State of the Generation: Big 3 Shipment Update Through March 2010 - News
by VGChartz Staff , posted on 14 May 2010 / 4,402 Views
Now that shipment results for the big three hardware manufacturers have arrived, it is time to look at totals industry wide, and how the future may play out. Don't be intimidated by the size of the document based on scroller - half the length is the 13 images.
March 2010 FY Shipments
For the year ending March 2010, hardware and software shipments were as follows.
DS – 27.11m / 151.59m
Wii – 20.53m / 191.81m
PS3 – 13.00m / 115.60m
X360 – 10.00m / ~115m (estimated)
PSP – 9.90m / 44.4m
PS2 – 7.30m / 35.7m
Lifetime to date figures stand at the following levels through March 2010.
PS2 – 142.5m / ~1512.8m (10.616 games per PS2)
DS – 128.89m / 718.51m (5.574 games per DS)
Wii – 70.93m / 544.83m (7.681 games per Wii)
PSP – 61.50m / 251.0m (4.08 games per PSP)
X360 – 40.20m / ~336m (~8.35 games per X360)
PS3 – 35.73m / 290.5m (8.13 games per PS3)
During the quarter ending March 2010, shipments were fairly strong across the board.
HW SW
DS – 3.76m / 30.21m
Wii – 3.48m / 35.17m
PS3 – 2.20m / 29.30m
PS2 – 1.70m / 4.60m
X360 – 1.50m / ??
PSP – 1.40m / 8.1m
This quarter marks an interesting break with the past. Wii and DS are now trending very differently at aligned periods, and X360 and PS3 are beginning to really separate as well.
Using aligned totals though, the lifetime to date performance of Wii and DS is still quite similar, as is PS3 and X360 even though quarterly outcomes are starting to change.
For the year ending March 2011, Nintendo and Sony issued the following projections:
- Combined DS and 3DS hw shipments will be 30m units worldwide.
No split was given, but I believe it will end up at something like 24m DS, and 6m 3DS for the fiscal year.
- Wii hw shipments will be 18m units worldwide
- PS3 hw shipments will be 15m units worldwide
- PSP hw shipments will be 8m units worldwide
- PS2 hw shipments will be 6m units worldwide
- Publishers will ship 165m Wii games worldwide.
This Wii software projection does not include the 30-35m games (Wii Sports & Wii Sports Resort) that will be bundled with Wii in the period. Satoru Iwata stated that this forecast actually means Nintendo expects Wii software to rise over the previous fiscal year when 191m Wii games – including bundled software – shipped worldwide.
- Publishers will ship 150m DS + 3DS games worldwide.
No split was given, but I believe it will end up as a split of about ~125m DS games, and ~25m 3DS games for the fiscal year.
- Publishers will ship “approximately” 195m games for Sony’s three systems according to Sony.
Sony’s forecast may be an indication that PSP2 is coming at E3. I say this because PSP + PS2 software should be down by 20-30m units in the current fiscal year. PS2 software has dropped by at least 50% quarter over quarter for six quarters in a row now - thus PS2 software alone could be down 15m-20m units. Meanwhile, PSP software has dropped by over 10% for the past two fiscal years. PS3 software should be within 15% of last year given that it only increased 11% last year on a 30% year over year hardware increase.
Without a PSP2, Sony is trending for software shipments around 175m units, as PS2 software will drop to 15m-20m, PSP software will drop to 30m-40m, and PS3 software should remain at 100-130m. That amounts to 145m to 190m units of software. PSP2 would lift that total by at least 10m units of software if it launched by Christmas 2010.
Biggest HW & SW Bases through March 2010
As of March 2010, the ten largest hardware bases in the history of videogames are PS2, DS, GB, PS1, GBA, Wii, NES, PSP, SNES and X360 – in that order. PS3 will make the top ten once or if it over takes X360, or once it overtakes the stagnant SNES which stopped selling at ~49m. Given Sony’s projection, the latter could happen by next March. Sony’s PSP will overtake NES next quarter, becoming the 7th largest hardware base ever. Figures are through March 31, 2010, worldwide, in millions, and for shipments.
