XI
you are not logged in
Opinion

3DS: Is It Failing At Retail?

And a look at Japan's July hardware sales.

The format of this month’s Japanese sales retrospective has been tweaked somewhat.  Having been writing these for the best part of two years now a minor refresh is long overdue.  Your feedback and suggestions are welcome in the comments as long as they are polite.

One thing that will not be changing is that these blogs begin with a look at some aspect of the Japanese video game market.  In previous months this has been topics like taking a look at how the 360 is performing in Japan as it approaches a sales milestone or contrasting this year’s hardware sales with last year’s.  Given recent news stories the decision of what to look at this month was a no-brainer.

How Well Is The 3DS Selling?


(Image credit: http://www.ft.com/)
In case you missed any of it, here is a brief recap of news revolving around the 3DS’ sales performance in the last week or so.  Like Sony’s, Nintendo’s latest quarterly financial update was not a pretty one.  With the value of its sales down 50% compared to a year ago (though its overall financial result was actually slightly better) and many questioning the sales performance of the 3DS, Nintendo announced a significant price cut for the 3DS.

From the 11th August the 3DS’ manufacturer’s recommended price will drop from ¥25,000 ($249.99) to ¥15,000 ($169.99), with the European price dropping by a third.  Existing owners, if they visit the eShop before the 11th, will be enrolled in the Ambassador program which will eventually give them 20 free games in compensation for being early adopters who paid the higher price at retail.

The repercussions of the worse than expected financial performance and 3DS price cut, as is so often the case in our always-on world, were immediate.  Nintendo’s stock dropped 21% as shareholders considered the much reduced profit margin on 3DS hardware sales and the company’s President, Satoru Iwata, told shareholders that he would take a 50% pay cut and that other directors would also take significant hits to their salaries.

All of which seems pretty catastrophic and makes you wonder just how badly the 3DS has been selling.  Fortunately that is something we can take a look at.  The perceived wisdom is that it is tanking at retail with some less informed comments even going as far as to suggest it is failing to the degree the PSPgo has.  Let’s deal with that latter misconception first.

Japan is the only territory that we can obtain unit sales figures for the PSPgo from, though anecdotal worldwide reports and Sony’s discontinuation of the console suggest the worldwide picture was similar.  Back when the 3DS launched in Japan we produced a graph comparing its first month sales to those of the PSPgo.  Here is an updated graph providing a normalised comparison of how things have gone since:

3DS in Red, PSPgo in Blue

3DS in red, PSPgo in blue

If you hear someone comparing the 3DS to the PSPgo and suggesting they are both a failure of a similar scale please feel free to correct them.  Is the 3DS a sales failure at all though?  It used to be that a new console from a manufacturer would immediately replace its predecessor at retail.  That is no longer the case so the 3DS is competing, to a degree, against the DSi and DSi LL/XL, much like the PS3 was competing against the PS2 at its release.

Let’s look at that latter Sony sales competition first.  In it’s first four quarters on sale, worldwide unit sales for the PS3 were 1.7m, 1.8m 0.7m and 1.3m for a total of 5.5m.  During those same four quarters the PS2’s sales were 6.7m, 2.4m, 2.7m, and 3.2m for a total of 15m.

In its first ‘financial year’ on sale the PS3 was outsold by the PS2 by a ratio of almost 3-to-1.  Yes, there are a lot of factors contributing to the differences between those numbers but they are an example of overlapping console lifetimes for which the numbers are readily available.  Sony were not outwardly showing signs of ‘panic’ a few months into the PS3 lifetime, they knew they were playing the long game with the PS3.

Nintendo’s reaction to the 3DS’ early-life sales looks like that of a company that has become used to its consoles being instant hits at retail.  Its shareholder have also come to expect that and so the perception that the 3DS is failing at retail has had to be addressed.

Is it failing though?  We took a detailed look at 3DS’ sales performance at launch compared to the DS and Wii once it had completed its launch in all regions.  Here is the comparison graph from that earlier post:

When you consider that the overall video game sales market has been contracting for several years now, that the economies and consumer spending in the ‘developed’ countries are still suppressed, and that the 3DS launched at a much higher price than the DS (even taking inflation into account) then it is difficult to say its launch performance was poor.

Nintendo’s latest quarterly financial update gives us the data we need to take at look at how its consoles have sold worldwide for the months of April through June.  What that data does show is that the 3DS is really struggling in Nintendo’s largest market; America.  Here’s another graph for you lucky people:

In Japan the 3DS is outselling the various DS’ by about 2-to-1.  In ‘Other’ (Europe, Australia, etc.) that ratio is reversed.  In America however, the DS’ are outselling the 3DS by 5-to-1.  That’s not the only area where America stands out, look at the DS’ sales.  You can see why Nintendo has not yet discontinued the DS Lite in America; it still makes up almost 50% of all DS sales there during the quarter.

Those numbers from America provide all the explanation we need about why Nintendo has slashed the price of the 3DS so soon after launch in an attempt to “create momentum for Nintendo 3DS and accelerate its market penetration toward year-end sales season, when the lineup for the applicable software shall be enriched”.

