PS3 and 360 Nibbling At Console Market Share

1/18/09

Japan - At the beginning of last summer, the Wii almost crossed its 70% console market share barrier with 69.99% on 06/02/08. While the Wii was reaching for historic highs, the 360 had reached its lowest point* and the PS3 was quickly decelerating in one of its lower moments (23.55%).

* The 360 bottomed out at 6.39% two weeks later. Shortly thereafter, I went on record predicting that 5% or less was inevitable.

Since then, the Wii has lost nearly 2% console market share, not an insignificant number this deep into the generation.* The 360 hasn't been that low again, climbing up to a much more respectable 7.68% and the PS3 looks like it will be locking in around 24% for the generation and currently sits at 24.18%.

*2% of all console hardware represents 225 thousand units at this point.

Questions for consumption:
1. Are we seeing the plateau of Wii success in Japan? Is 70% the zenith it will never quite reach?

2. What does this mean? Can Microsoft hold its head up a little higher with 7.68% than it could at 6.something %?

3. In the same breath, should Sony be ashamed that it only has 24% market share after dominating so completely for the past ten years? Or, has the market truly split into casuals vs. hardcore, and, as the fanboys put it, "it's doing really well for being so expensive!"?

Media Create Sales: 01/05 - 01/11

(click to enlarge)






1/18/09

17 comments:

JJS said...
This comment has been removed by the author.
JJS said...

This is probably something that will get angry responses from an Anonymous or three, but Wii could pick up a few percent later in life like PS2 did. More successful systems always last longer, and have the chance to pick up a bit of share once the competitors have stalled out. In a PS2/GCN comparison (ignoring Xbox), PS2 bottomed out at about 81%, but is now back to 84%.

Also, we've seen even bigger shifts even later in life. Look at DS/PSP. In early September 2007, DS's share was 76.3%. Add in one week of Crisis Core and one week of full PSP-2000 availability, and its down to 75.3%. By early March 2008 (six months, like you were talking about with Wii), it's down to 72.3%. At present it's at 68.9%.

PL said...

Excellent point JJS. One of inevitabilities of the market is the market winner always separates even further at the end of the generation.

This is true going back as far as the Super Nintendo era, but also holds true for the PS1 and PS2 eras as well.

An interesting counterpoint may be the DS v PSP battle currently ongoing, in which the PSP had a great 5th year. An upcoming article will explore this relationship and whether it holds water.

Anonymous said...

Well, I'm not sure how it will shake out but it's certainly not hardcore vs. casual. What people seem to forget is that there is always one console that really sets a fire among the mass audience. Last gen it was the PS2. This time it's the Wii. I'm confident that the majority of people buying the Wii bought the PS2 last time. Sure there are some grandmas and soccer moms buying it, but I don't think the grandmas amount to that much and the soccer moms also bought PS2s for their kids. The Wii will finish with similar market share to PS2.

Anonymous said...

Even though the Wii marketshare is currently 68%, we will have to see whether that will greatly change when Star Ocean 4 and Biohazard 5 is released in the next few months.

David Macphail said...

Please try to refrain from making such idiotic comments in the future - the PS3 IS selling well fot it's high price, you'd have to be a fanboy NOT to believe that.

If you think, even for a second, that the 360 would capture 24% market share at £299 (Or whatever the equivalent of that is in Japan) then i'm afraid you're blinded by your own ignorance of the gaming industry.

Has the Wii reached it peak? Hard to say - one thing i can say for sure is that the 360 HAS peaked and will only go lower from this point out. There's no way the 360 will own 7% of the market share when this is all said and done - i'd be willing to bet it would hold 2% or less!

The Wii will continue to sell well (Better than the 360 anyway, despite being more expensive) and the gap between the two will widen. Likewise the PS3 will see a sales explosion following the 2009 price cut (Whenever that is) and will see sales increase steadily off the back of such releases as:

Yakuza 3
Resident Evil 5
Final Fantasy XIII
Quantum Theory
Street Fighter 4
Gran Turismo 5

The gap between the real next - gen consoles and the 360 will only widen in 2009, the 360's price cut has already proven to be a short - term solution over there and during the year of quite possibly the 360's weakest line - up of games ever i can only see it fading further away into the distance. If there is one slim shred of hope left for the 360 it's the exclusive (For now) release of Star Ocean: The Last Hope......however i can only see this as another failed JRPG attempt on the system.

