Wii will, Wii will rock you

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/12/11/MNP714MI95.DTL

Wii will, Wii will rock you
Ryan Kim, Chronicle Staff Writer
Thursday, December 11, 2008

The Nintendo Wii is poised to dominate the holiday season for the third year in a row, an unprecedented trifecta for a gaming console that is proving impervious to the economic recession.

While the gaming industry historically has been able to resist the drag of economic slowdowns, the Wii has managed to soar, thanks to its innovative motion-sensing control scheme and broad appeal among non-gamers. The wonder device continued to fly off shelves even as Nintendo announced it was increasing production for the holiday selling season by 50 percent over last year.

The NPD Group, a consumer research firm, reported Thursday that Nintendo sold 2 million Wiis in November, twice as many as last year. It was a record number for a non-December month and a staggering feat considering that the machine was released in November 2006. The company also sold 1.57 million Nintendo DS portable gaming devices, also impressive for a handheld that has been on the market for four years.

"Everything about the Wii is unprecedented," said Cammie Dunaway, Nintendo of America's executive vice president of sales and marketing. "The strategy of making it fun for anyone to play video games, the innovation with the Wii remote and the broad category of titles and the sales levels, it's all unprecedented."

Low price, broad appeal

The tough economic times might actually be lifting Nintendo's sales. The relatively cheap price of the $250 Wii console along with its appeal across an entire family makes it an even more appealing choice for households, said Dunaway.

"Families are looking for inexpensive and fun activities that they can enjoy at home together, and the Wii solves that need," she said.

Overall, the video game industry, aided by the Wii and DS, looks golden heading into the home stretch of holiday sales. According to NPD, the industry last month raked in $2.9 billion in the United States, a 10 percent increase over last November despite having seven fewer post-Thanksgiving shopping days. The industry is still on pace to hit a record $22 billion in sales this year, NPD analyst Anita Frazier predicted.

Thanks to increased production, the Wii frenzy appears to have eased a bit for customers, who in previous holidays were left to camp out at stores or pay a hefty premium online for the device.

Frenetic chase

But the Wii is still a huge seller and dominates gift conversations. And in many cases, the chase for a Wii feels just as frenetic as it did last year.

"Demand for the Wii System is actually the same or higher than at the same time last year," said Marc Owens, the customer experience manager at the Best Buy store in Pleasant Hill. "Positive word of mouth about the benefits of the system has continued to drive demand at sell-out levels for the console."

Online auction site eBay said the most searched product on Black Friday was the Nintendo Wii, of which 3,171 were sold that day. Even on Cyber Monday, Nintendo Wiis were selling for an average of nearly $350, a $100 premium over its list price. In the past 90 days, eBay has sold 125,211 Wiis for about $45 million collectively.

Even non-gamers like it

Ted Pollak, market analyst for Jon Peddie Research and portfolio manager for the Electronic Entertainment Fund, said the Wii has the chance to be the most successful entertainment product ever. He credits Nintendo with expanding the market to include not just hard-core gamers but more women, girls and older players.

"Nintendo came up with a platform that's unique in that it appeals to core gamers and totally untapped gamers," Pollak said.

Two years ago, when the latest generation of hardware fully got under way, analyst Michael Pachter of Wedbush Morgan Securities projected the PlayStation 3, the Xbox 360 and the Nintendo Wii would walk away with about equal shares of the market. Now, he believes the Wii could sell as much as its other two rivals combined and ultimately eclipse the lifetime sales of the PlayStation 2, which he once thought was untouchable.

The PS2 sold 43.2 million in the United States over its lifetime and peaked at 8.2 million in 2002. The Wii, which has moved 15.4 million units so far, has sold about 8 million through 11 months of this year and is poised to shatter the PS2's annual record with a strong December showing.

"If Nintendo sells 400,000 more units in December, they will have sold more consoles this year than in any other year," Pachter said. "That's mind boggling that the Wii is on pace to be the most successful console of all time."

E-mail Ryan Kim at rkim@sfchronicle.com.

Console Race: Another Lap For Sony

http://www.businessweek.com/innovate/gamesinc/archives/2008/03/console_race_an.html

Console Race: Another Lap For Sony
Matt Vella on March 13

For the second month in a row, sales of Sony’s (SNE) Playstation 3 console system outpaced Microsoft’s (MSFT) Xbox 360 in the U.S., according to figures released late Mar. 13 by analysts at the NPD Group. Though both companies promptly issued press releases slicing the monthly results in their own favor, the results underscore the tightening race between the two tech giants.

