X360 to Become the Best Selling Home Console in the UK?
by Seb Parker, posted on 05 January 2012 / 4,496 Views
Can the Xbox 360 overtake the Nintendo Wii and the PlayStation 2 in the UK, and in the process become the highest selling home console in the country of all time?
If you had asked me, or many others this question some 18 months ago, you would have been laughed out of town. E3 came along, and, as well as the re-unveiling of Kinect, the Xbox got a redesign. From there things began to snowball. Wii still sold competently against Microsoft's double attack though. This year, however, that was not the case:
With full 2011 sales in, the gap between the X360 and the Wii is now below 1 million units, and the PS2 gap is 2.7m.
Like everywhere else, Wii suffered the infamous 3rd year peak in the UK (you could argue it peaked even slightly before then), something once synonymous with looking at how a console would sell over the course of its life. X360 (and the PS3) have seen no such peaks. Despite being on the market for 7 christmas seasons in the UK, 2011 marked a new peak year for the X360 here. Going forward, it's hard to predict how Nintendo will play the Wii in 2012. It's not hard to imagine that, outside of a few small games, all development has moved onto the 3DS and the WiiU, so in terms of support, things should be lacklustre for the Wii. Also, given the state of Nintendo's financials at the minute, and having only just cut the price of the console 7 months ago (to undesirable effects by the look of the year over year drop), it's hard to see Nintendo cutting the price. That said, they've already proven they value marketshare over profit as of late, and might be keen to get the Wii down to £99 before the WiiU hits.
If the Wii does receive another price cut, it's hard to determine how it will do in 2012. 2011 is proof that a price cut with little to no support doesn't really do much to sustain sales. I estimate the best the Wii can hope for with a price cut to £99 is around 500,000 units, and even this seems optimistic in light of recent sales. If Nintendo chose the route of profit, sub 400,000 units looks likely.
The X360 is even harder to predict. I thought for sure the console would receive a price cut this holiday, but Microsoft seemed to cash in on simply more advertising and strong software support for Kinect and the X360 itself. If this were their strategy for the entirety of 2012, I don't see it paying off again. With that said, I don't believe it will be. It's been over 3 years since the last baseline price cut to the 360 (Microsoft actually raised the baseline price in 2009 from £129 to £159). The current pricing is £149. Demand is clearly there for Kinect and the 360, but the current cheapest Kinect bundle is £249, so it isn't quite at mass market price yet. If they can get their cheapest Kinect bundle to below £200, along with the cheapest X360 standalone SKU back to below £129, sales shouldn't fall year over year, and again if this year is anything to go by, a price cut along with their strategy for the year could see sales increase year on year. Worst case scenario with a price cut is, I expect, 1.2m units.
Comparing Wii's 2012 best case scenario, and X360's worst, the gap would close to below 300,000 units. Vice versa and the X360 stays on par/generates a new peak year and it overtakes the Wii during the holiday of 2012. Even if this feat isn't achieved, it should happen sometime in 2013. It's now inevitable the Xbox 360 will overtake the Wii in the UK and become the best-selling home console this generation.
Not such a clear cut case is the Xbox 360 overtaking the PlayStation 2, which currently holds the record for highest selling home console in the UK with 10.21m. Like the Wii, the PS2 began to fall in its 3rd full year of sales. It didn't drop nearly as harshly, however, and during its 5th year rose year over year. X360 saw a similar trend, rising year over year in its 5th year, thanks to the Slim and Kinect, but this year it rose again and outsold the PS2 exactly 2:1 for their 6th years on sale.
Worst case scenario and a price cut would fail to keep X360 sales flat, instead shedding 300k year over year. From there it performs slightly worse than the PS2 did from 2006. This seems unrealistic, as it's currently much further ahead than the PS2 in the same time frame, but if this were to occur the X360 would fall short of PS2 lifetime sales by approximately 250k, just below 10 million lifetime. My best case scenario sees a rise in 2012 on the back of a price cut. This is much more likely than a 300k year over year fall, but still requires a good response from consumers this late in the generation. 2013 would benefit from the obviously successful price cut, that and there being no successor released for the majority of the year. From that point on it should begin to wane heavily. If this scenario were to happen the X360 would finish some 1.3m units ahead of the PS2 lifetime, hitting over 11.5m lifetime.
My likely scenario, however, is somewhat more cautious. A 2012 price cut would put the 360 around 400k ahead of the PS2 lifetime, at around 10.6m, meaning it can perform slightly worse than my best case scenario and still manage it.
The picture will be much clearer this time next year when we can evaluate how the price cut (assuming there will be one) affected sales, but as things stand it's looking increasingly like we're eventually going to see a new best-selling home console of all time in the UK.
