Daniel Eran Dilger
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Video Game Consoles 2007: Wii, PS3 and the Death of Microsoft’s Xbox 360

NPD monthly sales Wii PS2 PS3 Xbox 360
Daniel Eran Dilger
Throughout 2007, the media consistently reported leading sales of Microsoft’s Xbox 360, dismal figures for Sony’s struggling PlayStation 3, and celebrated the long shot Nintendo Wii as a possible contender in game consoles. This portrayal of the video game market in 2007 was grossly misleading, and I have the figures to demonstrate why.

En Español: Consolas en el 2007; Wii PS3 y la muerte de 360

Traducción: Marcos Limeres Aguín

Ships and Sales.
I’ve been tracking game console sales throughout the year. There are two major metrics for sales: worldwide production numbers stated by the manufacturers themselves (typically released several months after the quarter ends) and US retail figures tabulated by NPD, which are announced shortly after the end of each month. These two sets of numbers look at different information, and were frequently muddled together to create an inaccurate picture of what was happening in the market. However, both sets of numbers are very useful.

NPD’s monthly retail numbers only count US retail sales, but unlike PC or laptop sales, game consoles are all sold at retail. That makes it easier to track what’s happening in console sales compared to PC sales, and NPD’s quick turnaround gives a pretty immediate view of sales trends.

Manufacturers’ production numbers reflect worldwide sales and can reflect the number produced rather than in use. These can be more flattering for Nintendo and Sony, which have major markets outside the US; Microsoft’s Xbox 360 sales are not very significant outside the US, while its competitors only sell about a third of their consoles in the American market.

However, Microsoft’s console also had a full year head start with the 360 compared to the PS3 and Wii, so its manufacturer production numbers are far more impressive when stated as cumulative shipments to date. In the 2006 holiday season, Microsoft shipped a blowout surge of units to stores just as Sony and Nintendo were struggling to launch their new consoles and suffering through the inventory and production problems common to any new rollout. This was no accident.

Stuffing the Channel.
Microsoft, Sony, and Nintendo are all manufacturers that rely almost exclusively on independent retailers to sell their products. That means all three will willingly push as many units into channel inventory as possible, because once sold to stores the consoles are no longer their problem. In contrast, Apple sells a significant number of its Macs and iPods and the majority of its iPhones in its own retail stores or through its direct online store, making it pointless for the company to perform channel stuffing.

Nintendo simply couldn’t stuff the channel because it couldn’t make Wii units fast enough to even meet demand. Sony worked hard to stuff the channel, but also suffered some production problems. At the same time, the high initial price of the new PlayStation 3 helped accumulate channel inventory as many buyers were wary of throwing down $600 for an unproven new game console that was clearly going to fall in price.

Microsoft took the cake and ate it too in terms of channel stuffing. As I presented in the middle of last year, the company met two key goals in its first year, not by selling units to users, but merely by pushing huge inventories into stores. Microsoft announced it would sell five million units by mid 2006 and ten million units by the end of 2006. Both targets were designed to suggest that the company would overwhelm the market with 360s leaving little remaining interest in the new offerings introduced by Nintendo and Sony for the 2006 holiday season.

Sure enough, Microsoft hit its targets. However, after hitting each, subsequent channel shipments trailed off dramatically. That indicated that stores were stuffed with units they could not sell. After supposedly selling eleven million units by the end of 2006 (which required shipping 4.4 million units to stores in just three months), Microsoft then only shipped another 1.2 million over the next six months. It had initially planned to ship out 5 million new units in the first half of 2007, but there just wasn’t room. The channel was stuffed.

Ten Myths of the Apple TV: Xbox and Hardware

Ten Myths of the Apple TV: Xbox and Hardware

The Death of Xbox 360.
Throughout all of 2007, Microsoft could only push out 7.3 million units, a huge drop of 33.6% in unit shipments year over year from 2006’s 11 million units. The Xbox 360 peaked in 2006 and is now in decline, and the channel is still stuffed. This untold story is particularly interesting when compared to the sturm und drang sung about the supposedly “shrinking iPod market” that Apple faces.

Pundits ripped their garments apart and scraped themselves with pottery shards in lamentation over the fact that Apple increased iPod shipments by a mere 5% year over year in the winter quarter. Not only did they ignore the fact that Apple boosted iPod revenues by 17% that quarter, but they also failed to look at sales over the entire year in perspective. Despite the bewailing of the iPod as a product that has plateaued and can’t find new buyers, Apple actually increased iPod sales year over year by 13.5%, from 46.4 million in calendar year 2006 to 51.6 million in calendar year 2007.

Why was this modest increase of 5.2 million new iPods jumped upon by the media while the major drop in Xbox 360 sales by 3.7 million units year over year was conspicuously ignored? Apple has consistently been able to sell replacement iPods to existing users and market improved and expanded models that offer more mobility or new features; how many users will buy another Xbox 360 just to get an HDMI port or a different color or a different bundled game?

