October NPD Sales Data
Hardware sales for October were largely in line with the market's expectations. Total hardware units came in at 1.75 million units, just 0.57% ahead of the market's expected 1.74 million units.
As expected by the market, the Nintendo Wii lead hardware sales with 519,000 units, beating the expected 470,600 units. Xbox 360 came in second for home consoles with 366,000 units sold, just 8.18% below the market's expectation of 398,600 units. Once again, the PS3 came in third with 121,000 units sold, once again disappointing the market, which had expected 149,400 units.
Nintendo DS sales came in line at 458,000 units, compared to 467,400 expected unit sales. The PSP sold 286,000, beating expectations of 254,100 units.
Growth in video game sales was slightly below market expectations. Total video game software sales grew 39% from $369.3 million in October 2006 to $513.9 million. This was 7.19% below the market's expected $553.7 million.
The month's big winner, Activision's Guitar Hero III: Legends of Rock, came in line with the market's expectations. For the Xbox 360, Wii, and PS3 SKUs tracked by the simExchange in October, the game sold 882,900 units, just 1.22% above the market's expectation of 872,300 units.
This was the first month an NPD Future included a PC game. Enemy Territory: Quake Wars (PC) sold 18,600 units, far below the market's expectations of 124,300 units. This miss is likely due to a combination of smaller awareness of PC game sales, along with very disappointing sales.
The following tables compare market expectations on the simExchange and actual results as reported by the NPD Group.
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US Hardware in October 2007
Title Actual units Expected units % From Expected Nintendo Wii 519,000 470,600 +10.28% Nintendo DS 458,000 467,400 -2.01% Xbox 360 366,000 398,600 -8.18% PlayStation Portable 286,000 254,100 +12.55% PLAYSTATION 3 121,000 149,400 -19.01% Total Hardware Units 1,750,000 1,740,100 +0.57%
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US Software in October 2007
Rank Title Actual units Expected units % From Expected 1 Halo 3 (Xbox 360) 433,800 723,200 -40.02% 2 Guitar Hero III: Legends of Rock (Xbox 360) 490,800 548,100 -10.45% 3 Guitar Hero III: Legends of Rock (Wii) 286,300 211,400 +35.43% 4 Guitar Hero III: Legends of Rock (PS2) w/ Guitar 271,100 -- -- 5 The Legend of Zelda: Phantom Hourglass (DS) 262,800 270,600 -2.88% 6 Wii Play w/ Remote 239,700 -- -- 7 Half-life 2: The Orange Box (Xbox 360) 238,400 420,300 -43.28% 8 Guitar Hero III: Legends of Rock (PS2) stand-alone 231,700 -- -- 9 FIFA Soccer 08 (PS2) 129,700 -- -- 10 Brain Age 2 (DS) 116,900 -- -- NR Guitar Hero III: Legends of Rock (PS3) 105,800 112,800 -6.21% NR Final Fantasy Tactics: The War of the Lions (PSP) 98,100 127,700 -23.18% NR Ratchet & Clank Future: Tools of Destruction (PS3) 74,500 129,200 -42.34% NR Project Gotham Racing 4 (Xbox 360) 38,300 81,100 -52.77% NR Enemy Territory: Quake Wars (PC) 18,600 124,300 -85.04% Total Tracked Software Units 2,047,400 3,058,860 -38.00% Total Software Sales $513.9 million $553.7 million -7.19% How exactly does this work?
Gamers and developers sign up on the simExchange for a free trading account. Using virtual currency called DKP, players buy virtual futures contracts that are under-predicting sales and short sell futures that are over-predicting sales. This concept is widely known as "the Wisdom of the Crowd" and this system is known as a "prediction market."
About the predictions
Predictions on the simExchange should become more accurate over time as (1) the diversity of the pool of traders increases and as (2) more accurate players are rewarded with more virtual currency for their accuracy (thereby enabling them to form more predictions) and less accurate players lose virtual currency (thereby discounting their ability to form more predictions).
