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[UbiSoftologist]

Michael Pachter of Webush Morgan Securities provides a detailed review of video game sales for March 2005:

1) Video game sales in March

On Thursday afternoon, NPD Funworld released the March 2005 (five-week period ending April 2, 2005) U.S. console video game software retail sales (TRSTS data). Total sales were $544 million, up 38% sequentially from February’s $393 million, and up 31% compared to March 2004’s $414 million. Year-to-date sales are $1.31 billion compared with 2004 year-to-date sales of $1.14 billion (a year-over-year increase of 15%).

The overall sales figures were much higher than our expectations of $460 million (up 11%) with a greater number of new release games sold as well as stronger than expected PSP software sales. Approximately $40 million of the upside to our estimate was due to our mistaken assumption that a large portion of PSP software sales would be reported as hardware sales during the month, due to the large number of PSPs sold with software bundled. However it appears as if this was not the case, and that the NPD correctly recorded these software sales during the month.

In March, sales were led by continued strong performance of Sony’s Gran Turismo 4 (PS2) and Electronic Arts’ MVP Baseball (PS2, Xbox, GC, PC), both released in February. The top March releases were Capcom’s Devil May Cry 3 (PS2), Electronic Arts’ Fight Night 2 (PS2, GC, Xbox), Sony’s God of War (PS2), Ubi Soft’s Splinter Cell 3: Chaos Theory (Xbox, PC), and LucasArts’ Star Wars Republic Commandos (Xbox) along with a slew of strong-selling PSP titles.

There were 19 games selling more than 100,000 units apiece in March vs. our estimate of 12 and compared to 11 last year. The top 10 games captured 20% of dollar sales and 15% in unit sales in March versus 20% and 13% last month. The average selling price of all games (console and handheld, legacy and current generation) in March was $30.99, down 1% from last March’s $31.26 ASP, while unit sales increased by 33%. In 2004, ASPs held relatively steady, ending the full year down 1% ($30.76, compared to 2003’s $31.12), while full year unit sales were up 9% (from 186 million to 203 million). For 2005, we anticipate that console and handheld ASPs will decline by 3.4% (to $29.73), reflecting a decline in current generation console game pricing partially offset by significantly higher prices for new handheld software, and an increase in pricing for NFL games. We also expect unit sales to end the year up 13%. We forecast US console and PC software sales growth of 10% for 2005. ASPs year-todate are down 3% and unit sales are up 19%.

2) Top-selling games by platform (Retail sales $)

PS2 Title Publisher Projected $'s Projected Units
1 GRAN TURISMO 4 Sony $ 26,165,740 532,219
2 FIGHT NIGHT ROUND 2 Electronic Arts $ 12,891,970 261,974
3 DEVIL MAY CRY 3 Capcom $ 12,467,640 252,006
4 GOD OF WAR Sony $ 10,612,730 214,028
5 MVP BASEBALL 2005 Electronic Arts $ 9,917,162 337,736

Xbox Title Publisher Projected $'s Projected Units
1 SW: REPUBLIC COMMANDO LucasArts $ 10,644,190 214,923
2 FIGHT NIGHT ROUND 2 Electronic Arts $ 9,902,274 201,638
3 BROTHERS ARMS:HILL 30 Ubi Soft $ 8,670,007 186,542
4 T.CLANCY:CHAOS THEORY Ubi Soft $ 8,157,217 163,766
5 MVP BASEBALL 2005 Electronic Arts $ 5,456,600 185,589

GC Title Publisher Projected $'s Projected Units
1 STAR FOX: ASSAULT Nintendo $ 3,899,296 80,389
2 RESIDENT EVIL 4 Capcom $ 2,617,991 52,717
3 DK: JUNGLE W/BONGOS Nintendo $ 2,125,341 39,242
4 MARIO PARTY 6 W/MIC Nintendo $ 2,025,914 40,850
5 NBA STREET V3 Electronic Arts $ 1,996,246 41,134

