Analysts react to November numbers
Industry watchers weigh in on "record-low tie ratios" for Wii and PS3 and other results from the month of the new systems' debut.
The industry-tracking NPD Group released its retail numbers for November yesterday, and US sales were up nearly 15 percent over November 2005. It was good news for the industry after October's sales figures--predicted by analysts to show a percentage increase in the double digits--were unexpectedly flat.
In an investor's note discussing the NPD's numbers today, Pacific Crest Securities analyst Evan Wilson said the off month was due to consumers holding on to their wallets in anticipation of a big November. "It appears there was a meaningful pause in spending in front of the launch of the PlayStation 3, Wii, and lots of AAA software in November," Wilson said.
However, few of those AAA software sales were for games on the new systems, as Wilson noted that PS3 and Wii games weren't flying off the shelves as much as expected. The tie-ratio--the average number of games sold per system--was 1.1 for the PS3, and 2.1 for the Wii. Wilson blamed the low numbers on people buying the systems on their own to turn around and sell them for a profit.
Wedbush Morgan Securities analyst Michael Pachter also pointed out the tie-ratios, calling them "record lows" for new consoles. Despite that, Pachter expects the Wii and PS3 to play a significant role in year-over-year sales growth of 7-10 percent for the month, so long as Nintendo and Sony can get enough systems to retail and "the eBay effect" is suppressed.
For people who did pick up games with their new systems, Wilson said the best-sellers on the Wii were The Legend of Zelda: Twilight Princess, Red Steel, and Super Monkey Ball: Banana Blitz, in that order. Far and away the best-seller on either new system, Twilight Princess sold enough copies to spin in 86 percent of Wii systems sold in November.
On the PS3, the biggest mover was Resistance: Fall of Man, followed by Madden NFL 07 and Call of Duty 3, respectively. NPD figures show that Resistance sold a little more than one copy for every three PS3 systems on the market.