The other two differences between the Xbox 360 and the iPod are that Apple sold the iPods at a sustainable profit and that it is finding healthy growth internationally. The Xbox has lost Microsoft billions of dollars and has not been able to penetrate markets outside the US. The iPod is also acting as a launching board for the iPhone and, Apple hopes, the new Apple TV. The Xbox has not only done nothing to help establish related products like Microsoft’s Zune, as many analyst suggested it would, but has also squandered its brief lead in offering video rentals through the company’s online Xbox Live service.

 Wp-Content Uploads 2008 01 7-248-2041-1374-Store.Apple.Com-Catalog-Regional-Amr-Appletv-Img-Product-Hero

Apple TV Promises to Take 2008
Analysts, Investors Take Apple to Task For its Best Quarter Ever

The Sealed Fate of Microsoft Media Downloads.
After its peak year of Xbox 360 sales in 2006, Microsoft was still failing to sell any significant number of digital downloads through the Xbox, while Apple was selling 99% of online TV programs and 40% of movie downloads through iTunes. At this years’ Macworld, Steve Jobs announced Apple had sold 7 million movies, 125 million TV shows, and 4 billion songs, and noted that Apple’s share of the movie market had increased to over 50%.

Microsoft doesn’t release its media sales figures, but according to NPD, it doesn’t even figure as a full percentage point in the TV downloads market, and in terms of movie sales it fights over the tiny 7% slice of “other” vendors outside the top four led by iTunes. Apple had left Microsoft’s online media business in the dirt even before matching its Xbox Live features, including HD content and movie rentals. As Apple’s far larger iTunes media platform expands and the growth of Xbox 360 sales shrinks dramatically, will anything stop or reverse this trend?

In addition to just being smaller, Microsoft’s dying efforts in media attached to its gaming platform are also less attractive due to its requirement that would-be buyers trade their money for a points currency that must be used to buy or rent media from its Xbox Live service. Apple allows its customers to make micro-payments whenever they want, so buying one 99 cent track actually costs 99 cents, and doesn’t require a minimum points purchase or leave an odd balance of points remaining to be used or forfeited. In Microsoft’s points system, you have to buy at least 400 points for $5 online, and then use 79 points to buy the same 99 cent track, leaving you 321 odd points to spend or forget about.

 Wp-Content Uploads 2007 12 200712101801-1

Apple TV Digital Disruption at Work: iTunes Takes 91% of Video Download Market

The Real Story in 2007 Console Sales.
If the dramatic year over year decline in sales of Microsoft’s Xbox 360 and its futureless prospects as a media center device come as a surprise, wait till you see the plain numbers from NPD’s monthly sales reports. They simply unravel the entire sweater story Microsoft has worked so hard to knit. According to media reports throughout the year, the Xbox 360 seemed to consistently lead despite brisk sales of the hard to find Wii and much to the embarrassment of Sony, which couldn’t even seem to sell any of the consoles it managed to build.

But things were not as they seemed. Microsoft’s lead was only ever based on its channel stuffing from 2006. Throughout 2007, the Wii outsold the Xbox 360 every month outside of September despite being nearly impossible to find, and even when only considering US retail figures. Including sales outside the US, the Wii outsold the 360 by more than 200% (15.4 Wii units vs 7.3 million 360s), again despite severely constrained supplies of the Wii and abundant stockpiles of the 360.

Of course, the Wii and the 360 aren’t entirely direct competitors; many gamers who own the 360 bought a Wii in addition to their existing console, and use it to play different kinds of games or in group settings. The 360 directly positioned itself against the new Sony PlayStation 3, and fewer gamers are likely to buy and play both consoles. Still, the main competitor to Sony’s PS3 wasn’t the 360 but actually the PS2, which Sony continued to sell throughout 2007.

NPD monthly sales Wii PS2 PS3 Xbox 360

Sony vs Sony.
Microsoft couldn’t continue to sell its original Xbox because once the 360 was released, nobody would want it and its availability would severely detract from Microsoft’s new console were it priced competitively. In 2006, Sony sold its PS2 against the new Xbox 360 and easily outsold Microsoft’s new console, all the while making profits on the PS2 while Microsoft lost money on the 360. In 2007, Sony continued selling the PS2, and priced it to compete against the Wii.

The result was that the cheap PS2 nearly matched sales of the 360 in the US (4 million PS2s vs 4.6 million 360s) and blew past it internationally (12.7 million PS2s vs. 7.3 million 360s). The PS2 even approached sales of the Wii, and in doing so helped mitigate the deep losses Sony suffered on the new and far more expensive to build PS3. Nobody ever talked about PS2 sales despite its being the second most popular console of 2007 by a wide margin.

