, and a number of smaller games), demand for Wii increases across a much larger demographic - and sales will eclipse 360 once again.

For Microsoft to avoid a sweep in the six battles outlined above, I'd say sales on the order of 350k August, 500k Sept, 400k Oct, 700k Nov, 1.6 million Dec would be necessary.  My best forecast has 360 getting outsold every month but one - (flip a coin - it could steal either Sept or Oct), with Wii still selling 400k in Sept (5 week month), and 400k in October (Guitar Hero 3 will be included in the period by NPD's system, and hype will be building).  In terms of ordinary gamer appeal, you have Halo 3 and Galaxy for November to keep demand up, GHIII on both, and complimentary big games - (Nights, Soul Calibur Legends, Mass Effect, Rockband, Call of Duty 4).

Essentially my forecast boils down to this:

Wii August-Dec: All months at least 400k (2 million in December)

360 Augusut-Dec: All months at least 225k (1.4 million in December)

2) Sony's content for 2007 is solid, but is it compelling enough to justify the price when similar games are available for 360?  Exclusives will make the difference to some people.  But how many people buy a system just for new, unproven exclusives?  Those that do, are likely to already have the system...It basically boils down to which lineup looks better to the average consumer in Nov-Dec 2007 (assuming they have $1000 to spend):

Wii for $1000: Wii ($250), Wii Sports (Free), Zelda ($50), Galaxy ($50), Prime ($50), Wii Play ($50), Brawl ($50), 3 extra controllers/3 extra nunchucks ($200), Guitar Hero 3 ($90), 3 other titles ($150) (the other titles would be Fire Emblem, Nights, and Dragon Blade if I ruled the world), tax/virtual console games

PS3 for $1000: PS3 w/ Motorstorm ($600), Resistance ($60), Heaven Sword ($60), Ratchet & Clank ($60), Madden ($60), Haze ($60), tax/controller/PSN stuff

360 for $1000: 360 Elite ($450), Halo 3 ($60), GH2 or GH3 ($90), Madden ($60), Assassin's Creed ($60), Bioshock ($60), Mass Effect ($60), accessories/Live and downloadable content/controllers/tax

To me, the ten biggest console games of 2007 are going to be Wii Play, Guitar Hero 3, Halo 3, Galaxy, Brawl, Bioshock, Madden, Rockband, Assassin's Creed and Ratchet & Clank.  5 are on Wii, 5 are on 360, and 4 are on PS3, so alot will come down to pricing and value perception.

3)  One of the reasons Wii exploded in 2006 is because Nintendo launched it right before Turkey Day - knowing gamers would bring it with them to show Wii Sports to the relatives.  Thanksgiving is coming again.  In theory, the same phenomenon could occur again - since Wii Sports is still included in the package.  Gamers will certaintly be using the thing this Christmas - Brawl alone is probably good for 200 hours of play time.  At the same time, among younger (under ...30?) gamers, 360 and PS3 will make alot of inroads this holiday with the price drops.  It will be interesting to see if they see better sales in early 2008 (January) because of it.

4) Will an explosion of Wii sales result in weaker than expected software sales for 360/PS3/Wii software?  I think the big titles (popular successor games) will be o.k., but alot of smaller stuff - like Dragon Blade/Lair/Blue Dragon/Nights/Drake's Fortune/Mass Effect/Medal of Honor/Zack and Wiki will bomb.  Industry is still going to see record growth/money/profit this year.

5) Press coverage.  Will the mainstream press get sick of the Wii?  Will sites like 1UP and others come around a bit as they realize they are out of touch?  To me, when stuff like Galaxy, Brawl, and Fire Emblem comes out, Wii will see a surge in coverage among our specialist media - coinciding with the continuing mainstream press coverage - which will help it garner ridiculous sales this holiday.  Galaxy will be the one to watch, as it could be symbolic of Nintendo's ascent into the stratosphere, and it could potentially be the game loved by both the 'establishment' (1up/ign/egm/play/mainstream press coverage), and Wii fans/Nintendo devotees.  If Galaxy is largerly ignored, despite being an excellent game, then I would go so far as to say that 1up and the ilk cater only to a niche, rather than the entirety of gaming as they used to.   

That is about it...

- Ciao.

Doesn't Wii Play includes a Wiimote?