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Industry Q&A | Mat Piscatella answers your questions

Mat Piscatella

Mat Piscatella

Member
Analyst
Oh hey, that's me... well hello Install Base!

Long-time lurker, first time poster. Thanks for welcoming me in, and for the great group of questions.

I'll be back around 8AM Pacific to get rolling. Unfortunately for me, Ahmad set the bar pretty high with his Industry Q&A thread. So, I'll go get wired up on some caffeine and let's see what happens.

Video Games!
 
Cannot wait to read your answers to the questions people had!

It is always interesting to gain more knowledge from someone in the industry!!
 
Welcome Mat, looking forward to your responses. *grabs a seat*

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Well hello everyone!

Thank you again for the great group of questions. I appreciate the opportunity, should be fun.

storres asked:
Greetings, Mat!

Longtime follower!

My question for you is, what type of challenge or challenges do you think the Switch successor may tackle?

Thank you for all you do!
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Thank you! I appreciate that.

Nintendo does enjoy a few advantages that other companies do not when it comes to introducing new products, but that does not mean it is fully insulated or separate from the market in which it competes.

The obvious one, particularly based on somewhat recent history, is that Nintendo has to clearly communicate the proposition of the new hardware to consumers. We certainly don't need to relitigate Wii to Wii U transition, especially not here. However, making sure consumers understand what the new hardware is (that it's not just a Switch revision but a new platform - if it truly is that) and why consumers should want to buy.

The backwards compatibility bit is a benefit and a potential risk - having such a massive library available for the next Nintendo hardware at launch sure makes the upgrade path easy for those already invested in the platform. But at the same time, one of the biggest selling features of new hardware is the ability to play new games and experiences that were not possible on the old device.

If Nintendo goes the cross-gen route with new software - if new content can be played on either system - communicating the reasons to buy for the new device may be more challenging. It's that very tough balance that exists these days of not wanting to leave an audience behind for fear of not being able to bring them to the next platform.

Nintendo does have the ability to use its content library strategically to help here, but it's a balance.

But really the upgrade path question is a huge challenge for everyone in the console space. How do you get folks to invest in the new platforms, when the most popular games (Fortnite, Minecraft, Roblox, GTA, Call of Duty) run just fine on devices people already own (many of which aren't consoles at all)?

Nintendo's owned IP can certainly help here, but that doesn't mean that it won't face the same Fortnite challenge that is impacting, well, everything right now.

Danny asked:
Hi Mat!

My question is; Nintendo has in the past often struggled when they have transitioned to new hardware. Do you think Nintendo is well positioned now in the US market to have a strong launch of their successor hardware this time around?
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Nintendo is as positioned as well as any company can be, however I think moving the release of the new Nintendo hardware into 2025 did come with an opportunity cost. There's also a bit of a risk with lost momentum this year. Nintendo's share of the hardware market, at the moment, is far below what it has been for several years. Now, this is always a bit of an issue when we hit a console transition window which is what makes this market cyclical to begin with. But I do think it would have been better were the new Nintendo hardware launched this year. Of course, it's not that easy. All sorts of factors are at play.

In any case, yes, with its stable of IP, its enthusiast fan base and the incredible performance of Switch, Nintendo is moving into this next phase from a very good position. However, we've all seen that the move from a successful generation to another successful generation is far from guaranteed.

If Nintendo fails to clearly communicate the benefits of purchasing its next device or fails to convince players that what they're currently playing is not good enough or does not have the release slate in place to get people to stop just playing Fortnite, Minecraft, etc... it could be a bit of an uphill battle to activate the mass market like it has in the past.
 
Luke88 asked:
Hello Mat!

First of all thank you and Circana for sharing the games ranking for the US market and some tidbits with us fans that just want to know how much games sell and aren't acting investors.

Recently tariffs have been the talking point of the internet following the US elections, do you think a possible increase in prices for consoles could push hardware manufacturers to invest more to expand their install base in other territories rather than leading to US-based manufacturing? We recently learned that Nintendo's earnings have grown significantly in the so called "Other Countries" (aka not US, not Europe, not Japan) this generation so that's definitely a portion of the market they'll be paying close attention to in the upcoming console cycle in my opinion.
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Phew.

Okay, to start, I'm not an economist, nor an expert in international trade. Nor do I have any confidence in being able to predict what the incoming administration is going to do when it comes to tariffs. This is - obviously - a quickly evolving issue with implications that are nothing short of mind boggling across, well, everything.

So, let's focus a bit on the question of growing in markets outside the US. And for the answer to this one you have to look well before the 2024 elections.

The 2020-21 period acted as a bit of a time machine for video game market. Players, hours spent playing, and money invested in gaming all jumped forward a few years from previous trend. And what we've seen since is the more developed video game markets (such as the US) flatlining. Video games had been a growth market for decades prior to 2020-21, and then it became a mature market basically overnight. We're not seeing growth in player count or hours or spending, it's been, basically, flat (of course with churn amongst categories and platforms beneath the topline surface).