After a 2007 of fits and starts, Sony’s game system seems to finally be on firm footing. The company crowed about the nearly 281,000 PS3 systems it sold, representing 120% sales growth from the year before and a volume 10% higher than Microsoft’s next-generation console for the month. “We believe that Blu-ray becoming the high-def format of choice was the tipping point for many consumers,” said Jack Tretton, president and CEO of Sony Computer Entertainment America, referring to the demise earlier this year of the rival HD-DVD format formerly backed by Microsoft.

For its part, Microsoft issued a release saying supply constraints had held up sales. In Feb., Microsoft sold 254,600 Xbox 360s, up from 230,000 consoles the month before. The company says the so-called Xbox ecosystem – combined sales of game systems, software, and accessories – was worth $332 million, or 39% of the market for next generation systems. Microsoft was also able to sell more games with each of its systems than Sony.

Still, Sony seems to have the wind at its back. In addition to its advanced PS3 console, the company last month sold 243,100 Playstation Portables and an eye-opening 351,800 Playstation 2 units, its previous generation game system. A raft of highly anticipated exclusive titles including sequels to the Metal Gear Solid and Gran Turismo series are due in the next couple of months, which the company hopes will further boost sales. Some analysts have predicted that Sony could pull ahead of Microsoft this year, despite Redmond’s year advance on the Japanese games titan.

As a whole, the games industry continues booming. Year-to-date sales of both hardware and software were up 34% to $1.3 billion from $992 million. “Even following a red-hot 2007, the video games industry shows no signs of letting up,” said Anita Frazier, an NPD analyst. She added that a slate of blockbuster titles yet to be released could push “the industry to achieve another year of record-breaking sales despite difficult economic conditions.”

Is 2008 the year of the PlayStation 3?

http://www.msnbc.msn.com/id/23172933/

Is 2008 the year of the PlayStation 3?
Console still faces uphill battle, despite Blu-ray success and upcoming titles
By Levi Buchanan
MSNBC contributor
Fri., Feb. 15, 2008

While the beleaguered PlayStation 3 still faces an uphill battle, Sony believes the console is spring-loaded for a turnaround.

Why? The success of Blu-ray, an upcoming slate of much-needed exclusive games and new numbers from the NPD Group showing that the console bested Microsoft's Xbox 360 for the first time in January.

(MSNBC is a joint Microsoft - NBC Universal venture.)

Since the system's November 2006 debut, the PlayStation 3 has consistently been humbled by the Nintendo Wii and its chief rival, the Xbox 360. But numbers released Thursday show that the PS3 outsold the Xbox 360 in last month, moving 269,000 units in the U.S. and coming in second only to the Nintendo Wii.

Jack Tretton, Sony Computer Entertainment America's CEO, was upbeat in a email sent to reporters after the release of the NPD data: “Coming off a great holiday sales season we see strong momentum behind PS3 in 2008, and feel confident about the year ahead."

So will 2008 be the breakout year for the PS3? Probably not. The changing tastes of the market are not on Sony’s side, and a twitchy economy doesn’t help the company's chances, either. Plus, one month of besting the Xbox 360 — in a month where none of the systems sold more than 300,000 units — doesn't necessarily signal a turnaround.

Colin Sebastian, an analyst with Lazard Capital Markets, sees January as an aberration due to short Xbox 360 supplies following their successful holiday season.

"There may be a substitution effect there," he says. "It says as much about Xbox 360 supply issues as it does about PS3 sales."

Blu-ray boosted PS3

But the PlayStation 3 isn’t down for the count. The immediate advantage Sony has going into 2008 is something that initially looked like a liability: its Blu-ray DVD player. It was pretty cool to have the cutting-edge player inside every game system, but it also hoisted the price of the PS3 to $600 — at least initially.

"The added cost of Blu-ray to the PS3 hurt it. Consumers didn't see it as a compelling value,” says Sebastian.

But Sony has dropped the price of the PS3 since launch. The base model, which sells for $400, makes it one of the cheapest Blu-ray players on the market.

And even though the PS3’s sales looked anemic in comparison with its competitors — even in comparison with its older sibling, the PlayStation 2 — 3.2 million units sold surely helped Blu-ray in its apparent triumph over HD-DVD.

This week, online DVD-rental site Netflix threw its weight behind the format. And last month, Warner Bros., the largest movie studio in Hollywood, announced it was going exclusively with Blu-ray.

...But high-def hasn't caught on like DVD did
Having HD-DVD on the ropes is a good thing, but high-definition movies have not caught on like DVD did back in 2000. And after several years of the iPod's stratospheric ascendance, consumers are now plenty comfortable downloading their entertainment. For a new generation, physical media is just so yesterday.