Copyright and reprintingThe simExchange, LLC retains the right to the content of this article but permits the reprinting of this article with proper credit to the simExchange. Sales data published here includes data disclosed with permission by the NPD Group exclusively for the purpose of settling futures contracts on the simExchange.
Please provide you readers some context of what the simExchange is and how our forecasts work, example: "The simExchange is an online virtual stock market in which gamers, developers, and investors trade stock to predict how games will sell."
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Discussion - Submit a comment
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@CriticalHit, interesting...I don't quite understand the comparison methodology, but I would assume a prediction market would outperform a survey just on the basis of the information discovery.[ Guru ] [ Level 21 ] [ Rank: 219 ]bids
1@Just_Ben, hey this is the NeoGAF thread comparing simExchange and NeoGAF predictions I had seen.[ Speaker ] [ Level 20 ] [ Rank: 498 ]bids
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1@rikitikitik,
Nice of him to point out the SE did better, but its almost hidden at the bottom :(. Nice find.[ Oracle ] [ Level 26 ] [ Rank: 241 ]bids
1@rikitikitik, I've seen a NeoGAF thread that just covers a comparison between simExchange and NeoGAF predictions. We did better than NeoGAF aggregate according to their comparison method over several months.[ Speaker ] [ Level 20 ] [ Rank: 498 ]bids
3The folks at NeoGAF also had a prediction thread going for October's NPD here.
They actually included SimExchange's estimates as well. Since we do not have PS2 futures, the site performance suffered and we did a miserable 157th out of 192.
However, removing the PS2 estimate, SimExchange did a respectable 11th place, better than NeoGAF's average and Pachter's prediction as well.[ Oracle ] [ Level 21 ] [ Rank: 288 ]bids
1@Powertrade, thanks. I was wondering if PSP Slim was causing PSP software sales to rise, I guess not. It just goes to prove how strong the FF brand still is, I expect CC:FFVII to do really well when it comes here next year. Thank you to everyone else who responded as well. :)[ Speaker ] [ Level 20 ] [ Rank: 388 ]bids
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3@Laoldar,
Basicly, estimates of Charts in the UK etc. But also statements of some publishers. Valve said they sold more HL2 copies in Europe than the US. I would guess it is the other way around for the Orange Box on the 360/PS3.
Here is a basic question: Look at the console sales in Europe and ask yourself: Do the European do really that less gaming? Europe and the US are not that far away (culture). It's just PC Gaming>Console gaming (Especially for FPS) in Europe, except UK and maybe France. Sony was the first to realize they don't sell console with FPS in Europe, but Racers and Casual Games (Sinstar, Buzz) will do the trick.
Here some things to consider:
US retailers sold USD 203 million worth of PC games in the first two months of 2007 - a 48 per cent year-on-year increase, according to an analyst for the NPD Group.
Here are some swedish software charts, every time I see those the same picture: PC Games nearly take all top spots. If I remember correctly Bioshock PC>Bioshock 360 in the charts of the northern European countries.
I found some PC NPD numbers 2 month ago (Charts with numbers) but I can't find them at the moment. Was a white page, must have been Gamesindustry.biz or GameDaily (they where old). That should also give a crack where to put PC games in the US. I will search at home, maybe I find them.[ Oracle ] [ Level 21 ] [ Rank: 112 ]bids
1@Just_Ben,
I've seen that mentioned here before, but what is that idea based upon?
If you could point me in the right direction (or name where the data comes from so I can look it up), I'd appreciate it.
Also, since even estimates of US sales don't appear to exist, how can you say that Europe is larger? Is it based off of sales estimates, or PC estimates?[ Oracle ] [ Level 21 ] [ Rank: 182 ]bids
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1@Kemkle33,
Thanks for the words, and for being more specific about the games you feel are underpriced.
I agree with you wholeheartedly about Spore. I think this game (along with Starcraft, but that one is more skewed internationally) will really surprise people.
