Battle Royale in the Software Market

As is common, Microsoft released its latest tie ratio for the Xbox 360 in its statements to the press on the latest NPD Group figures. (Here we will discuss lifetime tie ratios, the total number of software units sold divided by the total number of hardware units sold.) Last month the tie ratio was 7.6 and it rose to 7.7 in May. That puts the total number of Xbox 360 software units sold in the U.S. at 79 million in 31 months.

According to statements made by Sony, we estimate the PlayStation 3 tie ratio at 4.9, or 22 million units of software sold since the system launched 19 months ago. For comparison, it took both the Xbox 360 and Nintendo Wii around 12 months to sell the same number of units of software.

To our best knowledge, no recent reports have been made on the Wii tie ratio. However, using the last known figure of 5.3 from March 2008, and rough estimates of the total number Wii software units sold in April and May 2008, we estimate the Wii tie ratio to be 5.4. Given the size of the installed base, that implies that 55 million units of Wii software have been sold in 19 months. For reference, it took the Xbox 360 a full 25 months to sell the same amount of software. Note that more than two Nintendo Wii software units have been sold for every PlayStation 3 unit sold since November 2006.



These software sales figures provide us with some additional insight into GTA4's prominence in the Xbox 360 and PlayStation 3 software markets. Approximately 5 million units of Xbox 360 software have been sold in the past two months, and 54% of those units (2.7 million) were Grand Theft Auto 4. On the other hand, over 3.26 million units of PlayStation 3 software have been sold in the past two months, and only 43% of them (1.4 million) were Grand Theft Auto 4.

Finally, the continued presence of Wii Play on the top 10 chart must be acknowledged. Since its release in February 2007, Wii Play has racked up over 5.7 million in LTD sales. An amusing comparison of scale: in the United States, Nintendo has sold 1.2 million more copies of Wii Play than Sony has sold PlayStation 3 systems.