Indeed, Apple recently announced the launch of HD movie rentals via its Apple TV box, mirroring something Xbox 360 owners have been able to do for a year. And let's face it — for a large number of consumers, DVD is simply good enough.

This dovetails with another problem Sony had in 2007 — a situation that is unlikely to change this year: The PlayStation 2 was also apparently good enough for many consumers. Last year was a good one for the eight-year-old system, which outsold the PS3 by almost 1.5 million — thanks to a $129 price point and a host of great games, such as "God of War 2."

There are also thousands of PS2 games on shelves, many in the $20 range, making them not only impulse buys, but also more comfortable purchases in an economy that has many consumers minding their bank accounts.

So, where are the exclusives?

Another problem that the PS3 must conquer in 2008? Its lack of exclusive releases. Microsoft’s Xbox 360 had a great 2007, with exclusive titles such as “Halo 3” and “Mass Effect.” Sony needs to step up the number of titles for its new system, period, and the number of games that can’t be played anywhere else as well.

"Exclusive content is one of the hallmarks of the PlayStation brand," says Scott Steinberg, vice president of product marketing at Sony. "And we'll have that in 2008."

The calendar looks good so far. The announced titles on deck for 2008 are Sony's racer "Gran Turismo," the sci-fi shooters "Resistance 2" and "Killzone 2," and the inventive "LittleBigPlanet," an action game that relies on gamer-created content to flourish.

All the anticipated games look fantastic so far, but "LittleBigPlanet" has potential to be a true breakout hit if it catches on via word of mouth, not entirely unlike a Facebook or Second Life. And speaking of Second Life, Sony will also debut "Home," its 3D virtual world community for both the PS3 and the PlayStation Portable in 2008.

Will 'Metal Gear,' 'Final Fantasy' be the ticket?

The PS3 will also be supported by Konami's anticipated "Metal Gear Solid 4" and Square Enix's "Final Fantasy XIII" — as long as these games remain PS3 exclusives.

Because games now cost tens of millions of dollars to develop, and the Xbox 360 has sold almost 10 million consoles in America alone, many publishers have converted former PS3 exclusives to multiplatform games, such as Capcom's "Devil May Cry 4" and Ubisoft's "Assassin's Creed."

What’s more, these games repeatedly sell better on the Xbox 360. "Assassin's Creed" sold only 377,000 copies on the PS3 last November, compared with 980,000 on the Xbox 360.

It's all about differentiation

The PS3 was also dealt a blow when decided to make its much-anticipated “Grand Theft Auto 4” for the Xbox 360 and the PlayStation 3. What’s more, Microsoft also secured exclusive bonus content for the Xbox 360 version of the game.

To really win this console war, Sony needs to figure out a way to differentiate the titles that go multiplatform, like “Grand Theft Auto IV.”

"If these games look like Xbox 360 games or are not as fun as Wii games, that's a problem," says Sebastian.

Will Blu-Ray keep exclusives on the platform?
Sony counters that the success of Blu-ray will help keep exclusives on the PS3 and provide that needed differentiation.

"The industry is moving toward large blockbusters that only fit on Blu-ray," says Steinberg, referring to the 50GB of storage available on a Blu-ray disc. (The Xbox 360 uses regular DVDs that store only 9GB.)

Size matters, but is the market really moving toward physically bigger games? With the graphically inferior Nintendo Wii as the uncontested winner of last year’s console slugfest, the unscientific data would seem to indicate that bigger isn’t always better.

"(Sony) probably miscalculated in terms of where the market was going. Sony moved up-market," says Sebastian. "The market has moved a little bit more casual."

In an attempt to capture this casual trend, Sony has its PlayStation Network, a place where gamers can download smaller games, such as the upcoming "echochrome," a puzzle game that looks like an M.C. Escher illustration.

These games should sell to a dedicated Sony fanbase, but it's doubtful that Sony (or Microsoft, for that matter) can wrest the casual narrative away from Nintendo at this point. The only thing that could possibly nudge the needle is another price drop, which Sebastian thinks is in the works for 2008. But Microsoft could immediately neutralize that salvo with an expected (and much overdue) price drop of its own for the Xbox 360.


This is now Nintendo's game to lose, and they show no signs of relinquishing the table — especially with the anticipated release of "Super Smash Bros. Brawl" next month, a title more hyped than last year's best-selling "Super Mario Galaxy."

The contest is for second place right now. And Microsoft just has too much of a head start on Sony to make 2008 a reversal of fortune, leaving Sony again holding the bronze over a console that was supposed to deliver the gold.

