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Category Economy cars
No Picture
Created 2015-11-24
Owner sandywang5230
Title handhelds are averaging around $180
Description o let's break it out further, looking at each segment, starting with hardware.First, just in terms of raw hardware numbers, the picture is quite similar to the revenue figures you see above. As the Wii and Nintendo DS burned brightly throughout 2007, 2008, and 2009 hardware sales for consoles and handhelds saw tremendous gains.While the Xbox 360 has continued to grow its sales, especially in 2011, these sales haven't been enough to bend the effect of the terminal trajectory the Wii is following. Moreover, the introduction of two new handhelds - the Nintendo 3DS and PlayStation Vita PSV - did little to lift the market for dedicated handheld hardware.As Michael Pachter, analyst for Wedbush Securities, recently observed about May 2012 sales: "Over the last 11 years, console unit sales have averaged over 600,000 units in May, and over the last five years, unit sales have averaged over 700,000 units." That was the weakest May since before the PS2 launched in 2000. June was somewhat better, I believe, but still not good.The underlying problem here is pricing, I believe. One of the counter-intuitive trends in the past few years has been the unusual pricing models that hardware manufacturers have pursued. For example, the Nintendo DS launched at $150 and then dropped to $130 prior to the launch of the DS Lite model but then the introduction of the DSi and DSi XL models pushed the average price for the platform up above $150 again.Something similar happened with the introduction of Kinect for the Xbox 360, where the average price of the system went from a low of around $250 to well over $300 as the Kinect models were pushed heavily.On top of these de facto price increases, each manufacturer of hardware has been reluctant to cut their respective entry-level prices. As of this writing, the lowest priced non-contract Xbox 360 is still $200, the Wii is still $150, and the PS3 still can't be bought for under $250. I'd also posit that the PSP lingered too long at $170, when it should have been below $150.Of course, consumers had to agree to purchase those systems, so I'm not faulting the hardware manufacturers for pursuing winning pricing strategies. Rather, I'd argue that pricing for hardware in general has been much higher this generation and that has to have limited the market for these devices. Despite these impediments, the installed base on paper is much larger than at the same point last generation. See this column from last month on that score. Now, at the tail end of a generation, the hardware Runeacape players continue to maintain what I believe are unrealistically high prices. So far in 2012 the average price for the Wii has been right around $148, the PS3 around $269, and the Xbox 360 around $285. Combined, consoles are averaging $250 this year while handhelds are averaging around $180.While I don't have complete data from last year, I think the figure for consoles has come down around $25 per system while the handheld price has actually gone up. Remember that at this point last year, only the languishing Nintendo 3DS had an entry-level price above $170. Across systems of RS 3 Gold all types, the average price last year was $228 and this year's its just $224.Prices have to come down before the situation is going to change, and that's true for just about every system. I'll speak more to this for individual systems in a coming column.Let's move onto software, because the dynamics there are similar but slightly different because of the nature of the product. Comparing the first six months of each year going back to 2007, the picture looks like this.I've provided three retail estimates for the first half of each year: total units sold, total revenue, and year-to-date average selling price ASP . The YTD ASP is just the total revenue divided by the total units. A few months ago, I observed that the total software unit sales figures for 2011 could be suggestive that the erosion of the retail software market was bottoming out. That is, after declining about 7 percent per year in both 2009 and 2010, the unit decline in 2011 was a mere 1 percent.Yet retail sales so far in 2012 appear to indicate otherwise, since the year-over-year decline is already a staggering 30 percent.
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