X360 should also end up overtaking the SNES by mid-2011 at the latest. Wii and DS are on pace to overtake GBA and PS2 respectively within the next year. Sony projects to ship 6m PS2s in the March 2011 fiscal year – that would put PS2 at 150.5m lifetime. Nintendo says it will ship 30m DS in the March 2011 fiscal year but that figure includes 3DS. If DS shipments came to 24m, DS would reach 153m in March 2011.
While DS is set to overtake PS2 within the year for hardware, PS2 software totals will remain unassailable for at least another four to five years. It is still the only system where software shipments have topped 1 billion units lifetime. DS may have enough left to reach a billion units (or more) of software lifetime, but software shipments are falling and the 3DS is coming. Even Wii is probably at least three years from a billion units of software as a lifetime total.
Note: Microsoft cites an 8.8 attach rate in its earnings reports, but it is an NPD figure for the USA – X360 has lower attach rates outside its ‘strong’ markets. The Japanese rate is closer to 5 for instance, and in much of Europe, the rate is more like 6. Thus, the X360 figure above is my estimate.
By March 2011, X360 and PS3 should both be larger software markets than SNES and GBA, but still short of NES figures. PSP is 11th all time, at 251m games shipped lifetime, but it probably won’t ever crack the top ten as it is trending for lifetime software totals of ~310-340m – well below SNES, GBA and the eventual PS3 and X360 software totals. Wii is probably the one system that still has a slim chance of beating PS2 software shipments lifetime, but with a smaller peak for software, odds are it will end up between PS1 and PS2 levels for software totals.
Generation Totals
Since a fiscal year just ended, we can also examine how the current generation of machines is comparing to earlier generations. The good news is that software in the Wii generation (Wii, X360, PS3) should reach an all time high. I’m defining generations as follows: NES era includes NES + MS, SNES era includes Genesis + SNES, PS1 era includes PS1 + N64 + Saturn, PS2 era is PS2 + Xbox + GC + DC to date, Wii era is Wii + PS3 + X360 to date. Xbox & X360 software is estimated.
NES Era SW – 533m
SNES Era SW – 550m
PS1 Era SW – 1.27b
PS2 Era SW (so far) ~ 2.00b
Wii Era SW (so far) ~ 1.17b
The PS1 era machines totaled 144m units. Wii era machines total 147m units through March 2010. On three million more machines than the PS1 era, about 100m fewer games have been shipped to date in the current generation – much of this is likely due to PSN, XBLA, WW, and VC though. With at least 40m more units Wii-era systems to be shipped in the next fiscal year, the current generation will top 1.5m games. Increasingly sharp declines in hardware and software figures will likely follow, but ultimately there is no reason why the current machines can’t reach 2.4b – 2.6b units of software between them on 275m or so systems. The four PS2 era systems will finish at about 210m systems lifetime with 2.04b units of software shipped lifetime. Thus, lifetime hardware of 275m, and lifetime software of 2.5b would amount to only 30% and 20% growth respectively.
The DS + PSP era of portables is already the second most successful generation of machines – and by the end of 2010 DS + PSP will overtake the PS2 era machines. Over 190m DS and PSP systems have been shipped to date, the PS2 era machines total 200m through March 2010. Without Dreamcast included, the DS + PSP generation will overtake the PS2 machines in the June 2010 quarter. For software, DS and PSP have seen about 970m games shipped to date, making it the fourth largest generation by software. Eventually, DS + PSP software will overtake PS1 era software shipments to become the third largest generation for software ever.
Visually, it looks like the Wii era machines have peaked in terms of software, and the DS era portables definitely have. Still, the current peak is about a third higher than any previous software peak for video game consoles.
Portable software for DS and PSP is already well off the peak. Nonetheless, software shipments for the DS era portables remained more than double the previous peak.
Historically, new hardware has been introduced when one hardware manufacturer decides that software shipments will get too small for comfort without a new system. As technology has become more expensive, this threshold has increased for each company. In the NES / SNES / GB era Nintendo’s minimal threshold appears to have gone from 50 to 100m. During the N64 / GBC / GBA / GC days that threshold held. Since DS and Wii have taken off, it looks as though Nintendo raised that threshold to 200m in 2006, and then set the bar at 300m. The timing of the 3DS should assure that software shipments on Nintendo platforms stay above 300m for at least FY 3/2008 to FY 3/2011.
