Is Microsoft In Trouble? Pt. 2
I promise I won't post too often just to say I told you so, but someonestolemydomain.com got a lot of heat for my article entitled Is Microsoft In Trouble? and I feel the need to point out the latest information. Really it boils down to if you believe having "4 million units shipped but onlu 1.88 million sold actually matters at this point in a console's lifecycle, mere weeks from a European launch.
The crux of the article was that Microsoft had better smarten up when it comes to competing with Nintendo, as budget concious gamers are clearly choosing the Wii over the 360 in droves. The effect of which is driving a wedge between Walmart gamers everywhere- offering Sony a golden opportunity to show up Fan-boys everywhere. I warned readers not to underestimate Sony's ability to exploit this industry trait again and re-establish it itself as it had with the PS2.
Here are January 2007's numbers for North America:
| Wii: | 485,000 |
| PS2: | 338,250 |
| 360: | 332,250 |
| PS3: | 275,500 |
It's important to note that this is North American numbers only. Sony is about to launch in the EU and supply the North American market with 2 million shiny new consoles. The PS3 is 50,000 units short of overtaking the 360 in North America and the games have barely begun to flow. All the more telling is the PS2's slight edge over the 360. In Japan, (while the numbers are not in) it can likely be assumed the 360 is not selling well and each Wii and PS3 sold is another nail in the Xbox 360's global ambitions.
But look at the Wii! You still can't find them in stores and it's not because they're not available. These numbers are simply amazing for January, even for a Nintendo console. I see Nintendo's sales sustaining this torrent pace for at least the next 6 months. Come 2007 the holiday season, the gloves will be off and I think this is where the Wii could really take off. If it fails in this objective, the Wii will truly be a flash in the pan- and that, may just be Microsoft's 2nd (and final) chance to finally overtake Sony.
My money's on Microsoft to finally breakout in the next (but not final) round of the Next Gen Wars (2010?). Sony had better start working on PS4 now to have a hope in hell after round three.
Check out these charts (from vgcharts.org) with inline analysis:
Next-Gen Wars Heat Up (Xbox360 vs. PS3 )
 Note the strong peak this holiday season for the 360, but if you compare the PS3's launch to Microsoft's numbers throughout 2006 its clear the PS3 has started stronger. |
The Gloves Are Off (Microsoft vs. Sony)
 First thing to note here is PS2's weak initial numbers and strong peak during the 3nd buying season and rarely drops below 300,000 units per month. Microsoft, due to supply-chain problems is well below this number, and yet was eclipsed by a system in its twilight. This is terrible and important to note the PS3 has had a stronger launch than the PS2. |
WTF?! (PS3 vs. PS2)
 What? Don't believe me? |
Taking Them Downtown (Nintendo Wii vs Xbox360)
 Look at the bite out of crime Nintendo is taking to Microsoft right now. Here is a rarity in the gaming industry: sustained sales during the quiet buying season. This means a lot of people who want a Wii are not getting it, or they are not willing to wait. It remains to be seen wether the Wii can maintain these numbers, but there is no doubt that they have stolen some market share from the Xbox 360, leaving room for a stronger than anticipated PS3 launch. Finally, it's important to note, that the Xbox 360 has barely out performed the Xbox so far in terms of sales during the prime shopping season. This must have Microsoft wondering if this is going to be harder than J Allard thought. |
The Magic 200k number (Nintendo 64 vs Gamecube)
 Ah, Nintendo's "slump". What's it like to be #3 Nintendo? Well it means alot of months, you dip below 200,000 units. These kind of numbers are reserved for quickly and (unfortunately) irrelevant consoles. |
Achieving Critical Mass (Dreamcast vs Xbox)
 Look at what happens to the strong early starter, who drops below 200,000 units. Also note, how in the grand scheme of things, the Xbox really didn't do much better than the Gamecube. Microsoft's marketing team might have you thinking otherwise, but there it is again, falling consistently below the 200,000 units mark. |
Believe what you will folks, but to me, the patterns above and the supporting January 2007 numbers don't lie.
Uh huh
I *think* I get what you're saying. Actually no, I don't. Maybe if you could explain a bit more how some of these charts foreshadow MS's failure? I really don't think it's as clear cut as people think. Right now the 360 has a dedicated user base, a solid online plan and anticipated titles. To top it off, their only 'true' competitor is Sony! I mean, for most of us gamers we couldn't live on 'just' a Wii, so we need something to complement that. Something that has what the Wii lacks, something with great graphics and a unique online experience. At the moment Sony hasn't proved to me they have that online plan, or even great titles within the next 10 months.
What I'm trying to say is, this next gen battle is really 360 vs PS3. The Wii has seemed to almost run away with number 1. So, the question for the 'Wal-mart' gamer is, which offers a richer experience? 360 or PS3? Right now the answer's clear, but 10 months from now? Sony could pick it up, but it's still too soon to count MS out.
Microsoft's failure?
It just goes to show that anyone will go and read anything into the fact
WHere did I mention Microsoft's failure. It's as if you want me to!
