Nintendo's Takeaways
As has been the trend for well over a year now, Nintendo has done a stellar job in May with both Wii and DS. Hardware sales for both platforms continue to impress, and all indications are that nothing will change in the foreseeable future. On the Wii side, there are some indications that supply might finally be catching up with demand, but it will be a few more months before we can accurately make a judgment in that regard.
Perhaps more impressive is the dominating software performance of the Nintendo platforms. 7 of the Top 10 games appear on Nintendo platforms, and according to a Nintendo press release, titles from Nintendo systems account for 19 of the top 30 software spots. No matter how you slice it, that's a very successful month for Nintendo.
Perhaps most illuminating, though, is the fact that a number of those software titles are 3rd party offerings. For instance, Guitar Hero 3, Boom Blox, We Ski all made it into the top 30, indicating that Wii's software ecosystem is maturing to the point that 3rd parties can find success.
From this point on, things get somewhat questionable for Wii from a software standpoint. While there's no doubt that Wii will continue to sell through the summer on the legs of Mario Kart and Wii Fit, Nintendo has offered up very few hints as to what it's planning for the rest of the year. E3, which kicks off in July, should provide a clearer picture of how the rest of the year will unfold.
Microsoft's Takeaways
For Microsoft, it might be hard to see a silver lining in the clouds for May. Not only was 360 beaten soundly by Wii (again), but PS3 put in a decent month to the tune of a 20k advantage. Further, only 1 software title made it into the top 10, and even its success is wrapped in negativity - Grand Theft Auto IV has sold well on 360, but it has not provided the hardware boost that many had been expecting.
But things are not quite as bad as they seem at first glance - Microsoft saw a year over year sales increase of 21% (186.6 this month compared to 155k in May '07). Taken in and of itself, that's a decent sales increase, especially in light of the increased competition from Sony (in fact, that all consoles saw a huge increase this year compared to last shows how well the industry is doing in general). However, it's the very competition itself that makes 360's year over year increase less important. Fair or unfair, a console's performance is not viewed in a vacuum - raw numbers are important, but relative success compared to competitors is also important.
Maybe Microsoft is content to trade market share for probability, or maybe they are still convinced that they can have both. Regardless of their intentions, though, 360's failure to capitalize on their early market share advantage is almost completely due to Microsoft's unwillingness to consistently and aggressively drop the price of their console. It is simply too expensive to compete with Wii and not cheap enough to differentiate from PS3.
June might not be pretty for 360, but it will see success in July and August with the release of NCAA Football and Madden 09, and games like Too Human, Gears of War 2, Bionic Commando, and Banjo Kazooie should help to create some momentum going into the holidays. Ultimately, Microsoft is trying to make it through this slow part of the year at the status quo, but like an old tube of toothpaste, there just aren't a lot of sales left to squeeze out at this price point.
Sony's Takeaways
While in the same boat as 360 in relation to Wii, PS3 saw some unexpected success in May. While the 360 version of GTA IV saw a ratio improvement over its PS3 counterpart, PS3 hardware saw a healthy increase month over month, which is even more impressive when compared to the slight decrease in 360 hardware sales from April.
This is an interesting point in PS3's life cycle. On one hand, the memories of lofty expectations (buoyed by PS2's huge success) are still fresh. On the other hand, it's been roughly 18 months since launch, and somewhere along the line, reality has set in. PS3 will not be the next PS2, it's that simple.
So what is Sony to do? Well, they're actually doing a pretty good job (their initial failures aside) - considering the awful start that the console had, the top brass has been pretty successful in maintaining some positive consumer association with PS3. With a moral victory in May over Microsoft, Sony is riding high going into June. Metal Gear Solid 4, released today, will not set the world on fire sales-wise, but it should prove to be moderately popular with the hardcore gaming community, and hardware sales should spike in similarly solid (though not spectacular) fashion.
Overall Impressions
- Nintendo has done it again. Not only did they dominate in hardware sales, but it's becoming increasingly obvious that software sales on Wii and DS are a force to be reckoned with. Watch for that trend to continue in the upcoming summer months.
- Microsoft had better brace itself for a tough June. After a disappointing May, watch for Sony to ride the popularity of Metal Gear Solid 4 to a more apparent victory in June. The popularity of NCAA Football and Madden will help to even things out in July and August, but Microsoft really needs to consider a price drop in the upcoming months.