Handhelds Title Publisher Projected $'s Projected Units
PSP NEED SPEED:UND RIVALS Electronic Arts $ 5,973,790 121,293
PSP TWISTED METAL:HEAD ON Sony $ 5,034,513 127,403
PSP UNTOLD LEGENDS:BTHRHD Sony $ 4,078,071 103,010
NDS WARIOWARE: TOUCHED! Nintendo $ 3,909,432 113,380
PSP METAL GEAR ACID Konami $ 3,483,612 88,362

3) Company-specific reviews

a) Activision

Releases during March: 3/23 Spider-Man 2 (PSP), 3/23 Tony Hawk's Underground 2 Remix (PSP).

Activision’s market share decreased sequentially from 5.6% to 4.5%, while its retail sales increased from $22 million to $24 million (compared with $16 million last March). Sales were led by the new releases of Spider-Man and Tony Hawk on the PSP, selling 102,000 units combined compared with our estimate of 70,000 units combined. Activision’s catalog games (Call of Duty, THUG 2, Spider-Man 2, Shark Tale, Shrek 2, etc.) continued to sell well. Activision’s ASP for all units sold was $29.68, up 5% from last year’s $28.30 reflecting the larger contribution of higher priced PSP games to the mix. We estimate that Activision’s quarter-to-date sales are $86 million in the U.S. ($69 million wholesale), and our worldwide publishing estimate for the quarter is only $90 million. This implies that the company may have as much as $25 million in revenue upside to guidance and consensus estimates when it reports the quarter in early May. While we do not expect a significant bottom line contribution, we are comfortable that the company will meet or exceed consensus estimates for the quarter.

b) EA

Releases during March: 3/8 Rugby 2005 (PS2, PC, Xbox), 3/23 Need For Speed Underground Rivals (PSP), 3/23 NFL Street 2 Unleashed (PSP), 3/23 Tiger Woods PGA Tour (PSP).

Electronic Arts’ market share decreased sequentially from 21.3% to 21.0%, while its retail sales increased from $84 million to $114 million (compared to $86 million last March). Sales were led by Fight Night 2 which sold 485,000 units in its first month of release. NBA Street 3 sold 175,000 units compared with our 150,000 units estimate (on top of the 401,000 units it sold last month), and MVP Baseball 2005 sold 572,000 units compared with our 150,000 units estimate (in addition to the 234,000 sold last month). EA’s PSP titles sold a combined 217,000 units versus our 150,000 units estimate. The company’s ASP for all units sold was $33.83, down 11% compared with last year’s $37.97, reflecting a significant shift in Electronic Arts’ mix of sales toward lower-priced catalog and the high contribution from price cuts on its sports games. We believe that the company is on track to meet recently lowered expectations for the March quarter.

c) Majesco (Phantom Dust sold 30k units!)

Releases during March: 3/8 Phantom Dust (Xbox).

Majesco’s market share decreased sequentially from 0.8% to 0.7%, while its retail sales increased from $3 million to $4 million (compared with $1 million last March). Sales were led by GBA Video products, which sold approximately 72,000 units combined at an average price of $18.39 (compared with February’s 79,000 units @ $17.38 and our expectations of 70,000 units). Its new release Phantom Dust sold 30,000 units compared with our estimate of 15,000 units. BloodRayne 2 and various GBA budget titles led catalog sales. Majesco’s ASP for all units sold was $16.66, up 14% from last year’s $14.56, but still much lower than the industry average due to its large mix of budget titles. We believe that the company is on solid footing to achieve its guidance for FY:05.

d) T2

Releases during March: 3/22 Ford Racing 3 (PS2).

