Can Halo 3 Put Microsoft In Console Control?

43 Comments

Halo 3By now you’ve probably been buried in the hype surrounding Halo 3, Microsoft (MSFT) Xbox 360’s exclusive “killer app” game released this week– the canny live action commercials featuring old veterans praising the franchise’s hero, Master Chief, the prominent coverage in the New York Times, the long lines and Chief tattoos and other totems of gamer enthusiasm.

With all that excess, you might assume this means Halo 3 is the game phenomenon of the year. And that would be a mistake.

From the market’s point of view, all that fanboy energy is a sideshow. The reality is that the 360 is no longer the market’s most popular next gen console: the Wii owns that spot, now with more than half a million more units sold worldwide (currently 11.78 to the 360’s 11.10 mil, according to Video Game Chartz). For that matter, the 7 year old Playstation 2 is still going strong, and even into this year, was still outselling the 360.

(Only last month did the 360 finally manage to slip past a system released during the Clinton administration, for God’s sake.) On pure numbers, then, the 360 is still a niche system, and while Halo 3 will sell well with the 11 million who already own one, the big question is, will it move significantly more 360s? And the even more crucial question, will it move the 360 back to its short-lived lead among next gens?

I’ll go on record right now and say No and No.

Hardcore gamers dominate console adoption patterns in the first couple years, and not coincidentally, Halo 3 will appeal to them most. So it’s safe to say most of those who want to play Halo’s final chapter already own one. Of course there’s stragglers (like me), but will they spend several hundred dollars for a new system plus $60 dollars for the game itself just to find out what happens to Master Chief? (Especially when influential game reviewers are beginning to express buyer’s remorse and deep disappointment with Halo 3.)

“I don’t think it’s really going to do much for the 360,” says Alexis Madrigral, very recently a game industry analyst with DFC, now a contributing writer for Earth2Tech. “The rest of their holiday lineup is what’s going to count. Can they get games out there that appeal to kids, women, and non-FPS fans not just in the US but in France, in Spain, in Germany?”

And of course, the significantly cheaper Wii has far more appeal to all those groups, not to mention the market-driving Japanese, who’ve never taken to anything from Microsoft. Meantime, Nintendo, which had a dearth of Wii titles at launch, is rolling out a massive variety of games and peripherals for the holidays, including a Wii-exclusive Metroid title, and even more seductive, a gun-shaped controller. And while Nintendo’s new console has already won over non-traditional gamers, these will do a lot to bring the hardcore into the Wii fold. While hurting the 360’s sales.

Don’t believe me? According to the Wall Street Journal’s game blog, just days into Halo 3’s launch, the Wii is back to outselling the 360 on Amazon.

Image credit: Halo 3.com.

43 Comments

Sagrilarus

A couple of bullet points —

  1. The Wii is not a niche product, as it appeals to a wider audience than either the 360 or PS3. Indeed the latter two platforms can more correctly be labeled “niche” due to their higher entry barrier.

  2. Wii numbers for console (and software) sales are being depressed because they are still hard to come by in many parts of the US. My neighbor spent six weeks finding one, my coworker about a month. Both got platforms via “inside” people at retail stores.

To some extent you’re comparing apples to oranges with the 360 and Wii, but here’s what boils down —

  1. Wii has a target audience that is ten times the size of the 360’s, so only has to achieve 10% the penetration to equal the units sold.

  2. Landing a much larger proportion of the six-to-fifteen-year-old age bracket bodes well for the Wii, as these kids will grow up expecting something other than the thumb-buster control.

  3. Nintendo introduced a fundamental concept change to how vidgames work and has people looking to them for the next gee-wiz innovation in HCI development. In short, they swung for the fences and cleared the wall of the ballpark, let alone the fence.

I enjoy both platforms, but enjoy the Wii more for EXACTLY one reason — I can play with my kids. My fellow adult gamers find that their 360 sits cold on the shelf until the kids go to bed. This is a problem for Microsoft and Sony. They can be profitable; they stay in the business and move consoles, but that doesn’t change the fact that this is indeed a problem for Microsoft and Sony. Likely this problem will remain until the next major release of hardware.

Sag.

Daniel Golding

James, please try again. I just purchased an XBOX 360 to play Halo 3 (and Bioshock). The Wii is for my wife and in-laws.

The Wii is a great success, but come on, its a different demographic entirely.

kaveh

there was a time that it was hard to tell whether Giga Om (starting with Om, himself) is partial and biased. It’s getting easier and easier.

In any case, this is not a game that’ll end … Nintendo, Microsoft, Sony will continue try to one-up each other. Most gamers own two or all of the leading consoles.

