Gaming and Culture

People who surf the Web also seem to love playing games. Among online adults, 27 percent own a gaming console, with another 10 percent planning to buy one over the next year, says a report released Tuesday by Nielsen Online.

Nintendo's Wii was the top console in May, owned by 14.3 percent of Web surfers tracked. That compares with a 9.4 percent market share among online adults for Microsoft's Xbox 360 and 5 percent for the Sony Playstation 3. But Sony's older Playstation 2 scored top honors, owned by 17.3 percent of online users.

Web sites for gaming consoles also proved to be hot spots in May. Nintendo's Web site enjoyed the largest audience with 2.2 million visitors, while Sony's site grew the fastest with 16 percent more traffic last month than a year ago.

The blogosphere has also been buzzing with gaming news. Blog stories about the Wii, Xbox 360, and Playstation more than doubled on June 2, the first day of the Electronics Entertainment Expo (E3), versus the prior week. This year's E3 generated 30 percent more blog activity than last year's expo.

Bloggers have also been busy writing about the latest gaming news. Microsoft's upcoming Project Natal created more blog noise than any other recent announcement. Blog activity also was boosted by news of Nintendo's two new Mario games for the Wii and Sony's new motion controller.

For the second straight month, video game industry sales tumbled nearly 17 percent year over year, a downward trend for a market segment that had previously seemed resistant to the economic pressures of the recession.

In April, according to industry analyst NPD Group, the industry posted revenue of $1.03 billion, down 16.9 percent from the $1.24 billion it recorded in April 2008. Sales for the month were also down 30 percent from $1.43 billion in March.

NPD analyst Anita Frazier cautioned in a report that it's hard to reach the conclusion that the industry has begun to soften, noting that "it's important to remember that April (2009) is being compared against a month--April 2008--that realized nearly 50 percent growth over April 2007."

Frazier also noted that the industry's performance last month was its second-best April on record, and that unit sales across the board were down just 5 percent, with the rest of the revenue decline coming as a result of reduced "average selling prices."

Still, there's little doubt that the trend line is heading down, both broadly and rapidly. March's numbers were already down 2.7 percent from February's $1.47 billion, and in April, each of the three major video game consoles--Microsoft's Xbox 360, Nintendo's Wii, and Sony's PlayStation 3--saw sizable sales drops. Xbox sales were off 47 percent, while the Wii and PS3 were down 43.4 percent and 41.7 percent, respectively.

The only bright spot, on the hardware side of things at least, was the newest generation of Nintendo's DS handheld gaming device, the DSi, which launched during the month. In April, Nintendo sold 1.04 million handhelds, up 84.7 percent for the month.

Perhaps most interesting in those numbers is the steep decline in sales of the Wii, which has been dominating console sales for some time. The Wii did still lead the pack in April, but there have been rumblings about its strength softening in recent months, despite the console now being easy to buy. Earlier in the year, and especially during the holiday season, it was nearly impossible to find a Wii for sale at retail. These days, they are readily available at many stores.

But Frazier, again trying to soften the blow of the April numbers, noted that the Wii's 52.4 percent year-over-year sales drop (Nintendo moved 714,000 Wiis in April 2008) was partly attributable to the fact that a year ago the console's fortunes had been driven by the launch of two "huge new titles: Super Smash Bros. Brawl and Mario Kart."

On June 22, Geek Gestalt will kick off Road Trip 2009. After driving more than 12,000 miles in the Pacific Northwest, the Southwest, and the Southeast over the last three years, I'll be looking for the best in technology, science, military, nature, aviation and more in Colorado, Utah, Idaho, Wyoming, Montana, and South and North Dakota. If you have a suggestion for someplace to visit, drop me a line. And in the meantime, join the Road Trip 2009 Facebook page and follow my Twitter feed.

March revenues for the video game industry dropped 17 percent from a year ago, the NPD Group reported Thursday, the first time in the current recession that the business has seen sales fall.

For the month, the analyst firm reported that the industry turned in total sales of $1.43 billion, down 17 percent from $1.72 billion a year earlier. Hardware sales were down 18 percent, while software was down 17 percent.

But while the numbers look poor, NPD analyst Anita Frazier said she attributed some of the drop to the vagaries of the calendar.

"While it might be tempting to jump to the conclusion that the sky is starting to fall on the video games industry given this month's results, it's important to remember that two very big things are different this year than last," Frazier wrote in a note accompanying NPD's report. "First, Easter fell in March last year whereas it fell in April this year, and last March included the release of Super Small Bros.: Brawl, which went on to become the fourth best-selling game in 2008."

Perhaps, but one game's fortunes are unlikely to be enough to turn around an entire industry, especially given that hardware sales dropped about the same as overall revenues.

Overall sales were also down 2.7 percent from February's $1.47 billion, and each of the six hardware platforms NPD tracks--Sony's PlayStation 3, PS2 and PSP, Microsoft's Xbox 360 and Nintendo's Wii and DS--had lower sales in March than in February. The PS3 and Wii led the drops, with 21.0 percent and 20.2 percent lower sales, respectively.