Take-Two’s market share decreased sequentially from 5.3% to 4.2%, as its retail sales increased from $21 million to $23 million (compared with $18 million last March). Sales of GTA San Andreas were again quite strong, with 105,000 units compared with our estimate of 100,000 units sold in its sixth month of release (on top of the prior 5.5 million units sold). Of note, the game has maintained premium pricing throughout. Major League Baseball 2K5 sold 364,000 units compared with our estimate of 150,000 units in its second month of release (on top of the 41,000 units sold last month). Take-Two’s ASP for all units sold was $21.86, down 20% from last year’s $27.48, reflecting the higher contribution from its $20 ESPN games this year. As the company’s key release during the quarter, Midnight Club 3: DUB Edition, came out this week, it is too early to tell how the company is performing compared to guidance.

e) THQ

Releases during March: 3/10 MX vs. ATV Unleashed (PS2, Xbox), 3/28 Full Spectrum Warrior (PS2).

THQ’s market share increased sequentially from 6.9% to 7.2%, as its retail sales increased from $27 million to $39 million (compared with $28 million last March). Its new release MX vs. ATV Unleashed sold 187,000 units compared with our estimate for 200,000 units, and Full Spectrum Warrior sold 14,000 units compared with our estimate of 50,000 units. The Incredibles, The SpongeBob SquarePants Movie, and WWE titles led catalog sales. THQ’s ASP for all units sold was $24.99, down 12% from last year’s $28.38, reflecting a lower contribution from higher priced new releases. We are comfortable that the company will meet guidance for the quarter.

4) Market share rankings

Company Market Share
1 ELECTRONIC ARTS 21.0%
2 SONY (CORP) 11.9%
3 NINTENDO OF AMERICA 9.5%
4 THQ 7.2%
5 UBISOFT (CORP) 7.0%
6 ACTIVISION 4.5%
7 TAKE 2 INTERACTIVE (CORP) 4.2%
8 CAPCOM USA 4.2%
9 NAMCO 3.9%
10 KONAMI OF AMERICA 3.7%
11 LUCASARTS 3.5%
12 VIVENDI UNIVERSAL (CORP) 3.4%
Top 12 Market Share 84.0%

 

[Mr Gump]

Ouch gamecube software sales BOMB.

The lowest software on any of the systems charts is greater than the best selling gamecube game.

Hardware numbers are going to hurt.

 

[Amir0x]

Approximately $40 million of the upside to our estimate was due to our mistaken assumption that a large portion of PSP software sales would be reported as hardware sales during the month, due to the large number of PSPs sold with software bundled. However it appears as if this was not the case, and that the NPD correctly recorded these software sales during the month.

Interesting.

No PSP sales numbers yet T_T

 

[Solid]

2 SONY (CORP) 11.9%
3 NINTENDO OF AMERICA 9.5%

 

[DarienA]

Damn EA had a nice month... why the hell where the MVP estimates so far off?

 

[snapty00]

Momentu...Ah, forget it. Making fun of Nintendo is like making fun of Sega now.

 

[IJoel]

LucasArts is having hit after hit on Xbox. They've done a fantastic job of turning the studio around.

 

[Unison]

3 DK: JUNGLE W/BONGOS Nintendo $ 2,125,341 39,242

At least we can be glad that those weren't total sales for it. I bought the one w/o Bongos myself.

 

[Hero]

Just as I predicted in the stickied thread.

Matt-IGN doesn't even bother to look at the fucking entire title and jumps to conclusions.

39K for DKJB+Bongos. If DKJB stand alone sold 30K (below NBA Street Vol 3) then that's not nearly as bad, although still disappointing. Perhaps it'll have legs, plus I'm sure it'll get another slight boost of sales next month when Donkey Konga 2 comes out.

 

[Slo]

No Bongos in this thread!

 

[Izzy]

Total sales were $544 million, up 38% sequentially from February’s $393 million, and up 31% compared to March 2004’s $414 million. Year-to-date sales are $1.31 billion compared with 2004 year-to-date sales of $1.14 billion (a year-over-year increase of 15%).

Very impressive.

 

[BuzzJive]

39K for DKJB+Bongos. If DKJB stand alone sold 30K (below NBA Street Vol 3) then that's not nearly as bad, although still disappointing. Perhaps it'll have legs, plus I'm sure it'll get another slight boost of sales next month when Donkey Konga 2 comes out.

