Blackfriars’ Marketing: XBox’s 360s Halo 3 surge peters out

The Wall Street Journal reports today that while Microsoft sold 3.3 million copies of Halo 3 in the few days it was available in September, October sales were only 433,800 units, suggesting that the pent up demand for Halo may be pretty-well satisfied. The result: The Nintendo Wii went back to outselling the XBox 360 console by 519,000 to 366,000 for the month of October. My takeaway: don’t expect Microsoft’s Entertainment division to continue those profits going forward, since XBox 360 consoles are sold at a loss. And with at least two years until there’s another Halo to boost XBox sales, Microsoft had better be looking for another franchise game if it wants to beat Nintendo.

While every analyst is entitled to their opinion, is it a bit too much to ask for a little more homework before spouting out a dire prediction? A disappointing analysis to say the least.

Microsoft doesn’t need no new franchise, a steep drop was expected. There is no way that Halo 3 could have continued to sell at that torrid pace — the user base isn’t big enough! In fact 433,000 copies of a game in ONE MONTH is outstanding. Let’s compared to the August numbers. The top selling game that month was Madden, a game with far more reach among the general public.. that game sold close to 900,000 copies. For Halo to sell half that number is still no small feat.

Yes, most people snagged their copy of Halo early, HOWEVER we have to consider that with the October numbers added in, the game has a penetration rate among the install base of close to 40 percent! That is extordinarily high. Everyone expected a bump in console sales due to Halo, because it is the kind of game that sells consoles.

What we need to look at is sales before and after the “Halo effect.” Console sales in August were at 277,000. October, 366,000. I don’t know what addition these people are using, but thats a pretty sizeable bump up.

Despite the pronouncements of this particular analyst, Microsoft’s gaming division will do fine this holiday season, and will pull a profit. Console sales will continue to be higher, and the 360 will continue to outsell at least the PS3 due to price and a much wider game selection.

I guarantee you, frustrated consumers who can’t find a Wii will consider a 360 long before a PS3. This will matter to the bottom line. I wish analysts would put more thought into comments before they post them.