GfK is one of the largest market research companies in the world and have been tracking the SA retail sales for quite some time now. They have kindly forwarded the following article to us which is purely related to the gaming consoles sales in South Africa.
From Roger Carbonell
The market for consoles in South Africa continues to grow despite the adverse economic climate and the overall credit crunch since the new NCA in June last year. From the scope of product categories tracked by GfK almost all of them are either flat or negative. Gaming consoles remains deep on the positive side with a volume growth of +22% YTD (compared to the same timeframe last year) and +16% in value. The lower growth rate for the value development is due to the price erosion among consoles in particular the XBox360.
One has to take into account though that the PS3 was introduced in Mar07 and the Wii in Oct07, automatically these two platforms will have higher growth rates than the previously introduced Xbox360.
The total stock in the market is a tricky question; we estimate an install base for the Xbox360 of around 65.000 units since launch which makes it the leader among the next-gen consoles. The PS3 should have approximately 40.000 units installed and leads the market on the value side. The last entrant into the console market, the Wii, has had the fasted introduction of all the next-gen platforms reaching approximately 45.000 sold units since spring last year. This would position the market in units as:
Install base in units (next-gen only)
Total 150.000 next-gen consoles
Taking into account the differing pricing strategies; then the value relevance changes significantly. In the YDT (Jan-May08) figures for 2008 the PS3 generated 40% of the value, followed by the Wii with 38% and the Xbox360 with 22%.
This analysis ignores the fact that the market also contains older platforms that continue to sell well and have the advantage of a tremendous install base. For example the PS2 has an estimated base of 750.000 active consoles and still generates right now 33% of new sales across all non-portable platforms plus it has an extremely strong position in the growing market of social games (Buzz!, Eyetoy, Singstar). Albeit this market is now also moving into the next-gen fold with Singstar for PS3, WiiFit, High School Musical and Guitar Hero.
Adding all the figures together means that the non-portable market in South Africa is 900.000 active consoles strong (8% household penetration total and 1,3 % for next-gen calculated on 11,4 million households). On top of that we have the portable units, a market that was created by the PSP, which is estimated at 120.000 active units of which the PSP has a share of 79% and the DS of 21%.
After 18 months of console introductions the market in 2008 has matured considerably. For example the share of bundled sales (consoles plus games) has grown to become the most significant part of the market, which in fact is a hidden price erosion benefiting the consumer by providing them with a working solution without the need of additional purchases. At the same time a more price aggressive stance from Microsoft has changed the sales in the last two months. Without undermining the successful introduction of the Wii, it is difficult to compare it to the other platforms because it mostly uses first party software. When comparing current multi-platform games then the competition is a lot tighter than the above figures seem to indicate:
Platforms Jan-May 2008
Army of Two: 57% PS3 & 43% Xbox360
Assassins Creed: 26% PS3, 27% Xbox360 & 47% PC
COD 4: 20% PS3, 26% Xbox360 & 54% PC
GTA 4: 55% PS3 & 45% Xbox360
This analysis is biased in favour of the PS3 because its main competitor has a higher number of titles available, of which some of them like Halo 3 are dedicated to the Xbox360 only. One has to assume that PS3 owners are more product starved than Xbox360 owners and will focus more intensively on each multiplatform title that becomes available. Nevertheless the competition between both systems is extremely close and fierce.
If taking the Nintendo history into account with its emphasis on first party software it remains to be seen if the Wii can break into the market of top promoted titles. Although upcoming games are announced to include the Wii as one of the platforms the Nintendo history is one. Regrettably on the other side this overview also signals the relegation of the PS2 as an ongoing system because most of the top titles don’t include it anymore. The last major release on the PS2 was NFS ProStreet late last year.
GfK Marketing Services South Africa
Last Updated: July 2, 2008