What also went entirely unsaid in media reports was that the struggling PS3 actually sold in decent numbers next to the 360 despite competing against its own cheaper PS2 cousin while the Xbox 360 had no cannibalizing competition of its own at all. While selling only a little more than half as many PS3s in the US as the Xbox 360 sold in 2007 (2.6 million PS3s vs 4.6 million 360s), Sony sold 6.5 million PS3s worldwide, a stone’s throw from the 360’s total of 7.3 million. Suddenly the PS3 doesn’t look like the dog Microsoft worked so hard to make it out to be.

2007 Wii Playstation and Xbox 360 market share

Sony’s Big Risks.
And now a different picture emerges: Sony was competing aggressively against itself and still won. Adding all PlayStation sales together (which will no doubt cause Xbox fans to spin into an apoplectic fit), Sony sold 6.5 million consoles in the US and 19.2 million worldwide. Again, Microsoft’s console sales were just 4.6 million and 7.3 million respectively.

Anyone talking about PC market share would collectively consider Windows XP and Vista both as Windows, and not exclude XP’s numbers just because it came out in 2001. Similarly considering Sony’s total consoles sales collectively drops the Xbox 360 into third place in the US (above right), and a very distant third place worldwide (above left).

Sony’s overall profitability certainly didn’t match Nintendo, which sold all of its 15.4 million Wii consoles at a decent profit. However, Sony achieved two things: it maintained its dominance of the console market while also establishing its next generation HD console and its Blu-Ray HD disc format. It certainly paid dearly to do this, but so did Microsoft. The difference was that Sony had the ability to continue selling a profitable Wii-class product in volume while also introducing a risky new venture in the PS3 that bet on big future payoffs in both gaming and media.

Microsoft not only ended up blocked from expanding outside the US, but also had its HD-DVD format and its related VC-1 and HDi initiatives skewered by Sony’s PS3 strategy of bundling Blu-Ray with the new console. Just as Sony risked drawing attention away from the PS3 by continuing to sell the PS2 on the cheap, it also took a big risk in including an expensive blue laser optical drive with its console.

Origins of the Blu-ray vs HD-DVD War

Microsoft’s Cheap Strategy.
In contrast, Microsoft hoped to strip the 360 of features and hit a cheap price point against the PS3; it only offered an HD-DVD drive as an option, left WiFi an $99 accessory, scratched the hard disk from its base model, and even left HDMI output off of a device being sold as an HD system for media and games.

All those stripped accessories ended up costing buyers more in the long run. Microsoft claimed this year that US consumers spent more on the Xbox 360 platform in 2007 than on any other gaming platform, not because they bought more Xbox consoles, but because they had to spend more on higher margin options that were missing out of the box.

Microsoft has consistently worked to set up false price competition to suggest that its products are cheaper when in reality they typically cost far more than rivals when configured as they would actually be used. Throughout 2007, Xbox fans couldn’t stop talking about how much cheaper the 360 was compared to the new PS3, but after matching its basic features, the 360 was actually more expensive. Sony’s big risk in delivering a fully equipped console with an expensive Blu-Ray drive, hard disk, wireless, and HDMI ended up providing its 6.5 million customers with a system they’ll be happier with and with fewer reasons to immediately pay for missing upgrades.

Microsoft’s corner cutting to create an illusion of savings means the majority of Xbox users–who bought the first 11 million consoles in 2006–have no HDMI outputs. Many also went without a hard drive, which is required to use Xbox Live media downloads. Microsoft’s cheap strategy therefore gave its users fewer reasons to try HD media rentals in Xbox Live, sacrificing its future plans in media and the value of the console in order to create the temporary appearance of domination back in 2006. That leaves the company’s gaming and media ventures wide open to competition from the increasingly affordable PS3, the increasingly available Wii, and media downloads through Apple TV and iTunes.

In addition, the rushed to market 360 has suffered more than its fair share of problems, with retailers complaining about a 30% return rate and Microsoft being forced to set aside a billion dollars to service warranty work for machines that overheat, scratch optical media, and make lots of noise.

Xbox 360: cheaper is more expensive

There Is One More Thing.
If all those numbers sound really bad, consider why they’re actually worse than they seem. Recall that I’m comparing two sets of numbers in parallel: manufacturer’s total worldwide shipments and NPD’s US retail numbers. These numbers overlap. When Microsoft stuffs the channel, it counts millions of units as shipped. When stores actually sell those units, NPD counts them again as having sold at retail. If Microsoft is indeed stuffing the channel unmercifully, NPD’s retail sales should demonstrate that. They do.

While I stated that Xbox 360 sales were 4.6 million for the US and 7.3 million internationally, I really meant that NPD counted up sales of 4.6 million units in the US and Microsoft managed to stuff another 7.3 million into stores. Microsoft did not neatly sell the difference of 2.7 million Xbox 360s overseas; whatever number the company actually sold internationally is still hidden by the piles of boxes in the channel at the beginning of 2007.

