Xbox 360 Launch 2.0
Written by Max Freiert (contact - e-mail) -- December 4th, 2006 |
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Q: How does one make a year old video game system more interesting to consumers than the ones that just launched?
A: Mark it down 66%!
On Thanksgiving, Amazon offered a limited number of Xbox 360 core system’s for $100 — 2/3rd off retail price. Amazon’s promotion was so popular that the site ran at a snails pace for a full 40 minutes as deal hunters slammed Amazon servers trying to get in on the promotion.
On a pure traffic volume basis, the 360 generated more online interest on the 23rd, than either the Playstation 3 or Wii commanded on their respective launch days, making one thing clear — the Amazon promotion was the Xbox 360’s Launch 2.0.
During the past few weeks there has been intense media focus on the Wii and PS3. However, the older Xbox 360 has been holding its own against the newer consoles. The Xbox seems to be benefiting from all the new consumer interest around the other two consoles, as consumers research and evaluate all their buying options.
The chart below shows weekly demand for all three consoles through the week of November 25th:
- The 360, despite being a year older, has been exhibiting similar demand patterns as the Wii, which launched on the 19th.
- During the week of the 25th, demand for both the Xbox 360 and Wii surpassed demand for the PS3.
- One week after launch, online demand for the PS3 dropped nearly 15%.
Daily demand for each console tells us an even more interesting story. The chart below illustrates daily demand for the Wii and PS3 from a week prior to launch to a week after launch, and also the Xbox 360 $100 promo “launch”:
- The Xbox 360 $100 deal traffic spike mimics the launch of the two other consoles.
- Wii demand has held relatively steady since launch, while demand for the PS3 and Xbox 360 have dropped.
All in all, the $100 Xbox promotion on Amazon yielded a lot of interest in the 360 on the busiest shopping weekend of the year, and that Microsoft (with Amazon’s help) has sent a powerful message to would-be Wii and PS3 buyers: the “on” button is always greener on a system that you can actually buy in time for the holidays.
Note: Compete, Inc. calculated console demand based on the number of U.S. consumers who shopped for the respective consoles at leading online retailers. Amazon’s special $100 Xbox promo pages were excluded from the analysis.
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- Price Cut Works: Xbox 360 Demand Matches Wii Demand in August
- Gaming Demand: Halo 3 snipes GTA4 - Wii still dominating the console war
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December 4th, 2006 at 11:19 am
I’m curious to what degree the “store rush” and long PS3 lines have discouraged people from researching / shopping for it online. The weak demand performance could be a result of people talking themselves into getting the PS3 after the holiday rush.
To my knowledge the Wii and Xbox aren’t having the same inventory issues as the PS3… right?
December 4th, 2006 at 11:46 am
Of course the demand was high, when it was 100 dollars. look at the demand drop off after people cant buy it for 100 dollars anymore. i mean, if it was 100 dollars, Iwould buy one. but now that it’s not, I’m not going to.
December 4th, 2006 at 1:42 pm
“The weak demand performance could be a result of people talking themselves into getting the PS3 after the holiday rush.”
I doubt it, gamers dont often talking themselves into waiting, even more so when the PS3 wont be readily available till MAYBE March…so if gamers wanted it that badly they would be hunting for it so this shows they must not want it as bad as Sony wishs.
No MS isnt having an inventory issues, Nintendo is but thats just because its a system launch and demand always outstrips supply.
Myself, I have a 360 and a Wii. The Wii will never be my primary game console but it is alot of fun.
December 4th, 2006 at 6:50 pm
What is the definition of demand? How is it measured? What is your methodology?
Without a clear definition and explaination of methodology, the graphs, rankings and data are meaningless.
December 4th, 2006 at 9:05 pm
Agreed, no clear methodology. We can’t appreciate if this is is really representative.
December 4th, 2006 at 9:25 pm
Xing,
Online retail demand is calculated by measuring how many unique U.S. people are shopping or researching a particular product across the top-20 most trafficked shopping sites online that sell that particular product (example: bestbuy.com, amazon.com, circuitycity.com, walmart.com).
