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Furious February sales impress analysts

Prognosticators single out DS, point to gaming's recession resistance; "PS3 in dire need of a price cut," says Greenwald.

There are a dozen different ways to look at the monthly data dump that is the monthly NPD US retail sales report. For interpretations of February's numbers, GameSpot turned to a handful of industry analysts and asked what stood out for them.

DSi be damned, the DS Lite keeps on selling.

DSi be damned, the DS Lite keeps on selling.

While much of the focus for Nintendo was on the first-place finishes of the Wii and Wii Fit, Electronic Entertainment Design and Research analyst Jesse Divnich was more interested in sales of the company's handheld.

"Nintendo DS hardware was very impressive," Divnich told GameSpot. "Typically when we're approaching the launch of a new hardware system, we'd expect a decline in hardware sales approaching that date."

Divnich said the absence of a sales decline suggests that DS Lites are being snapped up by casual and mainstream consumers unaware of the DSi's release next month. That in itself is encouraging for the industry, as it points to the non-traditional markets continuing to push sales even two months after the holiday season.

The top 10 software sales also point to a strong casual market, as the list includes game releases from each of the last five years.

"A lot of the new gamers coming into the market don't know that Mario Kart DS was released in 2005," Divnich said. "To them it's new. Same thing with New Super Mario Bros., or even Wii Fit. The fact that they're still in the top 10 is stronger evidence that our industry is being driven more by these casual and mainstream gamers coming to the market."

Lazard Capital Markets' Colin Sebastian was similarly impressed by the months' NPD numbers.

"It was another solid month for video games in an otherwise downtrodden retail environment," Sebastian said. "Thanks to Nintendo and a few new other console titles, people are still buying games even as unemployment rises and disposable income contracts."

Not everyone was so laser-focused on Nintendo. Signal Hill Capital Group analyst Todd Greenwald applauded the hardware sales of Nintendo and Microsoft, but bluntly pointed to "continued sluggishness" from Sony.

"PS3 is in dire need of a price cut," Greenwald said.

In a note to investors, Wedbush Morgan Securities' Michael Pachter said he expects such a price cut, but not until the second half of the year. However, he doesn't expect Microsoft to let its current price advantage go without a fight, as Pachter said the Xbox 360 maker would retaliate against a particularly deep PS3 price cut with one of its own or with more attractive bundles. Such back and forth would certainly spur hardware sales, Pachter noted, adding that "investors should consider hardware demand a signal that the video game industry is resisting the effects of a recession."

35 Comments

  • Rect_Pola

    Posted Mar 23, 2009 7:05 am GMT

    I understand DS Lite still having pull. Besides the casual market's constant new gamer effect, DSi isn't as direct an upgrade as Lite was to the original.

    If both were the released at the same time I'd argue neither stood out as a true dominate because everything it offers seems to trade off something else. New screens and better sound trades battery life. Photo and music functions to fiddle with trades a pure device where every ounce of power (and said battery life) goes to doing one thing 100% of its owners want to do. SD memory allowing downloadable games some gamers can't/don't access trades the GBA library that new casuals probably don't have.

    It will eventually take over (probably with DSi-only content the way GameBoy Color did), but I expect DS Lite is going to go down through a slow transition, not an inglorious dropping like Gamecube or first DS.

    As for the rest, I don't know what to say that hasn't been said by so many others.

  • Inconnux

    Posted Mar 22, 2009 5:07 pm GMT

    fps_dominator... I would recommend a basic course in economics #1 price dictates the market in most products. Take a marketing 101 course please. Every expensive video game machine ever brought to the market has failed. Market research would have shown this, but Sony in its arrogance thought it knew better... and it shows in sales numbers and the lost BILLIONS on just the PS3


    #2 xbox is not more expensive because it gives you OPTIONS on what is bundled... don't need a blu-ray player or wireless? you don't have to buy it. Thus the 360 is FAR cheaper.
    Once again a basic course in Marketing would do wonders.


    #3 live + PSN will average out to the same costs, subscription or not. Developers may pay initially but they just pass the cost on to YOU the consumer... Higher cost per DLC is probably the most obvious. In the end consumers always pay it... the 360 just puts it up front and shows you how much you are paying, PSN hides the cost. This is Economics 101.

