April 2010 NPD Recap. And the problem with the Wii...

Last Thursday NPD released the April 2010 results data and below was the data they publicly announced:


For some reason NPD decided only to reveal unit sales of the top 5 titles of the month instead of 10. Maybe they were embarrassed at how low the lower half of the top 10 performed, but hey, they just report the data. How well or poorly sales do is not NPD's fault. The other standard tidbits they published for April 2010 (compared to April 2009):

• Total industry sales fell 26% to $766.2 million
• Software fell 22% to $398.5 million
• Accessories fell 9% to $118.4 million
• April YTD sales were down 11%

Specifically on hardware:

• Nintendo DS sold 440.8k units (vs. over 1 million units in March)
• Nintendo Wii sold 277.2k units (vs. 557.5 units in March)
• Sony PS3 sold 180.8k units (vs. 313.9k units in March)
  
• Microsoft Xbox 360 sold 185.4k units (vs. 338.4k units in March)

The gist of most headlines was essentially "train wreck" or "sales derailed" or "it's the end of the frakking world" and such. So what happened? Some analysts were baffled or even dismayed at these results. Several explanations were floated around, the first of which being that Easter came earlier this year so its annual bump was felt in the March sales data this year vs. April last year. That's at least partially valid. Another theory on the Nintendo angle was hardware shortages. I find that unbelievable because every Best Buy, Target, Fry's and Gamestop store I've been to all year always had hardware stock in. Always. If this far into the Wii lifecycle Nintendo can't manage supply, people should be fired. I guess some of it could be true, but again, I have never been unable to find a Wii at a Best Buy or Target or Gamestop in the last year.

I think the real issue was just there was nothing new and exciting to buy from Nintendo on its platforms. There hasn't been anything good released on the Wii since New Super Mario Bros. in November, and notice it was #3 on the April chart at 200k units. In other words, it's crushing new all new releases after November. March's Pokemon blockbuster releases on DS came in at #2 and #4 in April, which also explain the 1 million+ DS hardware units sold that month. Wii Just Dance is the only 3rd party game on a Nintendo platform to crack the top 10 and that was released back in November, too. The Wii 3rd party market used to be dominated by Guitar Hero and Rock Band. This just reiterates for the 1000th time that only Nintendo releases matter on its platforms, especially late in the cycle. Everything else that isn't Nintendo is either associated with Nintendo - as in Sega's Mario vs. Sonic Olympics game...it has a picture of Mario on the pack front and has Mario in the name - or is a fad.

Said another way...

...the only 3rd party games that will sell big on the Wii are fads genres: guitar, fitness, dancing and such.

To be fair, that's sort of the nature of Nintendo. You buy their platforms for the 1st party games like Mario, Pokemon, the occasional Zelda game, maybe even Metroid. You dip into the fad genres and the forget about them. After guitar games peaked in 2008, fitness games peaked in 2009, even though the vast majority of the fitness category was driven by Nintendo's Wii Fit and its balance board peripheral. EA did okay with Sports Active and there are some new entrants in 2010, but already year to date fitness is way behind mainly because the Wii Fit is down. It's old news.

What's going to be the fad genre on Nintendo in 2010 that's going to turn it around? Can anything turn it around? Price drops always help, but the thing has to sell software, both 1st and 3rd party, for it to continue (wait, resume?) to make big profits, even if the hardware itself is a profitable business.

So where does this leave us regarding the Wii? Rather describe the Wii platform as being dominated by casual gamers, I think a better term is fadfickle gamers. Yes, I'm making up a word. It's called "fadfickle."

fadfickle - a type of gamer who typically buys hardware and software as part of a fad. Once they get bored they stop playing and don't buy anything new unless it's part of a hot new fad.

The Wii is dominated by these gamers. They followed the guitar fad. A smaller portion followed the fitness fad. The bought the Wii in the first place because it was a fad and was cheaper than the 360 or PS3 and its software was, too. When it came out in 2006 "subprime" was not a well known word. Once the economy soured the probability of fadfickle gamers dropping two to four hundred dollars for various types of Wii bundles declined.

Compared to the 360 and PS3, the Wii is still the bestselling console month over month, however compared to YTD 2009, 2010 Wii sales are lower while both 360 and PS3 sales are higher, especially the PS3 thanks to the price drop.

What does this mean? The "core" gamer is still buying, but more on that later...