The real battle will commence once the PS3 hits a consumer - friendly price point. There's no way the PS3 will finish with just 24% of the market.......there's no disputing the PS3's superior line - up of games over the Wii, once consumers are able to pick up a PS3 without going bankrupt we may see a drastic shift in market share......although by that time it may be too late.

Anyway, as the 360 fanboy's might say "The 360 is doing well for Japan". well no, actually, it's not. It's the cheapest console on the market, has a very good online service and yet is getting used to mop the floor by the competition. Honestly....holding single - digit market share when you're the cheapest console available??? LOL, isn't that some kind of record? Someone give Microsoft a medal - this is the most spectacular failure i've ever seen in my life!

Anonymous said...

Wow fanboy rant much?

Anonymous said...

Well 70 is a multiple of seven, a number that in the Bible represents completeness. It may symbolizes that Nintendo has console dominance in Japan for the rest of this generation.

PL said...

I freaking love you David Macphail. You're delusional, but charming.

Anonymous said...

PL, how id he delusional?
He had a point.

Anonymous said...

how is he delusional?

David Macphail said...

LOL, so i'm delusional because i've done my research about the gaming market??? I don't think so.

Regarding my comments about the 360's market share in Japan....let me simplify it for you:

The 360 currently owns 7% market share in Japan - in order to hold 7% by the end of this generation it would have to sell as many units as the Wii/PS3 between now and the final week of this gen.......i really can't see that happening, can you???

If the Wii/PS3 continue to sell more than the 360 on a weekly basis the gap will only widen and the 360's market share will DECREASE, yes?

By your logic - for the 360 to own 7% market share it will have to AT LEAST match PS3 sales which currently hit about 28,000 per week - the 360, in reality, is hitting about 10,000.......it's competing with the PS2 (8,500) in weekly market share - which is why it shouldn't be considered a next - gen console (Unless you want to call the PS2 a next - gen console as well and then who would be delusional?).

Then there's Star Ocean....LOL, how many times have Microsoft touted their next RPG as the "Saviour of the 360"??? Let's see:

Lost Oddysee
Blue Dragon
Infinite Undiscovery

What leads you to believe that Star Ocean will do better? What makes you think Star Ocean can compete with Final Fantasy XIII???

I know sometimes the truth is hard to accept but here it is - the PS3 and the Wii have slammed the door shut on the Xbox 360 and that's NEVER going to change no matter how cheap Microsoft sell the console for.

JJS said...

David Macphail: "Please try to refrain from making such idiotic comments in the future - the PS3 IS selling well fot it's high price, you'd have to be a fanboy NOT to believe that."

In Japan, PS3's price is now the same as the PS2's launch price. So there's historical precedent for a console of the same price selling a lot better.

David: "There's no way the 360 will own 7% of the market share when this is all said and done - i'd be willing to bet it would hold 2% or less!"

That's pretty close to impossible. Basically, it would take X360 sales stopping immediately, while PS3/Wii go on to more than quadruple their current userbases.


Some anonymous: It seems that the real system war in Japan is between the DS and the PSP; not between the Wii, the PS3, and the Xbox 360.

I think it's more like DS is the unquestioned dominator, and it's PSP and Wii fighting for pieces of second place. Currently PSP is doing better with hardware sales and third-party software sales, while Wii is doing much better with overall software sales.

David Macphail again: "The 360 currently owns 7% market share in Japan - in order to hold 7% by the end of this generation it would have to sell as many units as the Wii/PS3 between now and the final week of this gen.......i really can't see that happening, can you???

If the Wii/PS3 continue to sell more than the 360 on a weekly basis the gap will only widen and the 360's market share will DECREASE, yes?
"

No. You've made a pretty big math bungle. For X360 to maintain 7% market share... it has to continue selling 7% of the total number of home consoles. If it was matching PS3 and Wii combined, its share would shoot up and eventually pass 50%.

David Macphail said...

JJS - it's you who has made the maths blunder. Market share for this generation takes into account TOTAL sales of the 3 consoles - not sales starting from now.

I didn't mean i expected the 360 to match the sales of the Wii and PS3 COMBINED - i meant the 360 would have to somehow avoid the other consoles widening the gap - which is what they're doing.

Let me try to explain more clearly (Again):

If the Xbox 360 and the PS3 sell the exact same amount per week between now and the end of this gen - will they have equal market share at the end??? No - because nothing will have changed from right now - the PS3 will have maintained it's lead of about 2 million.