Because of this, companies had already been focusing much more on markets that show more potential for organic growth. The line always has to move up and to the right, after all.

Could import taxes accelerate that shift in focus from companies? I think it could, especially if the pressure on US consumers from higher prices on everything from car parts to vegetables jumps again and spending shifts again more towards everyday spending categories.

But even if the import taxes do not happen, I'm not sure how much really changes. Because the US is now a mature video game market, companies have to fight for share rather than strive for organic growth. And what would you rather do, try to find new players in developing markets with products and services that make gaming more accessible for them? Or would you rather try to fight Fortnite to get a bigger slice of player time and dollars in the US?
 
Aostia82 asks:
1) Which have been the most interesting gen for a US tracker/analyst ever, in terms of sales, competition, results, unexpected trends and so on..?

2) Which have been the most interesting (not necessarily succesfull) "accessory" (no game or console) sales curve/trend ever and in this generation?
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Neat questions.

1) Well, and I'm guessing I'm biassed here because of when I started in the industry, but that late 2000's era was a golden age, imo. From the Xbox 360's incredible launch in 2005 to the unbelievable success that was the Wii (still laugh that people called that thing a fad), to PS3s rough launch and recovery, the cultural impact of the dance/music boom, the launch of WoW and the MMO craze, and the rise of motion-based gaming, it was just a very competitive, creative and wild time.

When I joined Activision Publishing in 2005, its mission statement was "We make great games that sell." Now, when you look at the About page for ATVI it says... "We connect and engage the world through epic entertainment. Our products help build community and create social platforms that bring people together. We are relentlessly curious, pushing the boundaries of what is possible to create games of our dreams—and yours."

Then, it was about sales. And for analysts, the data was more easily accessible and complete.

Today, the market is far more fragmented and complicated, tracking it is far more difficult, and companies can have goals that sometimes don't even align with sales. It is what it is.

2) Great question. Interesting is the word that's throwing me off here, heh. I spent a LOT of time looking at guitar sales back in the day, and toys-to-life. And it was really all about attach rates, tie ratios and price sensitivities. Challenging, but I'm not sure how interesting it all was.

For most interesting I'd probably go with all the plastic shovel ware type accessories that showed up for the Wii. We always wondered who was buying all this crap and why.

Right now, there are two accessory types that have been most interesting. First - VR has just been completely rejected by the overwhelming majority of the audience, with a very small, hyper enthusiast core niche that absolutely loves it and will evangelize for it all day every day. The VR curves (outside of Meta, which is doing its own thing at the moment) are just rough all around. The other that's been interesting is the remote play device segment. PlayStation Portal has found a small, but enthusiastic, audience, but other streaming based devices have not found success. This category does have potential, but the speed of light is always going to be a challenge. Perhaps someday we'll see an adoption leap in the remote play device segment. And if we do right now is the time we'll look back on to see its beginning.
 
adriandlte asks:
What are your opinions on Gen Z and Alpha moving away from desktop consoles - Xbox and PlayStation - and towards PC gaming in the United States? Is it happening? What does the data we have tell us? If it is happening, how big of a phenomenon is it and how worried should Sony and Microsoft be long-term?
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Big (and excellent) question.

The overall percentage of people playing in these younger age groups in 2024 has fallen slightly from 2022 and of course is down from 2020.

It's slight, however. Like I mentioned above, the 2020-21 period spiked everything player count, and hours played, and things have basically been flat-ish since. You really have to squint at the player data to see it, and even then, you're in range of error territory for much of the observed change.

These audiences are often playing across multiple device types. And what they are playing? Well, you can probably already guess. For the 3-month period ending October 2024, the Console/PC video games played by 13-24 year olds were Minecraft, Roblox, Fortnite, Grand Theft Auto V and Call of Duty: Modern Warfare III. (Oh, and the top 5 mobile games for this group were ROBLOX Mobile, Candy Crush Saga, Monopoly GO!, Candy Crush Soda Saga and Minecraft - Pocket Edition. Fortnite was #6 and Call of Duty: Mobile #8.)

So, it's mostly a question of where these age groups are choosing to play these big live service behemoths, many of which can be played on practically any device. It becomes a question of convenience and preference as to where they'll play, rather than being forced to one device type (say a console).

I think it's pretty clear that both Microsoft and Sony are certainly aware of this and are actively attempting to address it. Microsoft's new marketing campaign is more obvious, but Sony's strategic moves (while more conservative) are also looking to address the challenge. We'll have to see which - or if either - will be successful.
 
BokatiFan asks:

Thanks for participating here Mat!

1) GTA6 will I think obviously be the biggest gaming launch ever, what effects do you think this will have on the market as a whole? Could it pull gamers away from their current preferred live service games?