I'm observing sales trends and history shows, things not looking good for systems like XBox360. The January sales numbers (usually a baseline month) shows the 360 have a rough go at it, for a 2nd year. THis is a perfect storm. ALLS I'm saying.
HOw can you so easily discount the Wii's impact on the market? On what fact do you base this?
It's right there in the chart, the wii stole what should have been the strongest christmas ever for microsoft- it wasnt. You don't think this somewhat worrisome to people at Microsoft?
Yeah
That's exactly why I said I didn't really get your point.
The post is called 'Microsoft in Trouble?' and you mention things like "it can likely be assumed the 360 is not selling well and each Wii and PS3 sold is another nail in the Xbox 360's global ambitions." but don't go into any specifics about your prediction.
So again, I don't really understand what your saying, or what any of these charts do to support a prediction that isn't really made clear in the first place.
Yeah they are in trouble,
Yeah they are in trouble, business is about growth and they are doing a terrible job over it. Considering a 5 year cycle this is very discouraging numbers for Microsoft.
The other statement refers to Japan...I dont need numbers to make sense of this, the anecdotal evidence is strong:
it can likely be assumed the 360 is not selling well and each Wii and PS3 sold is another nail in the Xbox 360's global ambitions
So if you add close numbers in North America, to the assumed Global numbers still due, MS's picture suddenly is even more bleak. This is to say that North America is pretty poor to begin with for both PS3 and Microsoft....except for the fact that PS3's launch has outperformed PS2.
Still don't get it?
Uh huh
Pardon me again for sounding condescending, I truly do respect your point of view, but remember this:
"WHere did I mention Microsoft's failure. It's as if you want me to!"
This recent post would seem to prove my initial assumption correct, you do indeed believe in MS' failure. So again, is it 'as if I want you to'? Or am I right, you really do believe in their failure?
No to clarify, I believe
No to clarify, I believe Microsoft is at the tipping point.
Compare it to other "unsuccessful" platforms: N64, DC and GC/Xbox.
They are not done by any means, but historically they are looking terrible considering they launched first with 1 year lead time.
What happens right now, through to CHristmas will make or break the XBox360, but January/Feb numbers are not looking as good as PS3's and Wii's if you compare launches side by side.
The 2nd Christmas is where consoles start to achieve critical mass, but Microsoft did not beat the same critical mass as the entry product Xbox (which was launched during the PS2's breakout season). You can draw your own conclusions from that, since you are familiar with mine.
So you see I dont believe they will fail, but we are seeing signs of the platform's weakness. Hence "IS MICROSOFT IN TROUBLE???" I dunno what do you think?
Thank you
Call it failure, or 'the tipping point' to failure. Whichever fits better.
Now if I ignore your insulting undertone I must say, I agree with you completely. For a console to have a year lead and show barely comparable sales figures does raise an eyebrow. If MS starts setting in 3rd place, it'll show in the next 9-10 months. Christmas is crucial, and Sony could easily breakaway post-E3 (or whatever they're calling it this year). The one chart that has partial relevance in all this is the DC vs XBox. Although I think a DC vs PS2 chart would be more telling, it's still proof a system can start off strong and eventually fail even with a year lead.
Thanks again for clarifying, and overall a good editorial.
Failure != tipping point.
Failure != tipping point. Failure comes after :)
Sorry I didn't mean to be insulting. If I come accross that way its jsut because this seems so obvious to me I defend it passionately.
Thanks for your comments/compliments! More hard-hitting rebel-journalism on the way.
BTW I didn't include teh chart you suggested as I figured readers could compare the four systems on their own (vgcharts only allows 2 at a time) and I didn't want to many charts. I definately agree.
Framingham, Mass.-based
Framingham, Mass.-based research firm IDC predicts that the Wii will outship and outsell the Xbox 360 and PlayStation 3 in 2007 and 2008, as Nintendo’s rivals battle over the core consumer.
Wow I'm not the only person that believes this.
If Nintendo is selling like hotcakes leaving their "rivals to battle over the core consumer" what does that mean? Well, considering Nintendo's tarket market is the CORE CONSUMER of all age groups- its pretty clear to me the analyst agrees that Sony and Microsoft will be fighting over the scraps.
If this is the case, things are much different than last gen, and Microsoft may end up being the odd man out as the underperforming Johnny Come-Lately as their sales have quite clearly not grown from last generation.
BakedGoods
He's using a time honored tradition that holds up in business, psychology, warfare etc...
It's called using the past to predict future actions. Many times, history does repeat itself. The scale is always different, but the fact remains that usually, past indicators are very good tools to predict future trends.
If I can trend
Hundreds of datastreams *competing* (read: irregularities and all) for finite resources over several years for a living, and do so successfully- I'm pretty sure I can handle the 3 datastream console war.
Seems everyone's comment is that the 360 doesn't compete with the Wii. This is wishful thinking and shows that by saying this, you don't understand the marketplace at all.
