I still don't think publishers are going to make a game more simish or more arcadey because they think this change to a sim/arcade racer will boost their bottom line. Maybe minor changes, but nothing that will really get a sim consumer or arcade consumer to jump ship.
If we take 360's sales upto now in NA and PAL and add what it sold last month for ex, this can give us a rough estimate for its #'s in AUG (but we should do it for NOV because Forza won't see real competition until then). For AUG not NOV: 5.83 million NA + 228,000x5= 6,970,000.
3.36 million PAL + lets say 100,000x5= 3,860,000 -> =10,830,000 But it will probably be 11 or 12 mil as you said because sales will probably increase, and who knows MS could do a price cut and gain even more sales, they're already making a nice profit on each 360.
Regarding GTR it has gone silent, so who knows when its coming, and it is niche.
If only 1 in 15 people pick up Forza 2 by AUG. with ~12.0 million 360's that's 800,000 AND that would be an attach rate of only 6%. Then Forza 2 would have ~4 years and only need to sell 400,000 to meet its current stock price. (And long tail often adds up to more...)
But we really should not say it has to sell 1 in 15 BY AUG, more like what it would have to be lifetime.
The 360 is predicted to sell 50,540,000 on here. If Forza 2 sold 1,240,000 that equals an attach rate of 2.37%. Forza 1 sold 2 million according to Wikpedia if you count its bundles, and vgcharts has it at 1.1 million. A year after FZ1 was released (FZ1 sold really nothing after that time) XB1 sales in NA and PAL were at 16.07+7.57= 23,640,000. FZ1@ 2 million/23,640,000= an attach rate of 8.46%. FZ1@ 1.1 million would = 4.65%.
So you're saying that FZ2 should have an attach rate much lower than 2.37% even though FZ1 had an attach rate of 8.46%? And FZ2 is expected by many to sell much better than FZ1.
The hype for E3 2005 was unprecedented. Microsoft was throwing money everywhere to hype up the 360 and XBOX as a brand. Yes, it was getting everyone excited about Next Gen games but it also had the effect of making XB games strangely as popular as PS2 games during April and May. 5 out of the Top 10 games of the month were XBOX games for two months straight.
The market I was talking about was for racing games in general. You're right about the Microsoft(Xbox360) controlled portion of that market. I'm not refuting that. What I am saying is that publishers are trying to make as much money or more in a much smaller overall market regardless of which SKU is currently commanding the lead in consoles. And because of this they will have to adapt their games to steal as many customers from each other and the niche market as they can.
I also agree that Forza is not going to have to compete with any big games in a somewhat slow period of the year. Which was a great decision on Microsoft's part because as I said before this franchise does not have a big enough name to not get lost in a pack. Sell it while it's hot. However, in my mind, this only supports that this stock is overvalued because it seriously limits the audience they have to work with. By August how many 360s will be in American and European homes? 11-12 Million?
Lets forget for a second that the PS3 is launching in Europe with Motorstorm and Formula One Championship Racing at the same time this is, that GTR will be coming out on the 360 a month before it hits here, and that Burnout will debut as the buying season starts to pick up. At the price this stock is set we are expecting 1 in 10 360 owners to pick up this admittedly niche sim racer. Even if 1 in 15 pick it up by August that's only 800k. I know that others are bullish that this will sell through well until the end of the year but I can't help but think of what is in store for gamers in the last quarter: GTA, Halo 3, Assassin's Creed, Madden, Mercenaries 2, etc... And it's a lock that if the big name racers don't come out during the holidays then they'll come out in the following months. If this game is as awesome as the first it will be able to survive the Holiday onslaught of big names but without any reviews or 1st day sales numbers this is still ridiculously overpriced to me.
