News that Microsoft slashed the price of its Xbox 360 in the Middle East this month led many gaming industry experts to speculate whether the next-generation console was in trouble.
Figures released by market researcher NPD Group show the Wii outsold its competitors almost two-to-one last month in the United States, selling 432,000 units, while Sony’s Playstation 3 sold 281,000.
Lagging behind was Microsoft Xbox 360, with only 255,000 shifting in one month.
According to Armagan Demir, head of Microsoft Entertainment and Devices Division, Middle East, the Xbox 360 “is now priced in a way that will allow new consumers to find out for themselves why Xbox 360 is the ultimate in high-definition entertainment”.
Data released by Microsoft and Sony suggest around 30 per cent of the UAE’s population play games and own at least one games platform in their household.
Aman Sangar, product marketing manager of Microsoft Middle East, told Emirates Business: “The gaming industry is currently growing rapidly across the Middle East as the region is characterised by its high youth population and high disposable income.
“With over 25 per cent of the population being under the age of 16 in the UAE, the demographics make it a lucrative market for gaming consoles and third generation entertainment.
Tim Stokes, sales and marketing director, PlayStation Division, Sony Gulf FZE, added: “Our internal estimates suggest around 30 per cent of the UAE population plays games on a regular basis, and that a same percentage owns either a Playstation 2, PSP or Playstation 3.”
It all started a little under a year ago on March 27, 2007, when Sony’s Playstation 3 was launched in the UAE, with “hundreds of people across the UAE gathered in malls to be the first to get their hands on it”, Stoke said. “While we cannot release local sales figures, globally Playstation 3 plans to sell over 11 million units worldwide by the end of this month.”
The console’s key selling points have been some very successful software titles, such as Motorstorm and Assasin’s Creed, plus the PS3’s support of Blu-ray discs, a feature that has been welcomed by consumers.
Stoke added: “There have been a number of key titles driving the success of PS3 at launch, including Motorstorm and Resistance: Fall of Man.
“There have also been innovative titles such as Eye Of Judgement, featuring the PlayStation Eye camera offering a completely unique gaming experience, and SingStar, which features the SingStore, which enables consumers to go on line and purchase additional music tracks to add to their collection.”
In terms of Microsoft’s Xbox 360, it is well known it has been an inauspicious start to 2008 for them, with the company failing to meet sales expectations due to inventory shortages, after an incredible high demand during the holiday season.
Officially launched in the UAE on April 27, 2007, the consoles did not shift as quickly as the PS3. However, the release of Halo 3 reignited the interest in the console, proving that the brand is incredibly important to Microsoft.
“Halo has moved beyond being just a hugely popular game to becoming an entertainment phenomenon.
“In November 2004, the world’s view of video games changed forever with the release of Halo 2, which generated a record-setting $125 million (Dh459m) in sales in the US within the first 24 hours and changed the way people think about interactive entertainment,” Sangar said.
“Then on September 26, 2007 Halo 3 went on to break first day entertainment sales record raking in a whopping $170 million in the first 24 hours after launch in the US alone. In the UAE, the response was incredible, with people rushing to stores to purchase their copy of Halo 3.
“UAE retailers have come on record stating Halo 3 was the fastest-selling game for them, however, this was expected based on the pre-order campaign excitement Halo 3 had garnered in the UAE.”
In fact, Sangar stated, Halo 3 went on to become the entertainment phenomena of the year and gaming history with first week worldwide sales of over $300 million.
When leading US retailers such as Warner Bros, Wal-Mart and Best Buy favoured Blu-Ray discs as the standard for next-generation DVD formats, an increased demand for the PS3 occurred almost immediately. Jack Tretton, president and CEO, Sony Computer Entertainment America, confirmed this.
He said: “Consumers are recognising the tremendous value of PS3 and we believe Blu-ray becoming the high-def format of choice was the tipping point for many consumers.”
Fortunately, not all is lost with Microsoft. Maybe the Xbox 360 was beaten, but in terms of games sales, the Xbox 360 are still best sellers.
According to last month’s official top 10, the top spots were taken by Call of Duty 4: Modern Warfare with 296,000 units and Devil May Cry 4 with 295,200 units.
So is Microsoft’s gaming console really in trouble? With a fresh supply of Xbox360 consoles expected in April, it remains to be seen if these latest figures reflect Sony’s PS3 upward trend or just a circumstantial position on the gaming market.
“This stalemate between the Xbox 360 and the PS3 is expected to continue well into April with the prediction market expecting the PS3 to outsell the Xbox 360 320,000 units to 315,000 units in March and a reversal in April with the Xbox 360 outselling the PS3 386,000 units to 371,000 units, respectively,” said Divnich.
While Microsoft and Sony continue to battle it out, Nintendo sits atop its perch in the United States, and the Wii continues to sell every unit the company can produce.
However, the same cannot be said for the UAE since the console is yet to be officially launched in the country, meaning it does not have an official Middle Eastern distributor as yet.
Additionally, one major problem they face is that hardware comes in NTSC format since consoles are exported from Japan, but most software is in the European PAL format, resulting in sales suffering.
US games sales, February 2008:
1) Call of Duty 4 (Xbox 360): 296,000
2) Devil May Cry 4 (Xbox 360): 295,000
3) Wii Play (Wii): 290,000
4) Devil May Cry 4 (PS3): 234,000
5) Guitar Hero III (Wii): 223,000
6) Mario and Sonic: Olympic Games (Nintendo DS): 206,000
7) Lost Odyssey (Xbox 360): 204,000
8) Turok (Xbox 360): 198,000
9) Guitar Hero III (PS2): 184,000
10) Rock Band (Xbox 360): 162,000
Hardware sales, February 2008, United States
587,600: Nintendo DS
432,000: Nintendo Wii
351,800: PlayStation 2
280,800: PlayStation 3
254,600: Xbox 360
243,000: PS Portable
Source: The NPD Group
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