Quarter 3 Sales Summary for the Americas Videogame Market - News

by VGChartz Staff , posted on 08 October 2007 / 1,868 Views

In the 13 weeks of the third quarter (July 1, 2007 to September 29, 2007), the industry saw strong software sales and tremendous change within the arena of hardware sales. Early in July, Sony introduced a new $500 PS3 sku (the old $600 unit), and added more value to the price point at $600 (by including Motorstorm and more memory in the package). Following suit, Microsoft dropped the price of its three Xbox 360 skus during the second week of August. The pricing cuts boosted hardware sales for both companies, although Microsoft’s price cut seems to be having a longer lasting impact (although Halo 3 and Madden helped.). Here are the total numbers of hardware units moved over the 13 week quarter, along with average weekly sales.

	DS	Wii	GBA	GC	PS2	PSP	PS3	Xbox360
Hardware	1,512,859	1,349,203	272k	16k	746,341	739,507	502,730	875k
Weekly	116k	104k	21k	1k	57k	57k	39k	67k

In addition to hardware numbers, it is necessary to look at how well software is selling by platform. While it would be ideal to calculate numbers for every company on every platform, time is a factor in assembling this assessment. Therefore, the top ten publishers in the Americas through September 29, 2007 (based on the Americas 2007 yearly page) will be examined, rather than smaller publishers such as Majesco, Midway, etc. On the year, Nintendo, Microsoft, EA, Sony, Capcom, Ubisoft, Activision, THQ, Take Two and Sega have sold the most games in the Americas. Below is the breakdown of their sales over the 13 week 3^rd quarter period.

Publisher	DS	Wii	GBA	GC	PS2	PSP	PS3	Xbox 360	Xbox	Total Units
Nintendo*	3,142,074	4,169,687	0	49,183	0	0	0	0	0	7,360,944
EA	381,019	639,526	2,718	4,929	1,458,322	207,325	1,047,264	2,690,245	188,728	6,620,076
Activision	285,798	162,286	0	0	1,675,523	61,147	118,667	613,674	0	2,917,095
Take 2	0	204,752	0	0	223,492	348,828	282,252	1,421,103	0	2,480,427
Microsoft	0	0	0	0	0	0	0	3,308,206	73,627	3,381,833
Sony	0	0	0	0	433,760	318,284	874,178	0	0	1,626,222
Ubi Soft	290,675	115,078	0	0	34,884	126,274	320,476	379,763	0	1,267,150
THQ	281,174	22,721	5,322	14,471	143,673	36,229	23,179	267,953	0	794,722
Sega	66,681	48,806	0	0	0	56,349	55,034	0	0	226,870
Capcom	189,262	271,333	0	0	0	98,020	0	139,054	0	697,669
Totals	4,636,683	5,634,189	8,040	68,583	3,969,654	1,252,456	2,721,050	8,819,998	262,355	27,373,008

*Nintendo’s software totals include Wii Sports for Wii. Feel free to remove 1.349 million units in comparing the totals.

Overall, the industry is doing very well. From these 10 publishers alone, the average total number of games sold each week was 2.1 million (in the quarter period). It is interesting to look at the companies to see where they have most of their units selling. While Nintendo, Sony, and Microsoft are obviously focused on only their platforms, even with Halo 3 EA nearly unseated Microsoft as the top publisher on Xbox 360. On PS3, EA is the top publisher – bigger than even Sony. As for Wii, EA accounted for roughly ½ the sales on the platform that did not go to Nintendo. DS is also driven by Nintendo, although EA, Activision, Ubisoft, and THQ were all between 250k and 400k for the quarter. Also of note for Wii, even with only one game, Capcom managed to take the second highest market share (among third parties). Take Two’s sales are interesting as well – very strong on PSP (where Take Two games outsold Sony games), and excellent on Xbox 360 – with additional contributions from PS3, PS2, and Wii – in that order. From the above totals, and with the hardware totals, it is possible to estimate revenue for the quarter as well based on units sold (and the following pricing assumptions – DS games are $35, PSP games are $40…all the way up to PS3/360 games costing $60…with a few exceptions – for instance RE4 Wii was only $30 at release).

