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Gamasutra analyzes the "consternation" around Wii lifetime game sales, showing they plateaued in 2009, and fell behind PS2's software sales trajectory -- despite having 5 million more systems on the market.

Matt Matthews, Blogger

July 14, 2010

4 Min Read

[Gamasutra analyst Matt Matthews examines the "consternation" around Wii lifetime game sales, showing they plateaued in 2009, and fell behind PS2's software sales trajectory -- despite having 5 million more systems on the market.] When the retail video game sales figures for May 2010 were released by the NPD Group earlier this month, analysts highlighted the role that Nintendo Wii software sales played in the software revenue picture. For example, analyst Michael Pachter of Wedbush Securities pointed out that the hardware base for the Wii had expanded by 44 percent since May 2009 but its software sales were down 29 percent, year-over-year. Meanwhile, analyst Doug Creutz of Cowen and Company noted that launch sales of Super Mario Galaxy 2 came in at only 564,000 units, well below their expectations of 700,000 units during the title's launch month. In our own examination of the figures, we noted that Nintendo had indeed ceded share to Sony's PlayStation 3 in the current-generation console market during the first five months of this year. Whereas Nintendo claimed 43 percent of that market's software dollars during the January to May period in 2009, its share fell 9 points to 34 percent during the same period in 2010. To shine more light upon the situation, we spoke further with Pachter and he provided market share data on the history of software sales. We extrapolated into software unit sales estimates (reproduced below). Note that the estimates shown below are only for retail U.S. software sales and does not represent data for software packaged with hardware (like Wii Sports) or sold through online distribution portals like Xbox Live Marketplace, the PlayStation Store, or the Wii Shop Channel. Moreover it does not include data from 2010 for the Xbox 360, PlayStation 3, PlayStation 2, or Wii. historical-software-sales-trends.png We believe this graph makes it somewhat more evident why there is some consternation regarding Nintendo Wii software sales. Compared to the PlayStation 2 -– which clearly has earned its reputation as a software-selling platform – software for the Wii ramped up even more quickly, reaching over an estimated 70 million units during its second full calendar year on the market. However, it then appears to have hit a plateau in 2009 with sales inching up only marginally, and falling behind the estimated trajectory of PlayStation 2 software sales. By the end of its third calendar year on the market, the Wii had sold just slightly more software than the PlayStation 2 had done by the end of its third calendar year. However, the Wii moved that much software on an installed base 5 million systems larger than what the PlayStation 2 had. (For those familiar with the term as used by the NPD Group, this means the PlayStation 2 had a higher tie ratio, more units of software per system.) And it appears somewhat unlikely that Wii software sales in 2010 will reach the same level they achieved in 2009. The way Wedbush's Pachter looks at it, the Wii may shift fewer than two units of software per installed system in 2010, its fourth full calendar year on the market, a rate he termed “unprecedented”. Indeed, if we were to compare the Wii to the PlayStation 2, the system whose sales ramp looks most like that of the Wii, our estimates indicate that it did not fall below two units of software per installed system until its sixth or seventh full calendar year on the market (2006 or 2007). It appears that the GameCube fell below that rate during its fifth full calendar year, as did the original Xbox. In the latter case, we note that that was the same year that Microsoft's successor platform launched, which no doubt affected original Xbox software sales. There is another possibility we can consider. Given the longer lifecycle for which the Xbox 360 and PlayStation 3 seem destined, perhaps the Wii will also see an extended middle age during which its software sales maintain a strong but flat level. The Wii would retain its place as the system with the greatest software sales were it to maintain the 60-70 million unit level this year and next.

About the Author(s)

Matt Matthews


By day, Matt Matthews is an assistant professor of Mathematics. By night and on weekends, he writes for Gamasutra, Next Generation, LinuxGames, and on his personal blog, Curmudgeon Gamer.

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