2) Is the higher price of new consoles a barrier to increased adoption as this gen continues? With the switch likely going its entire life without a price cut and the PS5 not seeing deep sales like the PS4 is this expected to reduce adoption as the generation continues?
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You got it, cheers.

1) Grand Theft Auto VI could certainly be the biggest entertainment launch of all time. And I think that's the expectation. No pressure.

There are two things on which the 2025 forecast (and heck, even beyond) rests - Grand Theft Auto VI and the new Nintendo hardware device.

Grand Theft Auto VI has to not only pull players in, but it also has to successfully transition its existing player base. But yes, if any game should be able to do this, it should be Grand Theft auto VI.

2) So, looking at this purely from the US market perspective, sure, lowering the price of hardware should help the adoption rate of that hardware. However, what companies are doing now is looking at the total lifetime value of that additional customer and balancing out that long-term potential with the short-term opportunity. You're also seeing more bundling happening (adding content or accessories to a hardware package) to increase the perceived value of the hardware purchase without dropping the price. Bundling has been a very effective means of driving hardware purchase.

And it's tough to say that adoption has been hurt too much by the current pricing. Switch is getting very close to PS2's lifetime sales in the US, while PS5 is tracking 8% ahead of PS4's pace. Xbox Series is trending 11% behind Xbox One's pace and is now 5% behind the Xbox 360 trend. But Microsoft has certainly expressed a decreased focus on the console as an ecosystem driver, for better and/or worse.

Perhaps we'll see even more aggressive bundling and short-term price promotion over the coming couple of years for PS5 and Xbox Series, but I think the era of $199 consoles is long gone.
 
Agazorth asks:
Hello:

1) Do you see Switch reaching 160 millions units sold in 2025?
2) Do you think Microsoft strategy for XboX family sistems is working? Is possible for them to leave the dedicated hardware market?
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1) I don't really pay a ton of attention to the global lifetime records like this. I do know that Switch is now within 550k units of PlayStation 2's lifetime sales in the US having just exceeded 46M units life-to-date. So, Switch should reach that benchmark in 2025, if not even sooner.

2) If you look at Microsoft's earnings, Xbox as a whole appears to be doing pretty darn well, even with the recognized and acknowledged challenges in the dedicated hardware space. Whether something is working or not depends to a large extent on what the internal goals are. There's probably some room to debate here, as the goals may have shifted around recently given some of the surrounding reporting.

Could Microsoft leave the hardware market? I mean I guess it could but I don't see that happening. What I would believe to be the more likely approach would be the creation of an Xbox front end for portable PC Steam Deck-type devices and trying to go the OEM route so 3rd party manufacturers could make Xbox-type devices as well as what Microsoft produces. Like Windows PC and Surface devices. Would it work? Who knows. But hey I loved both Windows Phone and the Zune so...

Astrogamer asks:
Hello Mat,

1) What do think was the most surprising game launch in the US market in the last few years and why?

2)Who do you think is the biggest missing publisher from the digital leader panel, outside of Nintendo and Take-Two, that would make the monthly charts more accurately reflect the full game landscape?
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1) Gosh there have been quite a few.

Now there are the hits that were surprising in just how big they were, although not surprising that they were hits to begin with. Games like Baldur's Gate 3 and Animal Crossing: New Horizons, for example.

But I think I'd go with the double whammy early this year of Helldivers II and Palworld. Both seemed to come out of nowhere and really moved the market in a big way. Helldivers II in particular, especially with its performance on Steam.

Looking globally, Black Myth: Wukong probably fits the bill. But while the game did perform strongly in the US, what it did outside the US is what really drove its overall success.

2) Nintendo is the answer here. Take-Two Interactive is a fully participating member. We just have to delay the inclusion of its digital sales revenue data by 3 months before inclusion in the best-selling titles charts per publisher request.

Because of the diversity and ease of digital self-publishing now, the biggest games that don't end up making the best-selling title charts from non-participating panel publishers outside of Nintendo titles tend to be from more one-off releases.
 
Aquamarine asks:
Back in ye olden days (circa late 2000s), The NPD Group actually used to provide NeoGAF with hardware numbers along with numbers for the Top 10 best-selling games by Units.

I understand why Circana clients may not want to have exact software numbers of their games posted without their permission. But has there been any thought at Circana about bringing back exact hardware numbers in your monthly PR reports like NPD did once upon a time?
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Long story short - there are so many interested parties and stakeholders when it comes to this data that balancing everyone's wants and needs isn't easy.

Back in the late 2000s, the overwhelming majority of everything video games were sold physically, and NPDs agreements with retailers allowed for incredible flexibility in how that data was disseminated and discussed.

I try to provide context that is aimed at helping people understand market trends. Would I like to be more specific? Sure. I'd like to do a lot of things. But instead, I do what I can, and if someone really knows what to look for they should be able to figure out the rest.
 