    #4 PSN dedicated servers mean more lag if the bandwidth or server gets overloaded. the 360 uses distributed computing which has FAR better performance. Think Mainframe computing vs Distributed computing. Technically this is probably far beyond you... #5 DS games are fun... Quality or fun does not mean graphics. One of the best Video game designers (I believe it was sid meier) designs his games using block graphics first... if the game isn't fun at this stage no matter how fancy the graphics are it won't be fun. These days a lot of developers build the fancy graphics first and expect it to be fun...

  • fps_d0minat0r

    Posted Mar 22, 2009 8:32 am GMT

    PS3 shouldnt have a price cut just for the cheapos of the world.

    if you cant afford it then you dont deserve it.....

    anyways xbox elite works out more expensive and xbox premium almost comes to same price as PS3 if you add wifi adaptor and XBL fees for a year.

    however xbox works out more costly in the long run because of XBL......on PSN, the devs pay the fees which is fair since they also make the profits.

    only difference is that PSN gets dedicated servers, XBL doesnt......id rather have this then cross game chatting....which sony are highly likely to bring out in the future since its very easy to program into its firmware.

    as for DS.....i remember playing games of that quality a decade ago.....

  • living_wmd_888

    Posted Mar 21, 2009 6:47 pm GMT

    The DS has turned out to be one of the coolest concepts in gaming ever. I remember five years ago when the analysts were saying the PSP would win and Nintendo was dead in the water. How things have changed.

    I will say, however, I'm not likely to replace my DS Lite with a DSi anytime soon. I'd rather have the GBA slot that yet ANOTHER digital camera anyway. There's so many cameras in everything these days that our society has turned into a surveillance state as well as a bunch of voyeurs/exhibitionists.

    The PSP, to be sure, is a good system, but Sony wasted a lot of time and effort marketing it as a portable multimedia device and let the games suffer big-time. They've done better in the past two years, which is why the PSP has done better, but they're not really doing enough.

  • fiskefyren

    Posted Mar 21, 2009 4:48 am GMT

    I pretty much have single console and handhold, beside the DS and the wii... i had the wii at somepoint but i disliked it so much i sold it, and no games for the DS have yet to interest me unlike patapon and megaman for the PSP which is pretty much why i even keep it around :p
    my only regreat of selling my wii was i would like to try house of the dead overkill but its probably a pretty bad game anyway xD

    lordrave:
    unless you want a homoerotic game, then don't.

  • nate1222

    Posted Mar 20, 2009 10:12 pm GMT

    While the DSi looks cool, I have yet to ditch my DS lite in favor of it. Namely because I still play mad GBA games on my beloved DS. Hell, one of the reasons I still play ye ol' PS2 is bc - I still like some PS1 titles. As far as PS3? Sony shouldn't have dumped so much into blu-ray. By doing so, they wound up ditching bc (a huge factor in PS2s success) and making manufacturing and development costs so damn high that a price drop might wipe them out. They screwed around and trapped themselves in a losing battle. I love Sony. The PS1 and PS2 made me a fan. But PS3 puts me off. I'll probably never own a PS3 despite keeping my PS2 around a few more years.

  • hatieshorrer

    Posted Mar 20, 2009 9:49 pm GMT

    Divnich is right (sarcasm) the continued sales of DS Lite have nothing to do with the fact that the DSi is $60 dollars more and has features that arent necessary. Also if I just bought a DS and have one friend with the latest online DS racing game and two or more friend with MarioKart DS its no surprise I would probably buy MarioKart.

    I dont doubt that the game industry is driven by casual gamers but he greatly exaggerates the stupidity of us casual gamers.

  • joke_man

    Posted Mar 20, 2009 9:05 pm GMT

    da illeas101:

    Yes I do. Especially when handheld sales for its competitor is double that. The PSP is in major need of 3rd party support as well. This is starting to be its biggest problem headed into Sony's new fiscal year. Also, look at the average number of games a PSP owner has compared to the NDS, I'm pretty sure the numbers show that most PSP owners don't have (on average) more than a few games, while NDS on the other hand is far more. This is partly due to 3rd party support and stellar 1st party games as well. 50 million might sound like a lot, but it's relative when compared to the fact that Nintendo has sold double that within a similar amount of time and seeing as there are on average more games sold with each console (over time) and there are far more better games on the system.