Side note: I am long time subscriber to this blog, but I read it less and less because it sounds more and more like a blog for all things anti-Microsoft.

blah

All:
Its but waste trying to point out the ridiculous fanboyism that has become anything but unbearable on Gigaom (not just gaming by Wagner). Do check out another piece on video.msn.com on Newteevee — stinks of the HUGE bias against it right from the start while it is being termed video site of the future by very well respected bloggers like ReadWriteWeb.

Gigaom and its stupid fanboyism is going to happily steer me away from this site — the team can bend down to smell farts of Google and Apple and can NEVER be unbiased and appreciate anything that MSFT would do. For the record, I DO NOT like MSFT myself, but biased reporting/blogging is just contemptible!

Gigaom, yeah do that bend down suck your Google’s and Apple’s ***** and **** their asses. F*cking fanboyism!

Steven Hellings

James,

See how your statements change for one post to the next. You are REALLY bad at this job and intellectually lazy. Get your facts straight before you open you mouth! Outselling is different than ranking above. Since you did not have specific unit sales then you should have never stated that Wii was outselling the xbox 360.

First Quote by James
” No, Halo 3 has three SKUs. The WSJ reported that the Wii is outselling the 360 on Amazon on a week that should be the system’s strongest.”

Second Quote by James
“That doesn’t follow, unless you have specific unit sales to add up. In any case, it doesn’t change the main point that the WSJ says Wii ranks above all 360s on Amazon’s chart. On the 360’s biggest week.”

Darren

this is the 2nd anti xbox pro wii article you have written and that in itself proves a point.

As an above poster pointed out most 360 owners have a wii.

I don’t see that they are in competion, MS and teh Big N have stated as much.

will halo3 shift more 360s I would say yeah, Its not going to shift many more but it will shift some. GTA4 will shift more I think.

Microsoft need to do a $100 price drop to own this market.

The wii is not a next gen platform. In fact the 360 is not a next gen anymore. Lets all move on now please.

Om please ban this guy from writing about this stuff…

Chuck

Has everyone forgotten that MSFT would like to MAKE money selling XBoxes and games? The fact is, they aren’t and haven’t been since it was introduced. And now they are having to take a $1B charge because of warranty issues. You can state the XBox is a great gaming platform and Halo 3 is an awesome game, but the reality is MSFT is not in the charity business. They have a choice to either continue losing money, try to change their strategy to hopefully start making money, or pull out of the market all-together.

Eric Atkins

These anti-XBOX360 articles on Om are getting old. And your reporting is not balanced. I don’t mind you throwing out your opinions to the world. But at least present more than a lop-sided view of the situation.

It shouldn’t be OBVIOUS to the readers that you’ve got something against the XBOX 360 and that you are pro-Wii. But it is.

You failed to mention that:

  • the PS2 also outsells the Wii and PS3. It’s an amazing system.
  • PS3. You mention a PlayStation, but you don’t mention how poorly it’s selling. Microsoft is beating SONY’s next-gen offering.
  • Halo 3 sold $170,000,000 worth of games in 24-hours. Has any other game done that?
  • The Wii is a niche system with a niche controller because game developers are having a hard time making games for the controller and those games don’t port well to other platforms.

But you are right. I don’t expect Halo 3 to dramatically increase the number of XBOX 360 sold. But, if any game is going to sell consoles, it’s going to be Halo 3. What other game on the PS3 or Wii platforms is going to sell more on launch day than Halo 3?

I don’t expect the XBOX 360 to catch up with the Wii. I didn’t expect XBOX 360 to outsell the PS3. But it is.

Chris

First Halo3. the only thing Halo 3 is bringing to the table that no other game has is the marketing team. I give full kudos for making the launch a ‘cultural event’ on the scale of Phantom Menace. It is up there with the launch of Quake, but mainstream. Of course, from what I’ve played so far- that is exactly what it is. After ‘hardcore’ gems this year in Bioshock and Stalker (here are your dots……..) a rail shooter with a pulp story just doesn’t hold up. Yeah it’s fun, but fun in a week or two fun, not in I’ll be playing this for years fun. This is not a game I’ll dust off to play agin in two years like Diablo or even God of War.
As for MP – um I guess. But competitive FPS MP to me still sucks on a console- as long as it has some auto aim. Back in the day, auto aim got you banned from servers, now in console world it is excepted.
Wii vs. XBox and the hardcore. First if you are a hardcore gamer you use a mouse :). But if we stick to console world, the upside of the Wii far outshines what the XBox can bring. Yeah it is the party game system at the moment- but when it gets a lightsabre game, a few good shooters with good mp (and that gun controller) what are you going to be playing? The most used console in my house is still the ‘Cube, the games are just fun. Sure cartoony, crappy graphics whatever, Nintendo’s design is what it should be: gameplay first pretty pictures second. Besides if I want ‘OMG’ graphics I go in the basement to my PC that outshines anything any console can do. As a long time gamer who has been playing MP on the net forever, I still scratch my head on why I have to pay MS to play, which makes me just go back to the basement and boot up UT, or Battlefield for free.