AuroraMusisAmica asks:
1) Hypothetically, you're now in the seat of Nintendo president Shuntaro Furukawa. When will you announce Switch 2? When will you release it? And what game is its launch killer app?

(Mat answers the hypothetical question.

Internet: NPD industry expert Mat Piscatella claims Switch 2 release date!)

2) What's your favorite Pokemon?
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1) It was announced in January 2024, and released at the end of March. It's already sold nearly 5M units YTD, and the entire narrative around video game consumer spending has been flipped on its head. Instead, here we are.

2) So, when Pokémon first dropped I was a college senior also working two jobs (delivering pizza and scrubbing retail shelves as a merchandiser for Banana Boat suncare). I was so broke I went into the Stater Bros (grocery store) hoping to find busted Top Ramen at a discount. I missed the whole Pokémon thing, so for favorite I guess I'd go with Squirtle. IDK, heh.
 
Crjunior35 asks:
Hello Mat! Sorry for any typos and grammar errors but here are my questions:

1 - If you could revive and change the fate and the strategy behind a "failed" platform to become a success, which one would you choose and what would you do?

2- How do you see the change from the exclusive 3rd party releases and late ports to simultaneous multiplatform releases? In the previous gens, exclusive 3rd party releases used to do fine and boost the sales of some major platforms, but now it seems that when a game is exclusive , most will underperform without a PC or a Nintendo release.
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1) Not necessarily failed, but didn't achieve its potential - I'd go with PSP/Vita. PSP had the huge installed base but of course was plagued by piracy (yeah yeah not every pirated copy is a lost sale and lots of people who pirate never would have bought the game anyway yadda yadda I know) and it just faded away. The PSP Go was a device well ahead of its time, and were one to come out today I think it may fare better. Vita as well. I don't know if there's anything that could have really been done differently at the time to make stronger success happen, I would just want to change their fates.

2) The availability of Fortnite, Minecraft, Roblox, GTA, COD, etc is far more important to a platform today than exclusive content. Sure, exclusive content still has its value, but nowhere near the level it used to. And for 3rd parties, there's just no reason to make a single platform exclusive unless that platform holder is going to provide the investment and support necessary to dramatically lessen the risk of overall development. Making games available on several platforms, and even device types (Mobile, PC, etc) helps provide more bites at the apple, and less dependance on one audience or manufacturer. The bets are so big now and carry such tremendous risk (so often now one release is make-or-break for a studio) that there's really no option to place the entire bet in one place. Again, not unless some platform holder pays a lot of money for it.
 
ReddDreadtheLead asks:
1) With the looming successor to the Nintendo switch, are external partners/publishers looking forward/excited to be working with the platform?

2) how would you compare market trends pre-COVID and post-COVID in Habits that encompass platform preferences, path of entry to game purchases(Physical/Digital), subscriptions, types of games being purchased and how you envision this next decade (ending 2032?) to shift, if any, from the pre vs post covid in terms of these aforementioned trends that major publishers and platform holders need to take into account that is best not ignored?

can you sing
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1) So, the folks I work with most at publishers are in sales planning or analytics or market research. They're not the ones that will likely have been briefed on the new platform and if they have been are likely under some strict confidentiality agreements. The people I work with are most interested in knowing what it is, when it will come out, how much it will cost and what games are coming with it. Just like the rest of the video game world!

2) Like I mentioned above, markets that were pretty well developed pre-2020 became mature markets afterwards, meaning low growth (at least for now). Strategies are now more centered around obtaining higher share of wallet and time rather than pursuing organic growth. The other big shift is the accelerating decline of physical. The increase in share for consoles that do not feature physical drives is increasing rapidly, and sales of physical games continue to fall, and the rate of decline is accelerating. Potential import taxes on physical games could accelerate this further, but we'll have to wait and see on that one.

As for singing, well, if my performance in Rock Band is any gauge... no.
 
Marukoban asks:
1.) With how younger generation prefer non-cutting edge graphics game, such as Minecraft, Roblox, Fortnite, etc, do you foresee that current type of AAA games are hitting ceiling in terms of unit sales? With preference of GAAS mobile game by younger generation, has the big publisher/platform holder successfully manage to convert them to be the audience for premium console games? Has there been any changes in focus of video game development by major publisher/developer?

2.) In terms of unit sales, has the console video game market in the US been expanding in the last 2-3 years? If yes, what are the main drivers of the growth? If not, which segment/genre has been contributing the biggest decline?
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1) Billion-dollar question for anyone not making Fortnite, Minecraft, Roblox, etc. I do not have a great answer for this. The live service behemoths are so entrenched, have developed such incredibly strong social hooks, and players have so much time already invested in these games that pulling them out is a herculean task. And while some of the bigger story-based games can break through for a month or two, they end up being little more than snacks between sessions of these huge live service games. And if your game is not one of the handful of outliers they are overlooked or ignored. There are reasons that so many studios are closing and so much of the investment has dried up. I do not know how this gets fixed. But it's what keeps me up at night.