That explains why NPD reported that Microsoft sold 721,000 units in the first quarter of 2007, despite Microsoft only reporting having replaced them with 600,000 new units worldwide. It wasn’t selling a negative number of units outside the US! Instead, Microsoft had run up a huge channel inventory balance worldwide by the end of 2006, and continued to slowly sell those boxes while it was forced to scale back new shipments from 4.4 million to 0.6 million quarter over quarter at the beginning of the year.

In comparison, Nintendo sold over a million units in the first quarter in the US but distributed over 2.6 worldwide, and Sony sold a half million PS3s in the US while shipping out 1.9 million worldwide. From the first quarter on, it was obvious that Microsoft hadn’t actually sold as many units as it was saying it had. For the rest of the year, the Microsoft not only fell into third place in the number of console units sold, but also saw its year over year sales shrink significantly as its rivals expanded their markets rapidly.

NPD and Worldwide Video Console Sales

Where Are the Missing iPhones Xbox 360s?
Pundits have been desperately searching for the 1.3 million iPhones that were sold but not immediately activated, but haven’t demonstrated any interest in finding out why Microsoft has shipped out a total of 17.7 million Xbox 360 units with free Xbox Live subscriptions, only to have only 10 million activated subscribers to announce. Where are the non-activated 7.7 million Xbox 360 units with as yet unclaimed free Xbox Live subscriptions, good for the free game Microsoft threw in as a bonus?

That’s a big number! It’s more units than Microsoft actually produced in 2007. A year’s supply of Xbox 360s have gone missing and nobody in the media has batted an eyelash. That’s on top of a dramatic 33.6% decline in unit shipments for 2007.

To recap:
iPod sales are up 13.5% year over year to 51.6 million units in 2007, and pundits are worried the platform has saturated the market despite strong international growth and new growth of higher margin products branching out into a new WiFi mobile platform.

Xbox 360 sales are down 33.6% year over year to 7.3 million units in 2007, and pundits are congratulating the company despite anemic international sales and having never turned a net profit on an end of the road platform with little prospects for expanding in any new direction.

Strong iPhone sales would further polish Apple’s iPod numbers were they mingled together, but standing alone they represent a major presence in the US smartphone market and dynamic potential for growth internationally, where demand is high enough to prompt hundreds of thousands of users to pay a premium to obtain it unlocked. Pundits worry that unit sales aren’t sustainable and that demand might collapse under the weight of huge unsold inventories, were they to exist, despite few competent competitors in the market.

Weak Xbox 360 sales are not only down precipitously year over year, but the channel is stuffed with enormous inventory. Competitors are both outselling it and out maneuvering it, leaving the Xbox 360 tied to the dead HD-DVD format and an unappealing media store that only an insignificant few are actually using.

Anyone fawning about the Xbox 360, Microsoft’s overall strategy, and the platform’s future prospects can simply have no credibility whatsoever.

Why Low Def is the New HD
Blu-ray vs HD-DVD in Next Generation Game Consoles

What do you think? I really like to hear from readers. Comment in the Forum or email me with your ideas.

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1 nat { 02.02.08 at 2:09 am }

For clarity, I meant to say “DRM was introduced before Apple introduced FairPlay, which was considerably less restrictive compared to the early alternatives.”

Also, on DRM. While people prefer non-DRM, they chose to buy Apple’s DRMed media due to its transparency and fairly relaxed parameters. There is no monopoly when people choose the best product, rather than a product made the de-facto through anti-competitive measures and spreading FUD.

2 cheeabdo { 02.02.08 at 10:24 am }

what a peace of crap! get your facts right! this is the second year for xbox 360 but the first for the oter consols. I would like to put this to any person wih sanity: would you buy the crap apple tv for 240$ or the xbox for a bit more? the xbox would do every thing crap tv will do, provide a family entertainment and extend your computer the same way your crap tv does! it is an apple tv and a ps3 in one! finally:are you being paid by apple for all this propaganda? if not you should ask for.. what a waste ….

3 mmbossman { 02.03.08 at 1:35 pm }

cheeabdo- Thanks for providing a rational argument supported by facts, I’m sure you opinion is valued everywhere you speak.

4 gus2000 { 02.03.08 at 6:18 pm }

Give the poor kid a break. He is obviously too challenged to use more than one finger at a time, since he loses the ability to type when he holds down the “shift” key. How do you expect him to form rational judgements, given his limited intellect?

Apple Fairplay has never interfered with any legitimate use I’ve had for my music. The only time it’s gotten in the way was when I bought a used iPod that still was loaded with music that I didn’t pay for and had no rights to.