Publisher	Total Units	Game Revenue*	Total revenue*
Nintendo	7,360,944	$251 million	$634 million
EA	6,620,076	$377 million
Activision	2,917,095	$148 million
Take Two	2,480,427	$138 million
Microsoft	3,381,833	$207 million	$511 million*
Sony	1,626,222	$87 million	$587 million**
Ubi Soft	1,267,150	$65 million
THQ	794,722	$38 million
Sega	226,870	$10 million
Capcom	697,669	$27 million

* Game revenue is total revenue coming in from price of game on (platform a game price)(sales) + (platform b game price)(sales) +… until all sales are calculated.

**Total revenue is based on:

**Nintendo’s total revenue = (price of hardware unit)(sales of unit) + (Wii Software sales total- Wii Sports total)($50) + ($35)(DS Software Sales). Accessory sales are not estimated.

**Sony’s total revenue = ($550 price estimate for PS3)(units sold) + (software totals)(respective price points) + ($130)(PS2s sold) + ($170)(PSPs sold). Motorstorm sales, as is the case with Wii Sports is now bundled with hardware – but its estimated sales with hardware have been subtracted out so as not to be counted twice in estimating revenue.

** Microsoft’s total revenue = (~$385 Xbox 360 price estimate pre-price drop)(unit sales)+(~$350 Xbox 360 price estimate post-price drop)(unit sales)+(software sales)(respective price points).

When looking at the software sales above it is important to remember that these figures are based on only the top 200 games each week. Many hundreds more likely sell over a 1000 units each week – there is simply no data for them in the charts. Overall however, it seems that Nintendo and EA are the big winners for the quarter – with huge software revenue. Microsoft had a lot of revenue come in from Halo 3, but it is not guaranteed to offset the hardware (net) losses that were likely still occurring early in the quarter. Sony is in a similar predicament, however PS2 and PSP continue to show solid, if not spectacular game sales, and PSP is likely profitable. Take Two did very well too – and sales of Bioshock should go a long way to softening worries over the GTA 4 delay.

If anyone is interested in the weekly breakdowns for the ten publishers in the Americas during this quarter, feel free to contact me.

32 Comments

Tinoha (on 06 March 2009)

princess (on 19 February 2009)

vbdevpro (on 15 October 2007)

Interesting. So the 360 moved more software then the PS3 and Wii combined?

TheSource (on 11 October 2007)

Yeah that is why I went with 'estimated revenue' rather than trying to estimate profit.

earlbrown (on 10 October 2007)

Problem with your numbers:

Game developer profits are not $60 per game for PS3 and X360 or $50 per game for Wii. A percentage of revenue goes to retailers and a smaller percentage goes to the console maker. Developers/Publishers split the remainder. I have seen estimates that range from 15-40% of revenue (depending on game price and console) taken by these costs.

grandmaster192 (on 10 October 2007)

Wow, the playstation 3 didn't get it's ass kicked.

TheSource (on 09 October 2007)

Fabiom your numbers are interesting, but for my revenue assumptions I was a bit more generous on:

PS3 hardware avg cost
Software pricing

Obviously these are just estimates regardless...but interesting. I'd also like to point out that I didn't include GBA pricing and GC pricing of hardware for Nintendo since I've noticed that different chains are selling the hardware for different prices (I've seen $50 for GC/$30 for GC/$75 for GC - and even more variation for GBA).

fabiom27 (on 09 October 2007)

[img]http://pix.nofrag.com/b/5/3/3c9feca285414018a1840c8700eed.jpg[/img]

choirsoftheeye (on 09 October 2007)

Because the good games sell better on the 360 than the crap ones on the Wii? Zounds!

mr-money (on 09 October 2007)

This confirms why 360 continues to get all the good games.