I apologize for my PGR2 numbers. I didn't follow through with PGR2 after its first year of sales in the US. It was at 530k in it's 13th week. http://www.vgcharts.org/amonthly.php?date=38292
The most important point I think is that Forza 2 will not have to compete with any Midnight Club game, no NFS game for at least 6 months, and no Burnout 5 for at least a few months. Thus, its only racing game competition is Burnout 5 for at least 6 months, and its only sim racing competition is GT4 which could be 6 months or years away.
I don't understand how you can say XB360 hype helped Forza 1. I'd say XB360 hype had people more interested in next gen games than an XB1 game.
You're saying that PS2+XB had 130 million market size when Forza 1 was released and comparing that to a projected 35 million market for Forza 2 by the end of the year. But, Forza 2 will continue to sell after the end of this year, and will benefit from being a Platinum Hit for years, maybe even 4-5 years.
Furthermore, XB1 had sold 13.79 million in NA and 6.5 million in PAL by March 2005, right around when Forza 1 released. Whereas, Forza 2 currently has XB360 at 5.83+ million in NA and 3.36+ million in PAL. That means the market is currently at 42% in NA and 52% in PAL, not 30%. And these numbers will get better by Forza 2's release.
I disagree that Burnout, NFS, and MC are going to throw some sim into them and that Forza is going to throw some arcade into it, in order for the games to appeal to a broader audience. They won't be making those games into sim racers at all, the arcade play is what makes them appealing.
I don't know where you're getting your figures for PGR1&2, because PGR1 sold 2.14 mil and PGR2 sold 1.56 mil.
The fact that Forza was BC doesn't change the fact that XB was dying shortly after Forza's release because of the 360 coming. People were getting a 360 for next gen games, not to play old games.
Joe, I understand where you are coming from and I agree with you that this game is going to be a hit with the market of players that enjoy sim racing.
What I was trying to state was that although Forza may not be the same kind of game it's going to have some stiff competition for a small market regardless.
In the late stages of the consoles the market for driving games was big enough to support both the big guys and the small guys: the arcady racers, the sim racers, and all the hybrids in between. XBOX 360 hype and E3 hype also helped fuel Forza's amazing run. However we're looking at a completely different situation now. We're going from a market that was X percentage of the total PS2 + XBOX (about 130 mil) owners to about X percentage of the projected Xbox360 + PS3 market (best case scenario of 35 mil by end of year).
So now we have the same publishers fighting for less than 30% of the market that they used to share meaning that those arcady games are going to throw some sim in them to appeal to a broader audience and vice versa.
Forza will still stand on its own as a great sim racer on the 360 but it just doesn't have a big enough name behind it or the tricks from 2005 to keep from getting lost in the pack. Check out what happened to PGR2 when it decided to launch in November - LOL - after a huge success with PGR. It was the highest rated of all 2003 XBOX Driving games but didn't even seem to break 500k sold in the US after the original did over 1 mil in the US.
Note: Your claim about the dying XB omits the fact that Forza was one of the backwards compatible games that could be played in a Xbox 360 and therefore wouldn't deter people who were planning on purchasing an XBOX360 in 5 months.
I think this stock is undervalued actually. Liquid you state that Forza is competing against NFS, Midnight Club, Project Gotham, and Burnout. However, none of those games are sim racers, they're all arcade. Thus, Forza is a game aimed at a different market of players.
Secondly, Project Gotham 4 is not coming out for a long time & PGR3 is budget now with minimal sales. PGR is another MS published racing game, they're not going to have it compete with Forza.
Third, NFS has been a downward slide in terms of quality, getting worse every game since NFSUG1.
Fourth, Midnight Club 4 has not even been announced.
Fifth, I made many points in my post on Mar 10 as to why this game will do well. I expect this game to sell at least 1.5 million, maybe as high as 2.5 million lifetime. Forza 1 sold over 2 million and it was released 5 months before XB360 on a dying XB.
LiquidJ, a well written post. If you take a look at the older posts, this was quite a stock of controversy (note the large trading volume).
The bulls made the argument that Forza 2 will sell better because Forza came out at time when people were looking past the Xbox. It is interesting that you use the same point but reach the opposite conclusion.
