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Retail

New consoles can't save software from 24% decline, but industry sales rise

New consoles can't save software from 24% decline, but industry sales rise

Thu 12 Dec 2013 11:30pm GMT / 6:30pm EST / 3:30pm PST
RetailHardware

NPD report reveals the biggest Nov ever for hardware in US; BF4, Call of Duty not enough to spike game sales

The NPD Group has released its report for the month of November (covering US point-of-sale data from November 3-30) and the good news is that total industry sales did increase by seven percent to $2.74 billion. Hardware sales rocketed up 58 percent, as you might expect with next-gen system launches, to $1.327 billion. The accessories category, which typically gets a lift from new hardware as people buy extra controllers and other items, also jumped 17 percent to $327.4 million. The downside, however, is that even with top-tier AAA games like Call of Duty: Ghosts and Battlefield 4, software took a 24 percent dip year-over-year, generating sales of $1.1 billion (including PC and portables).

NPD analyst Liam Callahan noted that November 2013 was actually the best November ever for hardware sales in the US. "With the introduction of the PlayStation 4 and Xbox One, coupled with positive sales for the Nintendo 3DS, sales in November 2013 marked the best November for hardware sales on record," he explained.

And while the focus has been on PS4 and Xbox One, Nintendo's 3DS portable has been performing quite well. "Supported by strong content throughout the year, including this month's The Legend of Zelda: A Link Between Worlds, Nintendo 3DS hardware unit sales have increased by 15 percent year-to-date through November," said Callahan.

All games on the top 10 selling software chart below are sold across several platforms, so it's unclear what portion of say, Call of Duty, was sold on the new consoles compared to the old.

1

18 Comments

Nicholas Pantazis
Senior Editor

1,017 1,463 1.4
So far Neogaf is calculating the 3DS at ~760K based on the 15% YTD increase claim, which would be pretty disappointing. Nintendo should definitely be able to outsell the PS4 and Xbox One, even in North America, and even on a launch month, at that crazy low 2DS price with Pokemon and Zelda. This is a good rise over last year's November numbers, but I think it's pretty clear that Sony and MS both launching in November was enough to sap a significant portion of potential 3DS purchasers.

I'm sure they'll win out the long game for the holidays anyway, with supply constraints and all, and worldwide they'll have a HUGE lead, but not winning America in November has to be disappointing.

Edited 1 times. Last edit by Nicholas Pantazis on 13th December 2013 12:02am

Posted:8 months ago

#1

Greg Wilcox
Creator, Destroy All Fanboys!

2,150 1,063 0.5
Nicholas, I don't think anyone I know who bought an Xbox One or PS4 would want a 3DS as a substitute because they either already own one or simply don't want one because they don't see it as a direct or equal competitor. Sure, it has more games, but after listening to enough "dudebros" at some game shops ragging on the 3DS for not having games they want to play, I don't think they'll be looking at Nintendo at all. On the other hand, I know I'll probably nab a 2DS just to replace my busted hinge system, although I dislike that tiny screen it has. I'd get an XL, but can't afford it at the moment, so saving 70 bucks means a "downgrade" that's still kinda cool...

Posted:8 months ago

#2

Nicholas Pantazis
Senior Editor

1,017 1,463 1.4
@ Greg I'm sure that's true for the dudebros, but a lot of people buying launch day/month systems are major enthusiasts like me. A 3DS isn't seen as an equal competitor, but as a potential purchase nonetheless. However, when you're dropping $500 on hardware alone, the chances of you having money left over for something like a 3DS (or even games) are very low. Hence the drop in software, and the worse-than-expected 3DS sales. I'd say the 3DS is much more likely impacted by the launch of the PS4 and XBO than it is the sales of smartphones and tablets.

Posted:8 months ago

#3

Richard Browne
EVP Gaming and Interactive

96 108 1.1
3DS/2DS is a Christmas present for kids at this juncture. That it can still sell that in November is astounding ; December it'll kill.

Posted:8 months ago

#4

Greg Wilcox
Creator, Destroy All Fanboys!

2,150 1,063 0.5
@Nicholas: True, true... although I'd gather most people who bought into next-gen as enthusiasts already own a 3DS (or at least I'd like to think that's where some of those sales have been going since Nintendo launched the handheld)... ;^)

Posted:8 months ago

#5

Bruce Everiss
Marketing Consultant

1,692 594 0.4
Early PS4/Xbone users will be core gamers so will have a very high attach rate. Disproportionate to the mere 1 million units a month these boxes are each currently selling worldwide.
Console software sales were in serious long term decline before the new consoles were launched. They may cause a blip but they won't change the inevitable trend. The whole business model is broken.