Sony Blinks, Drops Price Of PlayStation 3

http://www.mtv.com/news/articles/1564256/20070709/index.jhtml

Jul 9 2007
Sony Blinks, Drops Price Of PlayStation 3 In North America
Also announced: a new version of the console that will include an 80-gigabyte hard drive.
By Stephen Totilo

Sony appears to have blinked first in the current video game console war.

The company that dominated the battle among the PlayStation 2, Xbox and GameCube announced Monday (July 9) that its current model of the eight-month-old PlayStation 3 will drop in price from $599 to $499 in North America, effective immediately. Neither Microsoft's Xbox 360 nor Nintendo's Wii have dropped in price since the systems' respective launches in November 2005 and November 2006.

Sony also announced plans for the August introduction of a new version of the PS3 that will include an 80-gigabyte hard drive — 20 GB more than the current model — and a copy of the early 2007 racing game "MotorStorm." The new model will retail for $599.

The PlayStation 3 has been the third-place console in 2007 month-to-month sales, according to NPD, a research group that tracks sales in the U.S. Dave Karraker, head spokesperson for Sony's American PlayStation division, told MTV News that part of the reason to lower the price on the 60 GB model was to get the system in more hands. "We need to increase our installed base," he said. "That's no secret to anybody."

Sony Computer Entertainment of America President/CEO Jack Tretton cited falling component costs as an added factor. "Since the introduction of the original PlayStation 3 60 gigabyte model back in November of last year, the company has been able to reach some tremendous production milestones and ultimately has been able to reduce the cost of the PlayStation 3," he said in a statement. "We want to pass those cost savings on to consumers, and as a result, we have been able to lower the price."

When the PS3 price was first announced in May 2006, Sony officials explained that the console's cutting-edge Blu-ray disc player, which plays high-definition movies, was a significant factor in the console's unusually high price. Coupled with this announcement, Karraker pointed out that Sony's standalone Blu-ray players recently dropped in price by $100, a sign of falling Blu-ray component prices.

In April, Sony streamlined its PS3 line by eliminating a $499 20 GB model that lacked built-in WiFi. Why would Sony return to having two versions of the PS3? "The thinking is we would be offering this as part of the expanded effort for downloadable content and in preparation for the extended download store that's coming," said Karraker. He said the upcoming store will give PS3 owners the ability to download TV shows and high-definition movies. The added storage will also make more room for some of the bigger downloadable PS3 games, such as this fall's "Warhawk," which Karrarker said would be about 1 GB.

Aside from the increased storage and bundled game, the 80 GB version will be identical to the 60 GB one, and will not be in a different color or receive a specialized name. That's a different strategy than the one used by Microsoft. This spring, the Xbox 360 maker added to its line of $299 and $399 Xbox 360s a $479 120 GB Xbox 360 Elite, painted black to set it apart from the other model's white finish (see "Xbox 360 Is Back In Black With Roomier Elite Console").

Console comparisons are rarely apple-to-apple comparisons. As it stands now, the Elite will offer twice the storage as the newly price-cut 60 GB PS3, but only Sony's machine has built-in WiFi and the ability to play back high-definition movies on disc (the Elite can store and play high-def movies rented from Microsoft's Xbox Live download store). Naturally the other big difference is the competing lineup of exclusive games. Those rosters will be brought to the fore this week as Microsoft and Sony showcase their lineups at the Electronics Entertainment Expo in Santa Monica, California.

The current top-selling console in America is the Nintendo Wii, which has benefited from positive reception of its unusual motion-based gameplay and its lower price. The Wii has outsold the 360 and PS3 every month this year. For example, in May — the most recent month for which NPD sales are available — the $249 Wii sold 338,000 units to the 360's 155,000 and PS3's 81,000. (The $129 PS2 sold 187,000.) The cheaper the console, the bigger sales might be. So given the falling component costs cited by Sony reps, would the company consider bringing back the 20 GB model for a lower cost, possibly $399, to make a run at Nintendo? Not quite. "I think the 20 gigabyte [version] is gone and gone for good at this point," Karraker said.

What isn't being ruled out is a continued evolution of the PS3 and more new models to come. The 80 GB version may not be the last new PS3. "We'll see how the waters churn on it," Karraker said. "If people want more hard-drive space or want something else, we'll address that and keep moving. That's no different with a car model and adding new pieces and parts that people are looking for."

He added: "If you look at what we're really focused on right now, it's increasing our installed base and creating that great content for those games. Whatever we need to do to make that happen is what we're going to do."