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An Early Look at the 2012 Video Game Market - VGChartz

An Early Look at the 2012 Video Game Market - News

by VGChartz Staff , posted on 31 December 2011 / 9,573 Views

With 2011 just about over, it is time to start looking at the type of year 2012 will be.

In 2010, 79.6m units of video game hardware sold globally. That figure has declined in 2011 even with 3DS (and Vita to a much smaller extent) leading to a pretty substantial rebound late in the year for hardware. In 2008, when Wii and DS were peaking globally, hardware sales were 97m. Final figures are not completely in for 2011, but it looks like the drop from that generational high to 2011 will be by around 20m units. Through December 24, 2011, including PS2, just over 73m units of hardware had been sold.

The final week of 2011 will certainly not add more than 10m units to that figure. It looks like the 2010 to 2011 transition will be a decline of 5%. Figures below are in millions of units globally.

It is important to note that pre-3DS hardware (i.e. PS2, DS, PSP, X360, PS3, and Wii) dropped almost 20m units from 2010 to 2011 - mainly because of DS collapsing and no pre-3DS hardware growing at a significant clip. The growth in HD hardware, despite the first full year of Kinect and Move, and another substantial price cut (from Sony) and major holiday titles essentially amounted to a rounding error - 28.7m in 2011 vs. 28m in 2010 - 2.5% growth. That figure was not even enough to offset the massive Wii decline which also had a substantial price cut  - let alone DS, PS2, or PSP, which each dropped by large amounts from 2010 to 2011.

Software has also dropped by a huge amount from 2010 to 2011, as Wii, PS2, and PSP shrank a bit, while 3DS and Vita have, even combined, a single digit share of the global software market. With the slow 'next-gen' portable software growth, and big time drops for DS games, total software dropped quite a bit from 2010 overall. X360 and PS3 software remained just about flat even with nearly 30m more users.

Nonetheless, 2012 could easily see a rebound in overall figures from 2011 as more platforms release and the 3DS grows. Figures below are global estimates in millions of units worldwide.

The Western markets are likely to be slightly down again in 2012, as all three consoles have more room to drop than in Japan, while the portables will be slower to grow to massive figures. In Japan though, 2012 should be a year of substantial hardware growth following a fairly solid 10% improvement in hardware sales from 2010 to 2011.

J. Mazel: Moreover, while a global launch for PS4 and X720 is increasingly unlikely for 2012, there is still the possibility of a Japanese launch for either or both devices in late 2012, as the software markets and hardware markets for the HD systems are exhibiting much older behavior than in the US (X360) and Europe (PS3). The average Japanese PS3 owner bought 1.7 games in 2011, compared to around 2.5 games globally, while the average X360 owner bought around 1.2 games in Japan, compared to around 2.3 games globally.

Publishers dependent on software sales in Japan are likely pushing pretty hard for new systems given the slowdown of all pre-3DS systems in Japan has considerably narrowed the options for where games can be released at a healthy profit. The console market should improve a fair bit in 2012, as Wii U releases, and Wii / PS3 are sustained to some degree by price cuts (Wii in particular is way overdue for a price cut in Japan - the last one was in September 2009).

S. Parker: I agree with Jacob about the PS4 and X720 not launching in 2012, especially in Japan in the case of the X720 (this will be the last main region it launches in). It's far too early for a PS4 in Japan, especially whilst the PS3 is still selling very well. With most software development moving to the WiiU, it's unlikely the Wii will see anything that will shift hardware. Again, it seems price isn't the problem with the Wii, a price cut (especially in the middle of the year, again) could prove fruitless for Nintendo.

The US market, unlike Japan, should decline in 2012 from 2011, just as 2011 was down from 2010 (based on figures to date).

J. Mazel: Current data on VGChartz shows PS3 will end up barely increasing from 2010 in the US despite another price cut. Microsoft should still see excellent X360 figures next year after seeing the best X360 year ever in 2011, but a price cut probably won't help much in 2012 until the end of the year. Wii U demand may also hurt both systems a bit at the end of the year.