monal

its almost laughable now that we don’t even mention PS3 in the next gen debate then again for MS beating Sony was all that mattered. Being a Wii360 owner so far has been a colossal disappointment on the side of Wii. It is most definitely a fad device in the next gen realm so far but oh well the general public loves so let them eat it up.
The author of this entry definitely has issues with the 360 as all of his articles have had a negative slant from 360 failing to the Halo movie being unrealistic. Its actually amusing to the point no one can take em seriously……….

TDavid

James – you must not have read very carefully that one review you linked to as evidence that people are having buyer remorse with the Xbox 360. The blogger is clearly disappointed with the single player version of Halo 3

“But as far as a single-player experience, Halo 3 is a colossal disappointment, “

Doh!

Big Gamer

Give me back the 2 minutes of my life I just wasted reading this fanboy crap. If you want to write an article and be taken seriously, then write about facts, not fanboy hopes and wishes.

Omar Ismail

You know, rather than this silly sales talk which I don’t really see the point of. What I think SHOULD be covered is the revolution in game-specific User-Generated Content that Halo 3 brings to the table. Sure there has been mods before. Sure there have been level editors before.

But there’s never been level editing, game-type creation, saved film creation on a scale such as this. With such a ridiculously simple way to make them, and share them.

The fact that you can queue up a download of a map variant from the web that’ll automatically start the next time you boot up the game is revolutionary. This hasn’t been seen in a console game before. And it’s in such an influential game that it will have repercussions for a long time to come.

Habib

It’s okay to be divisive, half of America makes its living that way but to be plain silly? Did you marry into Om’s family?

You have to understand the depth of the issue. This isnt plain “oh my 100 dollar widget sells more then the 300 dollar widget. I have won the console wars. Yippee!” scenario in the first place. The XBox’s online play changes everything. and to think that Wii is even the 360’s competition. Heavens young man. Did you just come out of the fallout shelter yonder?

But since you seem to relish basic paradigms here is teh conclusion of August NPD figures: Xbox 360 sales were up 63 percent over July and 35 percent over August 2006. Microsoft points out that PlayStation 3 sales saw an 18 percent decline and the Wii, although it is still number one in sales, saw a five percent drop. The 360 is currently out-selling the PS3 by more than 2:1.

Software sales on the 360 were more than the Wii and PS3 combined, but of course it has a larger installed base than Nintendo and Sony’s latest consoles. Since last November when the Wii and PS3 arrived, gamers have spent more of their cash on 360 software ($24.3 million) than the other two systems combined ($19.8 million).

NobodyHereButMe

Don’t forget to consider the attach rate. If the installed base is comparable or even slightly less but the attach rate is still higher for the 360, then there’s not much for MS to worry about — they still get a good chunk of change and enjoy tons of publisher support since there would be comparable game unit sales.

If there are 2x as many Wii owners but 360 owners buy 2x as many games, MS is still laughing all the way to the bank. If the proportions shift so that publishers start to shift toward the Wii as their lead platform, then they have a serious problem

Raymond Padilla

“the issue is whether it’s substantially moving more 360s over the Wii. And again, that doesn’t seem to be the case.”

It’s kind of hard to tell considering the game has only been (officially) available for a few days.

Wagner James Au

“The Xbox has 3 SKU’s in the top 23 if you add those sales all together then it is OUTSELLING the 1 Wii SKU.”

That doesn’t follow, unless you have specific unit sales to add up. In any case, it doesn’t change the main point that the WSJ says Wii ranks above all 360s on Amazon’s chart. On the 360’s biggest week.

Steven Hellings

Oh my God James! Do you read? I am not talking about Halo 3’s different versions. The Xbox has 3 SKU’s in the top 23 if you add those sales all together then it is OUTSELLING the 1 Wii SKU. Understand?

Blake Snow

Strictly business here (no emotional attachment to some stellar games):

Will someone please paint the opposite picture for me (the one where 360 magically sells 115 mln systems like the PS2 despite having only sold 11 mln in two years), cause I’m just not seeing it?