5 jfatz { 02.03.08 at 7:42 pm }

…but the 360 IS an Apple TV and a PS3 in one! Except for the ability to wirelessly communicate, browse the internet, pull down YouTube videos, play iTunes content, play Blu-Ray movies, NOT charge you for online access, NOT feed you constant advertisements…

6 windyroad { 02.03.08 at 9:04 pm }


His point is that in 2007, with the much stronger game lineup, the 360 sold 12% more than the PS3 alone worldwide. That is only “clearly winning” if you ignore any and all other factors, and are a big fan of declaring major victories of single-digit margins.

It ignores that the PS2 sold almost as many consoles in the US, far more worldwide, and is ignoring the PSP altogether. It ignores that the Wii outsold the 360 by a wide margin in the US, that it outsold the 360 and PS3 together in the world by another wide margin, and is similarly ignoring the handheld contribution to gaming.

Yes, I’m ignoring the PS2 and the Wii and a whole heap of other factors as they fall into a different market segment. The first thing I did when I read the article was look at the graph and think “hang on a sec, 360 outsold PS3. How can he claim the 360 is dead?” After reading his article, I’m still unconvinced.

Any particular reason you’re a fan of ignoring all other contributions to a company’s bottom line, all potential sales-scavenging that may be going on but will taper off, all contributions to a company’s gaming platform rather than the direct sales of one machine, or the envornment of sales from this past year and what we may project from it into the future…?

So you are accusing me of being a 360 and/or MS fan? Too funny. Never owned any sort of XBox, likely never will. I’ve almost go enough WAF to get a Wii and prior to the Wii, I was trying to get a PS2. In the PC department, yes I run Windows on my work computer, but would swap it for a Mac in a heartbeat, if work would let me. At home I have a iBook G4 a AirPort express with Air Tunes,
a Apple HiFi, two iPods and I’m pining after an Apple TV, Time Capsule and a new Mac Book Pros (when the updates come out). So while I’m a big Apple fan (and a big fan of Roughly Drafted), I can still spot the difference between logical and illogical arguments.

Finally, my first point was that Apple shouldn’t have featured in this article. Agree or disagree? If the latter why?

7 jfatz { 02.04.08 at 1:26 pm }

I don’t “accuse” you of much, other than looking at a small sales margin worldwide and applying “clearly winning” to it while ignoring the broad landscape of consoledom and video games in general is not being very analytical. (If you were only claiming such in North America that would be one thing, but then we start getting into regional arguments as well… Heh.)

Part of his point is that while the PS3 is almost universally derided for high cost and poor sales, the 360 is almost universally lauded… for what amounted to a 12% advantage. (As he mentions in his reply “I’ve only looked at market positioning/strategy, actual sales, and how the media has covered it…”) Yet 2007 was probably the strongest year for software the 360 is likely to have, while the PS3’s has just been building and none of the heavy hitters came into play. The 360 has absolutely no competition from the original Xbox and had no continuing software releases, while the PS2 still sold substantially in 2007, had many new and looked-forward-to releases, which certainly has SOME kind of deleterious effect–though one can of course question how much. (It also will have SOME kind of positive effect in the future.) Microsoft has also felt it necessary to pad their own sales totals with channel stuffing, confuse the matter, and laud their own confusing totals, while Sony and Nintendo have been much more straightforward. (Of course everyone seems to go by “shipped” anymore.) One is, of course, still allowed to make fun of asinine and overconfident comments by execs and marketers, no matter who’s delivering them. ;-)

Meanwhile, in analyzing the future, the 360 is showing a much less strong game lineup, and not much of interest, while the PS3 (as you say, their more direct competition) is continuing to close the gap price-wise and package-wise, has the strong game lineup in 2008 that the 360 had in 2007 (though the FF’s might get delayed into 2009, and obviously with GT5 Prologue coming out in April, the full GT isn’t likely to make it by the end of the year–but GT5 Prologue is pretty strong all by itself), may well close the gap network wise as well as sprint ahead in other ways, has yet to release their own music/TV/movie/IP-shennanigans (some rolling out in Europe), has both a mobile platform and a massively-selling predecessor to “synergize” with (I tend to hate that word, but sometimes it works)…

(Year Two for any console is usually a GROWTH period, too. Certainly one can expect a bit of pinching from competitors when they enter the market, but a healthier console with readily-built momentum tends to keep that momentum and get continued sales out of it.)

Nintendo, meanwhile, is playing their own game quite effectively. I don’t see them as disconnected as you do, but then I tend to think what sales they pull they’ll likely pull pretty evenly from the 360 and PS3, or have no real way to determine anyway, so is a difficult point to bring to bear in number analysis.