2) Over the last couple of years, everything has been flat-ish with some bumps. In 2023, spending on console content bumped 4% compared to 2022, which itself had been 8% lower than 2021. For 2024 YTD ending October, console content is down 6% compared to the same point in 2023, with add-on content spending (DLC/MTX) growth of 8% offsetting a 7% drop in digital premium full game downloads and a 30% decline in new physical spending.
 
Stardust Traveler asks:
Hello, Matt. Thank you for taking the time to answer our questions.

1) When I look at the Circana charts, the thing that jumps out at me is the underperformance of Xbox hardware. The US is traditionally Xbox's best market, but it is selling worse than Playstation and is very close to the Switch, a much older console. How do you feel about the long-term viability of Xbox hardware? Do you think that in the future, Microsoft will transition away from hardware entirely and become a publisher focused on subscription services?
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You got it.

Microsoft's new marketing campaign reflects the strategy, which is a decreased focus on the dedicated Xbox hardware. Which could work, so long as it offers a compelling set of products and services to appeal to folks that could look at Xbox as little more than just another digital storefront. It's a big bet, and one that could take years to properly assess.

Like I mentioned above, I don't see them transitioning away from hardware entirely, but I could see a stronger emphasis on the OEM market and allowing 3rd parties to use an Xbox UI for Steam Deck-like and other devices in the future.
 
fiendcode asks:
Hi Mat, thank you for taking the time to answer our questions.

1) I'd like to know why Circana's MAU engagement charts don't cover Switch given it's sizable position in the marketplace as a leading platform?

2) Along the same lines, I'm curious why the PC MAU engagement chart is limited to Steam when there are so many millions of players outside that ecosystem (Fortnite, Roblox, Minecraft, WOW, LOL, Valorant, Overwatch, etc, etc)?
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1) It's a significant investment to run the Player Engagement Tracker on any platform, and even more so on Switch. Because of this, there has to be a client base willing to purchase access to that data. Switch engagement is dominated by Nintendo content. 3rd parties don't have the foothold on Switch that they do on other platforms. We have to look at opportunity versus costs, just like any business.

2) Same thing... running these types of tools is expensive. We're not just running an internet poll or a focus group. We're getting a read on activity on a rapid cadence, mapping out sessions, session length, what was played before, what was played after, looking at entire engagement patters over a huge sample across an expansive period of time. And so, a client base must exist to make that investment work. A WoW tracker, for example, would only be appealing to Microsoft, and they already have all that data in house.
 
WestEgg asks:
Hello Mat,

EA Sports College Football 25 seems poised to become the best selling sports title in the US next month. The NCAA series that originally ended in 2013 always did well, but never better than Madden. Do you think EA College Football will maintain its stronger momentum and outperform the Madden series in future years? Also, are there any other interesting data points relating to EACF25 that you would be interested in sharing?
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Hello back!

A sports game question! Love it. Sports video game players are the most 'hardcore' gamers out there but are often disregarded or mocked. But anyone dumping hundreds of hours into any game seems pretty core to me, whether that's in Elden Ring or Candy Crush. Anyways...

Yep, EA Sports College Football 25 should be the best-selling sports video game in US history starting next month. Of course, it also has years of built-up demand fueling it and released in an outstanding window. Future iterations (if it does become an annualized release) won't have those advantages. Could it continue outpacing Madden? Perhaps. But until that happens, I'd expect Madden to come out on top in future years. We'll see on that one.

The game that the highest percentage of EA Sports College Football 25 players on PS5 also play right now are Call of Duty HQ (which includes a bunch of Call of Dutys) and Fortnite, followed by NBA 2K25 and, somewhat surprisingly Madden NFL 4th. (Then comes GTAV and Roblox). So not even sports games are free from the pull of the live service behemoths.
 
SoonyXboneUh asks:
Hi Mat, glad to have you back for a while.

Q1) PS5 as the successor to market leader PS4 is over- and underperforming at the same time when it comes to (at least my) expectations. It's doing well in some random months and often compared to the competition in a tough overall market situation. But at the same time PS5 has massive struggles to reach PS4 peaks and shift huge quantities with price promotions and during the expected high volume months. Is that unpredictability, just demand leveling out over the year, or a shift in consumer and/or seller behavior? Some insight form someone with way more detailed data would be helpful here. I don't see this patterns with Xbox and Nintendo, who have more traditional, linear and predictable ones.