  • joke_man

    Posted Mar 20, 2009 8:58 pm GMT

    Jackhole:

    Thanks for the clarification and I totally get what you're saying.

  • da_illest101

    Posted Mar 20, 2009 8:40 pm GMT

    @ joke_man
    you think that selling 50 million units is failing? I don't

  • lordrave

    Posted Mar 20, 2009 5:24 pm GMT

    Er,
    I've been dying to play MGS4..
    Price Cut! Price Cut!

  • Merl57

    Posted Mar 20, 2009 5:18 pm GMT

    im waiting on the cut to buy a ps3

  • JackHoleFace00

    Posted Mar 20, 2009 5:10 pm GMT

    @joke_man

    That's all fine, but you totally missed my point--I didn't say the PS3 is better only because of better capabilities. I said it's a better value because it has built in wireless (which people DO want), Blu-Ray, etc.

    And much more importantly, it's about the games. The library on the PS3 is much, much better than the Wii--games like KZ 2, LBP, MGS 4, etc. Wii has a few great games, but they all came out more than a year ago (SSBB was the last true big hit).

    What I was mainly saying is that the PS3 is the best value all things considered and has arguably the best games (one could argue 360 too though--def not the Wii). But yes, agreed, at some point people draw the line, and at $399, that's just too much, no matter how great it is. Hence my comparison to the 3DO, which was a great system but died quickly due to the high price (PS3 is not in quite as dire of a situation, but still).

  • flameducky

    Posted Mar 20, 2009 4:58 pm GMT

    I suggest bundling Killzone 2 with the 80 GB after price cut. More people for me to pwn on Killzone 2!

  • joke_man

    Posted Mar 20, 2009 4:15 pm GMT

    Jackhole:

    People don't purchase gaming consoles for the extras... If that were true, PSP would be ruling the handheld market, but it's not and it's failing misserably. In my opinion, this is because people aren't looking for all-in-one media devices. They already have phones, ipods, etc. that can do most of the things a PSP can do. Same thing for a PS3, most consumers aren't ready to upgrade to Blu-Ray (because the movies are so expensive) or they already have a Blu-Ray player and find it pointless to drop the extra dough on something that has extra features they don't need. Nobody cares that the Wii doesn't play DVDs because the Wiis target audience already have DVD players and don't care about extra functionality. I've noticed that the consoles (or any electronic device for that matter) that has the most goods and extras, is usually the one that fails because of the price point. Look at the Dreamcast. It was far ahead of any other console and failed miserably...
    In my opinion a price cut would help Sony, but it may be too late to get a good foothold in what's left of the hardware market for this generation of gaming console. I think this is very dissapointing (seeing as the PS3 is a great console) and hopefully Sony can learn from it...
    Lastly, I would like to say that I am a 360 owner and can still admit to seeing a good console when I see one..

  • zacattack214

    Posted Mar 20, 2009 4:08 pm GMT

    "PS3 is in dire need of a price cut," Greenwald said. I agree, but I'm at the point where I don't think it will happen. Either way, I'm buying one this year.

  • Inconnux

    Posted Mar 20, 2009 3:53 pm GMT

    Nintendo sells because they make a FUN product. Everyone in my family has a DSlite and we all compete against each other. Unfortunately Sony has fallen for the fallacy that all a game needs to have is bleeding edge graphics to be fun...

  • ClayMeow

    Posted Mar 20, 2009 3:13 pm GMT

    JackHoleFace, I completely agree.

    I'm a PC gamer, so I haven't found the need to buy a current-gen console, but if I was to buy one, it would undoubtedly be the PS3. Why? Well Blu-Ray movies for one. Secondly, the PS3 has more exclusive games than the 360. Most games for the 360 eventually come to the PC (if not concurrently) and offer superior quality. But if I want to play God of War III or MGS4, I need a PS3. Yes, the Wii has a lot of exclusive games, but they get old. They're fun with friends when you first get 'em, but you just get tired of them after awhile. And if you don't have friends that live near you, then it pretty much sucks hard.

