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Numbers are fun: January 07 edition

posted on March 7th, 2007 by pat

There has been a decent amount of industry news in the gaming spotlight recently. A next gen system (Wii) was finally the best selling piece of hardware over a month (January) in the United States with 436,000 units. While the DS (239,000) still outsold the PSP (211,000), Sony’s machine has started to close the gap. All it took was a few original titles and sales have started to pick up. In terms of raw sales numbers, 2006 was a great year for the industry, and, in the US at least, terrific January sales have started 2007 off on the right foot. Japan sales last month were lower than those in January 2006, but this is hardly troubling. There are reporting problems with both the US and Japanese numbers that make it difficult to tell anything very specific, but it does seem as though the industry is alive and kicking.

At some point I mentioned somewhere that industry professionals are concerned about Wii sales staying strong throughout the year. Nintendo systems apparently have the reputation of selling well during holiday seasons and slumping during the intervening months. January’s stellar Wii numbers may demonstrate that Nintendo has addressed this problem, but I think we should wait a few months before jumping to that conclusion. It seems that gift cards have become such popular gifts that January almost still counts as the holiday season. The root of the issue is whether or not Wii sales will continue when parents are no longer buying them for their kids (the non-holiday season), and if kids are still buying the system with gift money in January, then strong January sales do not imply that the trend has changed, just the timing. We will have to wait and see.

These broader trends are all very interesting, but something I would like to examine in a little more depth is the success (or possibly lack thereof) of the Xbox 360, both in North America and Japan. The relative failure of the original Xbox in Japan is no secret. In its best year (2002) Microsoft sold 328,000 Xboxes to the citizens of Japan. By comparison, between 2001 and 2005 Sony sold over 2 million PS2s a year, including 3.7 million in 2002 alone. Nintendo sold just over a million Gamecubes in 2002, and had a few other years with sales in the same range.

Has Microsoft learned from the mistakes of last generation? Can they implement strategies that will lead to success in the Japanese market? Is it possible for an American company to succeed in the Japanese video game market at all? This last question lies well outside the scope of raw sales numbers, and I will not try to answer it. I do think the xenophobia arguments are a little exaggerated, and there is probably something to the idea that while the original Xbox was home to excellent sports, FPS and action games, it had very few Japanese style RPGs and even fewer dating sims. Now, onto the 360.

In North America, the Xbox 360 is at least holding its own. While comparisons to the other next-gen (current gen?) consoles are of limited use since the Xbox 360 is considerably less supply constrained than either the Wii or the PS3, the 360 outsold the PS3, and fell short of Wii hardware sales. In terms of software, the Xbox 360 (2.2 million units in January) continues to be the best seller (PS3: 663k, Wii: 977k) among its peers (but still well short of the PS2 and just shy of DS). Again, the Xbox 360 has more than a year’s worth of installed consoles, which the Wii and PS3 do not, but these sales numbers are solid.

In Japan the story is less clear. The comparison between the Xbox 360 and its direct competitors is completely one sided. In January the Playstation 3 sold 148,000 units while the Wii managed 405,000 units. The 360 fought its way to a mere 44,000 units. The software story is a little more hopeful. While Wii software (999k units) severely routed that of the other two consoles, the Xbox 360 (83k games) eked out a win (?) over Sony’s machine (61k games). While the same comparison problems exist in Japan as in North America, there is a glimmer of hope for Microsoft that they are selling some games. Sales of Blue Dragon did not set the Japanese world on fire (as I thought it might), but it has sold well, and is the best selling 360 title in Japan. Gears of War was met with a relatively strong launch as well.

You were supposed to save Microsoft, not look like a scarier version of the genie from Aladin.

A comparison between the original Xbox and the 360 may actually offer a little more insight. So how do these two compare? The Xbox was launched in Japan in February 2002. The 360 was launched December 2005. 2002 was a better year for the Xbox in terms of both hardware (328,000 units) and software (509,000) than 2006 was for the 360 (hardware: 209,000 – software: 447,000). And 2002 was not even a full year, while 2006 was. So from that perspective it seems as though the 360 may be falling flatter than did the Xbox.

On the other hand, January sales were quite solid, compared to what had happened in the past. In fact, if Microsoft can convince the Japanese consumers to buy anywhere near as many games throughout the rest of the year as they did in January, they should be able to just about double the best year the Xbox ever had (2002, described above), even without the probable sales bump around the holiday season. These numbers are not inspiring enough to think that the 360 may achieve actual objective success, but they do imply that Microsoft may be making inroads in a previously inhospitable market.

I have no personal attachment to Microsoft. I never owned the original Xbox and I do not yet own a 360. Conversely, I do enjoy many of the genres that are traditionally considered Japanese. The Xbox had very few games made in the “Japanese” style. It had no jRPGs and most of the oddball titles (Ico, Katamari Damacy, Cubivore, Odama) were on other consoles. If Microsoft can come up with a viable strategy for Japan, and sell some consoles, then Japanese developers will be more willing to create titles. There is something of a chicken-and-egg problem in that Microsoft will not succeed until it has games that appeal to Japanese gamers, and it will have few Japanese games until it begins to succeed. As I have suggested before, the onus in these situations is on Microsoft. I personally hope Microsoft pulls it off. The way I see it, we, as gamers, will benefit if the success of the 360 leads to different (how does MS feel about 2D?) and innovative games.

1 Comments

  1. Cunzy1 1 said on September 10, 2009:

    Nah mush it’s Chicken Cottage innit.

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