It should be noted that for the purpose of this analysis, Xbox 360 demand counts DO NOT include traffic to the customer value deal on Amazon, which was the only place to get the $100 360 deal.
Compete has developed a unique methodology created by experts in the fields of mathematics, statistics and the data sciences to aggregate, transform, enhance and normalize data in order to estimate U.S. internet traffic.
Based on anonymous daily web usage of more than 2 million people, Compete calculates total traffic and rank for nearly every site on the web. We use rigorous statistics to make sure our estimates balance demographic and connection factors that match the entire U.S. Internet population.
We estimate traffic to the pageview level, which makes it possible for us to calculate conversion rates and analyze conversion funnels for almost all websites.
I hope this answered your question.
-Max
December 4th, 2006 at 9:59 pm
There is a link on the upper right margin of the blog labeled “Where do these traffic numbers come from” that explains Compete’s data points. We will continue to update the community on gaming demand each month across console and game release.
Thanks,
TJ
December 4th, 2006 at 10:40 pm
I totally agree with graig. I too would by the 360 for $100, so you can’t really compare demand for a system with a deal like that going. If 1000 PS3’s were going for $200 it would have about the same demand or more so. All in all Microsoft has enough money to just throw away by giving away 360’s for $100.
December 4th, 2006 at 11:15 pm
Chris,
A discount of $200 on 1,000 Xbox’s cost Microsoft a paltry $200,000 in lost sales. IMHO, that is cheap (and brilliant) marketing - considering demand and most importantly mind share for the 360 went through the roof during arguably the most important shopping weekend of the year.
Compete data also shows that during the promotion period demand for the 360 not only went up at Amazon, but also at most other major online retailers as well.
December 5th, 2006 at 8:03 am
I caught this on Gamasutra.com com, but I thought I’d poke you a response instead of sending them a response article. Well here’s what I would’ve wrote them in reply to your post and all:
This is in response to the article “Analyst: 360 Markdown Interest Tops Next-Gen Launch Traffic”
What the blogger left out of mind when taking Amazon.com’s traffic for a source is a couple of
heavy points that easily explain as to why the traffic for the ps3 & wii pages would have been
lower than the xbox 360 markdown visitors around those days:
A. Amazon.com was out of preorders so customers knew supply would be low or possibly nonexistant on launch day.
Anyone who would have checked with Amazon.com a while earlier would have known that and thus preffered to either
go to a different location online, stand in line at a store or wait.
B. Online mail order takes a while to ship. One day shipping is particularly expensive, but when one wants a new
console at launch, one mostly would want it ASAP and prefferibly without the added shipping cost and wait. Therefore
a physical location should, to many, be prefferable to an online store as soon as preorders have run out.
C. A large number of people that were interested in either the PS3 or Wii were likely camping out or recovering from
camping out(and some mourning the loss of their time with empty hands.. or playing their shiny new PS3 or Wii) at the
time.
D.Unlike the prices and availability of the Wii (arguably not unlike the ps3, since availability was indeed limited) the markdown was a limited time offer.
Online traffic analysis group Compete has released a new report that shows that Amazon.com’s Thanksgiving weekend Xbox 360 markdown generated more consumer interest than the launch day traffic of both the PlayStation 3 and Nintendo’s Wii.
“Demand for the PS3, Compete says, dropped nearly 15% just one week after its launch.”
This also has to do with limited availability. People will less likely want to try buying something at an online retailer like Amazon.com when they know that availability is so low that the product is selling for more than 300% or more on ebay.
“Most interestingly, though perhaps little surprise considering its easy availability and markdown price, Compete’s chart illustrates that based off daily demand for each respective console in the week leading up to and following the launches of each system, the 360’s “2.0″ launch through Amazon’s promotion clearly generated more interest than for the other two next-gen systems.”
