Analyst: Next-Gen Hardware Sales Are Disappointing Options

[Xbox-Scene]

Analyst: Next-Gen Hardware Sales Are Disappointing Posted by XanTium | March 19 10:45 EST | News Category: Xbox360

From teamxbox.com: [QUOTE] GameDaily.biz reports a note issued by Deutsche Bank's Jeetil Patel, in which the analyst labels sales for the Xbox 360 and PlayStation 3 as "poor." "Next-gen hardware sell-through of 700K units in Feb-07 brought its total HW installed base to 8.0mn in the US, still 30% less than the prior cycle at 11.2mn units at equivalent stages. Xbox 360 (230K) and PS3 (130K) unit sales were below expectations of 250K-300K and 200K respectively. Retail checks reveal that ample supply exists, suggesting a demand problem for next-gen consoles," explained Patel. "Particularly disappointing is Xbox 360 HW sales of 230K in February, which puts its installed base at 5mn or in-line to the original Xbox which was an unproven console and faced substantial competition from the PS2," Patel added. [/QUOTE] Full Story: teamxbox.com

[sabbath_dude]

Prices need to drop on both consoles before sales increase.

[Junior04]

Damn right that the price should drop.
Just think what the PS3 will do in europe.

[Martinchris23]

Maybe this is more of a sign that either:

1. It was too early for next-gen consoles

or

2. The current gen console lineup (esp. PS2) is still extremely strong.

This isn't a bad thing - consumers have a right to choose and depending on disposable income, people will always vote with their wallet.

Particularly disappointing is Xbox 360 HW sales of 230K in February, which puts its installed base at 5mn

With worldwide figures of over 10mn by December 2006, I don't think this a particularly disappointing figure. I'd be more worried that the PS3 is selling less than the 360 even though it was only released last November.

Martin

[Havok]

People can spin numbers any way they want...

All that matters in the end is profits and attachment rate (since MS and Sony both LOSE money on the hardware).

Ideally for Sony and MS is not to sell a lot of consoles but to sell a TON of games and accesories. So far MS has done pretty good with that and Sony has not.

Nintendo on the other hand... is selling like hotcakes and they make money on the hardware and software...

So as a business venture.. Nintendo seems to have made the smartest plays.

[d-range]

Maybe this is more of a sign that either:

1. It was too early for next-gen consoles

or

2. The current gen console lineup (esp. PS2) is still extremely strong.

I'd say both, but point 1) surprises me the least of the 2. When the 360 was released the Xbox 1 was still a perfectly fine console with enough potential for at least a year or 2, it was killed *way* too soon. If I were an MS fanboy I'd be pretty pissed off that my investment in the platform was depreciated so early (I do own both an Xbox 1 and a 360 btw, but I'm using the xbox 1 only for XBMC)...

[bucko]

analyst are so funny. They assume everyone has money in there bank account?

[Martinchris23]

All that matters in the end is profits and attachment rate (since MS and Sony both LOSE money on the hardware).

Maybe I misread, but I was under the impression that the 360 now sold at a profit.. I'll try and find the article.

Martin

[sabbath_dude]

Maybe I misread, but I was under the impression that the 360 now sold at a profit.. I'll try and find the article.

Martin

It does but only the Premium pack. The core doesn't from what I remember though.

[kermit007]

Maybe I misread, but I was under the impression that the 360 now sold at a profit.. I'll try and find the article.

Martin

The components to put the system together probably sells at a profit, but the R&D needs to recoup quite a bit still I'd bet. Numbers spinning is fun. 360 sell at a loss overall, but if you only count whats spent this year on R&D (virtually nill outside of trying to keep moders out) + hardware = it sells at a profit!

[Landlocked]

I agree that the prices are too high. Mommy and Daddy aren't going to 1) find lots of kiddie games for the 360 and know that the young kid will be just as happy with a Wii as with an 360.

I read (elsewhere?) that Best Buy is going to stop carrying the 20 GB version of the PS3. Ouch. That will really put a pinch on Sony when price is the sole factor when purchasing.

It's been reported that the 360 is now making money on the base console. Fine, lower the price $50 and lose some more money and make it up with accessories and games.

[Methadon]

It does but only the Premium pack. The core doesn't from what I remember though.

If anything, I'd think it'd be the other way around. For $100 more than the core, you get:
* Hard Drive + 1mo free Live
* Headset
* Wireless Controller
* Remote Control
* HD Component Cables
* Standard Headset

That's a LOT of shit for $100 (although the controller and cables are just upgrades from the core items). Essentially, the core system features:

* Wired Controller
* Composite cables
* PSU
* System (duh!)

Judging from the compontents on the mobo versus companies like PC Chips who have onboard graphics, etc type mobos for PCs that RETAIL for about $100, I'm sure MS isn't paying $100 per mobo. DVD drives are probably between $15-$30. Also note these guesstimate figures are based off very large bulk status (since they've already sold over 10m worldwide).

Anywayz, back to the topic; sales are by no means dissapointing.
1) TONS of people are still playing Xbox and PS2. Why upgrade to a PS3 when you can still pre-order God Of War 2 (or Why upgrade to a Xbox 360 when there's a few titles that come out on both, and a bunch more that are Xbox exclusives).

2) NOW it's taxtime, so expect quite a few more to be sold by the next report time.

3) Lots of people holding off to see which system they'll be most satisfied with. The Xbox 360 is not even (or just barely) two. The PS3 and Wii are even younger. Also consider it costs considerably more to buy a PS3 than it did to buy a PS2, and still more to buy a Xbox 360 than it did to buy a Xbox (unless you're comparing an Xbox that came fully loaded for $299.99 to a Xbox 360 core that doesn't for $299.99).

[sabbath_dude]

If anything, I'd think it'd be the other way around.

Nope, costs for the current Xbox 360 motherboard US $204 (according to estimates so not %100 accurate).

See HERE and HERE.

[TheIceman72]

I really agree with you guys. M$ did kill the Xbox too soon. I just hope they learned something. I would hate to see the 360 die is less than 2 years. They should let the 360 run for at least 5 - 7 more years. Hell I cant believe people are still buying PS2's. Those came out shortly after the Dreamcast came out. Thats nuts. Also I think the PS3 on the other hand my get dropped early and they may work on the next console and let the PS2 ride out. I really dont see how they are gonna survive with that system costing that much. Even from a guy that could cop one any day, I just cant justify the cash I would spend on it. Now knowing Nintendo...the Wii will be around for the next 10 years or so. Just think about it. When ever the price drops it is gonna be under $200 bucks. Parents are already dropping cash on it now. When that happens every kid will have one. Nintendo just knows about how parents, spending, the consumer, and game systems work. They have the console war down to a science. Hell how many people can't say they have had every Nintendo system at least twice?

This post has been edited by TheIceman72: Mar 19 2007, 08:10 PM

[steveju]

Hell I cant believe people are still buying PS2's. Those came out shortly after the Dreamcast came out. Thats nuts.

What would you do with 20+ games on a system that breaks down every two years?