Interesting month. All console sales were up. Xbox took the top spot, but even so, the Wii was up something like 15%. So it rose year-over-year to more than 454,000 units. Interesting, huh? You can’t exactly have a successful co-option if the disruptor is seeing increased sales as well.
I wonder, where is the increase in Wii sales coming from? Is Just Dance 2 a killer app?
I love that people are screaming left and right for the Wii successor to come out despite Nintendo still seeing sales like this. Who knows, they might see another 7-million-unit Wii year in America since there’s no longer a UGC direction.
There’s been no change in the market. Wii is still riding the momentum of its usual suspect games. The Call of Duty franchise, and FPS in general, has single handedly saved the HD Twins from complete oblivion similar to how Monster Hunter single handedly saved the PSP in Japan. What is driving the HD Twins numbers are the FPS multiplayer games which is mostly Call of Duty.
Kinect is still showing no market impact whatsoever. Ever since Microsoft put out the Xbox 360 revision, their sales have been in up. Years ago, in an interview I was asked a question of something like what Microsoft would have to do in order to get someone like me to buy their system. I listed three things:
1) Redo the Xbox 360 hardware so it is stable and doesn’t break (note: Microsoft has just now discontinued the Red Ring of Death warranty).
2) Redo the controller so it has a decent D-pad on it.
3) Make Xbox-Live free (easily done by SCRAPPING features no one cares about like Twitter)
With the first one done, notice how sales began to go up? If 2 and 3 were done, sales would go up even more.
There is still nothing healthy about the current gaming market. There is too much reliance on social FPS. Move hasn’t worked. Kinect hasn’t worked (despite Microsoft’s desperate attempts to make people think shipments to retailers are indicators of consumer interest).
What I found more interesting was Pachter’s early comments:
“The big surprise to me is that hardware ticked up. Maybe the recession really is over. People don’t buy software because there is money burning a hole in their pocket. But they actually would buy hardware. Most recent jobs data show a slight uptick in jobs. Maybe consumer confidence is coming back. … It has to be either that there’s a change in NPD methodology or it is a reasonable signal that consumer confidence is back.”
I spit out my cigar when I read that! Consumer confidence is, officially, at an all time low. Is he not seeing the rising gas prices? The inflation?
Rasmussen tracks consumer confidence. In January, it was 88.3 . In February, it was 84.5. In March, it was 73.1 . This is not just decline but the realization of the public we are heading into a second recession and a 70s style stagflation.
The report Pachter was referring to is misleading because while it may say unemployment is lower to 9%, the slice of pie of unemployement doesn’t matter if the entire pie is shrinking. If you look at the Labor Force Participation Rate (published, of course, by the Bureau of Labor Statistics), the ratio of employment is 64.2% which is at a 27 year low. Why is the labor force shrinking? It is because if you were laid off during 2008 (or 2009 I think), ran out of unemployment benefits, you are considered no longer part of the labor force. It is more useful to look at the overall size of the labor force pie than a slice. The American labor force is still shrinking, and this is not good. It also correlates with the other bad news such as rising gas prices, rising food prices, or inflation you see for common products.
More hilarious is how Pachter tries to go around the fact that software sales are down overall by 5%. “People don’t buy software because there is money burning a hole in their pocket. But they actually would buy hardware.” This makes no sense. Why on Earth would people buy a video game console but buy no games for it? Everyone in this business knows that people buy game hardware to get at games. It is software sales that power hardware sales. This is Game Console Business 101.
It is far more probable that NPD has altered their methodology. They’ve done this before. Why not again? It doesn’t make sense why hardware, for all three console makers, would somehow go up uniformly from last year but the software didn’t. I could understand one or two console hardware going up, but all three? And the software going down? Nah, it is likely a methodology issue. This is why it is important to look at the ‘big picture’ and the trends and not get too caught up over the specific numbers.
So why did Pachter ‘outburst’ there? Why did he, for a moment, cease to be (or act) a professional analyst and began cheering, out of the blue, ‘consumer confidence’ when every metric shows consumer confidence has never been lower? It is because Pachter is not a financial animal at heart, he is a political animal. His emotions are overthrowing his judgment (as shown in the outburst) because he wishes a certain politician to do well.
None of this is surprising. Pachter looks like a politician. He talks like a politician. He is attracted to the press and talk shows like a politician. He is even educated like a politician with his law background. This is why he gave himself an ‘out’ by inserting at the end ‘or NPD altered their methodology.’
“Either space aliens from Pluto came to the United States, bought additional video game hardware in their vicious fight against the Space Amoebas from the Galaxy of Vexon, OR NPD altered their methodology.”
I can play that game too. Sadly for all of us, the Pluto aliens are currently more realistic than a recovery in the economy.