Analysts: September PS3 sales 'dismal'

Reaction to NPD report finds industry watchers sullen about Sony's console; Halo 3 accused of cannibalizing sales.

The biggest news to come out of the industry-tracking NPD Group's September US retail sales figures yesterday was that Halo 3 sold 3.3 million copies and helped push Xbox 360 hardware sales in a big way. Today, a handful of industry analysts added a bit more shading to the story with their own interpretations of the numbers.

Jesse Divnich, analyst for the gaming-prediction market simExchange, accused Halo 3's blockbuster sales of cannibalizing the market.

"The most curious result was that all other games severely underperformed the prediction market's expectations, indicating that Halo 3 had a substantial negative effect on other major titles across the board," Divnich said. "Games that were especially impacted were the Xbox 360 games Stranglehold, BioShock, and Madden NFL 08."

Despite Halo 3's taste for its own kind, Nollenberger Capital Partners' Todd Greenwald and Wedbush Morgan Securities' Michael Pachter both saw longer-term gains as a result of the shooter's success. Greenwald called the Halo 3-spurred boost to Xbox 360 hardware sales a "best-case scenario" for publishers.

"While the success of the Wii has been great for the industry, ultimately Nintendo, and not publishers, is the prime beneficiary," Greenwald said. "It is more advantageous for third-party publishers that the Xbox 360 and PS3 grow their installed bases."

Pachter also expects the hardware boost to pay short-term dividends.

"Although sales of Halo 3 accounted for all (and then some) of the growth during the month, the game clearly drove hardware sales that will position the industry for even greater sales in November and December, when many Halo players will be ready for a new challenge," Pachter wrote.

Analysts were particularly downbeat about the performance of the PlayStation 3, with both Greenwald and Pacific Crest Securities describing the system's hardware sales of 119,000 as "dismal."

"We expect similar (dismal) results in October for PS3 hardware units as a result of Sony's low-end price reduction to $399, which does not go in effect until the last two days of the October NPD period," Wilson wrote.

Sony's 40GB PS3 is scheduled to go on sale in the US on November 2, whereas the $100 price cut on the 80GB model is already in effect.

1264 Comments

  • DMC2677

    Posted Oct 25, 2007 7:28 am PT

    @bluedevil64 Exactly...head sart equals more sales! DUH!!!!! As I stated elsewhere on this site, both systems will have great games, competition makes us the real winners and Nintendo found that niche. We'll see after 08 how far ahead the Wii and 360 are after Sony really pulls out the "big guns".....oh and a $250 price point never hurts either, FYI to all the N fans.

    2008...that's all I have to say :-)

  • bluedevil64

    Posted Oct 25, 2007 4:18 am PT

    My console choice makes me who I am!!!

    Seriously people, does it matter which system sells what? Because I bought a 360 and someone else bought a PS3 means nothing. BOTH consoles will have their share of great games. The market reflects the facts, the 360 had a big head start and has a larger library because of it. Thus, it's overall sales numbers are better. The PS3 had some things going against it at launch (steep price, lack of games), but it will surely recover. If anything, the Wii is greatly affecting the sales of both consoles. It's a big wildcard and is drawing people to the market that would probably never be gamers otherwise. More sales of all 3 consoles is nothing but a good thing. This ensures that the games industry is healthy and will continue to prosper. Fanboys of all 3 sides fail to see this. If there was only one console, the market would suffer greatly and we would surely see a decline in the number of quality titles. What is so hard to understand here? COMPETITION MAKES THE MARKET STRONGER!!!

  • Silicon_Noob

    Posted Oct 25, 2007 1:10 am PT

    Did anyone else think that this article had an odd title considering the ps3 isn't even mentioned until the end of the article? It seems to be more about the Halo success story.

  • Fists1

    Posted Oct 24, 2007 11:34 pm PT

    i know three people in my area who bought PS3s recently

  • weiz

    Posted Oct 24, 2007 9:03 pm PT

    Not really a surprise. I'm very interested in seeing what the next Metal Gear, Final Fantasy , and God of War will do for the PS3. Realistically I don't think any PS3 exclusive can come anywhere close to the hype machine of Halo 3. But if anything will move systems, those three titles will.

  • uklegendkiller

    Posted Oct 24, 2007 8:14 pm PT

    That say's it all...