If the 3DS was performing at retail in America as well (or as badly, depending on your perspective) as it is in the other non-Japanese territories then it would be unlikely that Nintendo would have seen the need to drop the price so aggressively.  As it is, all of us who have already or will in the next six months purchase a 3DS are benefiting from its staggeringly poor sales performance in America.

Japan’s July Hardware Story

The overall relative performance of each of the consoles currently on sale in Japan is fairly well established, so each month we will just look at any cause of significant changes in relative sales and perform our usual quick overall corporate pie-sharing exercise.  The regular set of graphs and table will feature in a gallery, like so:

Topically, the middle of July saw Japan’s 3DS sales leap upwards enough for it to outsell the PSP-3000 for a couple weeks and take the overall monthly handheld top-spot by a whisker.  We only have to look as far as Fox McCloud for the reasoning behind the sales spike as it was the release of Star Fox 64 3D that sent 3DS sales barrel-rolling into the stratosphere.

The over notable deviation from normal sales levels was the Wii’s performance in the latter half of the month.  The software driver behind those sales was Rhythm Heaven which topped the software charts for those two weeks, a feat unusual for Wii games in recent months.

Now for our regular quick look at comparative performances.  Across the month the PS3 outsold the Wii by almost 50% (90,269 vs. 62,651) while Nintendo’s handhelds beat Sony’s by about 33% (156,985 vs. 116,506).

Overall shares of the month’s console unit sales saw Nintendo just manage to come out on top.  Out of the 439,106 consoles sold Nintendo accounted for 50% (219636), Sony 48.4% (212,558) and Microsoft 1.6% (6,912).

Source: Media Create (For Japanese sales data, see in-line links for others.)

Read more: #
39 Comments
  1. cc_star
    Team TSA: Writer
    Since: Forever

    Great to see some figures rather than just agendas saying ‘its flopped’ or ‘its broadly the same as DS & miles better than PSP’

    Good stuff as per 100% usual from the Gregmeister

    Comment posted on 07/08/2011 at 16:33.
  2. nemesisND1derboy
    Member
    Since: Apr 2010

    Apparently, I think this is Japan only, the pre-owned 3DS sales since the price drop announcement have been more than double the retail sales. It’s to be expected that pre-owned sales will increase, but more than double? Wild.

    Comment posted on 07/08/2011 at 16:35.
    • Watchful
      Team TSA: Writer
      Since: Oct 2008

      Pick up the console for below retail price and get 20 free games, bargain.

      Predictably, sales of new 3DS’ in Japan have gone over a cliff as people are either waiting for the price drop or picking one up second hand.

      Comment posted on 07/08/2011 at 17:24.
  3. BIGAL-1992
    Member
    Since: Jan 2009

    I think the 3DS is a bit of a slow burner for now. Give it time, and I think we may yet see sales pick up for it.

    Comment posted on 07/08/2011 at 16:37.
    • cc_star
      Team TSA: Writer
      Since: Forever

      The price of releasing before the traditional low sales summer period, so that you’re established in the market with a small back catalogue of games & pricedrop in time for the busy Christmas period where millions are sold?

      Comment posted on 07/08/2011 at 16:42.
      • bunimomike
        Member
        Since: Jul 2009

        Which is why any hardware release can happen when the manufacturers are ready. The Vita being a 2012 launch is hardly a problem and it will gain its own momentum, hopefully, regardless of it not making this Christmas. I’m sure Nintendo will have a fine catalogue of fresh, new games to tease customers with come Crimble-time. :)

        If you look at the positive sales of the PS3, the biggest factor was that initial price-point in holding it back. Nintendo have addressed this early on and will surely reap the rewards down the line.

        Comment posted on 07/08/2011 at 16:46.
      • Watchful
        Team TSA: Writer
        Since: Oct 2008

        And two games launching in time for Christmas… Super Mario 3DLand and Mario Kart 7. The 3DS will have a good Christmas.

        Comment posted on 07/08/2011 at 17:29.
  4. Awayze
    Member
    Since: Jul 2010

    3D on a low res screen like the 3DS is lame. No reason for Americans to get the 3DS.

    Comment posted on 07/08/2011 at 16:41.
    • Mason_Mk
      Member
      Since: Feb 2010

      Yeah totally, better games are already out there with better graphics as well on smartphones, i touches, fb, hell even PSP. And the vita will only be better. That’s why there’s no room for a 3DS in my life anyway, and i know that’s a fact for everyone i know too.

      Comment posted on 07/08/2011 at 18:32.
    • rept0n
      Member
      Since: May 2010

      Picked up a 3DS just the other day (£125 new)

      Now I’m a Sony fan boy and will get the Vita at launch (tempted by a Japan import), but I have to admit that I’m impressed with the graphics on the 3DS. It’s better than the PSP and Wii, plus I always find that 3D seems to make resolutions better than it would look in 2D.

