Posted by John on February 6, 2012

PS3 outsells competitors in shrinking market

PlayStation 3 outsold its competitors in Australia during 2011, but retail sales for the whole gaming industry were significantly down for the second year running.

After five straight years of ever-increasing sales figures culminating in 2009’s $2 billion record, Australian retail game hardware and software sales declined by 16 per cent in 2010 and a further 12.8 per cent in 2011.

Data compiled by independent market researchers NPD Group Australia, which includes sales from hardware, gaming peripherals and traditional boxed software sold through retail outlets, showed that sales in 2011 were $1.5 billion, down from $1.7 billion the previous year.

It is conceivable that the $2 billion mark will never again be surpassed in Australia as consumers move away from traditional boxed products and more towards online purchases.

NPD does not measure online sales, downloadable content, online game subscriptions and game purchases for mobile devices such as Apple’s iPhone.

The growing popularity of gaming on devices like the iPhone and iPad also seems to be having an impact on console hardware sales.

Declining software and hardware sales around the world is putting pressure on console manufacturers to release next-generation machines to reinvigorate the market.

But Nintendo is the only hardware manufacturer that has currently revealed plans to release a new television-based console. Its Wii U will be released before Christmas.

The barnstorming Wii console now has an installed base of 2.4 million consoles, but Wii sales in 2011 were down by nearly 30 percent compared to 2010.

NPD figures show the PlayStation outsold the Xbox 360 and Nintendo’s Wii in Australia during 2011, with around 400,000 consoles sold representing sales growth of 25 per cent compared to 2010. The console can now be found in around 1.5 million Australian homes. 

It has been a considerable turnaround for the PS3, which for several years languished in third place in the console sales battle after launching in March 2007 at the unprecedentedly high price of $999.

The strong 2011 sales for Sony were also in spite of its well-publicised PlayStation Network security breach, which prompted Sony to shut its PS3 online services down for a month.

PS3’s sales leapt appreciably after a price drop in August which saw the entry-level machine drop $150 from $499 to $349.

The PlayStation 3 platform as a whole (including hardware, software and accessories) enjoyed biggest sales in Australia during 2011 than its competitors. PS3 represented 25 per cent of units sold and a 31 per cent of the entire games market in terms of value.

The biggest selling game of 2011, Activision’s Call of Duty: Modern Warfare 3, sold the highest number of copies on PS3.

“The uplift on PS3 sales was no small feat,” says Sony Computer Entertainment Australia managing director Michael Ephraim. “In fact, our percentage year-on-year unit growth was triple that of our nearest competitor.”   

But Microsoft says it is very happy with Xbox 360’s performane despite the tough market conditions.

Xbox 360 was the biggest selling console for 2011 worldwide, the 360’s Australian platform revenue was up by 5 per cent in 2011, and it was the best selling console in Australia during the important Christmas sales period.

David McLean, director of Microsoft Australia’s consumer channels group says Xbox 360’s results were “promising”.

“It’s clear to see that the momentum in this industry is with Microsoft and the Xbox platform,” Mr McLean says. “We won at the telling Christmas period, we are standalone in our growth this year and looking at the past five years our consistency is unprecedented.”

The Interactive Gaming Entertainment Association attributes the overall declining retail sales to the growth in sales from online retail, downloadable content, online games subscriptions, in-game micro-transactions and mobile games.

iGEA CEO Ron Curry says the rising popularity in digital games isn’t reflected in the latest NPD data.

“As Australians continue to access video games through a host of different channels, it’s becoming more challenging to aggregate sales data through a single source,” says Mr Curry.

“Whilst the NPD data has revealed a dip in ‘traditional retail’ sales, which according to our latest Digital Australia report still represents the lion’s share of the games industry, other research has pointed to the growth in digital downloads,  multi-player online games, in-game purchases and online subscriptions.”

Microsoft says its online Xbox Live subscriptions grew by 40 per cent during 2011, while Sony also reported growth in online revenue on its PlayStation Network online service. 

Meanwhile, local technology analyst firm Telsyte estimates that in 2012 Australians will spend over $450 million in online gaming subscriptions and in-game purchases in 2012.

Telsyte senior research manager Sam Yip says “online gaming subscriptions and in-game virtual goods sales are growing strongly in Australia”.

“(They) will account for around 20 per cent of the overall digital goods and online subscriptions market (which consists of 26 categories such as internet video, internet music and digital news subscriptions) in 2012,” Mr Yip says.

PriceWaterHouseCoopers recently predicted revenue for both traditional and digital games to reach $2.5 billion in 2015, with online and mobile games estimate to account for a 50 per cent share.

The handheld market is also expected to help boost games industry sales in 2012, thanks to the new Nintendo 3DS console and the PlayStation Vita, which is released later this month.

IDC anticipates demand for handheld gaming hardware and software to rise by around 20 per cent in 2012.

Nintendo recently announced that the 3DS handheld was the fastest selling console to reach 200,000 sales in Australia, achieving the milestone in its first 37 weeks on sale. It did particularly well at Christmas, and now has an install base of over 255,000.    

iGEA’s Ron Curry says “overall we’re seeing a lot of evidence point towards a continuing healthy interactive games industry”.

“The incredible success of games such as Call of Duty 3: Modern Warfare 3, which became the fastest entertainment property to hit the $1 billion milestone globally, eclipsing the previous record set in 2009 by the film Avatar, is only one example of this.”

For the past few years, family games have been Australia’s best-selling titles. But in 2011 the most popular gaming genres by sales were shooters and action titles, which both represented 19 per cent of game sales. Family games represented 16 per cent of the market.

The Top 10 selling games in Australia for 2011 according to The NPD Group Australia were:

1. Call Of Duty: Modern Warfare 3

2. Battlefield 3

3. The Elder Scrolls V: Skyrim

4. Call Of Duty: Black Ops

5. FIFA 12

6. Batman Arkham City

7. Assassins Creed: Revelations

8. Pokemon White

9. LA Noire

10. Just Dance 3

 

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