The latest console war has been underway for five years now, and it’s still difficult to call a winner on the basis of sales. But one game company is winning the battle for a place in our minds.
Have you heard of “the Xbox factor”?
The story goes that cinema ticket sales are increasingly dominated by romantic comedies, character-driven dramas and film adaptations of lusty vampire novels – in other words, “chick flicks”. Some Hollywood executives have attributed this to the fact that men are becoming less interested in going out to see a movie as they become more caught up in “sophisticated video games” (and the Ultimate Fighting Championship, apparently).
To me, the most interesting part of this story is the fact that the phenomenon has been dubbed the “Xbox factor”.
Not the “Playstation factor”. Not the “Wii factor”. Not the “Games For Windows Live factor”, amazingly. The word “Xbox” has been chosen to represent all videogames – or at least the videogames predominantly played by young men.
It’s not the first time I’ve noticed that use of the word. Here a Rolling Stone article describes a male teenage telephone hacker “playing the phone companies like an Xbox.” Here a blogger explains how “blowing away zombies and defending the USA on your Xbox could mean fewer nightmares”. On Twitter a webcomic artist says he will never do a comic about ”1) zombies 2) steampunks 3) ninjas 4) draculas 5) monkeys 6) xboxes”.
Despite the enormous sales of Nintendo’s console and the competition from Sony, in the minds of the general public it’s the Xbox brand that is most associated with the core market for videogames, just as Coke is most associated with fizzy cola-flavoured beverages and Google is most associated with web search. Marketers call this brand association mind share, and it’s a powerful determiner of the success of a company.
Xbox hasn’t worn this crown for long. Until a handful of years ago, the typical anti-games pundit was more likely to be heard complaining that “kids today are so busy playing their PlayStations they no longer [read books / play sports / get jobs / make friends]“. It’s still heard occasionally from people who are a bit behind the times when it comes to videogames – people such as Hugo Chavez, the president of Venezuela, who declared on Venezuelan television last January that “these games they call PlayStation are poison.”
There’s a reflection of this tussle for brand dominance in last year’s Academy Award-winning film The Blind Side, which is set around the turn of the decade: when Sandra Bullock’s character tells her son to stop playing videogames, she calls the console a “Playbox“.
However, neither Xbox today nor Playstation six years ago could compare to Nintendo in its heyday. For much of the 1990s, many people used the term “Nintendo” as though it was literally synonymous with videogames. I remember my father telling my sister and I to “stop playing Nintendo and come to the dinner table” as we ran around collecting rings in Sonic 2 on the Sega Mega Drive. From as far back as 1990, this Far Side comic used a Super Mario reference to poke fun at videogames in general.
But what of Nintendo in 2010? Its erstwhile status as the videogame brand has either been restored or flipped on its head, depending on who you ask. Certainly Nintendo is often mentioned in television shows and newspaper articles, and its products show up increasingly often in movies, but in the minds of many, the Wii (if not the DS) is associated more with a lifestyle than with videogames. Nintendo itself seems to think this way, as its promotional images show idealised images of players more often than actual games. As Tristan Kalogeropoulos put it, “people don’t really see Wii as a ‘videogaming’ system. They play ‘Wii’ games on it, not videogames.”
I can vouch for that: I know people on both sides of the gamer fence who make a distinction between “Wii games” and “video games”. As well as the “blue ocean” players who own a Wii but don’t consider themselves gamers, many core gamers draw a thick line between casual games, including the Wii, and “real games“.
It’s undoubtedly a byproduct of Nintendo’s strategy of reaching out to a wider audience than the traditional gamer market. But while it may seem like a deep new rift in the landscape of game culture, is it really so different from the playground arguments between fankids of competing consoles, or the ongoing class snobbery between devoted PC gamers and console gamers?
In retrospect, I’m sure all of this clannishness will look like an unnecessary segregation of a shared history. Games are games, and all platforms have something to offer; they are all Xboxes in the end.
At least, that’s what my dad calls them all these days.
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Tags: brands, cultural, marketing, Nintendo, Xbox
“The latest console war has been underway for five years now, and it’s still difficult to call a winner on the basis of sales”?
How about the one that has sold significantly more then the other two combined? And also recently passed the others combined in total software sales as well?
