UK 2013: Microsoft Leads, Sony Surges, Nintendo Fades

Throughout the past year I've been dropping some estimates here for the UK retail software market, and today I was finally able to piece together a full picture for calendar 2013. The results show some very interesting dynamics, as Nintendo's Wii U failed to catch on with the public while the more expensive new systems from Microsoft and Sony both found an easy win in their first couple of months.

To see this clearly, here is a figure showing the full year software unit sales, as estimated by figures reported in the UK trade magazine MCV UK.

The Xbox 360 was clearly the top platform for the year, with 13 million units of software sold at retail. The PlayStation 3 came in second, with sales of around 9.5 million units. At around 1.6 million units of software, the original Wii was the third best-selling console of 2013.

That figure for the Wii was more than twice what the new Nintendo Wii U managed in the past 12 months. In fact, along with the PlayStation Vita, the Wii U was the only system on the market this past year that did not manage to break the 1 million unit barrier at retail.

The new Xbox One and PlayStation 4, despite being on the market for a very brief time during November and December 2013, each broke that barrier. The PlayStation 4 moved around 1.3 million units of software to around 530,000 new system owners, for a tie ratio of around 2.5 games per system. The Xbox One reportedly sold 364,000 systems in the UK during 2013, and retailers shifted just over 1 million units of software. As I expected, the Xbox One had a higher tie ratio, around 2.8 games per system.

Normally this is the point at which I'd say "and none of this includes software sold digitally". The catch this time is that the figures I'm basing these estimates on actually do include the digital game vouchers for games like FIFA 14 that shipped with the Xbox One.

Instead, what we can say is that this doesn't include any additional software that consumers purchased digitally after they got their new systems home. And, I suspect that even if we did have those figures the results would show that the Xbox One had a higher tie ratio. However, as I've argued before, once we start including digital software, the very concept of a single unit of software is probably meaningless.

The figure above also shows that the Nintendo 3DS has finally supplanted the Nintendo DS as the main handheld system in the UK. Next year the Nintendo 3DS will be the lone traditional handheld system in that market, as both the original DS, PlayStation Vita, and PSP all cease to be relevant. The big question for Nintendo heading through 2014 will be whether it can regain the consumers that once flocked to the Nintendo DS. I will be watching with interest as they make announcements in the coming months about the future of their handheld business.

We can also look at the market in terms of software revenue, and the corresponding figure for that view is just below.

There are some notable shifts when looking at the market in this way. First, both the Xbox One and PlayStation 4 move up significantly. The PlayStation 4 generated £64 million in software during its launch, while the Xbox One generated just over £47 million. Relatively speaking, the PS4 is a bit further head in this metric than when measured by units because its software had a slightly higher average price.

Note also how the PC fell in the ranking. That's due entirely to its low average price, since PC software at retail simply doesn't command a high price.

And finishing out the bottom of the chart are the Wii, Wii U, Nintendo DS, and PlayStation Vita. Three of these will cease to be relevant in 2014, and I'm not yet sure what will happen with the Wii U. Much hinges on what Nintendo does to promote its platform, and we should find out at least some hints about that next week when they hold their fiscal third quarter briefing for investors.

I thought it would also be useful to show what the data looks like if we simply break things down by platform holder: Microsoft, Sony, and Nintendo. The pie charts below give you that measure, both in terms of units and revenue. Naturally, in terms of units Nintendo looks better because it has lots of lower-price software on its older Nintendo DS and Wii platforms.

This is going to be an intensely interesting year to watch, both in the US and the UK markets. In the past generation, the Xbox 360 has shown a great deal of strength in both countries. For example, the Xbox 360 became the best-selling system of its generation in the UK back during June 2013. It will surpass the Wii in the US in a matter of months, if not weeks.

Meanwhile, Sony has had to fight bitterly for each and every PS3 sale, as they've toiled under their higher base price, less robust online services, and an image of having the lesser version for most cross-platform titles.

The playfield is now far more level between the two heading into this generation. The PlayStation 4 enjoys an edge in both territories at this moment, and its that kind of parity could be exciting. Not only will it provide me with lots of figures to pore over, but it should provide you -- the consumers -- with a stronger competitive market.