  • Homerj

    Posted Oct 24, 2007 4:21 pm PT

    "VG Journal suggested that it was in fact an indication that only hard-core gamers were buying Xbox 360s."

    Exactly why MS is trying to package consoles to appeal to the more casual market that Nintendo currently dominates. I dont think their marketing team needed this pointed out, as they are already heading in this direction. This argument only goes to add evidence to the opinion that MS currently dominates the hardcore niche of gaming, Nintendo has the casual market controlled. The big question is, just what segment of the market is really left for Sony?

  • motherboop

    Posted Oct 24, 2007 2:57 pm PT

    "We expect similar (dismal) results in October for PS3 hardware units as a result of Sony's low-end price reduction to $399, which does not go in effect until the last two days of the October NPD period," Now wouldn't you think sales for PS3 would be up in october, considering all of us who ran out to get it before the removal of the emotion engine???

  • motherboop

    Posted Oct 24, 2007 2:54 pm PT

    I bought a ps3 in October, so add one for me next month...

  • darkride66

    Posted Oct 24, 2007 2:06 pm PT

    hiway2hell. Would you have called the 360 dead in their first year? The PS3 is selling exactly on par with what the 360 did at launch. 2007 isn't even done yet.

  • hiway2hell

    Posted Oct 24, 2007 1:35 pm PT

    can we please just consider the ps3 dead for 2007. please sony fans just give up, uncharted is no system killer and haze is not even that well known. 2008 might be a better year since mgs4 and killzone 2 are supposed to aid the sales of the ps3.

  • darkride66

    Posted Oct 24, 2007 12:47 pm PT

    Homerj. I'm assuming by this that you didn't read the article regarding attach rates. I'll give you some highlights.
    "Video Game Journal took data from various sources, including Microsoft's own sales figures, and showed that the 360's attach rate tended to jump whenever hot new games came out. Rather than reflecting a healthy software market as the figures would immediately suggest, VG Journal suggested that it was in fact an indication that only hard-core gamers were buying Xbox 360s."
    "VG Journal suggests that the Xbox 360's climbing attach rate should be a concern for game companies. Catering to the hard-core gaming market exclusively is not a recipe for commercial success."
    VG Journal puts much more importance on the installed user base over attach rates. The user base for the PS3 is growing at the exact same rate as the 360.

  • realitysux21

    Posted Oct 24, 2007 11:56 am PT

    so halo is the syem killer ppl were tlkin abt?

  • Homerj

    Posted Oct 24, 2007 11:37 am PT

    Simple illustration of the importance of attach rates:

    Gears of War: purchased by 40% of install base = 4.8 million copies sold
    Heavenly Sword: purchased by 4.4% of install base = 220K copies sold

  • true_apollo

    Posted Oct 24, 2007 10:54 am PT

    Xandrilios, I found some of what you said hard to understand but I think I might be able to clear a couple of things up for you. From the link at the beginning of the article you would find out that the 360 sold 528,000 units in September compared to 501,000 for the Wii. There's the proof for the boost in 360 sales; This is the only month since the Wii was released that the 360 has sold more consoles, and the Wii had its best month since last holiday season. That should tell you how relatively good the 360 sales were. "Analysts were wrong with their predictions when the 360 came out, it was supposed to have sold loads more by now, PS3 should've been dead already and the Wii should lag behind the 360." -The 360 sales predictions were more of a goal set by Microsoft, and if I remember correctly they projected 12 million sold by the end of the summer and they missed it by 400,000: not a huge deal. The last time someone said the Wii would lag behind the 360 was before it came out and stunned everyone with its stellar sales. "And how come the sales of October of all months matter?" -These sales matter because September/beginning of October has been the best month for console sales this year for both the Wii and the 360 while the PS3 is now way behind both (even behind the PS2 in monthly sales).

  • Xandrilios

    Posted Oct 24, 2007 10:10 am PT

    Funny, all this throwing with numbers. Fact is, the really important numbers get skipped, or made relative, so real comparisons can't be made. Like, really, 119000 sales in less then a month is dismal, so how did the 360 do then? I only see 3.3 million copy's of Halo 3, which apparently boost the sales of the 360, without any proof given. Analysts were wrong with their predictions when the 360 came out, it was supposed to have sold loads more by now, PS3 should've been dead already and the Wii should lag behind the 360. And how come the sales of October of all months matter? This is almost the same period as January, with the exception of Halo, the holiday season will tell us a lot! And Sony chose now, just before the season to drop prices? Very smart move, so was bringing out Halo 3 to boost 360 sales.