That’s a fair point, David: the Wii is the clear leader in total sales. According to vgchartz.com, the Wii has sold 69.5m consoles to this point, which is not more than the Xbox 360 (39m) and the PS3 (33.5m) combined, but it is almost equal to them. The Wii has also sold the most games. However, there are signs that the other two platforms have stronger momentum, which could bring them close to the success of the Wii over the longer term.
For example, the PS3 and especially the 360 have higher software tie ratios than the Wii. You mentioned that the Wii has surpassed both platforms combined in software sales, but I think you’re mistaken, as total Wii software sales only overtook total 360 software sales at the end of last year:
http://www.gamasutra.com/view/news/26856/Analysis_Wii_Overtakes_Xbox_360_LTD_Software_Sales.php
That lead might last – or it might not. The anecdotal evidence that people grow bored of their Wii relatively quickly may be coming through in sales, as so far this year Wii game sales are significantly down on last year, whereas 360 game sales are steady and PS3 game sales have increased:
http://www.gamasutra.com/view/news/27665/Analysis_Examining_Declining_Wii_Software_Revenue_In_2010.php
By the time a new batch of platforms come out, a few years from now, I will be mildly surprised if the Wii still leads the 360 in software sales, although I’m sure the Wii’s install base will remain considerably larger.
And that only takes into account retail sales. The best estimates of digital download sales put the Wii Shop (that’s the Virtual Console and WiiWare combined) on a roughly even footing with Xbox Live Arcade games, and that’s not including the rest of the content on the Xbox Live Marketplace, such as themes, avatar costumes, DLC and Games On Demand.
http://wii.mytipsonline.info/2010/02/analysts-estimate-xbla-wii-shop-sales-kombo-com/
In addition to that, Microsoft must be making a ton of money from Xbox Live Gold subscriptions; the Wii has no such subscription service.
Despite all of that, it’s still fair to say that the Wii is in front on the main sales figures. But in the article, I’m not talking about a leader; I’m talking about a clear winner. The Wii has done enormously well, but the 360 is still a worthy competitor, and the PS3 has done ok. By contrast, the degree to which the word “Xbox” has been adopted into the language has left “Wii” and “PlayStation” in the dust.
I don’t know if you know this, but VGChartz numbers are widely considered to be farcical in circles of people who know numbers. ‘Made up’ is a kind way of describing them.
It’s generally considered gospel that the Wii hardware overtook the PS3 and 360 last year on a worldwide basis.
You’ve then proceeded to take a false assumption about worldwide sales and extrapolate guestimates of US-only attach ratios onto these figures. The Wii overtook Xbox 360 total software sales in the US a few months ago (according to guesstimates in that article), despite having been out a year shorter. This is pretty much the only market the 360 has, it happened a long, long time ago on a worldwide basis.
Based primarily on official shipment figures and their corroboration with the tracking we do have for the US, Japan and major European countries, in both hardware and retail software sales the Wii overtook the PS3 and 360 combined either late last year, or will have sometime this last quarter.
I’m not sure of the relevance of getting into revenue and profit, but it would really hurt any point to be made against Nintendo’s success and the others’ failure, given Microsoft and Sony are billions in the red for the generation and Nintendo tens of billions in the green. Ninetndo has therefore made infinitely more money then Microsoft or Sony, as M and S have not made a penny the whole generation. All these claims of ‘profitable quarters’ or even ‘profitable fiscal years’ are accounting baloney when they come no where near offsetting the initial losses of the first couple of years. Indeed, Microsoft ‘setting aside’ US$2Billion for RROD repairs was basically a way of buying ‘profitable’ quarters, which amounted to a couple hundred million, peanuts compared to the billions down the drain 2006-2008.
Your main point has merit, Microsoft truly do have brand awareness far in excess of their actual sales success. But in the end they’ve got a brand name of a money-losing second-place getting business practice. Nintendo pulled the rug out from under the ‘razor and blades console hardware arms race’, MS has spent eight years about about US$8 billion in red ink over two generations to come a distant second yet again, and their only win is that they have the category leader in a category that cannot make money and is unlikely to be repeated (bleeding edge tech sold at a loss to gain market share).
That’s a solid argument if it’s true, David, but you haven’t cited any sources for your assertions. I’m guessing you could, actually; but I’ve based my point on the hard data that I could find. To be told “that’s wrong” without any counter-evidence beyond “it’s generally considered gospel”is not terribly convincing.
For example, the sales figures from VGChartz seem to match up closely to what the manufacturers themselves claim to have sold. Is that why it’s considered suspect? What other data is available? Where is the data to show that the tie ratio for the Xbox 360 is not higher than the Wii in markets outside the US?