Q2) Price promotions. Nintendo started with not really doing them anymore, yet demand skyrocketed under covid. PS4 in the last trimester of it's lifetime followed and this year Xbox is doing no significant deals. Is it just not worth it anymore? Will people eventually just buy the console at normal price if they can't get a deal. In previous gens, those holiday promotions were huge demand drivers. Is historic knowledge of basic economic principles dead? I don't even want to talk about GPU prices. Some lower income households will surely be priced out with that. Especially if Series S is not desiderable enough and Switch 2 not launching immediately with a cheaper handheld only device.
The US is still seeing a big population growth for a "western country", yet the market is not expanding when it comes to userbase. Only in nominal $ sales. Is that really all the platform holder want to rely on in an inflationary world? Seems quite risky to me long term.
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1) Looking at long-term trend is more reliable that trying to take a lot away from multiple short-term windows. Over time, PS5's performance compared to PS4 in terms of lifetime adoption has been remarkably stable. In any small sample or abbreviated comp all kinds of noise can muck up the view and potentially lead to false conclusions. If you're going to look at things like promotion performance you also have to take into account things like retailer distribution level (what % of stores had stock, what % was going through online vs b&m, etc) - there could be things happening at a micro level that could screw up the entire read that are impossible to see. Over time, and a larger sample, those bumps smooth out. I don't get too fussed over short period comps because I'd wager that whatever conclusion I'm getting to is based on some false or unconfirmable assumption. Not quite answering your question I know.

2) The play now is to increase consumer perceived value through bundling more than discounting. You can certainly make the case that discounting may be more effective/appealing. But maintaining the higher ring, and keeping that price anchor in place, seems to carry more importance than just moving units. So more accessories or games or digital content get thrown in with hardware at the same price. It's been pretty effective, although how long that will be maintained, and what could happen should significant import taxes get thrown on... well then all bets are off.
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This is going long lol.
 
Vault-Tec asks:
Hello Mat,

1) The transmedia strategy is on a very rapid rise and seems poised to be one of the next big things in the industry. Data and specific comparisons may not exist, but what do you feel was the most impactful transmedia effort in the last few years in the USA video game industry (be it in terms of engagement, surge of interest, sales..) ? Between Fallout, Super Mario, The Witcher, The Last of Us, Cyberpunk 2077, Sonic and League of Legends.

2) What would be your dream video game adaptation ?
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Transmedia is the oldest new thing in gaming. The Super Mario Bros movie came out in 1993!!

1) Anyways, I think in recent years the most important may have been The Witcher. This is the one where I started getting heaps more questions from studio folks and parties outside of video games. Something about that got wheels turning. Of course there are so many other examples, but just in terms of something spurring the current wave I think The Witcher played a big role here.

2) Wolfenstein. I want to see more nazis get punched.
 
Hero of Legend asks:
1. Can you comment on how the Sonic franchise and historically performed across all platforms since Sega went 3rd-party? Sonic has historically sold most on Nintendo systems, is this still the case today with Switch versions vs. other platforms? Thanks!

2. I'll ask you this as well; any comments on Sony and Microsoft's current and future strategy on releasing games for Switch (and ahem certain future Nintendo hardware 👀), as we've already had both Ori titles, Grounded, and Pentiment from MS, with Sony now joining the fray with LEGO Horizon Adventures and now via licensing Freedom Wars Remastered to Bandai Namco. Are you privy to any further plans? MS have been quiet on this front with only PS5 getting any focus. Obviously I'm not talking about the expected Minecrafts and MLB The Show releases.

Thanks! :D
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1) Since 1995, Sonic ranks among the top 25 video game franchise in lifetime tracked full game dollar sales, which is very good. It's in the ballpark of Just Dance, Resident Evil, Elder Scrolls and Tony Hawk, among others. They keep making more of them, so I guess it's doing alright.

2) Even if I were privy to unannounced future plans I wouldn't be able to speak to them!
 
vixolus asks:
Howdy Mat, thank you for everything you do for the community with sharing insights and data with the public.

1) What is a market analysis you would like to do or share, but haven’t been able to do due to lack of data/permission/time/etc? Doesn’t necessarily have to be US specific.

2) Have you tried cloud gaming? If so, which services? What are your thoughts on it in its current state and potential for growth in the US market?

Thanks
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Thank you, I appreciate the shout out.

1) I want Nintendo digital data in the rankings. Everything else is distant second.

2) I'm 100% convinced I caught Covid for the first time in Feb 2020 at a Santa Clara hotel bar while playing Gylt on Stadia. But yeah, tried (and continue to try) them all (Luna, GFN, Xbox Cloud, hell I bought an OnLive console day 1 and played Homefront via cloud on my work laptop like what almost 15 years ago now) and continue to not enjoy the experience. It's a great thing for trial, but for long sessions nah I'm good. It needs to get better before mass adoption can happen, but the speed of light is a thing. Someday it could (should) take off. But we're not there yet.
 
TheSilentWombat asks:
Hello Mat, welcome to Install Base!

