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Console sales overview

Old 07-25-02, 10:10 PM
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Console sales overview

Well, once again it looks like we're seeing much debate about how all our favorite consoles are faring in the marketplace and since Sony and Microsoft just released their quarterly earnings reports, I figured it's as good a time as any to re-examine the matter (I don't believe Nintendo releases quarterly reports, but please correct me if I'm wrong).

Microsoft reported their fiscal year-end revenue at $28.4B for FY2002, making a profit of $7.83B for the year. In the last quarter (ended June 30, 2002), their revenues were $7.25B with $1.53B profit. They have $38.6B in cash.

Sony's last year-end report for FY2001 (ended March 30, 2002) stated revenues of $57B with a profit of $115M for FY2001. For this last quarter (Q1FY2002, ended June 30, 2002), their revenue was $14.4B with $481M in profit. If I'm reading their balance sheet correctly, they have just over $6B in cash.

I don't have Nintendo's latest quarterly numbers, but I have their numbers from their annual report for their fiscal year ended March 30, 2002. Their revenue for the year was $4.46B with $958M in profits. At that time, they had about $7.2B in cash.

In short, by revenue Sony is almost twice as large as MS and almost 7 times bigger than Nintendo. By profit, however, Sony barely eeked one out in their latest fiscal year, while Nintendo posted a record profit and MS remains one of the most profitable companies in the world. All the companies have a healthy balance sheet and enough cash to see them through a rainy day (or a deluvian flood in Microsoft's case).

All that, of course, is only significant in a big picture sense (btw, you can find all those numbers at each of the respective company's web sites). What we all care about here, of course, are how they're doing in the console gaming market.

In Japan, the XBox is comatose if not dead. Total sales since its February launch totals 240K through to June 30, which includes a price drop that was effective on May 22nd. Over a similar period (from January to June), PS2 sales totaled over 2M units while GC sales clocked in at 478K.

reference: CNN

In Europe and Australia, however XBox is faring significantly better. From AustralianIT, "In the most recent week, GameCube sales were 1370, compared to 2020 for Xbox and a whopping 9216 for PS2."

reference: AustralianIT

The latest information I have for Europe actually comes from an Activision earnings conference call. Ron Doornink, President of Activision, was asked about the Eureopean outlook. He's got access to research and numbers we can only dream of here, so I'd tend to give his comments quite a bit of credence.

He stated that the current installed base for GC in Europe was about 800K and they expected that to increase to 2.5 to 3M by the end of the year. For XBox, he cited current installed base at 500K with that likely to increase to 1.5M by year end.

You can listen to his comments directly at the following link. He makes them about 31 minutes into the call.

reference: Activision Conference Call hosted at Yahoo

In NA, Microsoft, eager to regain some of its lost momentum, spun a report from NPD, stating that the XBox had achieved the highest percentage sales increase of 138% since the price cuts at the end of May. What they failed to mention was that the PS2 experienced a similar increase of 118% since the price cut. (It doesn't state the number in the article linked below, but another article regarding the NPD report put the GC sales increase at 68%). Indeed, if you look at the raw numbers for sales over this period, the relative gain made by XBox looks much less impressive.

"Microsoft sold 265,000 Xbox consoles in June -- barely outpacing Nintendo, which sold 213,000 GameCube systems in the same period. The industry's bigfoot, Sony, was the biggest beneficiary of the price drop, moving 697,000 PlayStation 2s in a single month -- more than GameCube and Xbox combined."

reference: Mecury News

Last edited by belboz; 07-25-02 at 10:12 PM.
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Old 07-25-02, 11:00 PM
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Nice work. Thanks.
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Old 07-26-02, 01:01 AM
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Nice stuff and I think it's a good idea to contain the console debating in this thread and not have every other thread sidetrack into it.

Let the pissing match being! *steps aside*

Seriously, my opinion is this next Xmas is vital for GCN and Xbox. Who shall come out on top remains a mystery. Hopefully both.
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Old 07-26-02, 01:22 AM
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too long of a reading, can you summarize like:

ps2: xxx
xbox: xxx
gc: xxx
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Old 07-26-02, 01:42 AM
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ps2: still "winning" by a long shot
xbox and gc: pretty close, except in japan and europe where the gc is doing significantly better.
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Old 07-26-02, 01:45 AM
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zig: GC doing significantly better in Europe?