He, of course, doesn’t mean the 360 is going to stop selling, or they’ll stop making games or selling games… But if their sales stop growing and it progressively loses ground to Sony and Nintendo, then you could certainly point to a time when they started “dying.” Of course there is such a thing as dramatizing your headline to attract more views… ;-) And running it in stark contrast to the rest of what tends to run out there (normally with almost no analysis) is kind of a poignant remark, too. (I don’t think he’s above a bit of “I CALLED IT!” settings-up just in case, either. ;-) )

As for his “mentioning Apple” at all… Well, this site DOES have a tendency to talk about one particular topic in general, no? ;-) Plus, most of the Apple comments were in regards to their media treatment in relation to the 360, channel stuffing, etc., which are certainly valid points to bring up. He’s quite often (if not “always”) performing analysis hand-in-hand with industry critique… why would you expect any differently this time?

Tossing the Apple TV into the chart was a semi-gratuitous mention, but that was one bar in a chart; no precisely a big deal.

8 cheeabdo { 02.04.08 at 8:11 pm }

but the 360 IS an Apple TV and a PS3 in one! Except for the ability to wirelessly communicate, browse the internet, pull down YouTube videos, play iTunes content, play Blu-Ray movies, NOT charge you for online access, NOT feed you constant advertisements…
what about online gaming? HD downloads? Messenger?
cannot play iTunes cause its not Apple get over it. you can pull down videos from your computer through wifi. if browsing the internet is what you want to do then get a Mac mini and if you have to play games at the same time then get a Media Centre.

9 jfatz { 02.04.08 at 8:22 pm }

I wasn’t tossing out every factor as an end-all-be-all reason, but calling the 360 both put together is a bit silly.

I’d opt for a Mac mini over using any of the other devices listed as a media center/sync device as well, but suffice it to say that they all involve trade-offs.

Plus, I’m more satisfied using my monitor for gaming, so I don’t share my media files, but rather “click the HDMI switch.” ;-)

10 Accident { 02.06.08 at 5:25 am }

Actually, according to NPD numbers, the 360 had an increase of 28% in 2007 compared to 2006. Remember that the console was launched in november 2005.

2005: 930,000
2006: 3,600,000
2007: 4,620,000 (+28%)
Total: 9,150,000

Where are the missing PS3?

Sony: We’ve now got about two million PSN registrations. That’s about 40 per cent of users

11 jfatz { 02.06.08 at 6:27 pm }

NPD = not everything

A more concise breakdown, if you want it: http://www.gamespot.com/news/6184291.html

Admittedly, Daniel seems to be conflating the “2006 total” a bit higher, as it wasn’t a promise to SELL 10 million units in 2006, but to GET TO 10 million units. The launch-period sales (here listed at 1.5 million) are a part of 2005’s numbers.

Going by Microsoft’s own announcements, however, it’s still an 18% drop. (And Eru only knows just where their shipping numbers were at any point on the timeframe.)

12 Robb { 02.14.08 at 3:49 pm }

I’m sorry, I just can’t resist!

Microsoft seeing Xbox shortage in U.S.

But there all in channel… right?

13 bialia { 02.14.08 at 11:01 pm }

“Where are the non-activated 7.7 million Xbox 360 units with as yet unclaimed free Xbox Live subscriptions, good for the free game Microsoft threw in as a bonus?”

i’m not a microsoft supporter in any way, shape or form. they don’t need any more of my money, personal information, or leisure time.

however, what percentage of 360 owners have home internet access? and of them, what percentage of these users have a high-speed connection that makes xbox live viable? further still, how many are sentient adults (not kiddies who got their console for xmas, etc) that are capable of and/or permitted to sign up for xbox live? what percentage of users even own a router? what percentage don’t -care- if they go online with the thing?

the console is not a brick without internet access. xbox live= a desirable peripheral, at the utterly of the day. by comparison, the iphone is rendered pointless when it’s not activated.

big, -big- difference.

info-taining article to be sure, however.

14 KenC { 02.15.08 at 10:02 pm }

I’m sorry, I just can’t resist, but MS only shipped 200k units in January.

Do you really think they only made 200k units due to some mysterious shortage which they did not identify, or do you think Dan’s right, and the channel is stuffed just like last year after the holiday.

MS said, “”We are really running short of product here in the United States,” Jeff Bell, head of global marketing for Microsoft’s games business, said in an interview. “You could say we misjudged demand.”

The comments came a day before market research firm NPD is expected to release video game sales data for January and Bell said Microsoft was hoping to “manage expectations.”

“We’re literally out of stock in many stores. We think this will have an impact on our sales,” Bell said. “It may cause the overall industry number to be down a little bit.

“Retailers have been really upset, they are on allocation. It is a lag I think we’re seeing in January and that may continue into February, then as spring ramps up, we’ll be able to meet that demand.””

Even the article states that MS was SPINNING, but writing, “Bell said MS was hoping to “manage expectations”!” What a hoot.

Think about, it, he states they “misjudged demand”, and yet they only sold 200k units? So, that’s what they expected demand was going to be? It makes no logical sense at all. Either they thought 200k was enough, which means they thought demand was pitiful, or they’re lying. Which is it?

