DEC. 13, 2013 • With two new console introductions driving consumer demand the month of November turned out to be a robust month for U.S. video game hardware and software sales. Some of that was no surprise as it was already disclosed that PlayStation 4 and the Xbox One had already crossed sales of more than 2 million units each globally. What was something different is that Nintendo of America reported sales of the Wii U had increased more than 340% over October, building on the uptick already reported. As for Sony and Microsoft’s latest consoles, the NPD Group reported that retailers moved 1 million PS4s and 900,000 Xbox Ones in the U.S. during November. Those are tallies that took the PlayStation 3 four months, and the Xbox 360 three months, to accomplish. Dealers were also selling two games with each of the news systems sold. Consumers picked up plenty of Nintendo 3DS and 2DS handhelds during the month – 769,000 units to be exact – bringing the lifetime total in the U.S. to 10.5 million.
Impact: Compared to the PS3 and Xbox 360 launches both Microsoft and Sony sold-in significantly more units. We feel this was due to the strong branding created by those predecessors combined with a more consumer friendly price point – especially for the PS4 versus PS3. Also using more standardized components goes a long way in explaining why both companies were able to roll out so many more consoles. So much so that Sony just launched in 16 more countries: Bahrain, Bolivia, the Czech Republic, Greece, Kuwait, Nicaragua, Oman, Paraguay, Qatar, Saudi Arabia, Slovakia, South Africa, Turkey, United Arab Emirates, Uruguay, and Venezuela. As we expected, North American is accounting for about half of total units sold. Tie-ratios have dipped slightly, however. That might be a factor of gamers generally buying fewer games overall and playing them longer, or that there are more hardware/software bundle options for PlayStation 4 and Xbox One buyers this cycle. 
These systems were also clearly helped by the lack of competition from Nintendo. Nintendo did not disclose how many Wii Us were sold last month, but given that 300,000 Wii Us were sold globally in the quarter ending September 30, we would estimate that the number of units sold in the U.S. during November was somewhere between 150,000 to 250,000. The September price reduction to $299 definitely set the stage for the Wii U’s better fortunes, but the late November release of Super Mario 3D World, which sold 215,000 units, likely had a small positive affect on Wii U sales – though nothing like Mario games of the past.  Nevertheless, sales of Wii U remain pathetic. The Xbox One and PlayStation 4 each sold more in the last weeks of November than the Wii U sold the entire first 11 months of 2013. As for the 3DS family, handhelds make for desirable and generally affordable gifts. That goes a long way in explaining the decent sales of these units. That there is also a slew of strong 3DS games headlined by The Legend of Zelda: A Link Between Worlds, Pokémon X and Pokémon Y, was also a contributing factor. The trend to watch moving forward is what percentage of consumers move onto digital game purchases in the months ahead. The new systems all will heavily promote digital sales and even Nintendo is promoting digital downloads for its platforms, especially the 3DS.