In the UK my observation is that everyone is either buying or receiving a tablet this Christmas. And tablets are mainly used for gaming.
Android has well over 1,000 million active devices. It wouldn't surprise me if tablets sell more than a million units a day this December.
The writing is on the wall that the vast majority of gaming in our future will take place on tablets.
A lot will be simple phone games.
A lot will be mid core games optimised for tablet.
A lot will be hard core games when the industry adapts to the new reality.

The gaming industry is changing from a low volume, high price industry to a high volume, low price industry. On mobile 5 million users of a game isn't even a big deal.

Posted:8 months ago

#6

Patrick Frost
QA Project Monitor

393 189 0.5
Tablets are mostly used for gaming? News to me Bruce, I'd like to see your evidence for that if it's anything other than anecdotal.

Also, just as a point of courtesy, I would recommend staying away from catch phrases such as "the writing is on the wall" if you want people to listen to your point carefully.

Posted:8 months ago

#7

Klaus Preisinger
Freelance Writing

1,070 1,000 0.9
Dear Bruce,
consider the road, not the step.

The challenge of tablets is whether they are just the lifestyle toy of this half decade, or if they are devices which can integrate into everyday life in a lasting way. We have seen technologies, such as living room TVs, which have a lasting power no matter the changes to content delivery. But we also have seen technologies which have been gobbled up by the next technology, or were flat out replaced after a few years. In terms of the living room, you have to say that the screen remained, while anything surrounding it changed quickly. This makes for an interesting challenge for tablets. They are screen and content delivery device in one object. Maybe that lasts, maybe it won't. But because screen and device are one thing, we have the limitations concerning the hardware prowess of games.The industry currently adapts to that.

But imagine the Nintendo approach applied to everything. The screen is just the screen and the hardware behind it can be replaced because it is not built into the screen. The evolutionary advantage of the TV. Expand that concept to an iPad and 15 years down the road, we might only have a screen that connects us to the hardware surrounding us and would never expect the content to be rendered by a locally executed OS on the device. With hardware no longer subject to the limitations of a device strapped to the back of a screen, we are again looking at higher computing power allowing for more traditional AAA approaches to game design. The games executed on the device itself will be as far removed from the games of that time as some Mame emulator running on your TI-86. Sure, the processors at the back will be more powerful too, but the game of CPU power is a game of heat dissipation and a large device in the bookshelf shall always win that. While you have a bare minimum entry level, the convenience level of gaming will rise, not fall, not delay until mobile chips catch up with 10 years ago in terms of power.

Give me the specs to the Nintendo controller and I shall rig up your workplace in such a fashion that upon entering the office, you shall not be streaming Nintendo games onto your tablet, but your office computer desktop. You won't connect your tablet computer OS to a WiFi. You will connect your screen to the networked computer nearby. Naturally, this is also raising questions about Google glass and Occulus Rift fitting into this somehow. Because those will be the competitors for the title of mainstream screen of the future. With all having their distinct advantage, we may see an era of specialized screens.

Tablet devices combining rendering device and display device into one package are the thing right now, just as Walkman was the thing back then. Now think FullHD 13 Inch Steam-Machine tablet powered by the gaming PC in your home. Do you realize that it only makes half-sense considering the giant TV in your living room and the Occulus Rift? That is where tablet will fit. They bring gaming to a corner of the world where specialized gaming equipment is not present. Viable business for sure, but if you want to aim for the top you will make big games. Or do you see Peter Jackson dream of making Chinese TV series because it has more viewers?

Posted:8 months ago

#8

Bruce Everiss
Marketing Consultant

1,692 594 0.4
#9

Morville O'Driscoll
Games Blogger & Journalist

1,509 1,283 0.9
A lot will be hard core games when the industry adapts to the new reality.
I honestly can't see this happening, though it depends how you define "hard core games". Something like Baldur's Gate 2 is a hard-core game, and will see quite a bit of life on tablets, I'm sure. But...

There's only so much that touch-screens and multi-pinch zoom can do. The hard-core games where speed and ultra-quick responsiveness don't matter are fine on tablets. But FPSs, RTSs, and fine-control puzzle games won't migrate in totality to the tablet market - the control scheme isn't there, and I don't think will ever be there. After all, you're placing a finger/fingers over the viewable area, which cuts off precision. Add-in subtle movements when you remove your finger, and there's only so much that can be done.