15 muffinman { 02.18.08 at 9:23 am }

As anti-Microsoft, and pro-Apple as I am (own iPhone, two iPods, iBook G4, 20″ iMac, 15″ Macbook Pro) – this article is pathetic and truly shows Dan’s colors.

Dan, I suggest you go out into the real world and make some friends and see what console they are playing each other on. Anyone who blindly agrees with his article is a 45 year-old techno-nerd couch-surfing while pretending they are in-touch with the real world and what the real target demographics for these systems are interested in.

Do yourself a favor, go on a field trip to the nearest college campus and count the number of 360’s in play and call it a “failure”.

[I have never run an article claiming that the Xbox doesn’t have lots of fanboys. I’ve only ever pointed out that sales were grossly overestimated, over inventoried, under demanded, and completely devoid of any profit. Microsoft has lost billions on the Xbox failure, and has nothing to show for it apart from console sales in 2006 that didn’t eclipse the PS2, followed by an immediate and dramatic decline in sales last year as the Wii and PS3 started selling. The fact that you enjoy playing a poorly developed, unprofitable, loss leader does not make it a success in the context I’ve only ever written about. Xbox is a business failure. Your enjoyment of it does not change that reality.

In other news, college kids are also stealing lots of music. That doesn’t make torrents a “successful enterprise” either.

Also, you can be a Microsoft troll without pointing out how many Apple products you’ve acquired. In fact, that’s entirely irrelevant. Buying a Mac doesn’t give you a special license to have any particular opinion. – Dan]

16 Lessons from the Death of HD-DVD — RoughlyDrafted Magazine { 02.21.08 at 9:13 pm }

[…] Video Game Consoles 2007: Wii, PS3 and the Death of Microsoft’s Xbox 360 The War on Microsoft. While the PS3 pushed the Blu-Ray format over the goal line, the entire industry outside of Microsoft, Intel, and Toshiba was lined up behind Blu-Ray. There simply wasn’t any realistic chance that HD-DVD would prevail. This wasn’t a simple physical format war like the old VHS and Betamax rivalry; also at stake were the future of video codecs and embedded interactivity development. This was a battle for software and open markets that went far beyond HD disc movie playback. […]

17 Foe-hammer { 02.22.08 at 12:17 pm }

What a piece of biased journalism work. Dan, you definitely had an agenda when writing this propaganda. Very unprofessional. Good job.

[The bias comes from actual sales reports. This is not a wikipedia article attempting to say nice things about Microsoft products. It’s a factual portrayal of reality. The bright like must really hurt your eyes. Next time, at least make some effort to describe what you think is so dangerous about the truth when you attack it. – Dan]

18 The iPod Crisis Myth — RoughlyDrafted Magazine { 02.22.08 at 3:20 pm }

[…] Video Game Consoles 2007: Wii, PS3 and the Death of Microsoft’s Xbox 360 iSuppli’s Wild Roller Coaster of Slashing. After announcing that Apple would fuel a significant 27% growth in sales of Flash RAM components this year by increasing its own orders by 32.2%, iSuppli is now reporting that it now thinks Flash RAM sales will only grow in the single digits, in part because of fears Apple would “slash” its orders by some unreported amount. Apple did not comment on the report. […]

19 Toni Sacconaghi Alert: Excessive iPhone Demand Reason to Panic — RoughlyDrafted Magazine { 02.27.08 at 4:11 am }

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20 Donde estan las consolas perdidas? - Alkon Foro { 03.07.08 at 7:47 am }

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21 iPhone 2.0 SDK: How Signing Certificates Work — RoughlyDrafted Magazine { 03.19.08 at 5:54 pm }

[…] Video Game Consoles 2007: Wii, PS3 and the Death of Microsoft’s Xbox 360 How Much Does it Cost Developers? In addition to the retail prices that consumers face, there are big differences in costs to developers. The complex and unique nature of developing for the latest games consoles results in significant expenses for developers. Last fall, Sony slashed its fees for the PlayStation 3 SDK in half… to $10,250. Sony has to charge a lot because its SDK involves custom hardware and the package is only shared among the limited number of developers working on console titles. […]

22 iPhone 2.0 SDK: Video Games to Rival Nintendo DS, Sony PSP — RoughlyDrafted Magazine { 03.20.08 at 12:32 am }

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23 Does the iPhone Shortage Herald an Impending 3G Release? Probably Not — RoughlyDrafted Magazine { 04.05.08 at 4:24 am }

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24 Windows Vista, 7, and Singularity: The New Copland, Gershwin, Taligent — RoughlyDrafted Magazine { 04.23.08 at 12:04 am }

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25 ARM, x86 Chip Makers Fight to Ride Mobile Growth — RoughlyDrafted Magazine { 04.30.08 at 2:54 am }

