Friday, January 26, 2007

Almost five games sold per Wii console, more than six in the Americas

Nintendo has sold 3,19 million Wii consoles until the close of the calendar year. A phenomenal 17,51 million software units were sold alongside them, the company´s third quarter financial report (PDF) details.

Doing my own maths here and discounting the 2,05 million copies of ´Wii Sports´ that were bundled with the console outside of Japan (see below), 15,46 million software titles were sold, making for a phenomenal software tie-ratio of 4,85 (games sold per console). Here are the official figures:

Wii Hardware (in million units)

Japan: 1,14
The Americas: 1,25
Other: 0,80
Total: 3,19

Forecast until March 2007: 6,00

Wii Software (in million units)

Japan: 4,33
The Americas: 9,02
Other: 4,16
Total: 17,51

Forecast until March 2007: 21,00 (excluding bundled titles)

From this point on, I am doing my own maths again, but this is not exactly rocket science. I am now subtracting the amount of consoles sold from the amount of software sold for all regions outside of Japan, in order to discount the bundled title ´Wii Sports´. One copy was included in every hardware bundle in the Americas and Europe, so this will result in the amount of software actually sold over the counter.

Wii Software (excluding bundled titles, in million units)

Japan: 4,33 (not bundled, no change)
The Americas: 9,02 - 1,25 = 7,77
Other: 4,16 - 0,80 = 3,36
Total: 17,51 - 2,05 = 15,46

I am now calculating software attach rates (tie ratios) on the basis of the above figures, i.e. for both the software sales figures including and excluding bundled titles.

It is a simple matter of dividing the amount of games sold by the amount of consoles sold, resulting in the figure of games sold per console.

Wii Software attach rates (including bundled titles)

Japan: 4,33 % 1,14 = 3,80
The Americas: 9,02 % 1,25 = 7,22
Other: 4,16 % 0,80 = 5,2
Total: 17,51 % 3,19 = 5,49

Wii Software attach rates (excluding bundled titles)

Japan: 4,33 % 1,14 = 3,80 (not bundled, no change)
The Americas: 7,77 % 1,25 = 6,22
Other: 3,36 % 0,80 = 4,2
Total: 15,46 % 3,19 = 4,85

You can tell my maths is correct by a simple cross-check: Compare the tie ratios for both the Americas and Europe in the two tables above. The figures excluding bundled titles account for exactly one whole game less than the inclusive figures - that game being the bundled title.

´Wii Play´ bundle distorts figures slightly

A tie ratio of 4,85 is a phenomenal figure, but there are a number of things to bear in mind. One, almost every Wii user will have opted for the ´Wii Play´ and extra controller bundle, which should account for the strong tie ratios in both Japan and Europe.

However, the tie ratio is strongest in the Americas, where that bundle is not yet available. More than six games were sold per console there, which sounds almost incredible. I have checked and double-checked the figures, though, and it must be true - or there is a typo in the financial report, which is very unlikely.

Virtual Console games included?

There is the theoretical possibility that Nintendo chose to include Virtual Console game sales in the Wii software sales. The version of the report available to me makes no mention of Virtual Console game sales.

Kotaku claims that the full report makes mention of 1,5 million Virtual Console games sold, though. If those had been included and even if all of those sales had occured in the Americas, you would still arrive at 6,27 million games sold in that region, making for a tie ratio of just over 5 (a little over a full game less). So, even if they were included, VC game sales would not distort the figures much.

It also seems unlikely that Nintendo included the VC games. The company only expects to have sold 21 million games by the end of March - if the above figure did include Virtual Console games, then the forecast should be a great deal higher, I believe.

Can review units have pushed software sales?

We should, however, make some allowances for industry analysts, members of the press or other professionals who may have received a review console from Nintendo and have bought their own games over the counter. This is the only reasonable explanation I can find for the high attach rate in the Americas.

Tie ratio to drop significantly

At any rate, the tie ratio is set to drop sharply. Nintendo expects it to drop to around 3,5 by the end of March. They expect to have sold a total of 21 million games (excluding bundled titles) by then. Divide that by the amount of consoles expected to be sold up until that point (a total of 6 million worldwide) and you get a tie ratio of 3,5.

It is also common sense that the tie ratio must drop, if every American that already bought a console last year really splashed out on slightly more than six games each. That should be enough to keep them busy until the second half of 2007 when we will see a tidal wave of blockbuster Wii titles coming out.

EDIT The same document has now been made available on the Nintendo of America press server. Unfortunately, there are no further notes that help clarify the discussion (see comments) whether the ´consolidated sales´ only refer to units being sold to retail, not to the end consumer.

Source: Nintendo Co. Ltd. Investor Relations (PDF)
Thanks to: Kotaku


Metaldave said...

Wow, falafelkid great job with those numbers. I don't see any mistakes in your math at all and yes 6 games per console sold in the US/Americas is a huge number. You would think people would have just gotten 2 games-maybe Zelda and one other.

I think people who were able to buy a Wii at launch continued to buy games until the end of the year since some did come out in December.

I think people are seeing this system as "a Wii" and not "a Nintendo" if that makes any sense....

Anonymous said...

yeah, that makes sense dave... that's what nintendo was shooting for.

awesome job with the numbers falafelkid. i did my part to help these numbers, too. i'm a good little fanboy and currently own 7 games for wii, and i also bought 5 virtual console games, 2 vc controllers (to go with my two wiimote/nunchuk pairs) and of course, an SD card.

there are actually 4 more wii games i wish i owned right now, but just can't afford! it's all just too much! oh the horror!

go nintendo!

-"superfan" tactics.

Starstriker1 said...

Holy CRAP, that is a lot of titles per console...

Anonymous said...

I think people buying the games to get ready for the console is a large number as well. I know a few people in my area who have done this. They went and aquired the games already, but they do not have the system in hand. I believe this could be a larger number than people are thinking and would skew the numbers, but no matter what it is still good news for Nintendo.

Carmine "Cai" M. Red said...

Aren't those shipment numbers?

And don't the numbers ALREADY exclude bundled software? Just look at that little footnote at the bottom...

btw... /cry Nintendo wiped out my life savings between the Wii and the DS... I've got like... 13 Wii games with another one coming in the mail... /cry

~Carmine "Cai" M. Red

Anonymous said...

I don't think reviewers can really make that much of a difference. I mean of the millions of consoles sold how many reviewers are there really. A couple of hundred? Would they really make that much of a difference

Falafelkid said...

Hi Carmin.

Aren't those shipment numbers?

And don't the numbers ALREADY exclude bundled software? Just look at that little footnote at the bottom...

Firstly, the numbers do not simply concern shipments, I believe. The report mentions ´consolidated sales´, consolidated meaning that both a parent company and its subsidiaries are accounted for (though sales between, to and from the subsidiaries may have been eliminated from the figures).

It´s possible that sales mean sales to retail rather than to the end consumer, but this is all but clear in the report.

And the numbers definitely do not exclude bundled software. The footnote you mention only concerns the forecast of software sales. Good questions, though. Thanks.

Hi Anonymous.

I don't think reviewers can really make that much of a difference. I mean of the millions of consoles sold how many reviewers are there really. A couple of hundred? Would they really make that much of a difference

Well, I am clutching to straws here, you are quite right. But if those really are sales, then the figure would be immense.

My guess is that the number of review consoles in the US could be a little higher than you estimate, though, perhaps around 1000.

Anonymous said...

Great numbers! And great job, Falafelkid!

Now...could you please bring some more hype-stories and rumors, I really love the speculations those stories lead to :D

King D said...

Go Nintendo!!!!!!!
And Great news for developers is well;)

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