Sullla (on 09 October 2007)

TheSource, let me start with a huge "Thank you!" for compiling these numbers. The information is fantastic, and highly useful. :D

Now, getting into the actual numbers themselves. Not much to speak of in hardware beyond what we already knew. I will note that even with price cuts for both Microsoft and Sony, the Wii nearly outsold them both combined for Q2. It seems as though Nintendo doesn't even have to try to move those things, the same situation Sony's PS2 was in last generation.

Third-party analysis of software sales is, however, the most interesting information. It's extremely clear just how much of a giant EA really is in the American market, nearly outselling the next three third-parties combined (Activision, Take-Two, and Ubisoft). Those numbers are of course skewed because Q2 saw the release of Madden, but they correctly show how large of an influence the third-party giant has on the market. I was personally surprised to see just how large EA's commitment is to the "HD" consoles; more than half of EA's sales (3.6m out of 6.6m) were on either the PS3 or 360. In fact, if you remove Sony's first-party titles, EA is selling more software for the PS3 than every other company combined! I wonder if they're regretting sinking so much money into the struggling platform (?) Looking forward to seeing EA's next fiscal report; I'm predicting another year of rising revenue but falling profits. EA may actually lose money overall this year for the first time in ages.

Activision's sales are heavily skewed towards certain platforms; almost 60% for the PS2 and another 25% for the 360. (Compare this to EA, whose PS2 support has fallen drastically from last year, now just 22% of sales!) Activision's Wii and PS3 support is almost non-existant. Considering how large the company has become, that seems very surprising to me. With the multiplatform release of Guitar Hero III in Q3, I expect that their sales will become more balanced. Sales of Wii Guitar Hero could determine a lot as far as how much that company supports the platform.

Take-Two is enormously invested in the 360 (with the bulk of their Q2 sales coming from Bioshock). They have also almost dropped the PS2 entirely; Take-Two did more sales on the PS3 than PS2! Very little Wii support either, and NONE (!) for the DS. No wonder this company is in fiscal troubles! Their gaming portfolio is way, way, WAY too dependent on the mega-blockbuster game. Sometimes they get a big hit and make tons of money (see: Grand Theft Auto) but when they have a flop on a big-budget title, their company's earnings plummet. It's an incredibly inconsistent way to run a company, which is why their fortunes are a never-ending rollercoaster. As an investor, I still wouldn't touch them with a 10-foot pole. (Internet denizens only focus on the games and thus seem to love this company, even though their corporate strategy is a total mess.)

Microsoft's numbers are enormously skewed by Halo 3, so there's not too much to see there. It's amazing to see how Sony has diverted so many of its resources from the PS2 to the PS3; the latter sold double the first-party software of the former, with an install base 1/10 the size! That, more than anything else, tells me that Sony expected the PS3 to sell MUCH better than it has. They never would have dropped the PS2 this much if they knew how poorly the PS3 would sell.

THQ sees an incredibly disappointing Q2, with pretty much all of their big titles struggling. Their Wii support is abysmal (PS3 sales are also terrible, but they actually DID port their games to the PS3, the games just didn't sell!) I expect them to project a severe cutback in their fiscal forecast any day now.

The Japanese companies (Capcom and Sega) both seem more Nintendo-friendly than the American ones. That makes perfect sense considering the state of the Japanese market right now. I wonder if that trend will continue with companies like Namco, Konami, etc. (?)

Apologies for the long post, but you can't do a meaningful analysis of the market in a couple lines. :p

gbukowsk (on 09 October 2007)

"Microsoft had a lot of revenue come in from Halo 3, but it is not guaranteed to offset the hardware (net) losses that were likely still occurring early in the quarter." - Do you have a source for that or are you just baiting? Microsoft said they were breaking even at the beginning of the year (the hardware is 1 1/2 years old by this summer). So one would assume they would be making money by this summer which I think they also said would be the case at their fiscal review (end of June). You also can't use the RROD as a possible loss, since they wrote off the 1+ billion in LAST year's budget (in part to guarantee they'd be positive this year).

