Console Wars: The Effect Of Price Cuts On The Xbox 360, Wii, and PS3
  • 36 Comments
by David Diaz on November 4, 2009

consoles
While the Nintendo Wii continues to have a stranglehold on console sales, both worldwide and in the United States, the Xbox 360 and PS3 are battling it out for the the second place position for year-to-date sales. Just a little over two months ago, Sony announced that they would be slashing the price of their game console, the PS3, to $299. Microsoft quickly followed suit, and in just ten days dropped the price of their most expensive console, the Xbox 360 Elite, to $299. Nintendo, who has sold nearly double the number of consoles worldwide as these two, decided to lower the price of the Wii on September 27th to $199: this was the first time since its inception that the Wii has had a price cut. All three console manufacturers hoped that the decrease in price would help them to increase sales and finish the year on a strong note. The results have been mixed: while all three consoles have seen an increase in sales, the PS3 has seen astonishing growth in the US and abroad, and has wrestled the second-place position in worldwide YTD sales from the 360. As for the Xbox, even in its upgraded Elite form it has seen only minimal gains since the price drop.

Cumulative Year To Date Sales Worldwide

Cumulative Year To Date Sales Worldwide

Total Worldwide sales to date for the Wii are sitting just under 55 million consoles sold, while the Xbox 360 and PS3 are at 32.7M and 25.7M, respectively. The year-to-date worldwide sales are a bit different, with the Wii outselling both its competitors at 11M, and the PS3 and 360 at 6.6M and 5.9M. Where the sales figures get interesting are when we compare the number of pre-price-cut console sales, with that of sales post-price-cut.

Before Sony cut the price of the PS3, the Xbox 360 sold 4.53M units worldwide YTD, compared to Sony’s 4.12M YTD. Since then, the PS3 has outsold the 360 by 1.1M units (thanks to the PS3 Slim, most likely). What’s even more interesting, as you can see in the graph below, is that Sony’s biggest surge in sales happened two full weeks after Sony’s price reduction – right after the price reduction in the Xbox 360. The Wii also benefited from their small decrease in price as their sales went from hovering around 175K a week to over 350K the week after the price drop, to now what is nearly 400k a week. So why the marked difference in effectiveness between the three, and why did sales increase for the PS3 only after Xbox’s announcement?

Weekly Sales Worldwide (Sep-Oct)

Weekly Sales Worldwide (Sep-Oct)

The answer to the first part of the question is quite simple. The Nintendo Wii has outsold the other two consoles since its debut. It appeals to a broader user base, and the recent price break made it that much more accessible to those who don’t have a console. More importantly, its broad user base is different than that of the 360 and PS3’s. Although the Nintendo Wii is not as advanced as the other two consoles, (on a specs basis) its motion sensor technology coupled with the success of titles such as Wii Fit brand the Wii as not only a video game console, but a fitness and lifestyle enhancer. This difference, along with the decrease in price, is why the Wii is again outselling both of its competitors.

The difference in the effectiveness of price-cuts for the PS3 and the 360 is a bit more complicated. These devices, for the most part, appeal to the same demographic: those who buy a console primarily as a gaming platform. However, the biggest difference between the two consoles is that the PS3 features a Blu-Ray player. It seems that the PS3’s price cut, making it the same price as the 360 Elite, caused consumers to flock to the system which will let them play their precious Blu-ray discs.

The surge in sales for the PS3 didn’t happen until after the Xbox’s price announcement for a simple reason: Microsoft had been saying that a price drop was imminent and consumers were waiting to compare the two deals. Unfortunately for Microsoft, by gradually phasing out the traditional Xbox Pro model and only leaving their bare-bones Arcade model (it doesn’t have a built-in harddrive) and their higher priced Elite, the PS3 became a more enticing deal for many consumers. Had Microsoft cut the price of their Elite to below that of the PS3, or better yet, priced the Xbox 360 Pro at $199 (the price of the Arcade SKU) instead of phasing it out, then they might have seen the same growth in sales that the PS3 has, and could possibly have taken some sales away from the Nintendo Wii.

While all three makers have seen a higher demand for consoles since the price drops, the PS3 is the clear-cut winner thus far. They have surpassed the 360 in worldwide YTD sales, and if they have a strong end of the year, could possibly take the number two spot in YTD sales in the US, where they have historically struggled.

Sales numbers and graphs were collected from VGChartz. For more information on how they gathered their sales figures, click here.