Wii will continue to decline, but it's hard to imagine a rapid decline just yet when substantial software, including several million-sellers are still set to arrive in 2012 - Rhythm Heaven, Mario Party 9, Xenoblade, Dragon Quest 10, Pokepark 2, Just Dance 4, Epic Mickey 2, and The Last Story all should arrive by next December. With Just Dance 3, Zelda, Zumba 2, Mario & Sonic, and older Nintendo games and genre kings still performing well, and a price cut to $100 likely at some point in 2012, it's hard to see Wii rapidly falling off until 2013 or later.

S. Parker: As with the UK, the PS3 is seeing a trend in which it doesn't really sell much differently from the previous year. Whilst it's debateable whether this is good or bad, what with price cuts, software releases, etc. I think the fact that the PS3 is well past the supposed 3rd year peak means that merely staying flat year over year is an achievement. With that said, the PS3 slightly increased on last year's total thanks to the $50 price cut in August, so 2012 should be roughly flat again (expect a further $50 cut August next year to help sustain sales), or perhaps slightly down.

The X360 is also seeing a trend where, despite a baseline price cut since 2008, it is still increasing year over year, and with 2011 it achieves its highest year to-date by quite some margin. 2012 brings with it plenty of software that appeals to the US audience - Halo 4, Star Wars Kinect (both with limited edition consoles), as well as the next Call of Duty, all on top of a probable price cut which will mean the X360 shouldn't fall below 2010 figures. I would only expect a $50 cut (Microsoft won't cut more than they need too), however if they do cut $100 then it stands a good chance of surpassing this year's 8 million.

Despite its price cut (which was for the majority of the year), the Wii is down ~1.7 million. Even $99 Wii's on Black Friday couldn't put it close to the X360 for the week and even the PS3 outsold it for the month. This is perhaps a sign that price isn't an issue with the Wii. Turning to software, only Just Dance 4 looks to be the system's potential hardware shifter. Games like Xenoblade, Pokepark 2, Epic Mickey 2 and The Last Story will sell to the existing userbase, and struggle to reach the 1 million mark lifetime in the US (if at all).

J. Mazel: Excluding launch week, 3DS sold on average 30,000 units per week in the US before its price cut in August, and Vita will be launching with a higher price point - and so barring a huge price cut of its own or an unforseen wave of killer apps, Vita should sell around 300,000 - 500,000 in February, and then 100,000-150,000 per month until November. Call it 125,000 * 8 (March to October) in addition to 400,000 units sold in February, 350,000 in November, and 750,000 in December and you can see where the 2.5m comes from. The growth of Vita and 3DS will also all but completely kill off the remaining DS and PSP market - PSP should be completely off American shelves by the end of 2012, with DS down to a very a meager presence.

S. Parker: Vita launches in the US during early 2012, not the ideal launch frame but there we go. Vita doesn't have the luxury of the market presence the 3DS had (due to the huge DS userbase), yet it's launching the same price as the 3DS did. Where the 3DS had the market almost to itself, Vita won't. Sony will be reluctant to cut the price given they're already losing money on Vita, but it's likely we'll see even lower figures post launch than the 3DS. A late 2012 price cut and compelling software would see them through to the end the year on a high note though. If they resist, and keep the Vita priced $250, then it could do much worse than the 3.0 million estimated.

The European market has declined only slightly from 2010 to 2011, but should erode more quickly in 2012.

J. Mazel: The later launches for PSP, DS, and PS3 in Europe compared to the rest of the world means that those systems should hold up a bit better in Europe than elsewhere in 2012 even with new systems arriving. Vita and 3DS will likely see most of their shipments go to Japan and the US in 2012, but still reach respectable numbers in Europe. Nintendo probably isn't prepared for 3DS to achieve 'DS-peak' status in each market at the same time anyway, either in terms of game-releases or manufacturing capacity, given that the DS once sold 8.5m in a year in Japan, 12m in a year in the US, and 12m in a year in Europe - each at different times.

Europe and the US are largely mirror images for the PS3 and X360. PS3 is set for a very strong year in Europe in 2012, given the size of the market, and how the market has reacted to Move and Kinect compared to the US. The US market however is still Sony's weakest market, as in Japan Sony once sold 2.2m PS3s in a 12-month period, the US equivalent of which is roughly 6.2m PS3s based on the 2011 ratio of total US Hardware to total Japanese Hardware. It doesn't look like PS3 will ever reach that level in the US, even though the European performance of PS3 has reached the market adjusted equivalent of the Japanese high (2.2m * 2.5 ratio EU: JP HW = 5.5m) during 2011.