One of the other points that Forza will do better is that GT5 wouldn't have force feedback, but that appears to be negated now.
Is there anyone else who thinks that this stock is seriously overvalued?
The racing genre is just way too congested for a title like Forza to have expectations of over 1 Million sales at this point. Are we forgetting that this is also competing with
1) Need For Speed franchise 2) Midnight Club Franchise 3) Project Gotham Racing 4) Burnout
, all of which sold more, have bigger marketing budgets.
Don't get me wrong Forza will do alright. But comparing it's great sales of > 1 million first time out in the late stages of the XBOX's lifetime to competing with all the big guys in the early to middle stages of the next generation is very risky. It doesn't have the same kind of buzz that Lost Planet, Crackdown, or Gears of War has.
I was looking forward to this game, but the more I read about it the more amazed I am about what kinds of features it's going to have. To the point that it is now my most anticipated game. I think this game is going to do better than people may expect. Forza 1 was their first attempt at making a racing sim, came out 6 months before the 360, and many had just purchased GT4.
Forza 2 has so many more features, for example 50% more customizing than FM1, 60fps, more name recognition, a racing wheel created specifically for it, and is coming out early in the 360's lifecycle. They even have the TV show. I am long on Forza 2. Watch this video and you might be too.
I think the Forza community is pretty strong for the case of name recognition. MS puts a lot out in terms of marketing the product, as they currently have a reality TV show running on Speed that uses the name. I agree with kagaroos, the interface was pretty deep, but this is a hardcore racing simulation. It's only going to appeal to racers. PGR is not a racing sim. Cars do not handle like that in real life, and you cannot change the car's individual settings. Therefore, Forza is the only driving sim worth running for the 360.
The problem that arrives is timing. Forza was a hit in Europe, with a lot of hardcore racers jumping over to Xbox. The PS3 is coming out soon over there, and with it Formula 1 Championship Edition. With the popularity that brings to the forefront, and the hype the PS3 has over there, it's difficult to even forecast if Forza 2 is a buy or a sell, in my opinion.
9
If we take 360's sales upto now in NA and PAL and add what it sold last month for ex, this can give us a rough estimate for its #'s in AUG (but we should do it for NOV because Forza won't see real competition until then).
For AUG not NOV:
5.83 million NA + 228,000x5= 6,970,000.
3.36 million PAL + lets say 100,000x5= 3,860,000
-> =10,830,000
But it will probably be 11 or 12 mil as you said because sales will probably increase, and who knows MS could do a price cut and gain even more sales, they're already making a nice profit on each 360.
Regarding GTR it has gone silent, so who knows when its coming, and it is niche.
If only 1 in 15 people pick up Forza 2 by AUG. with ~12.0 million 360's that's 800,000 AND that would be an attach rate of only 6%. Then Forza 2 would have ~4 years and only need to sell 400,000 to meet its current stock price. (And long tail often adds up to more...)
But we really should not say it has to sell 1 in 15 BY AUG, more like what it would have to be lifetime.
The 360 is predicted to sell 50,540,000 on here. If Forza 2 sold 1,240,000 that equals an attach rate of 2.37%. Forza 1 sold 2 million according to Wikpedia if you count its bundles, and vgcharts has it at 1.1 million. A year after FZ1 was released (FZ1 sold really nothing after that time) XB1 sales in NA and PAL were at 16.07+7.57= 23,640,000. FZ1@ 2 million/23,640,000= an attach rate of 8.46%. FZ1@ 1.1 million would = 4.65%.
So you're saying that FZ2 should have an attach rate much lower than 2.37% even though FZ1 had an attach rate of 8.46%? And FZ2 is expected by many to sell much better than FZ1.
http://www.vgcharts.org/worldcons.php?date=38777&sort=0
http://en.wikipedia.org/wiki/Forza_Motorsport#Reaction
http://en.wikipedia.org/wiki/Long_tail