  • darkride66

    Posted Oct 24, 2007 10:04 am PT

    kennyjb00777. I think you mean to say EA doesn't live up to the hype. Just because someone doesn't use the PS3 to it's potential doesn't mean it can't be done. Look at how well Killswitch is shaping up. And what if you want great graphics and a Blu-Ray player to go with your hi-def? Do you go with the 360, then slap on a HD-DVD and hope you don't have one of the 30% of faulty 360's, or do you pick up a new, lower priced PS3?

  • kennyjb00777

    Posted Oct 24, 2007 8:56 am PT

    The bottom line is PS3 graphics don't live up to the hype. Madden 08 looks like a prototype on the PS3. XBOX360 has an arsenal of games waiting to drop, Devil May Cry 4. PS3 was advertised as a super machine with superior graphics, in the end you get a good machine with a blue ray players. For $600 I expect a far more than what PS3 DROPPED. If you want great graphics (assuming you have a 42 inch HD TV) go with the xbox360.

  • DarknessMageX

    Posted Oct 24, 2007 8:28 am PT

    "The Wii's doing fine but in the end the 360 and PS3 will come out on top just like last time.
    Wii is a fad."

    ---

    Yeah, that's why its sales last month were the highest yet for it, and in September the Wii actually surpassed the total sales of the Xbox 360 despite its one-year head start. Your logic is infallible. ^^

  • apardi1

    Posted Oct 24, 2007 8:11 am PT

    The reason Sony's so bad is that they need a better marketing stategy! What Sony needs to do is put the price of the 80Gig at $299.99. That way more people can afford to buy the system which will cause more developers to produce more games. Sony became too arrogant in their thinking that buy toting the PS3 as this super computer home theater enterainment system that does everything, everyone will buy it at a huge premium. Kutagari mis-handling of the PS3 strategy pissed off developers, thus losing key exclusives: Assasins Creed, GT4 to name a few. Another factor to PS3 sales being low!!!!

    They need to price the PS3 with the magic price number which the public has demanded for the last couple of months, $299.99. Now that Kaz Hirai has taken the rains, he needs to listen to the public and give us what we want... a better price point ($299.99) Even if Sony has to make the public purchase 2 games in order to get that price point, we won't mind. It only helps sell the system better and gives incentives to 3rd part developers that their games are being bought. Or do a exlusive bundle offer with MGS4 or a final fantasy deal with the PS3 having a different look and price the Machine at $359.99 (follow how you guys are treating the PSP bundles... actually I am waiting for a Crisis Core bundle and I will defintiely shell out another $200 just to get a PSP Crisis Core version) If there is a Final fantasy styled PS3 or Metal Gear Styled PS3... sales of the PS3 will sky-rocket!!!!!

    The magic # is $299.99 or if you do a bundle $359.99. I guarntee you (Sony) by do this, not only do you win back your customer base, but also your 3rd party developers and software partners as well and you might end up seeing a rise in your stock price.

  • RockaWuzHur

    Posted Oct 24, 2007 7:24 am PT

    The Wii's doing fine but in the end the 360 and PS3 will come out on top just like last time.
    Wii is a fad.

  • Temmehkan

    Posted Oct 24, 2007 5:45 am PT

    Yes september was bad but ps3 right now is outselling 360 2 to 1 in europe

    http://www.destructoid.com/ps3-outsells-xbox-360-in-europe-2-to-1-50613.phtml

  • bluedevil64

    Posted Oct 24, 2007 4:15 am PT

    What an amazing turn of events!! The system with the most/best games sells the most?? Insanity!!!

  • padejace

    Posted Oct 24, 2007 2:48 am PT

    Well I'm a ex-PS2 and I bought a XBOX 360 instead of the PS3 (too pricy, too late, not enough games). Back in the old-gen, I would have never tough about buying the orginial XBOX, but now this is different...

    To be totally objective, I think that Sony is missing his targets and it doesn't looks good (I'm not saying that PS3 is a bad machine, it is a great piece of hardware). But we have to consider the offer globally (Hardware AND Online service AND Online community size AND Available games library ... etc.

    Anyway, we will see the futur ...