X360 has the same issue that PS3 does in the US, but in Europe. Adjusted for market size, X360 should have reached about 7m units in Europe at its peak based on 2011 US sales - but it looks like X360 will end up peaking at just above 4m per year instead. Wii is also weaker in Europe than US figures would indicate, and has been for a couple years now, but the markets performed pretty similarly adjusted for size up until 2009, while X360 has always been substantially weaker in Europe than in the US, and PS3 has always been substantially weaker in the US than in Europe.

S. Parker: I disagree with Jacob about the later launches affecting the PSP, DS, and PS3 in Europe. This has been a longer than normal generation, and it's been 5 years since PS3 launched this coming spring. The launch date in each market isn't really going to affect the numbers they achieve in each region. I don't believe US and Japanese performances have any bearing on how well something does in Europe; just as with Japan and the US, it's a region with its own story.

If the Yen Vs. Euro situation is flat this time next August, or dare I say worse, I think Sony will hold out on a price cut for the PS3 in Europe, resulting in a drop YoY that will see figures on a par with 2010. Despite no price cut, and Kinect not being the hottest item in most regions of Europe, the X360 managed to stay flat. A price cut is overdue and so figures should only be down slightly, perhaps even flat again. As with everywhere else, the price cut for Wii didn't prevent big year over year losses, and 2012 will be no different, price cut or no price cut.

J. Mazel: Going forward, there should be increasing pressure on Microsoft and Sony to release new information for their new consoles, as it is difficult to imagine PS3 & X360 hardware sales not declining next holiday even with price cuts given how cheap X360 and PS3 are now. Slim models have been released, motion-control games have been added - there just isn't much more that can be done if price cuts don't boost demand anymore. Software rates per individual user are also still declining rather quickly too for both platforms now - and that will be magnified with any slowdown in hardware sales.

While there is no rush to put out new systems in 2012 for anyone but Nintendo, it probably would be a mistake for Sony and Microsoft to wait past 2013, which will be the last time software purchasing rates will still be over one game bought per HD user per year. March to September 2013 looks like a better timeframe than either late 2012 or late 2013 for both new systems with Wii U likely for next November.

S. Parker: Whilst Nintendo are in the habit of releasing information early on for hardware, it's unlikely Sony and Microsoft will reveal their new consoles this year if they're to launch late 2013. Both consoles are still selling well, and the Kinect + X360 combo has yet to see its first price cut (a $199 bundle would keep respectable sales up until late 2013). Another $50 cut will see the PS3 finally hit mass market price, and so should also sell well for the next 2 years.


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46 Comments

Ail (on 31 December 2011)

Your analysis hides the business reality. In practice most gaming companies will show an increase in sales in 2011 vs 2010 ( Sony, Microsoft, EA, Activision,..) and one company will show a huge decline ( Nintendo). At some point you are going to have to admit that the fall from grace for Nintendo isn't synonymous of doom for every publisher... You are very optimistic with your Wii projections for 2012 too, with almost no Wii software set to release, Wii sales are most likely going to drop by 30 to 35% and not the 20% you are projecting...( it makes totally no sense to have a platform that will release no software projected to drop the same amount as 2 HD platforms which still have plenty of titles set to release in 2012( and we're talking GTA5 , Mass Effect 3, not unknown games..).


Simulacrum (on 31 December 2011)

Nice.


  • +1
Seece (on 31 December 2011)

Good post Ail


  • -2
Conegamer (on 01 January 2012)

Nice post. However, the Wii DOES have some SW, namely, Dragon Quest X in Japan, and Xenoblade, The Last Story and Pandora's Tower in the west.

Will it be enough to prop the Wii up next year? I doubt it. However, I doubt the decreases YoY will be as heavy as you anticipate because of that.

Otherwise, spot on.