      Mostly bought for Zelda (as I’ve never played it), but hopefully Starfox and the promise of the free games will keep my attention until Mario Kart comes out.

      Best portable out at the moment – perfect if you want a stop gap between PSP and Vita.

      Comment posted on 07/08/2011 at 21:22.
      • Awayze
        Member
        Since: Jul 2010

        But after playing games on an iPhone 4, I don’t want to go back to a screen like the 3DS screen, 3D is gimmicky on it as well.

        I want a PSV because its confirmed it has high res OLED screen so bye bye washed out blacks like you get on the 3DS.

        Comment posted on 08/08/2011 at 00:48.
  5. bunimomike
    Member
    Since: Jul 2009

    Great stuff, Greg. I think most people here recognised it had underperformed (a bit) but was still doing okay. However, Nintendo aren’t happy about a few key things and have hopefully addressed that with the price cut. The Americas was particularly surprising. They really are just leaving it on the shelf, aren’t they.

    Comment posted on 07/08/2011 at 16:42.
  6. beeje13
    Member
    Since: Jan 2010

    Nice to see Sony have actually made something while their TV area have made a loss on the 4th consecutive year…
    But as for turnarounds you have to hand it to Pana.

    Comment posted on 07/08/2011 at 17:41.
    • Awayze
      Member
      Since: Jul 2010

      Well people with any TV knowledge will now that Bravia TV’s are NOT the best.

      Panasonic Viera’s whoop every other TV’s ass. I think alot of people tend to buy the Pana TV’s hoping they will have used the Pioneer Kuro tech in their TV’s

      Comment posted on 08/08/2011 at 06:29.
  7. Mike
    Member
    Since: Oct 2008

    Just ordered a 3DS again for cheap to get the free games – them alone will keep my happy.

    Comment posted on 07/08/2011 at 17:45.
  8. TSBonyman
    Member
    Since: Dec 2009

    Interesting stuff as always and i can’t wait to see how all the numbers fall when the Vita is added to the mix.

    Comment posted on 07/08/2011 at 17:52.
  9. dude90
    Member
    Since: Nov 2009

    I think M$ need to do something about Japan, sure the 360 isn’t successful there but surely they can of something that will please the Japenese gamers.

    Comment posted on 07/08/2011 at 17:59.
    • BIGAL-1992
      Member
      Since: Jan 2009

      I’d advise not using M$ around here. It just looks childish. That said, I do see your point.

      Comment posted on 07/08/2011 at 18:06.
    • bunimomike
      Member
      Since: Jul 2009

      The patriotism/loyalty to their own hardware is almost impossible to break. Americans are very loyal to their own companies too so Son¥, Micro$oft and Nint€ndo all have their work cut out in different regions. Oooo… look. Characters!!! :-)

      Comment posted on 07/08/2011 at 18:29.
      • Armonster9000
        Member
        Since: Feb 2010

        Why do you care whether or not someone uses a $ sign or a € or even a ¥?
        It’s no big deal. It’s childish that you care..

        Comment posted on 07/08/2011 at 22:22.
      • bunimomike
        Member
        Since: Jul 2009

        It seems pathetic that someone’s dislike of a company can get to imbecilic levels where they can’t type their name in without including a dollar sign (for example). All of the console companies want out money. Apple too. They’re in this for the money. Microsoft are an easy target due to how they’ve monopolised the PC world but we can still be mature enough to refer to them without petty dollar signs as if they’re the devil compared to every other company that wants our money.

        Comment posted on 08/08/2011 at 00:51.
  10. Crocadillian
    Member
    Since: Feb 2011

    I think people also decided pretty early on from when they released it’s specifications as to whether they wanted one (such as battery life). I don’t think a price cut will save the console, Nintendo are still too dependant on their own bunch of…. colourful, characters, franchises and gimmicks, and the third-party support is abysmal even at this point.

    Comment posted on 07/08/2011 at 18:22.
    • bunimomike
      Member
      Since: Jul 2009

      You say that, but the masses keep on lapping it up. Generation after generation, I’ve never seen franchises be such a close variation of a theme and still sell by the bucket-load.

      Comment posted on 07/08/2011 at 18:31.
      • Crocadillian
        Member
        Since: Feb 2011

        I wasn’t necessarily targeting their franchises as something that isn’t profitable, but that Nintendo’s franchises seem to leave little room for other developers, and I still feel that there will be a point where it’s brand strength will decline with the presence of other creations and innovations in the future.

        Comment posted on 07/08/2011 at 19:46.
      • bunimomike
        Member
        Since: Jul 2009

        Agreed. Nintendo’s franchises seem so strong that other titles barely get a look in sometimes. It feels harder to get a franchise up and running with Ninty than other platforms. Sorry if I have digressed. :-)

        Comment posted on 08/08/2011 at 00:52.
      • Crocadillian
        Member
        Since: Feb 2011

        No problem, you have good arguments :D

        Comment posted on 08/08/2011 at 01:42.

Leave a Reply

You must be logged in to post a comment.

Latest Comments

TSA Meets

  • None today