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  • Yes, I think so the Wii has outsold the other two consoles.

  • another anecdote to this. i’ve had a 360 for a couple of years, and the PS3 has just been historically too expensive to justify a purchase. i think there are a lot of X360 owners who were in the same situation, where the $300 price point finally made the 360 more attractive.

    i expect the surge in PS3 sales to level off after a couple months once the 360 owners have had a chance to buy it.

    one thing of note, too. the ps3 has had some finally had some stronger titles coming out this season which caused some people to pick up the PS3 slim. myself and a few people i know did this just to get exclusives like Uncharted 2.

    their success will be driven by their ability to keep up the great exclusive titles. otherwise, the x360 is a much better system, with great exclusives (gears of war, halo, etc.), and the user experience of the hardware and the system software is much stronger than that off the PS3.

    • You also have to take into account the Online experience you get from these consoles. Even though you have to pay for Xbox Live, it is definitely worth it IMHO. PS3’s online network, along with the Wii’s have some major catching up to do if they want to attract more gamers.

    • My god are you complete loser.

      Xbox 360
      ————

      Worst console hardware in history – RRoD

      Laughably weak graphics hardware

      50 dollar a year forced online charges

      Crap online service – laggy P2P networking, tiny online game sizes like only 5vs5 for Gears of
      War, 8vs8 for Halo 3

      No 1080p lossless audio BluRay moviesNoisy as hell

      Giant external powerbrick

      Can’t use standard off the shelf laptop drives

      No Bluetooth

      No keyboard and mouse support

      No webbrowser

      Only three first party Microsoft dev studios compared to 20 for Sony

      You really have to love the retarded fantasy world Xbox fans live in. 140 million Playstation owners out in the world and this clown actually thinks the buying plans of the tiny almost entirely US based Xbox niche of the console market matters enough to even mention.

      Get a clue. Get a life.

      • The tiny, almost entirely US based Xbox nitche you speak of is outselling the PS3 worldwide.
        As crappy as you think the 360 is, it has still sold more units than the PS3. I don’t think many people would argue the Wii is a technically superior system, yet it sells way more than the 360 and PS3. Don’t worry, I am sure the PS3 will outsell the 360 this generation. Please just stop kicking and screaming about how great your system is. Sony dropped the ball at launch, but they are making up for it.

        • “The tiny, almost entirely US based Xbox nitche you speak of is outselling the PS3 worldwide.”

          Wow, just wow.

          How is it possible there are people as utterly delusional as you out there?

          Let me guess…you get your ’sales numbers’ from that Xbox fansite vgchartz…

          The PS3 is only selling at a slower rate than the PS2 and Wii. It has long since dumped the 360 into last place in both Japan and Europe. The US is the only market the 360 isn’t in last place.

          And this was all before the 299 price point.

          The PS3 is the top selling console in all three major console regions right now – Japan, US, and Europe.

          Reality vs delusional fanboys like you Lance.

          Reality always wins.

        • “The tiny, almost entirely US based Xbox nitche you speak of is outselling the PS3 worldwide”

          It was on sale over a year before the xbox 360, and its not outselling the ps3 as shown in this article. Also RRoD is all i need to say, a 34% failure rate for the xbox 360 compared to 2% for the ps3.

        • ps3 kills x-box

      • My keyboard and mouse work fine with the 360. Perhaps you, sir, should purchase some telling information.

      • I own both. PS3 and xbox360. Got the ps3 after the price drop. For me, so far: ps3=better hardware, better deal. xbox 360=better gaming experience.
        But, like Xbox360, its just a matter of upgrading the “software” to bring a totally different experience to ps3. And they could learn a lot from the Microsoft people. Let’s wait.

      • Dolan — You’re rude, but probably accurate.

    • “the user experience of the hardware and the system software is much stronger than that off the PS3.”

      Live is better than PSN, but what part about the hardware is better? The extremely loud noises it makes? The 50% RROD rate? The gigantic power brick? The lack of built-in wireless? Ridiculously priced $100 wireless adapters and hard drives?

  • lol 360 owners always say the exact same thing. We have Gears and Halo. Change the record.