Even when you factor in attrition (did that), growth (doh did that too), and historical sales data its pretty easy to see the Wii is having a serious impact on Microsoft and Sony. But the kicker is: Sony is doing better than they ever have and Microsoft is not doing as good as they need to be doing at this time.
Why is this so hard for people to understand?
Thank you for seeing my work for what it actually is- An intelligent digest of sales numbers to date. I would happily stand in any boardroom and present these results with analysis.
Alright
HolmesIV, using historical data is one thing, but an ability to understand market differences is another.
This generation is much, much different then you think. Sure the common variables are there, 3 competitors, 3 consoles, but almost 3 totally different strategies. In previous times you generally had similar consoles competing, with graphics being the main muscle power. Think Master System/NES, Genesis/SNES, PSOne/N64, DC/PS2, etc. Today we have a much different scope of competition in which some competitors are focusing on graphics, others on connectivity, and another (who almost lacks both) featuring 'fun'. These are very different times, times where previous sales numbers can't predict with as much ease. Surely even you yourself realizes this.
This generation we have an interesting twist. While most systems general debut at the same price as each other we now have a drastic shift in price difference. Buy a PS3 for $600, a 360 for $400 or a Wii for $250. A very significant difference on it's own. Now look at each system, each one offers a unique experience, an experience that almost can't be duplicated on the other's system.
My point is, sure the Wii is taking market share from MS, but the difference here is due to price and varying experiences it almost makes sense for customers to buy another system, whether it be a PS3 or 360. As Larry Probst of EA said about the Wii; "...if you're second on everybody's system, you're first overall." So if we accept (or at least pretend) the Wii runs away with the most market share, it'll be MS and Sony who compete for 'first on everybody's system'.
I don't mean to be condescending but, why is this so hard for people to understand?
Mainly because most people
Mainly because most people can still only afford 1 system.
Back then people spent far less on their technogy budgets than they do now. Plus game systems have never been more expensive.
Clearly I've factored in these considerations and it doesn't change the fact that people on average, do not spend more on videogames in 2007 than they did 1990 for instance- PER CAPITA.
I dont have figures on this but I'll let you know as soon as I can find some.
I have read (and can locate) articles supporting these statistics...Stats Can!!!
Uh huh
I'd be very interested in seeing these statistics. From what I've heard consumer spending has gone up quite a bit the last few years, so I think it's very plausible to imagine gamers owning more than 1 system.
On the other hand you're right. If everybody were to only buy 1 console then the Wii would be absolutely dominating the 360. But again, it's my belief (and obviously MS shares this) that the Wii/360 can live in piece and harmony...until MS comes up with a 'Myy' console next-next gen that owns the Wii ;)
You'd be correct, but in the
You'd be correct, but in the last 20 years some other things have changed from the golden years:
Technology budgets have increased, but so has the amount we spend on various forms of entertainment. But that entertainment budget is now shared by: ipods, PC/gfx upgrades, micropayment entertainment, plasma tvs, pay-per-view, satelite tv, HD content, and the like. Things have really changed, but we didn't exactly become richer per capita....
Don't tell me the average person has buying two consoles on their mind because it just wouldn't be true. You, me, and your buddy from college are not average people- and that's where the real growth potential lies.
The Nintendo Wii is a prime example, and Microsoft is losing out on their chance to be the set-top-box for joe worker with 500$ burning a hole in his pocket.
I'd love to break down some stats for you- I'll see what I can find out there over the next few days..
owned yourself again!
Dragon_noob, would't using 'history' and 'future' involve using 'time' as a whole? Isn't that an argument you criticized me for using before? Although I think HolmesIV is 100% on the right track, this just proves you're a complete hypocrite! Hahaha!
*Sigh*
The difference here is that HolmesIV isn't counting anyone out, and his use of "time" is a common practice used in multiple arenas. Your use of "time" was to prove a meaningless point that is completely irrelvent.
And laughing? +2 on the pathetic scale, making your rank move from "fat ass who plays Halo 2 all day while eating Doritos" to "loser who spends the whole day on the computer trying to refute one person". Congrats on the demotion.
HAHA
Wow, re-read your comment. You make no sense whatsoever. You're arguing about time?! Wtf?! Must be a new tactic of yours: provide a completely random and irrelevant argument based loosely on the measurement of time in an attempt to confuse the 'arguer' into submission. Too bad you fail. You're still wrong I'm still right.
And yes, I love providing truth to your ignorance...it's my calling =)
Sure dude
Whatever you want to say to make yourself sleep better, but remember, I'm not the one that hangs on every word of my "opponent". You can sit at your computer until you're 100 and claim that you're right and I'm wrong (which is a ludicrous claim by the way), but my life doesn't revolve around you the yours does mine.
If only you could get paid for your pathetic life, then you'd be set.
Hypocrite.
Hypocrite.
Loser
The title speaks for itself.
Still need the last word?
Still need the last word? I'll let you have it again, I'd hate to see you waste more time thinking of weak insults.
Please respond with your lame comeback below:
.......
refer to the post entitled loser.
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