    I know a lot of people have held off purchasing a PS3 because of the price. The price drops have helped, but there needs to be more. God of War III is going to help push console sales, without a doubt (I already know a couple of people who will be buying a PS3 near its release), but that game alone may not be enough.

  • JackHoleFace00

    Posted Mar 20, 2009 2:52 pm GMT

    Said it before and will say it again: The PS3, even if it is arguably the best system, it unquestionably needs a price cut to survive the long run. Why? Three words: The 3DO effect.

    I think it's the best system in terms of games (only 360--not Wii--could argue otherwise), which should be the most important thing. And yes, it is ALREADY the best value, considering it has at least an 80 gig HD built in, built in wireless, an awesome rechargable controller, and it plays back Blu-Ray--add those costs to Wii or 360 and it costs WAY more than $399 (more like $600+).

    But the problem is a lot of consumers are dumb. They don't see value. They see that a 360 is $199 for an "Arcade" Edition and a Wii, which can't even play a DVD, is $249. They don't think about the added costs for accessories or wireless or Blu-Ray etc. at the INITIAL point of sale. It's reality and something Sony needs to realize if they wanna survive long term.

  • raahsnavj

    Posted Mar 20, 2009 2:33 pm GMT

    "Divnich said the absence of a sales decline suggests that DS Lites are being snapped up by casual and mainstream consumers unaware of the DSi's release next month."

    Wait a minute right there! Sorry, but I snatched one up full well the DSi was coming... you want to know why? The DSi is yanking out my freaking GBA port! So I finally quit putting off getting one simply because I was affraid the current superiour DS model was going to disappear quick...

  • Sendmn23

    Posted Mar 20, 2009 2:26 pm GMT

    @Grigjd3. Its got to make you wonder huh? I mean whats going on with Sony, right? The Playstation 3 is an awesome machine, and leap years ahead of its time. I just wanted to point out to you that Final Fantasy 13 stopped being exclusive for a while now. Its going to ship on the X-box 360 on the same day. (Final fantasy versus 13 hasn't made any announcements to whether they will stay exclusive.) We could sit here and try to disect everything we think Sony is doing wrong. Its so easy to be a critic. I think its better that we focus on the postive of what Sony is doing. The playstation network is free. Thier sales are growing. They seem intent on getting good quality games out as fast as they can. I'm not worried one bit. I think within the next couple of years we'll see a turn around. The x-box 360 will start showing its age, and the Playstation 3 will start to finaly come into its own. I'm a huge X-box 360 fan (even with its huge failure rate), but I'd have to admit I want the Playstation 3 to succeed. It would be shame if it didn't. I own two playstation 3's, and two x-box 360's, (and yes one did get the fatal r.r.o.d.) The gaming industry shows no signs of real slow down.... the sky is the limit.

  • SonicDBZRacer

    Posted Mar 20, 2009 2:23 pm GMT

    Just wait two more days, Pokemon Platinum sales will be huge. April will have big sales because of the DSi. All looks good for Nintendo. >.>

  • MADDjoe

    Posted Mar 20, 2009 2:20 pm GMT

    I think $ony will just have to wait till next gen console war to gain back their customers, with allot of games which should include awesome ips. I'll give it to Nintendo though for keeping their cool while everyone said that their system was just a gimmick and would die in a year. Way to go and grats on being the number one system in the world. As for the 360 goes way to go at being a great middle man, and staying int he game (even if I had to buy 3 systems due to the red ring)

  • noxian

    Posted Mar 20, 2009 2:13 pm GMT

    @ grigjd3 = um, no, the slowest to develop their online was Nintendo by a FAR margin. to the point where Nintendo has pretty much admitted so themselves. this is fairly understandable considering the fact they rather intentionally focused on co-op play in the living room. but let's not spread false claims.