  • With all the recent price cuts for the consoles, i’m curious to see how the upcoming holidays will an impact on the sales.

    http://bit.ly/4oGyip

  • It seems only Playstation boys read this forum.. I would say by far FPS win out on the 360. Their Live connection is so much better, I try to play with my mates online and thats quite easy but without a headset its f**king hell. You have to hit the Home button scroll across to the far right side, wait for the contacts to load, press traingle on the contact (an effective right-click), scroll to ‘List Messages’ wait for them to load, open up the message, wait for that to load and then once you read it you have to reply and wait for that to load. Its slow and definatly not very user-friendly. If you press X on the contact it will open up his stats and trophy table and then you waste more of your time waiting for it to load so you can quit and then you start all over again. Gah. Im fustrated just talking about it. The only other option is to start a chat room but thats confusing as all hell. XBox live wins hands down but I really do anjoy gaming on the PS3 so much better. Its so fast. Eg. Call of Duty 4, no load times until you select a level! Racedriver: Grid only loads for each level. Nothing else. I havnt played them on the XBox so I dont know that theyre the same. But when you play Racedriver Grid on a 52″ 1080p HDTV in Blu Ray. Its amazing. Beats out XBox by a mile.

    • “It seems only Playstation boys read this forum”

      That’s because most of CG’s readers are grown peep’s with job’s and good incomes and can afford to spoil themselves with these luxury’s.

      360 owners that troll this site are usually still living at home with parents and had their mommy’s and daddy’s buy them a console. Hence why they got stuck with the 360.

      Let the flame’s begin!

  • I just bought a PS3 for my family based on 3 things: the price drop, the blu-ray capability and the free online gaming. Xbox does not have the latter 2 features. The blu-ray player in particular was a big selling point.

  • Xbox was cheaper at launch and there were big hit games such as halo3, xbox live is great. Ps3 will gain the number 2 spot eventually due to bluray, better hardware, quieter, slimmer, price finally coming down to reasonable levels and some solid titles launching. The landscape has become more apparant now. Bluray won the format war and xboxes get RROD like there’s no tomorrow (mine is currently away for its 2nd repair). Now let’s look at the upcoming FFXIII. Yeah its coming out on both but would you really want it on dvds and sounding like there’s a jet engine. I’ll probably get a ps3 just for ffxiii with the bluray and other things a bonus.

  • I just got a PS3. I’m used to be a gamer long ago, but not any more. I got it for the blu-ray. And free game demos doesn’t hurt. Also a walk around the virtual world in PS Home is not bad. It is free after all. The only thorn on the side was lack of Netflix streaming. But with the launch of that I have no complaints.

  • I quite agree with you both, Kyle and David. As a 360 Elite owner, I have patiently waited for the price of the PS3 to drop, as I just could not justify it’s purchase. When Sony released the PS3 slim…. smaller, lighter (and better looking, IMHO) for $299, that was the sweetspot.
    I was always going to get it to use it as a Blu-Ray player primarily, as the 360 always had a better gaming line-up. Happily, that has since changed, with some strong titles being released recently and some more in the pipeline.
    David’s point about the online experience is also very valid, as xBox Live is getting better and better and leaves Sony’s offering in the dust. We won’t even mention the Wii here!!

    All in all, by Christmas, my Family will have all 3 of these consoles, as they each serve a different purpose and entertain a different crowd. The Elite is Daddy’s escape from the pressures of work and life in general (that’s my story and I’m sticking with it!); the PS3 Slim will be the Blu-Ray player and media streamer (taking over the streaming from the Elite, which was excellent at it, btw), as well as occasional gaming rig (Uncharted 2, here I come!) and the Wii is the Family entertainment device, keeping the kiddies and adults happy and fit!! Got the Wii earlier this year and the kids love it.
    So, you see, there is a piece of the pie for everybody!!

  • The price cuts are going to make for a very interesting christmas period. Sales will be very high I think.

  • now i have a xbox and a ps3 both have failed me the ps3 all it was that the cd drive craped out on me
    my xbox over heated and almost brund down my house

  • The question is, I have yet to see ONE sales analysis that factors in the Xbox failure rate properly. For all we know there could be more PS3s in working state than Xboxes out there.