Those are genuine questions rather than counter-arguments. I’ll be convinced if you can demonstrate to me that the numbers I found are wrong, rather than simply asserting it.
Again, though, I’m not talking about who’s in the lead. Perhaps I wasn’t clear enough in the article (but remember this was only a passing mention by way of introduction to my actual point), but by “winner” I mean a company that has muscled its competitors out of market share; the Wii has been spectacularly successful, but it’s primarily operating in a new market rather than competing directly with Microsoft and Sony. The success of the Wii isn’t crippling the success of the other platforms. They are all still successful platforms in that they have continued to sell bucketloads of games. In the current generation there is no equivalent to the Turbografx, the Sega Master System, Saturn, Dreamcast or Game Gear, or the N-Gage. No platform is doing even as badly as the Nintendo 64, the GameCube or the original Xbox, and these are hardly considered abject failures, even if they weren’t terribly successful.
This is a Coke vs Pepsi level of competition, but the kind of “winning” I’m talking about is Google vs Yahoo! Search.
Hmm, having trouble posting, so sorry if this is a double post, please delete the other one if so, I edited this one a bit:
VGchartz and guesses based on limited US data by a Gamasutra writer are not ‘hard data’.
From Nintendo, Sony and MS’s quarterly reports, covering up to December 2009:
Wii (hw): 67.45m
Wii (sw) 509.66m (specifically does not include bundled software in the report)
PS3: 33.5m
Ps3 SW: 261.2m
Microsoft to December 09
360 Hw: 38.7m
MS stopped publishing software sales when they fell behind the Wii about two years ago. They publish their US shipped attach ratio of 8.8, which assumedly includes bundled software because they don’t state otherwise. If this figure held worldwide (a generous assumption) it would make their software sales to that quarter 340 million. Here’s the PPT with that figure:
http://www.microsoft.com/msft/download/FY10/Q2-FY10Slides.ppt#270,15,Diapositiva
Here’s the Sony report:
http://www.sony.net/SonyInfo/IR/financial/fr/09q3_sony.pdf
And here’s Nintendo’s investor briefing from that quarter, they go into some regional stuff with independent tracker data, which basically shows that Nintendo’s shipped figures are much closer to their actual sold figures then the other two, much shorter shipping pipelines evidently (The Wii is sold out a lot), and less software stock rotting on shelves.
http://www.nintendo.co.jp/ir/en/library/events/100129/index.html
So, for company shipments, keeping in min it’s three month old data and with Nintendo provided proof from independent trackers that their own shipments are closer to actual sales then the others:
Wii (hw): 67.45m
Wii (sw) 509.66m
PS360 HW: 72.2m
PS360 SW: 601m
As you can see, VG chartz hardware figures are basically just 3 month old shipment figures. We’ll find out within a week or two the new shipment figures of each where there’s likely to be clear sky between Wii and PS3+360 in hardware, and a tight race with Wii software likely to have overtaken PS360 software totals in shipments. And if it’s a tight race in shipments, it will be a Nintendo win in sales, and they’ll likely let us know this in the investor briefing.
Nonetheless, you’ve dramatically softened your argument from ‘difficult to call a winner based on sales’ to ‘The 360 has done better then the Gamecube and N64, so isn’t that bad a loser’. The Wii is far, far ahead of either competitor, a completely unassailable lead in both software and hardware, and the fact we’re even considering comparing it to both competitors combined should demonstrate this. Yes it hasn’t crushed the others like the PS2 did, but it didn’t launch first coming off momentum of a mega-successful predecessor with a new popular video format and with the weight of the entire 3rd party development community behind it either. God help competitors if 3rd parties just straight on the Wii2 from day 1.
Your ideas about ‘momentum’ are the same cries that have been coming for four years now that ‘the Wii fad will end’. ‘Anecdotal evidence’ of ‘people getting bored of the Wii’? Still? After all these years of that being wrong time and time again? And why are MS and Sony unashamedly co-opting motion based interfaces if they’re such a fad?
Wii software and hardware sales *were* down for most of 2009 compared to 2008, but were still much higher then 360 software and hardware sales. To beat something you have to beat it, not just lose by less, the Wii still gained on both competitors in a bad year. And New Super Mario Bros reignited the Wii, so much so that it had the highest selling hardware month of all time for any platform in the US in December.