[…] Video Game Consoles 2007: Wii, PS3 and the Death of Microsoft’s Xbox 360 Why Microsoft’s Zune is Still Failing Microsoft’s Unwinnable War on Linux and Open Source Microsoft Behind Linux and OS X in the Battle for Mobiles. And so the tables have turned. Microsoft’s fortuitous rise on the back of one of the least suitable processor architectures isn’t going to be duplicated, at least not by Microsoft. Mobile devices are exploding on top of the ARM architecture, and Apple’s software is on two iconic brands, the iPod and the iPhone, which are both accounting for a significant chunk of mobile devices and currently leading the market in WiFi web savvy. […]

26 Zune Sales Still In the Toilet — RoughlyDrafted Magazine { 05.09.08 at 3:29 am }

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27 Diesel-Busa { 05.12.08 at 6:11 am }

I think the most important factor in the success of the Wii, being that it’s quite possibly one of the most idealistic mediums for physical therapy and personal training of the 21st century. Hospitals, health clubs, schools, retirement homes, and anywhere else you can think of. All of these places have one thing in common. Every last one, has purchased in excess of 3 systems each. Being a personal trainer my self, I might be a good source for that statistic. Each of these systems has it’s own piece of ground breaking ingenuity, taking gaming to motion sensory is just a stepping stone, but one that took the world by storm, Blu-ray, walked all over HD, and being that it’s backward compatible with normal DVD’s is phenominal in and of itself, then the Hard drive for memory, saved on cost, and space. Another upside to the hard drive, no need to worry about where your annoying little brother put it this time. This battle for the best gaming system undoubtedly has to be limited to the gaming systems, the 360 and the PS3. Wii, is the next generation in physical rehab, building of hand eye coordination, mobility, reflexes, whatever. As the gaming generation we have to see what direction Nintendo is taking in this next generation of video games. The Nintendo games are targeting personal well being, and quality of life. That’s my tangent.

28 antimat82 { 07.18.08 at 7:12 pm }

“I presented what actually happened in 2007, using actual real sales numbers from NPD and Microsoft. This isn’t a bunch of exaggerated rumors and fear, it’s a factual presentation of the death of the Xbox in 2007 even while the media was writing about it like it was in first place. It remained in third place.”

Hey “blogger”, I’m sad to say, that all this “data” is highly a misinterpretation. You say you use NPD and Microsoft’s shipment numbers. Ok, great. Guess what? What about the rest of the world?

It is common knowledge that what NPD presents is sales figures for the North American Region. All of your “actual sales figures” are NPD numbers, which are just North America! How can you base an article of this caliber on just those two figures??


THIS graph is incredibly…incredibly, wrong. First of all, it does not show the shortage in Q4 ’05…which actually was there…with some reports saying it lasted till the end of Q1 06. Secondly, you honestly, from the looks of it, only used NPD data for sales. Thirdly, it honestly looks like you used December 06 only reporting for Q4 2006.

This whole article is spin, because it honestly does not take into account world sales at all. 6 million consoles were reported by vgchartz.com by september 06. And if you haven’t been to that site, I suggest you visit it, because their figures are NOT from actual Microsoft shipments, but from research companies around the world that report from retailers and the likes. Your graph does NOT even represent that data at all! 10.96 million by March 07. If the channel was “stuffed” for all of 2007, as you so eloquently put it, by this data alone, it was stuffed until only March, by 1-2 million units. Does it look like that’s the case at with this graph at all?

No matter how you present this article, it is not a “factual representation” of what you are trying to prove as a “doom” to the console. I really suggest people do some research before taking any of this to the brain.

29 antimat82 { 07.19.08 at 4:07 pm }

Also about your Xbox Live comparison to Apple Itunes service: It is not comparable. You can’t compare a popular PC service with an exclusive console service, because the userbase of PC’s FAR OUTWEIGH the userbase of consoles. And how do you even get off comparing a console not really catering to the mainstream (and doesn’t exactly require internet to use) with an extremely popular mainstream device that is based entirely on an internet service to enjoy?

Second, about your stats:


It is not a strange thing to see people that don’t have user accounts for online networks on their respective console. I mean, PSN is totally FREE, but the userbase? About 65%. In fact, 60-70% network connectivity is probably what will be average for these consoles for the rest of this generation. And to add to this, users can easily create multiple accounts on PSN and XBL (usually to pick up demos/content from other regions that aren’t available in their home region), which really adds to the total number artificially.

So the true amount of online users is probably in the 55-65% range.

It’s just the availability of internet connections, bottom line. With something like Itunes, it’s a GUARANTEED internet connection, so your numbers are drastically skewed towards products/services that have guaranteed internet connections to use.

Consoles don’t always have guaranteed, because you can enjoy them without online.

30 Will Nokia Rescue Microsoft’s Zune? Haha No. — RoughlyDrafted Magazine { 08.09.08 at 2:48 pm }

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