Following yesterday's NPD July data report, Wedbush Morgan Securities' Michael Pachter has commented that while Xbox 360 and PS3 hardware was way up, the Wii was essentially flat. And when it comes to software, Wii sales were down quite a bit. While software sales for PS3 climbed $22 million and 360 software sales climbed $17 million, Wii game sales dropped by $41 million.
"Xbox 360 software sales benefited from the dramatic hardware sales increases from discounted models and the new slim Xbox 360, while the Wii appears to be suffering from console saturation and fatigue despite the recent launch of the Wii SportsResort/Wii Motion Plus bundle. PS3 sales continued to show solid year-over-year growth in both hardware and software," Pachter noted.
Overall sales in the industry definitely appear to be impacted by the Wii's sluggishness of late. "Higher hardware sales should result in growth in software sales, and that has certainly been the case for the PS3 and the Xbox 360. Unfortunately, Wii software sales were down significantly in July, driving overall software sales into negative territory... It is easy to say that the decline in Wii software is due to a lackluster lineup of games; we think that is largely true, but note that the PS3 and Xbox 360 lineups were also relatively light. Year-to-date, Wii hardware sales total 2.7 million, compared to 1.8 million PS3s and 2.4 million Xbox 360s, so it is difficult to blame the year-over-year Wii software sales decline on poor hardware sales. Instead, we think it is becoming apparent that the average Wii owner is just buying less software than his PS3 and Xbox 360 counterparts," Pachter said.
The Wii declines are not encouraging for publishers either, who seem to be backing away a bit from Nintendo's console. "[EA] said that it was encouraged by solid growth of 'high definition console' software, and pointed out that its market share on these consoles exceeded its share on the Wii, positioning the company to gain market share overall. We expect to hear similar statements from virtually all third party publishers in the coming months, as the weakness in Wii software is likely to spook all but the most fearless," Pachter remarked.
While Microsoft and Sony are both hoping to jump start their businesses with Kinect and Move, respectively, it's not clear what Nintendo will do with the Wii. "The launches of Sony’s Move (in October) and Microsoft’s Kinect (in November) are likely to spur console sales, particularly as bundles are rolled out. Nintendo appears to us to be the odd man out, chugging along with the same hardware model it introduced in 2006 (albeit a different color), while Microsoft and Sony have substantially upgraded their core console models," Pachter said.
