How Did Each Console Maker Fare In 2009

How Did Each Console Maker Fare In 2009

Nintendo, Microsoft and Sony have all flaunted their 2009 year end revenues, but none of them tried to compare it to last years'. Perhaps this has something to do with the fact that the trio have seen their revenues fall this year.

Microsoft's Xbox 360 related revenues (including hardware, 1st and 3rd party games, XBL and accessories) has declined for the second time in a row from $5.1 billion in 2007 to $5.0 billion in 2008 to $4.8 billion in 2009. On the other hand, more Xbox 360 consoles were sold in 2009 than in 2008.This means that Xbox 360 price cuts were the main reason behind the revenues fall.

Similarly, Wii price cut can be seen as the main contributor to Nintendo slight revenues fall. Nintendo's revenues which include both Wii and DS revenues has seen a decrease from 2008's $10.0 billion to 2009's $9.8 billion.

The most alarming revenue drop has hit Sony which saw a year-over-year revenue drop of $1.3 billion. Wedbush Morgan analyst Michael Pachter estimates that Playstation 2 software sales decline accounts for about half of the aforementioned revenue drop. Another $150 million may have been caused by Playstation 2 console price cut. PSP have seen around $225 million revenues decline due to the 1.3 million decrease in number of hardware units sold in 2009 as well as another $100 million in software sales.

Sony's revenue has declined from $6.4 billion in 2008 to $5.1 billion in 2009. Most of that drop is related to Playstation 2 hardware and software sales which are almost impossible to revive.

As it stands now, Nintendo has exactly 50% market share (in dollars), Sony has 26% and Microsoft has 24%. Remember that Sony's market share counts all includes Playstation 2 and PSP sales in addition to Playstation 3's. Microsoft revenues count Xbox 360 sales only and Nintendo counts both Wii and DS earnings.