Video Game Sales High, Both Sides Take Lead in Console War

January 17, 2014 by Staff - Leave a comment


Whenever new consoles are released, a “war” of sorts begins, as fans insist that one console must win over the others. This often leads to interesting interpretations of data. The results are in for the video game and console sales in December, and both Microsoft and Sony have reported the data in such a way as to suggest the Xbox One or PlayStation 4 is in the lead, respectively.

Microsoft noted that the Xbox One was the highest-selling console in the United States during December, with 908,000 sales. Additionally, the Xbox 360 sold 643,000 units, which made it the highest-selling last-gen console and the third best-selling overall.

Sony, on the other hand, emphasized that the PlayStation 4 has sold over 4.2 million units overall, across the world. When it comes to cumulative sales, they are in the lead. Meanwhile, the Nintendo 3DS took the lead for 2013 hardware sales, and the Wii U sold more units in December than in any month so far.

The highest-selling games were Call of Duty: Ghosts and Battlefield 4, although Grand Theft Auto V sold more copies in 2013 than any other game. Overall, video game sales for December were quite high—total game sales rose 2% from the previous year and hardware sales rose 28%.

With everyone giving the data their own spin, the most accurate view that can be taken from the sales is that the video game market is doing well, and all three of the major console companies have their own successes to celebrate.

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PS4 to dominate console war through 2016

January 1, 2014 by Staff - Leave a comment


Michael Pachter, a financial analyst for the video games industry who we’ve written about many, many times in the past has some new predictions and recently revealed his thoughts on the next generation of consoles through to the year 2016.

Pachter recently sent the email you can see quoted below to various investors and other people who like to know about these matters, but the gist of it is as follows:

  • 37.7 million PS4 consoles will be sold by the middle of 2016.
  • 29 million Xbox One consoles will be sold by the same time.
  • The Wii U will do fairly poorly with sales of under 20 million by that date too.
  • The PS4 will drop to $299.99 by the year 2016.
  • The Xbox One will be $349.99 by the middle of 2016.
  • Brand new games will still cost $59.99 in 2016.

We expect Sony’s and Microsoft’s new consoles to thrive over the next three years, with cumulative worldwide sales of 37.7 million PS4 and 29 million Xbox One consoles by year-end 2016. We do not expect Nintendo’s Wii U to fare as well, with cumulative sales of under 20 million by 2016.

We expect a modest reversion to more normal software attach rates or “tie ratios,” with software sales of approximately 3 units annually over the next three years for each Xbox One and PS4 sold, and with tie ratios of just over 2 units for the Wii U and just under 1 unit for the 3DS. We think that Nintendo consoles are more susceptible to competition from mobile and tablet games, as we believe that a disproportionately high percentage of Nintendo customers play more casual games, and are therefore more likely to view mobile and tablet games as close substitutes to software developed for Nintendo’s platforms.

Software sales for the next-generation consoles are expected to grow to $12.2 billion by 2016. In contrast to the last cycle, we expect software sales for PS4 ($5.9 billion) and Xbox One ($4.9 billion) to dominate, with Wii U software capturing market share of only 11 percent. We expect overall software sales growth (including PC) in the U.S. and Europe combined (the addressable market for the publishers we cover) of 10 percent in 2014, 7 percent in 2015, and 6 percent in 2016.

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