  • I really enjoy all these conversations about which console is of the greater gaming capacity. I have all three consoles. With multiple game genres on each one. Role-playing games, First person shooters, sports games, arcade games, trust me I own them all. What the argument comes down to though is what types of games you prefer. The Xbox 360 is clearly the better choice with FPS’s. I mean maybe you dont enjoy Halo and Gears of War, but most of the rest of the world does. The PS3 is great for sports games. I love NBA 2k9. The PS3 controls make it a perfect genre for the system. The Wii is obviously an arcade-like system. Mario, Wii Sports, Zelda. Overall, it comes down to what genre of video games you like. You may have to pay for Xbox Live, but with it comes many benefits. PS3 internet access also has benefits, hooray free access! woohoo! The Wii has great games and free access. I do not have a specific preference of which console is better. I like them all and I leave it at that.

  • Just bought a PS3 for myself. I have never owned a gaming console before. Wii may be a good choice for some, but it does not appeal to me. The PS3 price drop and blu-ray player influenced my purchase. Until now I didn’t consider buying a console, primarily because of the price.

  • Is this blog post just another thinly veiled attempt to bash Microsoft?

    Anyways, Sony sucks.

  • People who keep on stating that Live is better than PSN clearly live in the past! Nowadays it is definitely on par and in many cases even better with games using dedicated servers, a feature which Live shys away from. Plus PSN is FREE!!!! The only thing it lacks nowadays is party-chat but that feature is a waste anyway.

  • I have both Xbox and the new PS3, and I use them with a 52inch HDTV. The PS3 visuals are just so much more impressive (combination of high res game content, processing powers, and connectivity), so I feel my Xbox days are over.
    HALO is great game, but the graphics are clearly dated, and I believe Xbox just reached its limits with this. That may be one reason why some of Xbox users upgrade to PS3 now.

    • I disagree. Take Assassin’s Creed 2 for instance. On the 360, the graphics are just as good, but the PS3 suffers from frame-rate problems. The 360 version does not.

  • It is true that the Ps3 has superior hardware over the 360. The fact that everyone seems to forget is that these are “gaming” consoles. If you want a blueray player and a gaming system get a ps3…you will like it. But I have to stand up for microsoft for just this once. On a gaming head to head graphics for graphics the 360 out performs on 90% of all cross platform games. Framerates are consitantly better and less screen tears than the ps3. Proprietary games like Metal Gear and Uncharted are of course going to look better on the ps3…it was designed for it. Same for xbox exclusives. When the game developers start to learn how to use the cell processor you may in the future be able to bash the 360 for games but for right now in the present the 360 still has the best graphics for “cross platform” gaming

  • You are all wrong the best gaming system I own aside from my PS3 is my PC. All bow down to my quad core supremacy.

  • Fanboys, fanboys, what you gonna do.

    I bought a 360 last Christmas, largely because I was able to buy the console, as well as nearly twenty of the best games that have appeared on it, for the same price as the PS3, at that time. Given that I have little interest in online gaming, and nor am I not bothered about playing games as soon as they are released, I’m satisfied that I got a good deal.

    As far as I am aware, the 360 that I bought is not likely to have the same RROD problems, although, even if it does (I haven’t had any problems, thus far), it didn’t exactly cost a lot, anyway, and you can send it off for repair.

    What convinced me to buy the 360 was that on all review sites that I visited, the 360 had twice as many highly rated games as the PS3. I knew that the PS3 would eventually overtake the 360; that the developers would eventually start to realize the PS3’s awesome potential, but why should I have cared about that, last xmas, when it wasn’t yet the case? It is only now that we are seeing the PS3’s full potential even begin to be realized.

    As it is, I will buy a PS3 some time in the next couple of years, preferably when the price drops even more, and then I can play all of the games that I haven’t been able to (though my brother has a PS3, already). As the PS3 is likely to be around for longer than the 360, I consider my strategy to be quite reasonable, though I understand that other people with different priorities and needs may think differently.

  • I realize that the 360 has sold 32 million and PS3 has sold 25 million worldwide. However, my question is since the 360 has more hardware issues how many of those 32 million have been re-bought because they did not want to deal with Microsoft. So how many 360 compared to PS3 are in peoples living rooms, because I am pretty sure that there are a lot of 360’s that have been trashed because of hardware issues. Meaning that the amount of consoles on actual living rooms are a lot closer than total world wide sales, true? Since 360 has a 40 to even 50 percent error prone machine.

  • And please, do not forget the dreaded “RING OF DEATH”; because for me this was one of the primary reasons why I didn’t bother with the Xbox 360.

    The Wii is genuinely a fun console. It brings the family together. My three(3) year old daughter and her 60 year old grandma, argue as to who should get the single controller next. (smile)

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