Now, read that paragraph again. See where I mention RTSs? How many RTSs are on consoles? Not that many, right? I can easily foresee another skewing of the market, so that certain genres exist in-plenty on tablets, whilst others are non-existent, just as the console and PC markets have definite divisions. Which means all the evangelising about tablet and mobile gaming is useful, up to a point. But beyond that point, it just shows a bias against the current industry paradigm, ignorant of many types of gamer (and game) that are out there. To argue that
The gaming industry is changing from a low volume, high price industry to a high volume, low price industry. On mobile 5 million users of a game isn't even a big deal.
Is the be-all-and-end-all of the industry is short-sighted. As short-sighted as the doom-sayers who predicted the total end of PC when the consoles broke mainstream, and as short-sghted as the people who say the Steam Machine will be the absolute downfall of the console. Unless you're going to argue that CoD and BF are going to exist on tablets, then you have to accept that consoles (and PC) will continue to thrive.

Now, whether they will continue to thrive based on hundred-million dollar budgets like the GTA series? That's debatable. :)

Posted:8 months ago

#10

Sandy Lobban
Founder and Creative Director

312 196 0.6
@Bruce I have to disagree that they are mostly used for gaming. I can count on one hand the amount of people I know who play games on them, even semi-regularly. Social networking, reading, video calls, email, shopping and keeping up with current affairs all rank well above games as far as I can see.

Edited 1 times. Last edit by Sandy Lobban on 16th December 2013 10:25am

Posted:8 months ago

#11
Problem is some folks live a pocket dimension, which conveniently ignores the wider eco system of gaming.

Posted:8 months ago

#12

Bruce Everiss
Marketing Consultant

1,692 594 0.4
@Sandy Lobban
When I use public transport or go to the pub I see lots of people playing games on tablets. Obviously not your friends.
All the research that has been done on tablet usage has games as number one.
Mainly because they are brilliant gaming devices.

Posted:8 months ago

#13
Define " brilliant gaming devices"

Tablets are best for reading and browsing.
For zooming, pinching - its good for simplistic haptic type interface, but I'd hardly call it brilliant for games. Its certainly not a universal game type device as its input is extremely limited.

I did enjoy Battle Commander - although the interface is 80% accurate, and its just DRAG and release

Posted:8 months ago

#14
Bruce is right about the time spent playing games on tablets - Apples own recent figures report 48% of average ipad usage is spent playing games, more than double facebook/twitter combined and easily dwarfing all other activities on the platform. Tablets really are coming alive for games, whether the press or industry chatter reflects that is another story.
However these players clearly are not gamers as we understand them - it's more grandma playing Candy Crush than Junior playing GTA. And I would have to imagine a huge amount of this group is playing games for free. Remove f2p games and you might see that 48% drop hugely. So the market value does not tally with the amount of players. The most interesting part is that so many people are getting converted to game players, free or not.

Posted:8 months ago

#15
I guess depends what one defines as a gamer, the type of games played and the total amount of money/footfall made really

Posted:8 months ago

#16

Franck Sauer
Creative / Tech Art Director

63 9 0.1
I'm sick of these misleading headlines from analysis not accounting for digital sales (not to mention it's US only unlike the headline seems to pretend). In other news I read digital is to surpass retail in 2013, go figure...

Posted:8 months ago

#17

Christian Keichel
Journalist

624 849 1.4
I'm sick of these misleading headlines from analysis not accounting for digital sales (not to mention it's US only unlike the headline seems to pretend). In other news I read digital is to surpass retail in 2013, go figure... .
In other news of 2013 I read about:
Blitz Studios closing
EA closing Quicklime, PopCap, EA Phenomic, BioWare San Francisco and Victory Studios, laying of 900 employees in total
FIshlabs laying off most of his staff
Capcom halfing european work force
Atari going into bankrupcy
IO Interactive halfing it's staff
Disney closing Junction Point Studios
Microsoft shutting down Microsoft Victoria
Timegate Studio closing it's doors
Sega laying of staff in North America, closing Sega Studios Australia
Take 2 closing 2K Marin
Activision laying of 40 members of the High Moon team after Deadpools completion
Sony closing Studio Liverpool

Edited 2 times. Last edit by Christian Keichel on 16th December 2013 1:59pm

Posted:8 months ago

#18

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