Video game hardware sales in April were well below the market's expectations. Total hardware units came in at 1,969,800 units (excluding the PlayStation 2), 22.93% below the market's expected 2,201,500 units.
Nintendo Wii was the only console to sell in-line with market expcations, selling 714,200 units compared to an expected 688,100 units.
The Xbox 360 slid by the PS3 once again with 188,000 units sold against the PS3's 187,100 units. Both platforms underperformed the markets expectations. The market had likely expected Xbox 360 and PS3 sales to be higher from the release of Grand Theft Auto IV. It appears the massive title was not able to move more hardware units.
Growth in video game sales were below expectations for April. Total video game software sales grew 68% from $389.4 million in April 2007 to $654.7 million. Traders on the simExchange prediction market expected $978.4 million. Much larger sales growth was expected due to the release of blockbusters Grand Theft Auto IV and Mario Kart. It appears these titles underperformed the market's expectations and also cannibalized sales of other games.
The following tables compare market expectations on the simExchange and actual results as reported by the NPD Group.
|Title||Actual units||Expected units||% From Expected|
|Total Hardware Units||1,969,800||2,201,500||-22.93%|
|Rank||Title||Actual units||Expected units||% From Expected|
|1||Grand Theft Auto IV (Xbox 360)||1,850,000||2,296,700||-19.45%|
|2||Mario Kart (Wii)||1,120,000||1,117,000||-4.84%|
|3||Grand Theft Auto IV (PS3)||1,000,000||1,328,300||-24.72%|
|4||Wii Play (Wii)||360,000||--||--|
|5||Super Smash Bros Brawl (Wii)||326,000||567,000||-42.50%|
|6||Gran Turismo 5: Prologue (PS3)||224,000||322,100||-30.46%|
|7||Pokemon Mystery Dungeon: Explorers of Darkness (DS)||202,000||--||--|
|8||Pokemon Mystery Dungeon: Explorers of Time (DS)||202,000||--||--|
|9||Guitar Hero III: Legends of Rock (Wii)||152,000||--||--|
|10||Call of Duty 4: Modern Warfare (Xbox 360)||141,000||--||--|
|NR||Tom Clancy's Rainbow Six Vegas 2 (Xbox 360)||103,500||254,700||-59.36%|
|NR||God of War: Chains of Olympus (PSP)||64,000||90,000||-28.89%|
|NR||The World Ends With You (DS)||43,000||73,800||-41.73%|
|NR||Ninja Gaiden Dragon Sword (DS)||23,700||33,000||-28.18%|
|Total Tracked Software Units||4,754,200||6,142,600||-22.60%|
|Total Software Sales||$654.7M||$978.4M||-33.08%|
How exactly does this work?
Gamers and developers sign up on the simExchange for a free trading account. Using virtual currency called DKP, players buy virtual futures contracts that are under-predicting sales and short sell futures that are over-predicting sales. This concept is widely known as "the Wisdom of the Crowd" and this system is known as a "prediction market."
About the predictions
Predictions on the simExchange should become more accurate over time as (1) the diversity of the pool of traders increases and as (2) more accurate players are rewarded with more virtual currency for their accuracy (thereby enabling them to form more predictions) and less accurate players lose virtual currency (thereby discounting their ability to form more predictions).