By comparison, the Xbox saw its sales fall between February and March, but less than the PS3 and Wii, and Frazier reported that Microsoft's console was the only one with good year-over-year news.

"While it's not unusual for March hardware sales to be lower than February," Frazier wrote, "I thought we'd see higher unit sales on most platforms. The Xbox 360 was the only platform to achieve a year-over-year sales increase."

Frazier also said Nintendo's numbers were noteworthy, given the effect of Super Smash Bros.: Brawl on the company's March 2008 sales.

"Wii and NDS hardware sales remained brisk, taking the top two spots for (March 2009) in hardware unit sales," she wrote. 'It's important to keep in mind that the (game's) effect from last year impacted hardware sales as well, so while the year-over-year comps are down for the Wii, the sales are still impressive."

Still, the Wii--the darling of the video game industry media since its surprise success became almost institutionalized--has seen some negative press recently.

In March, for the first time, the PS3 outsold the Wii in Japan, and many observers wondered if that milestone indicated that Nintendo's console's dominance had finally come to an end.

The rumors are flying about a possible big Sony PlayStation announcement for Tuesday. The only problem is no one is sure what the announcement involves, with speculation running from a PS3 price drop to a PS2 price drop to something about God of War 3.

Anyway, the original rumor came from an Australian publication, Smarthouse, but Kotaku says it's gotten word directly from Sony that an announcement is "imminent."

Furthermore, Kotaku thinks that we're looking at a PS2 price drop to $99.99, not the much-hoped-for PS3 price drop to $299.99. Joystiq concurs with a source at K-Mart saying the cut is coming April 5. How anticlimactic would that be?

So, what do you think Sony's announcing (if indeed, there really is an announcement forthcoming)?

Update: According to Joystiq, Sony is calling the rumors of a PS3 price drop totally false. However, it didn't deny rumors of a PS2 price chop (but who really cares, right?).

(Source: Smarthouse via 1up via Joystiq, Kotaku)

Updated at 5:28 p.m. to include additional data and analyst perspective.

Though the retail economy suffered what appears to be one of the bleakest holiday seasons in recent memory, it looks as though the video games industry bucked that disastrous trend.

That's one conclusion that can be drawn from holiday Xbox 360 sales numbers released by Microsoft Monday, in which the company reported that its console business had the most successful holiday season in its history.

All told, Aaron Greenberg, director of product management for Xbox 360, said Microsoft boosted the Xbox's worldwide sales lead over Sony's PlayStation 3 to 8 million units, explaining that, based on internal data, the Xbox has now sold 28 million units globally, compared with the PS3's 20 million.

Microsoft said its holiday data came from internal sales numbers and weekly sales data available in some regions, like Europe, as well as past years in which December console sales are typically twice that of November, which in turn are typically twice that of October.

In November, Microsoft sold 836,000 Xboxes in the United States, suggesting that if Greenberg is right, the company moved about 1.67 million of the consoles in December.

No official North American video game sales numbers are available yet for December. They are expected to be released on January 15 by industry analyst the NPD Group.

To be sure, it can be confusing comparing North American sales numbers with global figures, especially when the numbers are simultaneously based on different kinds of sources.

But there does appear to be ample evidence that the video game industry is proving more resilient to the economic crisis, if not outright recession-proof, than other industries, and data provided by Microsoft, Sony, and Nintendo seem to be at the heart of it.

Nintendo, for example, sold 2.04 million Wiis in November, and while reports of shortages of the console seem less prevalent than in 2007, it is likely it did extremely well during the holidays. While nonscientific, of course, if Greenberg's formula is correct, Nintendo would have sold about 4 million Wiis in December.

For its part, Sony said recently that sales of the PlayStation 3 between January 1, 2008, and November 30, 2008, were up 60 percent from the same period a year earlier, though the company has not yet released any kind of figures for December.

"We've had a solid holiday season and have delivered consistent growth throughout this year. Two thousand eight was a pivotal year for PlayStation with the best software line up in the industry, a dramatic expansion of PlayStation Network including the launches of the video delivery service and the beta of the PlayStation Home," Ian Jackson, vice president of sales for Sony Computer Entertainment America, said in a statement. "Early internal data points to an increase of more than 130 percent of PS3 hardware sales for the holiday season--since Black Friday--and we're also seeing a growth of nearly 40 percent in total PS3 hardware sales for the calendar year. We remain confident this momentum will continue into the new year."

However, the PS3 was the only one of the three next-generation consoles to see its November 2008 sales drop from a year earlier. According to NPD, sales of the PS3 fell 18.8 percent, from 466,000 to 378,000. By comparison, Wii sales skyrocketed 108 percent, from 981,000 to 2.04 million and the Xbox grew 8.6 percent, from 770,000 to 836,000.