In order for the 360 to maintain/extend it's market share it has to find a way to close the weekly sales gap between itself and it's competitiors - or find a way to stop it from INCREASING - how is it supposed to do that considering about 10 price cuts a year haven't helped in the long - term???

What if the PS3 sells a couple million units between the price cut and the Release of Final Fantasy XIII (Which it probably will)??? What would happen to Microsoft's market share then??? The Xbox 360 would have to have a rise in it's own sales EQUAL to that amount or it will LOSE more market share, see? I'f the PS3 increases it's weekly sales - it would be at the expense of the 360.

I know 7% is the best a Microsoft console could ever hope for - considering the quality of software available on the system but i wouldn't get too comfy if i were you - the 360 will lose market share this year and will NOT be able to get it back. THAT'S what i was getting at.

Every time the Wii/PS3 see's a sales spike the 360 HAS to match it or it will lose market share....i really don't think i can make this any clearer.

Anyway, it's far from impossible that the 360 will finish up with 2% of the market. The PS3 will at least double it's user base between now and the end and i can guarantee you the same cannot be said for the 360 - again - the gap will WIDEN.

JJS said...

Market share is based on percent. It doesn't matter whether it's 0.5 million versus 2.5 million for a 2 million gap, or 50 million versus 250 million for a 200 million gap, it's still a split of 20% and 80%.

Since this week X360's 13.2% share of console sales was higher than its previous cumulative share of 7.something percent, its overall share has just increased.

For things to stay perfectly even would X360 need to match Wii and PS3 spikes with spikes of its own? Sure, and those do happen. 2008 examples include the releases of Tales of Vesperia and Infinite Undiscovery. Relative to what X360 normally sold, those were bigger spikes than PS3 got at the release of Metal Gear Solid 4, or what Wii got at the release of Super Smash Bros. Brawl.


What do you think the end-of-generation userbases might be, so that X360 ends up with only 2%?

David Macphail said...

I'd put the PS3 and Wii at close to 23 million each for this generation....the 360 probably won't sell much past 1 million. YOU do the math.

The thing you don't seem to get is:

The Wii is at a family - friendly price and sells well CONSISTENTLY.

The 360 has to be price cut multiple times a year and still only sells well for a few weeks before dropping off again.

When the PS3 get's another price cut sales will go up and STAY up - like the Wii. Meanwhile the release of big games will give it added temporary boosts - like the 360.

The differnce is that a low price isn't helping Microsoft (Wether that's down to shoddy hardware, rubbish games or a garbage and overpriced online service is anyone's guess) yet it IS helping the Wii and WILL help the PS3.

Let's be honest here though, let's say that you're right and the 360 WILL defy all odds to capture 7% of the TOTAL market..........is that really something Microsoft would rush to put on their resume??? Would YOU be proud if a product you made captured a pathetic 7% versus, say, 43% and 50%??? Would the Xbox 360 be considered a success or the next Dreamcast if it only got 7%???

7% is absolutely PATHETIC, however i still don't believe Microsoft are even THAT good. What do you think the total sales figures will be, for the 360 to end up with 7%???

JJS said...

David Macphail: I'd put the PS3 and Wii at close to 23 million each for this generation....the 360 probably won't sell much past 1 million. YOU do the math.

Ha, OK, with those numbers X360 would only end up with 2.1% total share. However, it doesn't strike you as EXTREMELY unlikely that in the remaining years of this generation PS3 will sell 20.3 million, Wii will sell 15.3 million, and X360 will only sell 140 thousand?

David: The 360 has to be price cut multiple times a year and still only sells well for a few weeks before dropping off again.

Are X360's sales bad compared to any first or second place console? Absolutely. However, it also just had the best year any Xbox system has had there, so an imminent drop to absolute zero doesn't seem to be in the cards. If X360 does as well this year as last year, it will reach 1 million by September.

David 7% is absolutely PATHETIC, however i still don't believe Microsoft are even THAT good. What do you think the total sales figures will be, for the 360 to end up with 7%???

I'm not certain it will stay at 7%. But I could imagine something in the neighborhood of 19 M Wii, 6.5 M PS3, 1.5 M X360, which would make for a split of 70.4 / 24.1 / 5.6. I see no reason to believe in a market that's become so dominated by handhelds that even one console will necessarily top PS2's numbers this time, let alone two.

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