It's possible that the standalone version sold close to 50k, since these charts are ordered by revenue instead of units. Another 40k seems like a reasonable guess, making it a respectable 80k.

And hey - with nothing coming out in April, maybe some people will pick it up this month

 

[Mooreberg]

That's a lot of titles selling well. Hopefully publishers pay attention to this starting spreading releases out more instead of creating a cluster F*ck of releases every November.

Momentu...Ah, forget it.

NOA's E3 conference should be interesting. :lol

 

[acklame]

great month for sony, GT4's already at 1,150,778 in one month & 1 week. Looks like it'll have no problem hitting 2 million by end of year

 

[rastex]

I think one of the interesting things is that the Xbox game sales are comparable to the PS2 versions. This could of course be caused by GT4 taking a lot of sales that would've otherwise gone to other PS2 games, but if it's not, then from a 3rd party perspective Xbox certainly is on the same level as PS2 which will mean a lot going into next gen. I want to see what April's numbers are going to be where the effects of a huge 1st party title aren't as significant. GoW can't compare to the popularity of the GT series.

Oh damn, GT4 has been out for 2 months now, I forgot. Ok maybe its effects won't have subsided even in April. Damn that's crazy.

 

[acklame]

I think one of the interesting things is that the Xbox game sales are comparable to the PS2 versions. This could of course be caused by GT4 taking a lot of sales that would've otherwise gone to other PS2 games, but if it's not, then from a 3rd party perspective Xbox certainly is on the same level as PS2 which will mean a lot going into next gen. I want to see what April's numbers are going to be where the effects of a huge 1st party title aren't as significant. GoW can't compare to the popularity of the GT series.

It's on the same level or better on certain titles. But for the majority I wouldn't say it's on the same level. Looks MVP & Fight Night sales, for example. Conversely, you can point out SC:CT & Brothers in Arms, but SC has a bigger fanbase on xbox (with the original console SC debut/ exlusive on xbox) & fps appears to be xbox market's favorite genre. What publishers look at is how much revenue they get from each platform overall. Take EA's latest earning report, for example, and you can see that they get 46% revenue from PS2, 16.7% from PC, 16.3% from Xbox, 7.6% from Gamecube. That's not really that close then.

 

[rastex]

It's on the same level or better on certain titles. But for the majority I wouldn't say it's on the same level. Looks MVP & Fight Night sales, for example. Conversely, you can point out SC:CT & Brothers in Arms, but SC has a bigger fanbase on xbox (with the original console SC debut/ exlusive on xbox) & fps appears to be xbox market's favorite genre. What publishers look at is how much revenue they get from each platform overall. Take EA's latest earning report, for example, and you can see that they get 46% revenue from PS2, 16.7% from PC, 16.3% from Xbox, 7.6% from Gamecube. That's not really that close then.

Actually it's Fight Night's sales that triggered my initial comment as unit and revenue wise they're pretty close on the two platforms. Those percentages you're getting are for the top 5, it may swing in different favours if you look across the entire catalogue (I'd actually expect GC to increase). But you're 100% correct that PS2 is EA's biggest moneymaker by far, but for other big publishers like Ubisoft, Activision, etc there might not be such a big difference. It's tough to tell with these numbers though, sonycowboy would have to run the trends and such to be sure.

And all of this is ontop of the monster that is GT4.

 

[acklame]

Actually it's Fight Night's sales that triggered my initial comment as unit and revenue wise they're pretty close on the two platforms. Those percentages you're getting are for the top 5, it may swing in different favours if you look across the entire catalogue (I'd actually expect GC to increase). But you're 100% correct that PS2 is EA's biggest moneymaker by far, but for other big publishers like Ubisoft, Activision, etc there might not be such a big difference. It's tough to tell with these numbers though, sonycowboy would have to run the trends and such to be sure.