  • 0
dividePower (on 31 December 2011)

Handhelds FTW, now let's hope nothing bad happens to Vita in February. That being said, 2012's the prime year for the 3DS to shine (GameFreak Pokemon R/S Remake / Grey pl0x), plus keeping the momentum of game releases after the first half of the year.


pezus (on 31 December 2011)

"including the availability of a $200 price point for most of November and December". Eh, wasn't PS3 only available for $200 during Black Friday?


thismeintiel (on 31 December 2011)

Yes, lol. But know the deal. Make Sony's and MS success seem normal, while at the same time celebrating Nintendo's or making excuses for when they're not doing so well. :-P


  • +6
Carl (on 31 December 2011)

The Wii has Dragon Quest X in '12 in Japan, Seece.


Seece (on 01 January 2012)

Does that have a release date


  • -3
Carl (on 01 January 2012)

Wii version in 2012, no date on Wii U version.


  • +2
Salnax (on 31 December 2011)

Looks like it's up to the handhelds to save the day again!


Torillian (on 31 December 2011)

Man, those are some huge assumptions about Xenoblade Chronicles and The Last Story, not only will TLS release in NA next year but both will be million sellers? That would be pretty massive and unexpected.


menx64 (on 31 December 2011)

Well we can hope so, no?


  • +1
sethnintendo (on 01 January 2012)

Would be nice to see them both reach at least 1 mil


  • 0
menx64 (on 31 December 2011)

Good reading... I hope those 3ds numbers are spot on, 35 millions next year?... Amazing... And hoping the best of lucks to the vita & wiiU, I am already saving money for both, so they better do well ;)


megaman79 (on 30 December 2011)

Wii U should really be pushed forward to Sep - Oct. Captalize off E3, and the slowdown in 360/PS3 console sales for Christmas 2012. Cmon Nintendo, show us you mean business.


thismeintiel (on 31 December 2011)

Quick question about your numbers for 2010. Where did you get them? If you go by the new Global Charts we have, the PS3 only sold about 13.9 million units last year. I got that by subtracting the total PS3 sales at the end of 2010 from the total from the end of 2009. That would be more like a 5% increase YOY.


Kai Master (on 31 December 2011)

14.4/13.9=3.6%, how did you calculated 5% ?


  • 0
thismeintiel (on 31 December 2011)

They had it at 14.6 before they took it down and edited the article.


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Preacher37 (on 02 January 2012)

The irony is that if project rainfall succeeds the Wii will have more life left than it did this holiday season...guess things are still up in the air. My question is given the Wii's selling power even in its fifth holiday season, with very few games to stick up for it(hey, it is still keeping up with 360/ps3, just not equaling their combined numbers anymore) where is the assumption of the WiiU not topping 4m this year coming from?


Seece (on 02 January 2012)

Wii didn't even top 3m during its first holiday


  • 0
.:Dark Prince:. (on 03 January 2012)

Yeah, but Wii U is rumored to have a Spring-Summer release.


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Nintendogamer (on 01 January 2012)

This will be the year where Wii crosses the 100M mark and marks the first Nintendo home console to top 100M.


ZuZayLi (on 01 January 2012)

you're completely wrong with the 3ds 2012 numbers. I'm sure it will surpass the 30 million consoles only for this year.


Kai Master (on 31 December 2011)

Just a question to both : what are those 2010 numbers here : vgchartz.com/hw_annual_summary.php, they don't match the ones in your article !


Seece (on 31 December 2011)

Outdated is what they are.


  • +1
Kai Master (on 31 December 2011)

Just a question to both : what are those 2010 numbers here : http://www.vgchartz.com/hw_annual_summary.php, they don't match the ones in your article !


yo_john117 (on 31 December 2011)

You know this would have been a great 2012 preview article if the numbers weren't so horribly skewed.


Millenium (on 01 January 2012)

I can't help but agree.


  • 0
non-gravity (on 31 December 2011)

Good read. I don't see how Wii U will do 1.5 million in Japan though in a few short months. I also hope Vita won't end up with barely 20% handheld market share at the end of next year - 8.5 vs 35.


kowenicki (on 31 December 2011)

You have 13.6m for 360 in 2010. That's pre-adjusted data. It did 13.38m, so if it ends at 14.1 then the YOY increase will be more like 5.38%. I suspect other consoles 2010 data is also pre-adjustments too.