When looking at the numbers, 360 is slightly above pace with the first Xbox — 24 mln life to date. It will take more than a single game to vault the 360 into long-term profitability.

I fear that poorly designed hardware and a $300+ launch price will ultimately result in a missed opportunity for Microsoft.

Omar Ismail

For a professional blog this is a pretty poorly written piece. I’ve seen far more educated and research posts on gaming message boards (www.neogaf.com for one). I think you’re somewhat out of your element here, and being a little iconoclastic for the sake of it.

Also you make points that SEEM to be self evident, but in actuality are not. Just because the Wii is selling better isn’t the whole story. Look at software sales. Look at who is making money.

The Wii is a phenomenon, there’s no doubt about that. But to discount what Microsoft has achieved with the 360 is foolish at best. I mean, a 6.2 attach ratio at this point in a console’s life is UNHEARD of.

And just another tidbit, if you look at the Wii’s weekly sales trends in Japan they’re dropping faster than bricked iPhones.

Suds

It doesn’t matter whether you guys think that the 360 is a better console or that the Wii isn’t for the ‘hardcore’, the fact of the matter is that number of units sold = profits = success

It’s just not doing as well as the Wii (worldwide); and I have to agree, I don’t think Halo 3 will translate into lots of extra 360s sold. Halo 3 will be an amazing hit (amongst existing 360 owners), but I don’t think it will sell enough new consoles to break the Wii’s lead.

Wagner James Au

Again, the issue is not whether Halo 3 in all its variations is selling well, of course it is; the issue is whether it’s substantially moving more 360s over the Wii. And again, that doesn’t seem to be the case.

ajadoniz

oh james, stop being such a silly goose. everyone loves a good david and goliath story, but, it’s only a fairy tale. besides the fact that you’re reaching, like comparing a DVD player to a Beta Max, and then distorting facts is sad :( James, that’s a sad emoticon.

Steven Hellings

WRONG AGAIN JAMES!

SKU 1 Xbox 360 Elite System Console Includes 120GB Hard Drive

SKU 2 Xbox 360 Console Includes 20GB Hard Drive (with HDMI)

SKU 3 Xbox 360 Console Halo 3 Special Edition (with HDMI)

ALL IN THE TOP 25. Is this three SKU’s James???

Wagner James Au

“The Wii is not outselling the Xbox 360 on Amazon since the Xbox has three SKU’s.”

No, Halo 3 has three SKUs. The WSJ reported that the Wii is outselling the 360 on Amazon on a week that should be the system’s strongest:

“New sales for Wii blasted the hardware past the Xbox 360 Premium to rank at No. 3 on Thurs. The Xbox 360 held a previous position of No. 6.”

david

I don’t know why people keep comparing the Wii to the 360. They’re for TOTALLY different markets.

If you’re a hardcore gamer, you’re not going to want to play a Wii when you’re down for real gaming. The Wii is for play and goofing around.

This isn’t from a 360 fanboy either. I own and enjoy both consoles and used to have a PS/2.

When friends are over, we play the Wii. It’s awesome for playing with the family or, hell, just drunk after a night out. When I’m in for real gaming, the 360 is up. I’m not even entirely sure why the Wii is considered “next gen”, it isn’t even HD.

You’re right it’s a niche market, but real gaming has always been a niche market. I think you’ll find that PS/2 users will graduate to being 360 users, not Wii users.

davidphile

No need to have a vested interest in Nintendo to see what’s going on. The Wii is cheap enough that the hardcore get it as a second console and friendly enough that everyone else gets it as their only console. Nintendo literally said they can’t compete in the hardware wars, leaving Microsoft and Sony to fight a bloody war. While the men are off to war, Nintendo slips into your village and has their way with your women. Mwahahaha!

I’m a Wii60 owner, BTW.

Steven Hellings

James,
What are you smoking? You and Om are so in love with Apple you can never give credit to Microsoft no matter what they do! Microsoft has a hit in Halo 3 and it will drive 360 sales. The Wii is not outselling the Xbox 360 on Amazon since the Xbox has three SKU’s. Funny how you you fail to mention that little fact. Lazy or do not want to tell the truth?? If this was Apple you would fawning all over Halo. This blog become less and less significant as the objectivity quickly disappears.

Waren

HIGH-larious!
Posting a link to one negative review out of thousands of glowing, positive ones. Quartertothree.com?

Nice reach. Except not at all.

Nintendo’s Wii will fade, just as the Gamecube did. Hell, I even bought into the Wii hype. Only to have the P.O.S. sitting in my entertainment center, collecting dust for the past 6 months.

The 360 is this generation’s Playstation 2.

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