Sony has similar policies. PS2 was introduced to prevent software shipments on Sony platforms from dropping below 150m in the early 2000s. Looking back, the PSP appears to have been introduced to offset the slow declines in PS2 software and keep software shipments on Sony systems above 200m. Sony probably figured PSP would hold the fort for a couple years at 200m+, and then when big PS2 software drops began in earnest, PS3 would be introduced to push software shipments back to 250m+. Initially, the plan worked to some degree. Sony went from a company where one platform topped 200m games in a few years, to a company where between three platforms software topped 200m per year. Over the past two fiscal years though, software shipments have instead dropped off by 30m and 42m units as PS2 and PSP dropped faster than PS3 rose. Thus there is some incentive to introduce a new platform for Sony as well. I’m expecting a PSP2 at E3.
Industry Wide Trends
Sony’s PS3 was the only system to see hardware shipments increase in the March 2010 fiscal year. Thus industry wide hardware shipments dropped off by 13% from the all time high of 100.8m units. Historically, after a major shift in industry power the rises and falls in hardware shipments are steeper, so it will be interesting to see how many years the hardware dip lasts this time. Hardware figures are in millions, and combined for Nintendo, Sega, Sony and Microsoft across portables and consoles.
Even with a new PSP possible and the 3DS, hardware shipments will likely remain at about 85-88m for the March 2011 fiscal year as Wii, PSP, DS, PS2 are likely to decline, and X360/PS3 could easily remain flat or decline too if the price cut/3D/Motion initiatives don’t work or get delayed.
Software shipments also dropped off worldwide in the March 2010 fiscal year as software shipped on Sony platforms dropped by 18%, while software shipped on Nintendo platforms dropped by 15% compared to the March 2009 year.
Games shipped for Nintendo systems accounted for 52.5% of all video games shipped worldwide in the fiscal year. Software for Sony’s systems accounted for 30% of all software shipped worldwide. In the prior fiscal year, games published on Nintendo and Sony systems totaled 54% and 32% of all video game software shipped worldwide.
Software for Sony systems actually dipped below 200m units for the first time since the fiscal year ending March 2001. The 195.7m games shipped for Sony’s three systems is only 27% off the all time software peak on Sony systems in a year – but PS2 had software production shipment of over 200m for three years, and peaked 252m. If we look at shipments of console software only, the situation is quite different and more dire for Sony.
Since peaking at 262m games shipped for PS1 + PS2 during the March 2005 fiscal year, software shipments have declined in four out of five years, and fell to 151.3m in the March 2010 fiscal year.
The last time software shipments on Sony’s consoles was lower than the fiscal year ending March 2010 was the year ending March 1998 when PS1 was still breaking into the market.
Hardware shipments also appear to be moving back in favor of ‘consoles’ over ‘portables’.
Not surprisingly, software shipments for consoles are declining slower than for the portables, even though the current portables have a much bigger hardware base at the moment then the current consoles.
The year ending March 2010 was also likely the year when the current big five platforms (Wii, DS, PS3, PSP, X360) will account for the greatest percentage of software shipped worldwide. During the March 2010 fiscal year, 19 out of 20 video games shipped worldwide were for one of these five platforms. In the March 2011 fiscal year, 3DS, PS2 – and possibly PSP2 – should begin to push that domination by current generation systems down.
Conclusions
After a down year for hardware and software shipments worldwide, the big three are going to try to revive the industry in the coming fiscal year. But hardware and software have still likely peaked for the generation, and industry wide. A new peak looks like it is several years off.
Still, the declines won't be too sharp, as 3D, 3DS, PSP2, Natal, Vitality Sensor, Move, and price cut rumors abound for the March 2011 year. The problem is each of these possible sales pushes – save for the price cuts – starts with a base of zero in the fiscal year. It’s entirely possible that every one of these initiatives will really come in the fiscal year and push hardware. But even so, the bases won’t be big enough to reverse software shipment declines in the fiscal year that are industry wide, especially as more content goes digital.