  • Anthony71B posted Oct 24, 2007 1:43 am PT (does not meet display criteria. sign in to show)

    Anthony71B

    Posted Oct 24, 2007 1:43 am PT (hide)

    WHat a ridiculous headline with the clearly blatant attempt to "hurt" the PS3 by some fanboy Xbot masquerading around as an objective journalist. I wonder what Gamespot will say about PS3 sales for November, December, and beyond.

  • TripSe7en

    Posted Oct 23, 2007 8:32 pm PT

    I wish that i would have waited to buy my PS3. I was one of those who waited in line and got the PS3 and the Wii preordered at toys r us when it came out nearly a year ago. I had already owned a 360 which I played often. In the last year, I have only bought one game for the PS3 besides resistance which I bought at launch, and that game was Warhawk. Warhawk was a fun game, but not too cutting edge and all it did was wet my appetite for Halo 3 ( I haven't turned on my PS3 since!). In my opinion, and it is only that, I would wait and buy a PS3 in a year if it is still around. There are no exclusives, the graphics are better on the 360 in the comparable games, and an online community is utterly lacking (I also just bought a new laptop with Vista Ultimate which interacts with the 360's media center amazingly!) I hold no allegiance to any system as the PS3 has potential, but the $600 I spent a year ago could have bought me two PS3's at the price they will be selling them at in another year. Until then I play Wii with my girlfriend and Halo and Madden on the 360!

  • Rizer

    Posted Oct 23, 2007 7:31 pm PT

    Of course the PS3 sales are dismal. They're only focusing on the PS2 game wise, so logically why would anyone bother getting a PS3 unless their PS2 suddenly died on them? Sure, Halo 3 didn't help, but the PS3 was suffering due to a lack of good exsclusive titles way before that. Heck, why do you think the Wii leap frogged the PS3? It wasn't because of Halo.

  • darkride66 posted Oct 23, 2007 7:24 pm PT (does not meet display criteria. sign in to show)

    darkride66

    Posted Oct 23, 2007 7:24 pm PT (hide)

    hordaak. The PS3 is selling exactly the same as the 360 since launch and has 80+ games out, 60% of which are rated good or better from this site. I'm not saying wait. I'm saying great gaming on the PS3 is here right now. And as much as I love Halo 3 and Bioshock I've been without my 360 for just short of 5 months since launch because of 3 bad consoles. All my multiconsole games are on the PS3 from now on because I know I can trust it. So, while some may say wait and see I'm playing NHL 08, Warhawk, Ghost Recon 2, Rainbow Six Vegas, and GOW 2 (which can put 80% of what's out there on the 360 to shame.)
    Remember, the PS3 is selling exactly like the 360 since launch, and in a much tougher environment. Don't worry about them.

  • chupamelpo

    Posted Oct 23, 2007 6:33 pm PT

    DO NOT BLAME A GREAT GAME LIKE HALO 3, BLAME ALL THOSE OTHER CRAPPY GAMES OUTHERE. honestly I think the 360 has the best game library now. I have a Wii, and a PS3, and I just cant stop using my 360. The wii is for my little brother, and the Ps3 is just for heavely sword, and renissance and that's it.

  • gamefreakwill

    Posted Oct 23, 2007 6:16 pm PT

    Deleken: Do you have proof the 360 will not have enough "killer" games to help it into 2009? I don't see any. Oh and what about KOTOR 3, which is rumored as an MMORPG? THAT WOULD BE FREAKING HUGE!!! That would make people buy a 360, but hey Halo 3's covering that. Halo 3 will also cover the future sales as an always selling game. Don't forget, we got Halo Wars, Splinter Cell 5, Gears of War 2, Ninja Gaiden II, so many new and awsome sequels and franchises coming alive. Stop telling us to wait and see, the PS3's lineup for 2008 looks promising, don't get me wrong, but not enough for the PS3's to sell like mad.

  • Flame_Co

    Posted Oct 23, 2007 5:40 pm PT

    I don't even like Halo and argue that the PS3 is junk, of course a game as hyped as Halo 3 is going to kill it in sales......

  • Deleken

    Posted Oct 23, 2007 5:39 pm PT

    people don't seem to remember the past very well and tend to forget that the PS2 didn't get it's vice like grip on the industry until well after it's 4th year and momentum of the system didn't really start until almost year 3. With that being said 2008 will be the year the sony comes back around. Sony will regain it's lead by last 2009 as much like last gen, the xbox won't have enough 'killer' games to support it.