1. With both Microsoft and Sony planning handhelds and the success of devices like the Steam Deck and the Portal, do you think there is an untapped market for handhelds other than Nintendo, or is Nintendo going to be the dominant player in that field for the time being?
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Massive opportunity for Portables exists and is the reason why everyone seems to be jumping in (or considering doing so). Switch proved the hybrid concept, now comes the next wave. Can certainly see a market where more and more currently dedicated devices like consoles could go the hybrid route.

Joseki asks:
Hello Mat.

1) Relative other major regions like Europe and Asia, it seems that in the US PlayStation 5 is finding the biggest growth and Nintendo Switch is experiencing its biggest decline. What do you think are the factors behind this?
2) Nintendo currently does not share digital sale figures to Circana (or any other sale tracker worldwide). While Nintendo is notoriously hard to predict, do you personally expect this stance to change in the near to medium future as digital approaches the 50% barrier?
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1) Switch had a very strong peak in the US, and some later demand probably got pulled into 2020-21. I mean, these few years really mangled anything resembling a normalized decay curve in the US, basically have to throw out the entire generation when it comes to comps (although no one will actually do that). PS5 volume was really held back in 2020-22 from stock. Then the stock came in and it boomed, then demand normalized and it fell... it's all just a mess.

2) I'm hopeful, but realistic. If 3rd parties develop a strong presence on the next Nintendo device and there's a need for Nintendo to better understand 3rd party digital share data across competing platforms, then maybe. If the next Nintendo hardware device remains primarily a Nintendo box, maybe not.

GamingCJ asks:
Hi Mat, thank you also from me. I have only one question.

1)Could you update how Xbox Series and PS5 are doing saleswise in the US compared to one another and to their predecessors?
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Covered this previously in the thread. But PS5 unit sales in the US are currently 8% ahead of the PS4's pace and 61% ahead of PS3. Xbox Series is 11% behind Xbox One and 5% behind Xbox 360.
 
Welfare asks:
What I'm curious about is to what degree of control Circana has on its current data sets. If the company were willing, could it still give out hardware numbers like "PS5 sold 300K this month, Switch 150K" and it chooses not to, or was there some agreement with console vendors that they'd rather that data not be given out? The digital panel of publishers, from what I understand, works in this way where digital data can't be published without approval from the publisher.
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Well, I can't get into specific partner agreements. I will say that what I provide today in terms of something like hardware units is what I can, and I am always looking for ways to expand on that. I also touched on this issue in the response to Aquamarine's question, above.

2. Following up on the previous question, what other rankings could Circana release every month? We get top 20 for the month and YTD, top 10 for each platform, and a top 10 for active players. We're always told what the #1 accessory is, but NPD used to release a top 10 accessories ranking in the early to mid 2000's. Could an accessories top 10 be produced? As well, do you think the platform specific rankings should stick to a top 10, or be expanded to a top 20 like the main ranking? What gets missed in the Xbox and PlayStation rankings that the Nintendo ranking benefits from is more games that probably wouldn't show up in the main combined platforms list have additional context to where they rank. Coming up on the holiday season and discounts, I would think the Xbox 11-20 would look more unique to its platform than the PlayStation 11-20, which would be different to the combined platforms 11-20.
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It's a balance for public facing reporting. You don't want the biggest, or most important, factors impacting the takeaways from a reporting period to be buried by the sheer overwhelming wave of charts and graphs. At the end of each year, we do publish the expanded charts and recaps. And I'm always looking for ways to improve and expand the reporting. But really, when you look at the actual press coverage that the monthly release gets, the focus is always on the total spending line and the top 20 best-selling games of the month. It's extremely rare to see the best-selling accessory mentioned, for example, or even the top selling game on PlayStation.

So, we could expand some of those lists and charts (particularly something like accessories), but there is a point where the amount of info can detract from the effectiveness of a release rather than enhance it.

I'm always open to suggestions though. Sometimes I can make them work, sometimes I can't.
 
Paronth asks:

1)I would like to know the market share of console sales in relation to retail chain and online stores? I think Walmart and GameStop are #1 and #2 but it would be nice to have confirmation with percentages (for Best Buy, Target and Amazon too if possible)

2)And is this share the same for physical video game sales?
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Unfortunately, I cannot get into retail-specific data or shares. Sorry!

Kmds asks:

Hello Mat, thanks for answering these questions:

1) Did you find the explosion of the Wii in its early years or the extended longevity of the Switch in the US the more surprising?

2) Which Nintendo first party IP in your opinion pushed the Switch to have the most success in the US?
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1) The Wii. No question. The Wii was a cultural phenomenon that few saw coming. Heck, years into it people were still calling it a fad. Grandma was bowling at Thanksgiving. Like, what? How did any of that happen?

2) Animal Crossing: New Horizons when the pandemic hit. It's been discussed quite a bit, but that game at that time... nothing like it. There have been so many games on Switch that helped it reach its success, but I'm not sure the Switch gets close to the PS2 without Animal Crossing: New Horizons releasing when it did.