I disagree with you about Crysis however. It severely limits itself by what is required to experience its major selling point (amazing graphics). It gains a lot of publicity for how pretty it is, but that also restricts the number of people who can play it. Also, it is my belief (and experience) that, unfortunately, those who have the best gaming rigs also tend to be the most savvy at piracy. While publishers can combat this with keys that lockout multiplayer functionality, what can they do to prevent piracy for a single player focused game?
Also, there's the bigger issue of historical lifetime sales. Without even a service as flawed as VGChartz, we have no idea what most PC games end up selling. Right now it seems that traders are positioning PC stocks just below PS3/360 versions, and I think that is systematically overpricing them.
I never said I agreed with the idea that piracy is destroying the market. I simply posted it as an example of a developer stating the impact that it has (it's impacting sales enough to be noted and feared). Your example of mp3s is a bad one...music piracy is still a huge issue and a lot of people/companies are suffering due to it with the full effects yet to be determined (sales at stores dropping 20%+, estimated 2.6 billion illegal downloads every month, etc). Piracy has (and still is) hit that industry hard. Record companies started with deep pockets...PC game publishers have thin profit margins as it is.
I like your mention of direct-to-drive methods. I'd be interested to see if any publishers have released stats on how that has been received by consumers.
Oh and patching doesn't affect piracy. Previously, patches would work just as well with a pirated game and updated cracks are always released.
I think you're shrugging off piracy too easily. The hit to the music industry wasn't "hype"...it was billions of dollars. The industry survived because the companies had enormous profit margins (which have now dramatically shrunk, but still exist). The PC gaming industry doesn't have the revenue that music did...there's a reason why so many studios are willingly selling themselves to larger studios and why they've committed more resources to console instead of PCs.
Piracy is a much bigger problem than you seem to think.[ Oracle ] [ Level 21 ] [ Rank: 182 ]bids
2@Laoldar,
That's true, I did forget about piracy as an issue for PC games. I guess I was under the naive impression that since my friends and myself all buy our games we were a relatively equal and reliable source for how piracy effects game sales. Thank you for reminding me that there still are pirates out there and that I need to take into account their activity on the PC side of the industry as well. If I could give you more than one upbid I would.
I say it is a good time to buy because of the installed user base and the amount of pull a family friendly sim game has on the general PC public. The Sims and Sims 2 are excellent examples of such. Knowing how Will Wright has a dedicated following and how the last few games he helmed have done spectacular sales, I said that it would behoove people to give some PC stocks a second chance. Games like Crysis appeal to the hardcore gamers with those amazing rigs that are overclocked into the next time zone. Crysis looks wonderful and I'm sure plays fine as long as the AI problems are resolved by launch.
PC Futures are what I would consider too high risk because of piracy yet the life time sales of a PC game are more assured as the pirated copies become more and more difficult to find as time goes on. People need the space on their drives and servers and games which are huge but bring little traffic are quickly removed.
But to think back to PC piracy, I doubt that the availability of free software is going to destroy the PC market. Music is a good corollary to base this decision on as Mp3s are much easier to download and that makes up for the gap in sales between music and video games. When Napster was first brought to court it was said that stealing music via mp3 was going to bring the whole system to its knees. But look where it is now? With the use of direct-to-drive alternatives to buying the game in a brick-and-mortar establishment we see that video games are still making money using a process similar to iTunes and its Store. Piracy is an issue but still minor enough to only drop, at most, half a million from life time sales of a product. With a game expected to sell a couple million, like Crysis or Fallout 3, people will buy the original because patching would fix problems while rendering their fake copies useless.
I dunno, software piracy is a bit overblown with hype like the music industry was five to eight years ago. The world won't end; programmers will still have a job and we will still enjoy the fruits of their labor.[ Elite ] [ Level 14 ] [ Rank: 709 ]bids
1@Kemkle33,
You can't blame traders for the correction in PC stocks. Since this site has been around, PC stocks have trade at irrationally high levels because we never received any data (not even VGChartz) as to how they were selling. The drops in PC stock were entirely rational because this title gives a sampling of data.