In Europe .... however XBox is faring significantly better.
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Old 07-26-02, 01:51 AM
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All the companies have a healthy balance sheet and enough cash to see them through a rainy day (or a deluvian flood in Microsoft's case).
 
Old 07-26-02, 01:59 AM
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Originally posted by Gallant Pig
zig: GC doing significantly better in Europe?

It's australia that xbox is doing about 700 units better in.

"He stated that the current installed base for GC in Europe was about 800K and they expected that to increase to 2.5 to 3M by the end of the year. For XBox, he cited current installed base at 500K with that likely to increase to 1.5M by year end."
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Old 07-26-02, 02:08 AM
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Right, if you stay away from projections, it's neck and neck.
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Old 07-26-02, 02:18 AM
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Well, I wouldn't call 800K to 500K neck and neck in a normal situation. But yeah, when the PS2 is so far ahead, does it really matter who's second place as long as nobody is too far behind the other?
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Old 07-26-02, 03:37 AM
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It looks like the numbers are going towards the projections in the last thread with PS2 moving towards 50 Million and GC pulling ahead worldwide and soon in the US.

By the years end I think the GC will have twice the installed base of the XBox with Sony having twice the combined installed bases of both systems combined.

with the XBox having ok numbers here I figure that the XBox will continue to see good support till next year in the US. if this sales picture does not improve then next year could be a tougher one for microsoft.
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Old 07-26-02, 04:15 AM
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belboz - awesome report.

I went into Video Round-Up today... it's this old Video Arcade/Pool Hall that I used to go to when I was a kid and teen. It used to always be full of kids playing video games and playing pool - you had to wait in long lines to play the latest Mortal Kombat game or whatever... It's mostly pool tables now (they were in serious disrepair and in fact I remembered when they changed the felt on all the tables and got new poolsticks like over 10 years ago and that was the last time) and all the video games that remain are the same ones that were there 10 years ago - no newer ones and those all look really old. Everything was off and there was only one customer in there. They asked me and my friend if we wanted them to turn the games on for us because they were trying to save on electricity since they weren't really making any money. Half the games were broken anyway with signs saying "I'm on vacation blah blah..." They had moved all the remaining games (about 70% of them were gone) to this one tiny room to make space for more pool tables that they had most likely gotten second hand. It was really depressing.

Anyway - I contributed all this to consoles... this generation specifically. I can remember even 5 years ago seeing the parking lot of that place packed with cars. I'd say that all 3 consoles are a success. Honestly, I wouldn't care if I was the only person who owned an Xbox - the only reason these numbers are important is because the higher the numbers go, the more developers are going to want to publish games for these systems. I think the next generation of systems is going to be alot tighter because Microsoft plans to unleash the Xbox 2 before or at the same time that Sony unveils the PS3 and I think that'll help to level the playing field a bit.

I don't know what Nintendo plans to do, but I'd like to see them pull a Sega and just publish games for other systems - it's a possible step since they've burned alot of bridges with 3rd parties and because they've outsourced their console manufacturing this time. And let's be real here - if you're making money off the games and losing money on the consoles, you're competition has umpteen times more consoles in homes than you do, and logic dictates that if you can sell umpteen times as many profitable product by simply stopping your hardware division (which is a financial loss leader for you anyway) - why wouldn't you just publish games for other systems?
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Old 07-26-02, 04:51 AM
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You're right, the xbox is really just a loss leader for MS. It would be a shame to see another hardware maker go the way of Sega I think, particularly when Nintendo has been responsible for some useful hardware innovations over time (4 controller ports built-in for 1).

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Old 07-26-02, 06:04 AM
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Well at least Microsoft has yet to burn bridges with 3rd party developers which is the key to why I suggested Nintendo be the company that goes software only... it wasn't a favoritism thing. Yes, both consoles lose money on hardware and only make profits with software. The thing is, there's never been room for 3 consoles on the market. There have always been about 3 give or take, but never really room for all of them. I'd say there's room for 2. People love Nintendo mostly because of the games they create if I'm not mistaken. Love for their hardware is secondary if anything. I have no love for their business practices, but that's another issue (not that I have love for Microsoft's business practices or Sony's for that matter).
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Old 07-26-02, 06:06 AM
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Don't worry about Nintendo. They seem to be doing OK as is. Their profits are ridiculous considering they only sell one category of product.
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Old 07-26-02, 06:16 AM
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In Europe .... however XBox is faring significantly better.
...than in Japan.