  • djwood84

    Posted Mar 20, 2009 2:10 pm GMT

    BTMSlayer:

    Sony posted its first loss in 15 years last year.
    I'm not a fanboy of any system, i have played Ps3 and I love it. I have a 360 and.. I don't play it too much. Might by a Wii... BUT, the Ps3 DOES need a price cut. Plain and simple. Consoles in warehouses don't make money.

  • Fed__X

    Posted Mar 20, 2009 1:28 pm GMT

    Free Xbox 360s!!!

  • BTMSlayer

    Posted Mar 20, 2009 1:25 pm GMT

    I disagree with the statement by the analyst. Sony is a business that has been in gaming quite some time, I think they know what they are doing. Things have been slow on their front but I enjoy the hardware and 1st party exclusive. The 360 has good marketing but it keeps it technical flaws, and has deep pockets to secure 3rd party exclusives. Not to mention they were out a year before. I own both and play them equally, but what no one knows is that I pratically paid an equal amount when I purchase these syetems. People are going to complain about something, especially when that something has been on top for too long. First gamers complain the PS3 had no games, sony delivers on exclusives and better tech support from the past. Now ppl complain about the price. In the end the public can never be plz "u stay in long enoguh, u eventually become the villian".

  • thekey

    Posted Mar 20, 2009 1:18 pm GMT

    "continued sluggishness" from Sony. How is 100,000 consoles less than the 360 last month sluggish sales?

  • BradHummr

    Posted Mar 20, 2009 1:02 pm GMT

    With Sony not even breaking even, I won't expect a price drop for quite some time. I'm not saying a price drop wouldn't be nice, but jeez...I don't see how they can do it.

    I also wouldn't consider casual or mainstream gamers to be leading the gaming industry. I go back and purposely buy old games. Why? Because they're cheap AND fun. So a game was released in 2005, does this mean that a gamer such as myself has no interest in it? Heck no.

  • Sendmn23

    Posted Mar 20, 2009 12:59 pm GMT

    "PS3 is in dire need of a price cut," Greenwald said. -lol! Oh really? Geeze I think most gamers have been saying that(no slash the last word) SCREAMING that for a while now. Since I already own two Playstation 3's its not really going to affect me one single bit. I have to give it to Sony though the Ps 3 is a quality product with a 0.01 console failure rate.... Just give me my God of War 3, and promise me a new Kingdom Hearts and I'm golden!!

  • TruthOpinionSpk

    Posted Mar 20, 2009 12:56 pm GMT

    The price of components continues to drop, but Sony still is not breaking even on their console. Games are where the money lies ... but ... you know, we'll see. I like my PSX/Ps2/Ps3/Blu-ray player/computer. The price was quite reasonable. Not only that, but I bought it the day after black Friday in 2007 from Wal-Mart. 15 free blu-ray movies. Grab 10 off the shelf, send in for 5. I got one of the better deals.

  • grigjd3

    Posted Mar 20, 2009 12:53 pm GMT

    I think Sony actively gave up it's position of console dominance in this generation. The initial buy in price has always been too high and lately, Sony has only followed trends rather than lead them. They're the furthest behind in terms of casual gaming. Their online service has been the slowest to develop. It's even taken them the longest to get their good exclusives out. I'm still waiting for God of War 3 and FFXIII and versus. It's as if Sony, the company, looked at everything they did so well with the ps1 and the ps2 and decided to throw that out the door with the ps3. This opened the door for the shoddy 360 to make serious gains despite all the technical failures and the Wii to take off even though Nintendo's previous console was a flop. If they don't find a way to cut their prices soon, they'll be wondering whether they should keep making the ps3. It's frustrating for hardcore gamers too because the other console option with current gen graphics has so many technical problems.

  • membernametaken

    Posted Mar 20, 2009 12:51 pm GMT

    Better yet... a price drop with a Killzone 2 + Dual Shock 3 bundle.

    Hotcakes, I tell ya... hotcakes.

  • TheArcade

    Posted Mar 20, 2009 12:35 pm GMT

    @fauljosh: AGREED!

  • fauljosh

    Posted Mar 20, 2009 12:25 pm GMT

    I agree a Sony price drop is NEEDED.

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