Should the next futures show higher sales (say, above 200,000 units sold each), this could reverse. For what it's worth, I think most of them are still overpriced. I'm curious, why do you think it is a good time to invest in them? Do you have any historical data to suggest that their lifetime sales will be higher?
Also, don't forget about the spectre of piracy. These games begin by suffering from a fragmented and non-standard install base, but they also exist in a market that is much more prone to piracy.
A couple of years ago, Forbes ran a story about the hundreds of millions of dollars lost through PC game piracy. At that time, PC gaming sales were decreasing by 12% per year, while console sales were increasing by 5%.
Last year a developer on ET:QW decribed piracy as "destroying the PC market".
This isn't a new problem. However, it hits the PC game market particularly hard and traders should take that into account with their predictions. Most people will be more willing to burn a disc to pirate a PC game, but far fewer will risk modding their console and potentially wrecking it.[ Oracle ] [ Level 21 ] [ Rank: 182 ]bids
2@Powertrade,
Well I didn't put money in it, because I didn't know where to put it, I never heard of it, and there where enough investments for me. So, well I let you put down the PC futures, I'll pick them up cheap then.[ Oracle ] [ Level 21 ] [ Rank: 112 ]bids
2@jj984jj,
At 98,100 units sold, it probably is. There won't be a lot of titles between it and Brain Age 2's 116,900 units sold at number 10. Also, PSP titles rarely reach huge numbers anyway, and FF Tactics is the biggest potential title last month.[ Oracle ] [ Level 21 ] [ Rank: 288 ]bids
3If ever there was a time to have bad news for PCs hit, it has to be the night after I dump 1M into PC games. This hurts so much, I don't know if I can balance enough to recoup the losses.
But seriously, as a PC gamer who grew up with Quake and tout Quake as the heir to the FPS throne which is in constant contention with UT, I had never heard of ET:QW. It had horrible media coverage too as most of the news for it just seemed to trickle in every once in a while. Something like Spore, on the other hand, has been hyped for years and now that it has a release date and a future only months away people are suddenly scared of the news that PC games may not do as well as we think. It does remain impressive that five traders, an admin, and twenty words are all that it takes to grind off 20% of PC games value.
At least right now is a great time to invest in some lifetime stock sales.[ Elite ] [ Level 14 ] [ Rank: 709 ]bids
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3@Powertrade,
Exactly. It has the dual fortune of being a Quake game, as well as the successor to the popular Wolfenstein mod of a few yers back.
I thought that PC Futures prices were way out of whack. People should go and re-evaluate their positions on them...good thing this was chosen for a Future.[ Oracle ] [ Level 21 ] [ Rank: 182 ]bids
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3@Just_Ben, well I have heard of QUAKE =). I would assume most Quake fans who continue to follow PC games would've known about the title. I can't believe a title is what hurt the game's sales...besides, it didn't hurt our forecast. Looking at the game's stock, it appears people far overvalued the prospects of the title in general. I think this is largely because we haven't seen a whole lot of PC game sales data before. After we saw some BioShock numbers, it was evident that was much too high as well.[ Guru ] [ Level 21 ] [ Rank: 219 ]bids
2@Powertrade,
I don't think so, ever heard of that game before? I don't. Thats just a bad buz title, i would guess. Crisis and UT on the other hand are both high profile.[ Oracle ] [ Level 21 ] [ Rank: 112 ]bids
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There's also the factor that not everyone trading on here is aiming for a close prediction. Many players are simply trying to increase their DKP, so stocks can fluctuate as people try to create profitable opportunities.
If anyone has the time, I'd be interested in seeing if our Future's predictions become more or less accurate in the month leading up to a game's release. This could also show the effects the VGC numbers have on our predictions.