Record profit -> getting out of the console business?
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Old 07-26-02, 08:35 AM
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Originally posted by Kellehair
Don't worry about Nintendo. They seem to be doing OK as is. Their profits are ridiculous considering they only sell one category of product.
Except that their profit is all in their handheld hardware sales and games, along with stuff like Pokemon. It doesn't really make a lot of business sense to keep making consoles to compete with sony and MS.

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Old 07-26-02, 10:49 AM
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Doesn't make a lot of business sense? If I can recall, I remember seeing somewhere that Nintendo is making a profit on its Gamecube, even with the lowered price. How that doesn't make sense, I fail to see.
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Old 07-26-02, 10:51 AM
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Originally posted by Chris_D
Except that their profit is all in their handheld hardware sales and games, along with stuff like Pokemon. It doesn't really make a lot of business sense to keep making consoles to compete with sony and MS.
This argument could be applied to both Sony and Microsoft since both of them make the bulk of their profit on things other than consoles as well.
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Old 07-26-02, 11:00 AM
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yes they are making a profit on the cube. I know this because ATI knows this and they told us.
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Old 07-26-02, 11:10 AM
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Why would Nintendo stop making consoles and go 3rd party when right now there are so many people who want to play their games and they know will eventually buy the console to play them?
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Old 07-26-02, 11:10 AM
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I don't personally see Gamecube pulling ahead in America anytime soon, I imagine XBox will remain the #2 in America..

GAmecube will be #2 in Japan, but it doesn't matter that much, as all developrs realize their best and biggest market is America.

-Jim
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Old 07-26-02, 11:20 AM
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More suggestions of Xbox disappearing?

Does anyone really think Bill Gates signed off on Xbox because he wanted game players to experience Amped (great game, by the way)? If it was just about game software, MS could have gone third-party. And I'm sure they would have had Sony not shot down Gates' request to have his operating systems running PS2.

Everybody, both on the hardware side and the software side (music and movie biz, along with games) fears Sony. And that includes Microsoft. That's the only reason Xbox exists. [And that's even without going into how research and applications done this year for Xbox could have HUGE implications elsewhere... VoIP, perhaps.]

There is no way Microsoft just disappears from gaming anytime soon. Who else has the resources to step up and challenge the Playstation 3 from scratch, when the brand is even more entrenched after two incredibly successful generations? Nobody. And who would ever think of buying another MS console if Xbox was pulled, a la Dreamcast or Saturn? Nobody. Talk about an uncontested battle for the living room during the broadband era for as far as the eye can see... Sony executives must dream of this scenario.

Both Xbox and Gamecube are doing fine. The rate of success of PS2 seems to have obliterated the fact that the PS2 is a freak. It's the only system ever to sell the way it has. Every other successful system's sales could be plotted as a bell-shaped curve with the sales starting to really kick in during the second holiday season (end of first full year).

Unless there are tumbleweeds rolling down either the Gamecube or Xbox aisles this Christmas, everybody in the Western world should just accept the fact that there will be three worthwhile systems, each with more worthwhile games than the average consumer will have time to play, through 2005.

Last edited by mr.snowmizer; 07-26-02 at 12:24 PM.
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Old 07-26-02, 11:25 AM
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Originally posted by mr.snowmizer



everybody in the Western world should just accept the fact that there will be three worthwhile systems, each with more worthwhile games than the average consumer will have time to play, through 2005.
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Old 07-26-02, 12:09 PM
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Originally posted by mr.snowmizer

Unless there are tumbleweeds rolling down either the Gamecube or Xbox aisles this Christmas, everybody in the Western world should just accept the fact that there will be three worthwhile systems, each with more worthwhile games than the average consumer will have time to play, through 2005.
Couldn't agree more. I think we all need a strong, healthy competitor like Microsoft to provide competition for the Sony juggernaut and I don't ever want to see Nintendo stop making games either. Competition is what pushes innovation and keeps prices down.
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