An excellent analysis on the brick & mortar sales revenue. I wonder how much comparatively the 3 are making on downloadable sales including the Xbox Live fee.

dschumm (on 09 October 2007)

Ubisoft played a huge role in launching the Wii. It will be interesting to see how that translates to future sales as Wii takes off and their sequels land.

mesoteto (on 09 October 2007)

nice break down

TWRoO (on 09 October 2007)

It seems that in America third parties almost means just 4 companies, to be honest when many of you say Wii needs more third parties you mean EA, Activision and Take2 (UbiSoft comes next but they do ok on Wii)

thanks source

hunter_alien (on 09 October 2007)

Nice breakdown ... yet a nother fine job by The Source :)

Faxanadu (on 09 October 2007)

@Ben, Duderino: I heard in Brazil you can easily found new religions. All you need is a guru, two or three believers and a place of worship....

The source, thanks a lot. Excellent information.

Just_Ben (on 09 October 2007)

TheSource, my respect :o) Do you plan to do a new Christmas prediction in the forum after your tests? Would be cool to know how you see sales after the new infos are in. As for the rest: El Duderino if you do that, I come to cologne and help building it :o)

routsounmanman (on 09 October 2007)

TheSource HOW DO YOU DO THAT??? Congrats, man.

TheSource (on 09 October 2007)

If someone wants to make fancy charts or what not...have at it. I just don't have time this week. I have 4 big tests this week, and a bunch of other work to do. But if you build some nifty images and send them to me I'll throw the best one or two in if they add to the article.

BTW, I did this by hand, so yeah it took a hell of a long time.

shams (on 09 October 2007)

This just shows how misleading "revenue" could be. The project margin on revenue from hardware is much smaller than software. In fact, revenue from PS3 hardware is actually losing Sony money (such that the lower the revenue on hardware the better!).

Lets wait till financial reports are out, and look at the figures that matter - profit.

z64dan (on 08 October 2007)

Interesting that sony's revenue almost matches Nintendo's for this quarter. They must be selling alot of PSPs or something. Unfortunately they should still post a loss from this quarter if even 1/2 of the revenue came from PS3 console sales (which loses money).

Ari_Gold (on 08 October 2007)

atlus joined the top 20... and atari went out.. :)

999301573 (on 08 October 2007)

Excellent job, we hail you.

madskillz (on 08 October 2007)

Most definitely, source. You totally rock ...

superchunk (on 08 October 2007)

Great job Source. Very interesting.

shams (on 08 October 2007)

Very nice :)

Interesting to see EA as such a strong #2 on the Wii - that surprises me. Guess they have released a LOT of software for the platform. Also shows how important EA is to every platform.

Amazing that the PS3 did more than double the software of the PSP - guess the titles outside of the top #200 would impact this greatly.

360 is the clear winner software-wise, and MS has a real chance to keep that momentum running through the generation.

EA + MS + Take2 account for more than 85% of 360 software sales. Throw in Activision, and you have closer to 95% of total sales.

I can't wait to see what happens in the 4th qrt (Oct-Dec) this year.

NJ5 (on 08 October 2007)

Nice analysis TheSource, lots of interesting numbers there.

I'm looking forward to see Sony's financial report for this quarter and if they change their forecasts.

naznatips (on 08 October 2007)

Great analysis Source. Thanks. Nothing particularly odd or unexpected here, but great breakdown of the numbers and nice well-organized list.

FishyJoe (on 08 October 2007)

I hope you're right about the software levels, because that would be a 40% increase for Nintendo from the previous quarter. If that numbers holds, Nintendo could be looking at over a $1 billion profit for the quarter.

El Duderino (on 08 October 2007)

Source, you are da man... if I ever change my religion IÂ´ll build you a shrine...

madskillz (on 08 October 2007)

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