But Sony said that the November sales drop was an anomaly due to "an abnormally strong month due to a price cut (with) the introduction of the 40GB PS3."

"From a hardware perspective, I think the clear (holiday) winner is Nintendo," said Colin Sebastian, an analyst with Lazard Capital Markets, "and Microsoft has also benefited by cutting the (Xbox) price in September."

Sebastian added that Sony must address the challenges it faces this year, among them that the price of the PS3 is significantly higher than its competitors, as well as the fact that the console's internal Blu-ray drive has not driven the kind of sales Sony had hoped.

In the early days of the next-generation console wars, it was generally assumed that it would be a three-way race between the Xbox, the PS3 and the Wii. But because of the massive popularity of the Wii, Sony and Microsoft no longer compare their consoles' performances to that of Nintendo's.

The rationale seems to be that the Xbox and PS3 are completely different types of machines than the Wii, given the former's reliance on high-quality graphics and superior performance and the latter's focus on more casual games intended to appeal to a broad audience.

Whether that is semantics is a question neither Sony nor Microsoft seem eager to answer. In fact, both frequently make the point that Wii owners often also own either an Xbox or a PS3, if not both.

Of course, that is music to Nintendo's ears, and its growing confidence is borne out by the tremendous sales of the Wii since its launch in November 2006.

And to many, the most remarkable thing about the Wii's success is that it continues unabated.

According to Nintendo, the Wii has sold 15.4 million units since its launch, with 8.02 million of those consoles selling between January 1, 2008, and November 30, 2008. That means more than half of all Wiis bought in the U.S. were sold in 2008.

For the Xbox, the biggest strategic move to date has been the lowering of the console's entry-level offering to $199, making it the cheapest next-gen console, lower even than the $249 Wii. By comparison, the most inexpensive PS3 costs $399.

Interestingly, though, a recent study conducted by Nielsen Media Research, the clear winner among all consoles when measured by minutes played is neither the Wii, the Xbox 360 nor the PS3. In fact, the study concluded, the venerable PlayStation 2, still the most successful console of all time, continues to dominate players' time, even now.

All told, fully 30.2 percent of console minutes played were on the PS2, according to the study, more than twice the third-place Wii's 13.5 percent. The Xbox 360 came in second, with 18.3 percent, while, in fifth place, with 7.7 percent, the PS3 was embarrassed by the fourth-place finish of the original Xbox.

It's not surprising that the PS2 would come in first in such a study, given that there are more than 100 million of the consoles in players' hands.

But the runner-up finish by the Xbox was a victory of sorts for Microsoft, and a vindication of the efforts it has put into its Xbox Live service.

In fact, Greenberg said Monday that Xbox Live grew to 17 million members by the end of 2008, from 14 million at the end of October.

And the service--which offers members thousands of downloadable games, as well as movies and TV shows--also saw its revenue jump 84 percent, Greenberg said.

To Sebastian, the biggest advantages that Microsoft and Nintendo have over Sony is that the video gaming market has shown a clear preference for the more casual play that the Wii and Xbox Live offer.

"Sony has not been able to capture much of that market," Sebastian said.

Next week, NPD will release its December U.S. sales data, and it is certain that Sony, Nintendo and Microsoft will all issue press releases touting the successes of their respective platforms.

But asked why it decided to release its global lifetime sales numbers Monday, rather than wait until next week, Greenberg said, "All this data is based on our own sales data. This is (information) we have available, so we'd rather share this data now, rather than sitting on (it)."

Whether you're one of the legions of hard-core Xbox players or someone who's only played with the game console casually, get ready for an all-new Xbox Live.

Since the first announcement of the new approach to the massively popular service at E3 in July, some longtime fans have fretted that Microsoft is morphing it into a place for purely casual players at the expense of those for whom Xbox Live is nearly as much a home as where they actually live.

Well, based on a demo I got recently of the (not quite finished) new version of Xbox Live, I'd have to say, fret no more.

Dubbed the new "Xbox Live Experience," this re-launched service--which is rumored to be launching in November, but which Microsoft will only say is due "before Christmas"--really does seem to have something for everyone: an easy-to-use graphical interface complete with deeply customizable avatars that casual players will enjoy, and all kinds of new functionality that will actually reward the dedication of the hard-core Xbox player.

Microsoft readily admits that there may be a bit of a transition period for those core players--a time during which a lot of griping might be heard--but the company fully expects a gradual realization on the part of those players that the new service takes the existing Xbox Live and adds all kinds of new community and interactive functions to it.

And, again, I would have to agree.

To date, the Xbox Live interface has been based on what are called blades, essentially pages of information stacked on top of each other in such as way as to maximize the number of choices Xbox Live players have and the directions in which they can go. They can see lists of games to play, choose to watch a movie, go into a section to buy add-ons for games, and so on. The new interface largely does away with the blades era and moves into a more advanced motif of full windows that spread out on the screen and stretch off into the distance, allowing users to shuttle through them, left to right or right to left.

But that's getting a little too far ahead.

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