The PC Gaming Alliance has come out swinging saying that PC gaming is doing far better than anyone expected. In some ways, they are right, but it's all in the interpretation.
Industry total for the PC is $10.7 billion, which by itself looks astounding, but let's break it down.
$4.8 billion is online gaming/MMO revenue, which leaves $5.9 billion.
$800 million is advertising sales, which leave $5.1 billion.
$2 billion is digital distribution, which leaves $3.1 billion for retail sales worldwide.
For that same period at retail in the United States alone, the Xbox 360 sold $4.8 billion in software only, the Wii sold $3.5 billion worth, and the PS3 sold $2.2 billion.
So there is some positive news...the global PC game market is healthier than the U.S. PS3 game market...at least at retail.
Just remember that this is worldwide sales, not U.S. only sales. Back in 2006, PC retail in the U.S. was only $970 million...only a 1% increase over the year prior. For 2007, it dropped to $910 million.
Remember, it always pays to check the numbers when people make claims.
7 comments:
Rom, I think your estimates for the XBOX 360, Wii, and PS3 software sales are incorrect. According to this link below the console software sales for 2007 were 6.64 bln. And that most likely included PS2 sales as well.
http://www.gamespot.com/wii/sports/mariosonicattheolympicgames/news.html?page=1&sid=6184847&cpage=3
In the report, the console sales were 6.64 bln, while handhelds were 2.00 bln.
The biggest hangup I always have with these sales figures is that they always lump the consoles sales together relative to the PC platform sales. My feeling is that the PC is a "platform" much like the 360, Wii, and PS3 are individual platforms.
Last year, the consoles sold 156 million software units in the US at retail. That includes 4 consoles (PS3,PS2, Wii, 360). If you were to divide the units sold at retail evenly across the platform (which I realize isn't a true representation of the market) that averages out to about 40 mln units sold per console. Granted, the distribution is probably skewed more heavily on the 360 and PS2 than on the other two platforms in the situation, but I was doing it to keep the math simple.
When you compare those units sold to the PC, the 36.4 mln sold on the PC isn't really that bad. Granted, the total sales numbers look bad but that's most likely due to the type of games for the PC that sell at retail. How many of them are the $10 budget games on the racks at Wal-Mart? How many of them are $20 or $30 expansions for the SIMS? When the average cost of a console game hovers around $50, it's understandable why the total sales are higher.
One X factor in this that I haven't considered and perhaps you know the answer to this. Do used game sales factor into the NPD sales numbers? I'm assuming that they don't, but obviously that side of the business muddies the waters quite a bit more.
I guess I'm done. I guess what I'm trying to reiterate is that PC gaming as a whole isn't "dying." One can argue, however, that "hardcore" PC gaming may "die" at the hands of the casual game market. One could argue that given Nintendo's successes, you might very well see the hardcore business on the console suffer as well.
Roosterhead,
Thanks for writing. If you'll look at the links from my posting (the DigitalTrends article in paragraph 5 and the second Gamasutra link in paragraph 7), you'll see that they're pulling additional data from the same report that was not quoted in your link, even though your link was a larger summary of the full report.
If you compare apples to apples from the NPD report, the PC's $910 million in software sales compared to even $2.2 billion for the PS3 is rather pathetic.
Also, NPD does not track used sales, only new. With Gamestop reporting that 50% of their income is a direct result of used sales and them not doing used sales of PC software, the totals start to boggle the mind.
Thanks for the comments.
I do agree that it can be humbling when a game like COD4 sold around 5 mln units on the console during the latter part of '07 and it only sold 383,000 units at retail for the PC.
I've also thought that another thing that impacts the PC sales is the demographics of the user. I'm in my late 30's and I would assume that I fall into the "normal" demographic. I think that group tends to be more discriminating about games because of their age and all of their other "grown up" financial obligations.
Also, given the nature of the retail sector, I think they tend to wait until the prices fall on the PC games until they are far cheaper. When I talk to my friends about getting certain titles, in many cases we talk about waiting until the price drops before picking it up. In my situation, I have a backlog of 15 to 20 games, so I'm not in a hurry to run out and buy something when it's first released. There are always exceptions. I did pick up Bioshock the day it came out because I wanted to show my support for that game.
In fact, I tend to pride myself on the number of games that I've picked up for $10 or less. Over the past 2 or 3 years, I've probably picked up 12 to 15 games at $10 or less. Several of them I picked up for $5 or less. Most of these games had been out for at least a year so I'm sure they had been written off by the publishers at that point.
This leads me to an interesting question. I know you've worked in the industry and I wonder how the industry perceives people like me. I buy a bunch of games but I pay very little for them. Is my support viewed as half-hearted at best? From my standpoint I merely play by the rules that the retail sector has established. If something doesn't sell after a few months, you keep slashing the prices until it finally gets sold so you can make room for the newest title that you hope is going to make more money.
I guess that all I've got to say at this point.
Rom, I do have a little more to add. I've pondered the numbers and I really think the original costs that you quoted include hardware sales. Consider this. I didn't get this from your report but I know that in 2007 there were 156.4 million units moved at retail. If you assume a 50 dollar price point, that translates into about 7 billion dollars. That's closer to the 6.6 bln number I quoted from the report.
Now, let's flip it around a bit. The Wii sales for 2007 in the report from your link were 7.4 mln. At $250 per console that equates to around 1.75 bln dollars. Considering that the Wii sales were 3.5 billion from your original post, it is very reasonable to assume that the cost has to include the console sales.
One last thing to add to the pile. Halo 3 sold 4.8 mln units on the 360 and that was considered a gargantuan hit. Even at $60 per unit, that's almost 300 mln dollars. Call of Duty has sold 10 mln units worldwide across all platforms. At 50 dollars per copy that translates into 500 mln dollars worldwide.
I really do think the dollar figures you quoted have to include the hardware sales.
I hope you don't think I'm trying to start a fight or anything. I know that the PC market isn't exactly in the best shape in the world, but I truly don't think it's as bleak as you make it out to be.
Consider me a ray of sunshine on the PC gaming market :)
Sorry, "admin," no spamming assholes allowed.
Roosterhead, I'm still working on a reply to you...been busy at work.
Rom, that's okay. I understand.
I do want to clarify something. When I was rattling off sales figures for the various games, it was merely meant to provide some perspective about the relative dollar amounts for some of the software sales.
In fact, your delays have made me ponder the situation further.
I went to Wal-Mart today and looked at the PC game section. I would dare say that 60 to 70 percent of the game software for sale consisted of the following:
- Sims (Insert Whatever you want)
- World of Warcraft
- Casual Games (Luxor, MCF, etc.)
As I said in my original post, the retail side of the PC market isn't really that bad in terms of units sold, it WHAT those units consist of that stinks from the perspective of a hardcore gamer such as myself.
Even so, I still stand behind my opinion that the PC gaming market in general isn't that bleak. I guess I just want parity among the platforms in terms of software sales. If the XBOX sells 3 billion in software sales and the PC gaming market only sells 3 dollars, I'm okay with that. I just feel like that the console makers play a bit of a shell game with the numbers. They collectively tally their totals for all of the platforms which makes the consoles sound much bigger than what it really is.
I do have one final question to bog you down with. Do the retail sales figures include online retailers such as Amazon, GoGamer, etc? If not, are they included in the original PC gaming alliance report in any fashion?
See, you don't have to be in any big hurry to respond. I'm doing enough talking for both of us :)
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