'Halo 3' drives spike in Xbox sales; can Sony recover?

Posted Oct 19th 2007 6:50AM by Douglas McIntyre
Filed under: Launches, Industry, Competitive strategy, Microsoft (MSFT), Sony Corp ADR (SNE), Technology

Halo 3 may have done better than expected, but it also had a very long tail that pulled up sales of the Microsoft (NASDAQ: MSFT) Xbox 360.

NPD, the research firm, reported that Microsoft sold 528,000 consoles in September. The FTwrites that NPD said "3.3m US copies of Halo 3 were sold in the five-week retail period, despite the game only being launched on September 25."

The Nintendo Wii sold 501,000 units, also a monthly record. But the Sony (NYSE: SNE) PS3 sold only 119,000.

While Xbox 360 sales almost doubled from August, and Wii sales were up 24%, the PS3 number was actually a slight drop.

The September headline may be about Halo 3 and Xbox 360 sales, but most of the story has to do with Sony. After years of dominating the video game business with PlayStation 2, its new version is widely considered a failure. It is unclear whether a recent price cut can change the momentum as the holiday season gets into full swing.

It may be that the gaming unit, which drove Sony's earnings for so long, will never do so again and that the big Japanese company will have to rely on TV and consumer electronics sales along with the results from its movie studio.

The PS3 may be doomed.

Douglas A. McIntyre is a partner at 247wallst.com.

Even if it fails i'm still going to make the most of it. Ratchet and Clank comes out in a few weeks!CerMakAlot

Well Halo 3 was the game every1 that even knew what an xbox was, was waiting for so it's pretty much expected that it'd sell consoles...

Ps3 still has a price cut and a load of pretty cool games coming this fall/winter plus through '08...I doubt it's doomed

Besides so far the only major games have been original IP's which no one was sure of...I'm sure resistance and motorstorm sequels would draw a bigger crowd as well as games like God of War, GT5 and other established franchises...

Basically I'd say Sony haven't even pulled out the big guns yet...just been warming up...while Microsoft are blitzing away!

Does the PS3 have the ability to come back? Certainly.

Will it? Who can be sure.

Its not like 360 sales are gonna be this high every month. its because of Halo.Zero5000X

Only one thing for it MS. Release even MORE good games.

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Another day, another PS3 price cut. Sony (NYSE: SNE) will roll out a $400 model of its fledgling PlayStation 3 video game console, hoping to somehow price itself back into the market it once dominated. The company's also dropping the price of its 80-gigabyte PS3 from $600 to $500.

The new model will have a 40-gigabyte hard drive -- less storage capacity than the mainstream model, but twice as beefy as the 20-gig drive that rolled out with last year's now-discontinued, $500 entry-level PS3.

The $400 PS3 won't play earlier PS2 titles. That's a bigdowner for PS2 owners who were waiting for a price cut. It's not much of an incentive toupgrade if your existing library is obsolete. Still,the price is right, even it's still a bit higher thanthe Nintendo (OTC BB: NTDOY.PK) Wii's $250 or the entry-level Microsoft (Nasdaq: MSFT) Xbox 360 at $350.

Is Sony desperate? You bet. Did I mention that this $400 hardcore gaming machine also doubles as a Blu-ray player?

Sony is certainly packing a lot of value into its console, figuring that consumers will buy in sooner or later. So far, the PS3's performance hasn't been pretty for Sony; its sales lag those of both its latest rivals.

Lacking "can't miss" proprietary titles like the new Zelda on the Wii and Halo 3 on the Xbox 360, Sony is realizing that you can't win a video game war on spec sheets alone.

Software developers follow the money. When Sony's PS2 was the gaming platform of choice, top dogs like Electronic Arts (Nasdaq: ERTS), Take-Two (Nasdaq: TTWO), and Activision (Nasdaq: ATVI) had no problem pursuing the larger Sony audience. Now developers are slaving away to make the most of the Wii's revolutionary motion-based controller. (Trust me, Madden football on the Wii is a whole new experience.) Heck, even tiny Majesco (Nasdaq: COOL) is putting out some "cool" Nintendo games.

How low can Sony go? It's been widely reported that Sony was losing money on the initial consoles. It's likely to lose even more with every price cut. Component prices don't fall that quickly. Sony's hoping to offset the subsidized hardware through software sales and the championing of its Blu-ray platform -- but is that even possible at this point?

Right now, it seems that Sony's simply trying to save face. It's as if the company will do anything to make sure that it's not wearing the embarrassing bronze medal around its neck by next year's holiday season.

If that's the case, look out below. Sony has just $399 more in price cuts before it starts giving those suckers away.

A PS3 history lesson:

No...no...no. The TC just doesn't get it.....tsk...tsk..

Cows have repeatedly claimed that all the Halo fans already bought an x360 before Halo3 launched. Now these honest & trustworthy cows wouldn't mislead people, would they?

ps3 will sell well in cowland (Europe), but i think that as most devs are in the US and as they tend to focus on US sales, Europe will come around in the end. The only thing that is holding MS back is the core which virtyually no one is buying.valakos

Here in the UK Nintendo went from being the nerdiest company alive with the most anti social fans in history and now everyone wants the damn thing. Sony on the other hand still have brand loyalty, but it seems like the type of loyalty Nintendo had 5 years ago with the GC.

Its not like 360 sales are gonna be this high every month. its because of Halo.Zero5000X

IDK why cows downplay Halo's effects. When sales spike, it's like "duh price drop" or "duh Halo 3".

YES, A GREAT GAME SPIKING CONSOLE SALES? WHAT'S SO IMPORTANT ABOUT THAT?

That means EVERYTHING in SW!!! 360 has tons of great games = 360 does well. PS3 has 0 great exclusives = PS3 sells terribly.