There are some indications that the big bases the big three have are already beginning to go to waste for software publishers. If we look at software purchases by the entirety of the hardware base as an average, the previous fiscal year indicated that the irreversible boredom that eventually ends every console generation has begun to arrive.
Purchases by Base = FY SW Shipments / HW Shipments LTD
FY 3/2007 FY 3/2008 FY 3/2009 FY 3/2010 FY 3/2011 Est
Wii 4.94 4.89 4.06 2.75 2.20 (195m/90m)
DS 3.07 2.63 1.94 1.18 0.81 (125m/153m)
PS3 3.75 4.57 4.56 3.23 2.46 (125m / 51m)
PSP 2.06 1.37 0.92 0.69 0.51 (35.5m/ 69.5m)
I’ve modeled PS3 and Wii purchasing decline rates at fairly low levels in the chart above. In the previous fiscal year the drops in purchasing by the bases were 29% and 33%. This time I have 24% and 20%. Regardless of what exactly the figures come out to be, the decline in base purchases is irreversible once it begins. With Nintendo and Sony both likely to cut prices on the four systems above because of competition and new portables the declines in usage could be steeper. Bundling of software with systems should also increase this year, which may further drive down the need for new system owners to purchase software, especially in the short term. So no matter how big the hardware bases get from here on, we’ve likely seen, or are about to see as much software as these machines are capable of pushing. This is a bit of a shame, as DS and Wii are probably going to top 170m and 120m respectively before they stop selling, and PSP and PS3 could reach 80m and 75m respectively.
Over the remainder of the generation, the question will be how third parties view software declines. In the last fiscal year, removing games published by Nintendo, Microsoft or Sony, the Wii software market totaled ~105m, while the PS3 and X360 software market totaled ~190m. With Wii games cheaper to make, this means the third party market on Wii still supports more profitable third party games than the HD market. If Natal and Move change that equation by lowering Wii hardware sales or making it easier to profit on X360 and PS3, there is the possibility that more third party support will move to X360 or PS3. On the other hand, if the initiatives don’t alter the equation enough or at all, there is the possibility that the motion projects planned for Move or Natal go to Wii.
Contact Vgchartz at jmazel@vgchartz.com
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I see the PS3 and the 360 both getting to 50 million at around the same time.
Nintendo needs to push the Wii over the 100 mill mark by Sept. 2011 imo. Then they could release the Wii Too.
good job!:-)
To me, the PSP is not a failure nor a big hit, about 80M would match the GBA's 82M, which is not bad at all and far better than the 11M of the GameGear. BUT, the success of a console comes from its game sales, and the PSP seems either to be a multimedia platform with VG option and/or an heavily pirated handheld, 250M games is exactly the same ratio as for the GB (4.2), not that bad in fact... But when you look at the charts above you see that the PSP didn't take Nintendo's shares of the portable market, it expanded it.
The very last comment is interesting. I tend to agree with it, in that Wii might benefit from the push of Natal/Move as much as it's hurt from those new products. Given that Motion+ is standard for all new Wii owners, and that 10's of millions of existing Wii owners already bought WSR or another game that's bundled with Motion+, it'll be hard for Microsoft and Sony to overcome the HUGE headstart that Motion+ has. Couple that with cheaper development costs and Nintendo's marketing charm, and it's a tough act to follow. I still think MS launches Natal as part of their next system though, and not as an add-on for the X360. Nintendo waited to implement motion controlls for the Wii instead of the GC (for which it was originally developed) and look at how well that worked for them.
I expect Wii shipments to topple GBA shipments around October.
@Silver_tiger
PSP is a handheld, and NES is a console, you can't compare both. ANd peopel told me DS doesn't count when it's soon to top PS2.
@Silver-Tiger - People who said PSP is a failure solely do that in comparison to DS. On its own it is a success on many levels.
Very good read. Awesome to see this gen going so well (and being much more broad than previous gens). Always good to see things looking well for the video game industry.
interesting... PSP is on the verge of passing NES lifetime sales. Makes people who said PSP is a failure look silly.
Huge report... But very interesting though. About the third parties, is all unknown, because they all know wii development cost are lower than in the other platforms but even knowing that, wii support is far from good. So it would be very interesting to see how third party devs react to the hardware declines..