  • matrixman2k

    Posted Oct 23, 2007 4:56 pm PT

    There you have it - straight from the horses mouth!

  • DChy

    Posted Oct 23, 2007 3:46 pm PT

    Well of course of Halo 3 is cannibalizing other video games, Master Chief is a beast.

  • gornack0

    Posted Oct 23, 2007 3:23 pm PT

    Hd-dvd and blu-ray are nice, but what about red-ray and hdvdd-dvbbdbvd

  • Rect_Pola

    Posted Oct 23, 2007 2:01 pm PT

    Ratchet & Clank may be the first game to truly demand attention since Resistance. Which is good

    Both were made by the same company. Argueably less good At least Insomniac has the creative passion to figure out and follow through using the PS3 well from day 1. Like Ubisoft and Konami did with the Wii. I don't care who you want to win, that deserves props
    (yeah, yeah; Red Steel; rush job; they were a little overzealous and it bit them.)

  • commando611

    Posted Oct 23, 2007 1:59 pm PT

    all people do is blame halo for everything...growup!

  • darkride66

    Posted Oct 23, 2007 1:54 pm PT

    Homerj. I recommend you read the analysts opinion's on high attach rates and what they mean to the industry. There are some concerns what the high attach rates mean to the overall life of the 360. Microsoft likes to throw around those numbers but they aren't necessarily anything to be proud of. Of course the installed user base for the PS3 is half. The 360 came out a year earlier, they're selling the same since their respective launches, it's half. By your logic we should expect developers to completely abandon the 360 and the PS3 in favor of the Wii. And, as for being hard to develop for I've read developers scoff at that. I don't see Nintendo or MS winning awards from developers, but we're seeing that with Sony. I think the "hard to work on" theory is overblown. Where there's a market there will be people to cater to it. It's simple economics.

  • IVIic

    Posted Oct 23, 2007 12:46 pm PT

    Lol Halo eats all

  • Homerj

    Posted Oct 23, 2007 12:31 pm PT

    The overall analysis is simple. For the 360, you have a decent installed user base, development is well supported and results in a PC version almost ready-made, and software attach rate is very high (top selling games can net 30% or more of the total install base). Except for PC porting, pretty much the same thing goes for the Wii.
    For PS3, the install base is less than half, development is poorly supported, much longer cycle and more labor intensive (and architecture makes it impossible to quickly port to other platforms), and the software attach rates have been so far much less than 20% of the user base per title.
    Its a simple economic calculation for third part devs that want multiplat releases. It also makes the PS3 highly undesirable for exclusive and most especially timed exclusive titles.

  • darkride66

    Posted Oct 23, 2007 11:52 am PT

    Daggpp. This last week, ending the 20th the PS3 almost doubled the 360's sales worldwide. It's a bit behind so far this month but is showing strength since the price cut. It'll be interesting when the 40GB unit hits the market. It's a good time to be a gamer. I hear the new Ratchet and Clank is nothing short of awe inspiring. "Raises the bar" I understand.

  • Daggpp

    Posted Oct 23, 2007 11:27 am PT

    "darkride66 Expect this all over again next month when the headline reads "Sony catching up to Wii. In tie with 360.." That's how the Oct numbers seem to be shaping up and these forums will fill again with frothing mad fanboys. Can't wait"

    ROFL ok xD

  • darkride66 posted Oct 23, 2007 9:54 am PT (does not meet display criteria. sign in to show)

    darkride66

    Posted Oct 23, 2007 9:54 am PT (hide)

    Expect this all over again next month when the headline reads "Sony catching up to Wii. In tie with 360.." That's how the Oct numbers seem to be shaping up and these forums will fill again with frothing mad fanboys. Can't wait.

  • ---n00b_kid---

    Posted Oct 23, 2007 9:16 am PT

    wow 1214 comments and people are still coming back to give 'lectures'.

  • DMC2677

    Posted Oct 23, 2007 8:19 am PT

    Again Wii60 fans, it's only year one!!! The 360 didn't take off (really) until.. Gears of War which is good I'll admit, and that was after a year in. Yes Sony's taking a pounding from 2 places, their own arrogance and tons of people and media who pounce on anything negative and blow it up. I don't know about the rest of you but I don't have a problem with their current line up (Resistance, HS, Ninja Gaiden Sigma, Tekken DR, Warhawk, Drake's UF, etc...). The price cut is a start but they do need games, which will come in 08, trust and believe on that.

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