Analysis: U.S. Software Attach Rates For Xbox 360, PS3 Reveal HD Console Trends

[As part of his monthly NPD Group U.S. retail video game sales analysis, Gamasutra analyst Matt Matthews delves into software attach rates for HD consoles Xbox 360 and PlayStation 3, examining games like Black Ops and Bulletstorm.] Under the assumption that the Xbox 360 and PlayStation 3 are still growing their markets, and may do so for at least another year, we now turn to the question of how well each of those systems is moving software. To this end, the NPD Group provided us with exclusive data on the sales of some recent top-selling games. However, we were not provided with raw sales data, but rather with attach rates, which are another means one can use to measure sales on competing platforms. Briefly, an attach rate is the percentage of a hardware installed base that owns a particular item of software or peripheral. So, for example, if a game sells 300,000 copies to an installed base of 1 million systems, then its attach rate is 30 percent, or 300,000 divided by 1 million. (This is often used interchangeably – and we believe erroneously – with tie ratio, which is traditionally used to describe the number of software titles sold on average to a system owner. Platforms have tie ratios; software and peripherals have attach rates.) Like every metric, attach rates have their own drawbacks. When a system has a larger installed base – as is the case with the Xbox 360 over the PS3 – its attach rates tend to be lower simply because a larger base includes a more diverse cross-section of gamer interests. A game would have to have an attach rate 1.66 times greater on the PS3 to have the same absolute sales as the same rate on the Xbox 360. That is, in terms of just absolute sales figures, an attach rate of 5 percent on the PS3 is equivalent to 3% on the Xbox 360. In all the examples below, there is no game for which the PS3 version outsold the Xbox 360 version. In our first comparison, we have taken several recent action games for which data was provided by the NPD Group and compared the attach ratios on the Xbox 360 and PlayStation 3. The corresponding figure is below. (Regrettably, our agreement with the NPD Group prevents us from revealing the actual values of the attach rates.) The new shooter, Bulletstorm, developed by Epic and People Can Fly and published by Electronic Arts had only a few days on the market and has been taken up by a very small percentage of the installed bases of the Xbox 360 and PlayStation 3, but strongly favors the Xbox 360. Given the popularity of Epic's Gears of War series on Microsoft's console, it is unsurprising that the lion's share of Bulletstorm sales were on that platform. By contrast, Dead Space 2, another shooter from EA, has a higher attach rate on the PS3 than it does on the Xbox 360. However, because the rates are so close and the Xbox 360 installed base is significantly larger, even without specific figures we can say that it sold better on the Xbox 360 than it did on the PS3. This is also the case for Ubisoft's Assassin's Creed Brotherhood, where the rates are approximately the same but because of the larger installed Xbox 360 base, it actually leads the PS3 version by several hundred thousand units. And, for the other extreme we have a third shooter, Medal of Honor (2010), also from EA which launched back in October 2010. Here the attach rate for the PS3 version is substantially different from the rate on the Xbox 360. As a result we estimate that the Xbox 360 version sold only 150,000 units more than the PlayStation 3 version, a relatively small differential given the game's total sales. The observant reader will, of course, wonder where Activision Blizzard's Call of Duty: Black Ops figures on this scale. We will address that game last, after the next group of games. In our next comparison we have examined several games we have loosely characterized as competitive games. These include a racing game, a fighting game, and three sports games. Unlike the situation with the action games above, the PlayStation 3 has a higher attach rate for all five of the titles considered above. Specifically, the best PS3 showing for any of these cross-platform games was Capcom's new fighter, Marvel vs. Capcom 3: Fate of Two Worlds. It sold roughly equally on both platforms in absolute terms but the attach rates are still quite small – only a couple of percentage points in each case. The PS3 also substantially outperformed relative to its installed base for all three of the sports games compared above. For example, both FIFA Soccer 11 and Madden NFL 11 sold much better on the PS3 than the size of its base would otherwise have suggested. On the other hand, while NBA 2K11 still had a strong showing on the PS3, the Xbox 360 version still holds a significant lead in absolute terms. Finally, we wanted to include Call of Duty: Black Ops in this comparison, but given the truly amazing sales of that title, its attach rate isn't in the same class as any other game considered here. We have taken the game with the top attach rate in each of the previous two comparisons and added it to the following diagram along with Black Ops. With sales of over 13.7 million units across four platforms, Black Ops is reportedly the best-selling game ever in the U.S. Naturally, this excludes games bundled with hardware, like Wii Sports. Given recent comments by analysts like Michael Pachter of Wedbush Securities, we can surmise that Black Ops has shifted 13 million copies on the Xbox 360 and PlayStation 3 alone. Given the installed bases for these systems, that would put the combined HD console attach rate at around 31 percent. Moreover, the ratio of Xbox 360 Black Ops sales to PS3 Black Ops sales remains essentially unchanged since the title launched in November 2010. The only cross-platform title for which we have data that shows an attach rate exceeding Black Ops is the original Call of Duty: Modern Warfare which had an attach rate of 36 percent on the Xbox 360 and 32 percent on the PS3 back in January 2008, three months after release. Of course, the installed bases for each system were significantly smaller at the time too (9.4 million and 3.5 million systems, respectively). The next-closest game in our data (which we admit is incomplete) is Grand Theft Auto IV which had an attach rate of 28 percent on the Xbox 360 and 32 percent on the PS3 in mid- and late 2008. Let us return to the question of sales on the HD consoles. If indeed this is where publishers will focus their efforts in the coming months and possibly years, then how will they allocate their resources to target both the Xbox 360 and PlayStation 3? First, both platforms are generating significant sales of these key cross-platform titles. With the exceptions of Bulletstorm and Assassin's Creed Brotherhood, every game here performed better on the PlayStation 3 than the ratio of installed hardware bases would suggest. So while we may casually refer to the PlayStation 3 as the “third place system” for this generation, it accounts for anywhere from 33-50 percent of the titles we've examined, and those sales aren't so casually dismissed. Second, the Xbox 360 by itself generates a tremendous amount of software sales, and its dominance isn't yet threatened. Microsoft has successfully positioned its console with both developers and consumers and cultivated a reputation for having the best version of most cross-platform games. That advantage can't be eliminated easily. That said, Microsoft may well be courting a new kind of consumer with its focus on Kinect, and we expect that this could make it more difficult to increase its base of consumers for some titles, like Gears of War or Madden. That is, it isn't clear that the family that buys a Kinect for Kinectimals will be as likely to buy the type of games which have traditionally defined the Xbox 360 demographic. And while Sony currently holds an attach rate advantage in sports games, generally, it may find that advantage diminished as its also pursues customers with its Move controller. Realistically, given Move sales so far, this should not be a near-term concern. For Matthews' full, in-depth analysis of February's NPD U.S. video game retail sales data, read the full feature, available now on Gamasutra.