And all of this is ontop of the monster that is GT4.

Yea I agree for other publishers it might not be that big of a difference. Perhaps someone has the number for them. But the platform percentage I got for EA is not from the top 5 only, it is from their entire catalog for their latest fiscal quater.

 

[sonycowboy]

Actually it's Fight Night's sales that triggered my initial comment as unit and revenue wise they're pretty close on the two platforms. Those percentages you're getting are for the top 5, it may swing in different favours if you look across the entire catalogue (I'd actually expect GC to increase). But you're 100% correct that PS2 is EA's biggest moneymaker by far, but for other big publishers like Ubisoft, Activision, etc there might not be such a big difference. It's tough to tell with these numbers though, sonycowboy would have to run the trends and such to be sure.

And all of this is ontop of the monster that is GT4.

Activision is even more PS2 friendly saleswise. Ubi obviously is a VERY big supporter of Xbox , but for ~most multiplatform publisher's Sony accounts for 2.5-3 times the revenue than Microsoft domestically. It gets even bigger when you look at foreign markets (relative to the US).

Which makes sense as that's approximately the difference in the installed base.

 

[rastex]

Activision is even more PS2 friendly saleswise. Ubi obviously is a VERY big supporter of Xbox , but for ~most multiplatform publisher's Sony accounts for 2.5-3 times the revenue than Microsoft domestically. It gets even bigger when you look at foreign markets (relative to the US).

Which makes sense as that's approximately the difference in the installed base.

Have those percentages been changing in recent times? If you look at it on a monthly basis so I guess what I'm asking for is this:

For each publisher's catalog of games released in the past year the number of units that have been sold in a month and the platform distribution of said titles sold, have the percentages changed and is there a trend?

ok, I'm still not satisfied with the way I put the question, here it is algorithmically

for each publisher in Big 3rd Party American Publishers
   for each month in past 12 months   
         for each title released in past 12 months 
             ps2monthly += PS2units
             xboxmonthly += Xboxunits
             gcmonthy += GCunits
             totalMonthly += PS2 + Xbox + GC
         end for
         ps2percentage[month] = ps2monthly/totalMonthly
         ... repeat for other consoles...
    end for
end for

so how do the percentages track over the past year?

 

[acklame]

Have those percentages been changing in recent times? If you look at it on a monthly basis so I guess what I'm asking for is this:

For each publisher's catalog of games released in the past year the number of units that have been sold in a month and the platform distribution of said titles sold, have the percentages changed and is there a trend?

ok, I'm still not satisfied with the way I put the question, here it is algorithmically

for each publisher in Big 3rd Party American Publishers
   for each month in past 12 months   
         for each title released in past 12 months 
             ps2monthly += PS2units
             xboxmonthly += Xboxunits
             gcmonthy += GCunits
             totalMonthly += PS2 + Xbox + GC
         end for
         ps2percentage[month] = ps2monthly/totalMonthly
         ... repeat for other consoles...
    end for
end for

so how do the percentages track over the past year?

that's too much work for all publishers

I quickly did EA's since their fiscal earning report are right next to me:

For Q1, Q2, Q3 of FY2005, EA's platform revenue for ps2 were: 38%, 43%, 46% in that order. For xbox, they were: 15%, 20%, 17%.

Since EA's latest report goes up to Q3 FY2005, I've calculated data of EA's revenue mix from Q1, Q2, Q3 of FY2004 and compare that to FY2005:

Q1-Q3 FY2004                                             Q1-Q3 FY2005
---------------------------------------------------------------------------------------
ps2: 45%                                                 ps2: 44%
pc: 17%                                                  pc: 17%
xbox: 14%                                                xbox: 16%
co-publishing & distribution: 12%                        co-publishing & distribution: 8%    
gamecube: 6%                                             gamecube: 6%

 

[rastex]

Thanks!

Ya, there doesn't seem to be a strong trend either way. The YoY numbers have shifted but that's still just 2 data points.