Michael-5 (on 31 December 2011)

So despite 360 growing more then PS3 this year, you think PS3 will drop less next year? I don't think the sales difference between the two consoles will be that different then this year. 500k, not 1 million, the gap isn't going anywhere.


thismeintiel (on 31 December 2011)

They both rose around 5% this year, so that shouldn't really be used to determine anything.


  • +1
Kai Master (on 31 December 2011)

I think if there's a price cut for PS3, Europe will react more than US, as Europe is more price-sensitive than US, just look at PS2 sales which are far more important in Europe than in US in 2010 and 2011. In the long run and with price cuts the PS3 should broaden its gap lead and win this HD-generation !


  • 0
enrageorange (on 31 December 2011)

Next year portables will have a ridiculous share of the dedicated gaming market. Also I don't understand why in the next year the 360 is estimated to drop more than the wii. The 360 with kinect has had a pricecut only on black friday, or one day, and those 360s quickly sold out. Free 50$-100$ giftcards do not equal a pricecut. It is a very big difference to pay $200 for a $300 product, than $300 for $400 worth of products 100$ of which you are basically forced to buy. One is a 33% discount. One is a 25% discount and you get things you weren't necessarily going to buy otherwise.


sirroman (on 31 December 2011)

Another great read as always, the source! Also, I couldn't agree more with your time frame for X720/PS4.


goldeneye0065r (on 30 December 2011)

psp is already dead my local walmart has 0 games in stock for it except a few in the bargin bin if thats not a sign of things to come i dont know what is and bad vg charts predicting vita to sell 500 k ? i dont think so , much less than that! if japan is anything to go by! and since us is psps worst territory- i think its more safe to assume it wont be different now!


Gab (on 31 December 2011)

What do you mean much less than 500k? It already sold 430k so only needs 70k for the last week of 2011 to hit that number, should be pretty much spot on.


  • +1
NintendoPie (on 30 December 2011)

The PSP has already been shot in America and then with the PSV release it would be shot around 5 more times and die a horrid death (PSV will do ok.) Same with the DS except somehow the SW for DS is still doing great, hrrmm... But overall the 3DS will probably dominate next year especially if they get a Pokemon game on it. ^-^


sirroman (on 31 December 2011)

DS has a huge install base and 3DS has backwards compatibility, that's why DS SW will keep selling well into 2012.


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NintendoPie (on 31 December 2011)

Yeah, probably should have thought a little more on that.


  • 0
DirtyP2002 (on 01 January 2012)

Ail is right. Your prediction and analysis are just not that logical. Nintendo is the only one of the big three that is massively down. Sony is down 2m for all systems combined, which is perfectly fine for having a successor ready (PS Vita) to release and PS2 in its last breath. Microsoft is 800k up. Nintendos DS and Wii are down 16.7m units! There is no justification to put Sony and especially Microsoft in a bad light for Nintendo going down. And nothing points towards the Wii staying at this level. Somehow you think its decline will be in line with Microsoft and Sony. Microsoft has not cut the price since September 2008. They are in a very healthy position. Sony will sell quite a few consoles this year as well. The price cut is not long ago and both systems see big software releases quite frequently in 2012. The Wii on the other hand has no big releases except DQ in Japan and a successor will launch this year. The price cut this year did nothing to put the system up YOY. I am not saying 2012 will be the best year for Xbox 360 and PS3 they ever had, but there is a lot of selling-power left, but not so much for the Wii.


loy310 (on 30 December 2011)

Is the 2011E figures in the first chart shiped , or 2011 total sold estimate?


thismeintiel (on 30 December 2011)

Sold.


  • +3
loy310 (on 31 December 2011)

OK... it can't be sold, the front page have 13.8 PS3 and 13.6 360's. unless he is estimating figures for the last week of DEC, and if so for some reason he increased the gap between PS3 and 360 by a lot in PS3's favor. Is this for the calendar year, or fiscal?


  • 0
thismeintiel (on 31 December 2011)

He's estimating the last week of Dec, which the PS3 will win by a small margin. Or at least small compared to the gap the 360 had over the PS3 this week. And it is for the calender year.


  • +2