The Wii has won, utterly convincingly, dramatically, and with basically zero support from the rest of the industry.
And one final point: this entire argument has skipped by the *real* real winner of the generation, the Nintendo DS. Which this quarter will easily become the highest selling system of all time.
To December 2009
NDS (hw): 125.13m
NDS (sw): 688.29
PSP (hw) 63.0m
PSP (sw) 244.0m
Just for fun:
PS3+360+PSP hw 135.2m
PS3+360+PSP sw 845m
Wii+DS hw 192.58m
Wii+DS hw 1197.95m
In unit sales (shipments), Nintendo is 59% of the industry by hardware and software.
EDIT: Hmm, the links don’t show up too well against this grey background. We’re still tweaking the site design, but for now I’ll just put them in bold.
Please give me a little credit. I wasn’t really softening my argument, I was defining it more clearly. You are working off a different criteria for “winning” than I am; I’m thinking about this like a market, not like a race. It’s perfectly acceptable to consider it like a race, but since you’re trying to prove me wrong, it’s necessary that you first understand what I’m saying.
If we are to consider it as a race, the Wii has a clear lead, but it is flagging, and the finish line has not yet been crossed.
It’s a small point, but VGChartz and the numbers from Gamasutra are hard data. Hard data is “data in the form of numbers or graphs, as opposed to qualitative data.” What you’re disputing is whether it’s accurate, and I genuinely appreciate your input on that.
Still, the numbers you’ve provided support what I already said – that according to the most recent available comparable data the Wii has not outsold both its competitors on either hardware or software – plus some speculation about how accurate those numbers really are. “We’ll find out for sure soon” is not the same as “We know it’s already in the lead”, which was your original claim.
Of course, it’s hardly a black mark against the Wii’s name that it hasn’t outsold both its competitors, but since the 360 makes up the bulk of those combined sales numbers and has a higher tie ratio than either (even if it isn’t 8.8 outside the US), I would say it doesn’t give the Wii an unassailable lead – just a strong one.
It would take a lot to close that gap and put the 360 market within arm’s reach distance of the Wii market. Wii game sales would need to fall and 360 game sales would need to increase, by margins which I now don’t think are likely, given the data you’ve provided. But there are indicators that the Wii’s lead over the 360 will at least contract significantly.
Those who claimed the Wii would fizzle out within two or three years (for the record, I was never one of them) have been clearly proved wrong, but of course the Wii will lose popularity eventually – just as the 360 and the PS3 will, just as every console before it has – and it is showing some signs that its attractiveness is waning faster than the other consoles. It’s not just that Wii sales were down for most of 2009 compared to 2008, it’s that they are down again so far in 2010 compared to 2009. Some game industry analysts have suggested this will continue (e.g. 1, 2). Their word is not prophecy, but it shows that the point is widely held; these are not stroppy fanboys in a forum somewhere.
Support from third parties is a tangent, but it’s an interesting issue. The Wii has actually had more games released for it than the 360, the PS3 or even the DS (according to the ESRB: 1501, 1012, 809 and 1456 respectively). Only a small percentage of those were first-party games. Many of them were shovelware, but plenty were not, and most of those sold poorly regardless of their quality. Consider the Wii games MadWorld, Okami and Zack & Wiki: three games with almost nothing in common except high review scores and mediocre sales. Ubisoft, EA and Capcom all pledged great support for the Wii in the first few years, but have recently “refocused” on the 360 and the PS3 after finding it less profitable than they expected (1, 2). Once again, this supports the idea that the Wii’s lifetime may be shorter than that of the 360 and the PS3, and it also suggests that the Wii2 won’t necessarily have great third-party support either – although let’s not even go there, the future is way too cloudy.
To bring up some of that much-maligned anecdotal evidence: of all the people I’ve talked to who bought a Wii, the dedicated gamers rarely play it any more, and the “blue ocean audience” types who only bought a Wii show little interest in anything that isn’t a traditional Nintendo franchise or a Wii Fit-esque lifestyle game. And they only want a few of those; their drive to buy new games is far lower than that of the 360 and PS3 owners. Without the quantitative data to back it up, that’s a pretty piddly survey, but since it gels with the wider market surveys I’ve mentioned above it’s meaningful qualitative data.
DS sales are a non sequitur. It’s the most successful console of all time by most measures, but I was talking about home consoles. Out of interest, if the discussion of mind share was to include handhelds, “Game Boy” would have to be the enduring champion of all time.