Here I would like to see a direct comparision between Amazon.com’s and Ebay’s traffic for the same timespan, categorized by consoles.
January 21st, 2007 at 4:05 am
The wal mart in my small town got 6 PS3s about Jan 1st. Since then they have sold 3. In that time they have sold about 20 Premium 360’s. Persoanlly, the only reason I would buy any of them is for Gears of War, which I think is one of the best games I have EVER played.
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February 3rd, 2007 at 5:56 am
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April 17th, 2007 at 7:53 pm
Thanks Max! Your blog entry helped me with my report for this one class :)
April 20th, 2007 at 2:16 am
THE XBOX 360 MAYBE A YEAR OLDER THAN THE REST OF THE OTHER CONSOLES, BUT THE 360 HAS ALL THE EXCELLENT AND AWESOME GAMES AVAILABLE! I CAN GIVE YOU TWO GAMES: GEARS OF WAR AND HALO 3. DOES PS3 HAVE ANY COUNTER ATTACK AGAINST THESE GAMES? I DON’T THINK SO! JUST BECAUSE I OWN A 360, IT DOESN’T MEAN I’M JUST GONNA BASH THE PS3—BUT IT’S THE FACT!! GAMERS AROUND THE WORLD (MYSELF INCLUDING) ARE EVEN COMPARING HALO 3 TO GEARS OF WAR–WHICH IS THE BEST SHOOTER GAME? I MEAN, WHOA!, THAT’S WHAT I CALL “HYPE”, SINCE BOTH EXCELLENT AND AWESOME GAMES ARE EXCLUSIVES FOR THE 360! IT JUST DOESN’T GET ANY MORE BETTER THAT THIS! THANK YOU, MICROSOFT! THANK YOU, PEOPLE FROM EPIC! AND THANK YOU, BUNGIE!
April 22nd, 2007 at 9:00 am
I`ll tell you the XBOX 360 is the best i found, it is awsome, and maybe is a little older but still has some to show, and ‘i don`t say this just because I own one, but I get real fun.Thanks!
April 23rd, 2007 at 4:10 am
wii ROX who realy cares bout’ graphics??? when i’m playing a game i care about it being FUN not bout’ weather it lookz gud…examples of awsum games, zelda. metroid prime corruption(HELL YEA!!).super truck.spidey 3 (where you can make him swing using ur own hand gestures!!HOW KOOL).Godfather blackhand edition. N a ton more!! when it comes down to it whats more important? everything looking perfect or having a blast when playing?? oh yeah n ps3 said that wii was a novelty…then we dould there sales 4 that month…. w00t!!! not 2 mention ur saving a bomb if u buy da wii!!!
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December 19th, 2007 at 9:39 pm
This is a very interesting article. I am amazed that the $100 promo helped the xbox so much even when thousands of people were very frustrated. I bet people assumed they would get one, and so afterwords really wanted to buy one, even at a different price.
For those who didnt get the cheap xbox, I recommend http://x-box-360-free.blogspot.com/ . It has a great tutorial on getting your own free xbox 360. I am amazed that most people don’t do this when they want a console!
January 3rd, 2008 at 12:44 am
The elite has definately upped the ante, I personally wanted a PS3 first, but because of cost got an Elite. I am very happy with my purchase, and when the price goes down, I will probably get a 80gig PS3.
September 19th, 2008 at 2:28 pm
the 360 would have abolished all if it didn’t break like it did!
January 30th, 2009 at 5:03 am
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May 10th, 2009 at 10:36 pm
There is obviously a lot to know about this. I think you made some good points in Features also.
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June 30th, 2009 at 1:17 am
hello buddy how are you dear i read your comment it’s great i like it dear i learn alot of things from your comment i hope everyone likes your post dear thanx for this information.
This is a very interesting article. I am amazed that the $100 promo helped the xbox so much even when thousands of people were very frustrated. I bet people assumed they would get one, and so afterwords really wanted to buy one, even at a different price.
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