Digikiki asks:

1) With the PS5, I think it's fair to say that although sales are still great, they're not significantly better than that of the PS4 - the PS4 still gets a good amount of support and has an active player base too. And we've started to see people slowly grow less infatuated with the idea of additional power, as was seen with the reaction to the PS5 Pro. So my question is: do you think Sony is going to have trouble maintaining their typical sales momentum going into the next generation, and what could they do to offset any potential problems (assuming they aren't going to make many drastic changes to the hardware of their next console and that it will be a fairly straightforward successor)?
2) If you could sit down and have a conversation with any person who has worked in the video game industry, living or dead, who would you most want to talk with? And what would you want to ask?
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1) Going to go right to what I think the crux of the question is... so people buy new consoles at launch not so much for what can be played immediately, but rather for the promise of what is to come. Given where we are in both technology and the prevalence of the live service behemoths, that buying-on-faith incentive for a new console won't work in the future like it used to. Much like Nintendo will have to give potential buyers of its next hardware device reasons to buy, so will other manufacturers. They can't lean on the more power-more pixels pitch (I mean, they can and will, but it will be nowhere near as effective as it has been previously). It will be more difficult a pitch.

2) Phew. Good question. Probably Carol Shaw. She made River Raid (my favorite 2600 game as a kid), worked at Atari in the 70s before going to Activision, went through the crash. Brilliant programmer. Would just want to get her read on the current gaming world, if she has one. Also, just seems like there'd be STORIES.
 
Lelouch0612 asks:

Hello Mat and thanks again for doing this 😊

  • What are your sales expectations on the Black Friday/Cyber Monday deals? (Hardware and software)

  • In terms of hardware launch nowadays, which strategy optimizes adoption? (Launch month? Earlier launch with 1M units first month or delayed launch to build more stock)
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Thanks for putting it together!

1) I just want some of the bleeding to slow. It's been a brutal year for hardware, and there's not much happening promotionally that I think is going to fix that. So, my expectations are that it won't be great. There are a few deals out there, sure. But it's mostly just more of the same, and not good enough imo.

2) For any hardware launch the limitation is always going to be production capability and/or risk tolerance. Ideally, you'd thread that needle to make the new box tough, but not impossible, to find by accurately predicting potential demand (much easier said than done of course). In reality, often the first few months will just mirror some benchmark historical release and then production goosed or lessened depending on initial response.

Gimmick asks:

1) Sony finally confirmed that the PS2 sold over 160 million. Switch is selling sensational for an old console in Japan, but it needs the EU and US to get that record. Do you think it can do it?

2) We know that MLB, Madden, and FC (FIFA) are doing great, and the reboot of College Football is seeing great success, but what about NHL, NBA, and UFC? I get the feeling their trajectory has been disappointing in the last 5-6 years or so, is that correct? and why would they lock NHL and UFC on console? what's the benefit of that?
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1) Talked to it above... but in the US Switch is probably going to match PS2, so long as distribution keeps going if/when the new box gets released. Globally, I don't know.

2) The sports titles are pretty consistent release to release, with some jumps and dips due to the quality of that individual release. I don't think I have any kind of strong take on the trajectory of any of them changing significantly. And of course, the sports games are now driven to a large extent by the post-launch monetization, which is captured best in the earnings reporting of the individual publishers. And given those reports, well, the licensed sports business is generally a good business to be in. And I'm not sure why the lock to Consoles, but my first guess would be about the concern of risk to the in-game economies from h4x0rz but I don't know.

Sagitario asks:

Hello, Mat! Thanks for doing this :)

1) Do you think there is an upper limit to games and consoles pricing to the point where sales (units or revenue) drop or get stagnant? I feel the next couple of years are going to be rough for the gaming community (well, for everybody actually) and lots of people will be locked out of gaming because of costs.

2) I know that your area of work is focused in the US market, but is there any data or insight you could share about the Mexican market? Like size comparison of userbase or revenue. Anything is good. There is not a lot of info publicly available to consult about my country.
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1) Well, we may already be there. Now what happens next is the question...

2) We cover all of the Americas for physical and digital point-of-sale data, but unfortunately, we have not fielded player or engagement studies like we do in the US.

In Mexico for the 2024 year-to-date period, the top 10 best-selling games in tracked spending are:
1 - EA Sports FC 24
2 - EA Sports FC 25
3 - Dragon Ball: Sparking! Zero
4 - Mario Kart 8 (digital not included)
5 - Super Mario Bros Wonder (digital not included)
6 - Super Smash Bros Ultimate (digital not included)
7 - Grand Theft Auto V (Aug-Oct digital not included)
8 - Call of Duty: Modern Warfare III
9 - Minecraft (Switch digital not included)
10 - Hogwarts Legacy

In revenues, the top 3 best-selling hardware platforms in Mexico YTD are PS5, Switch and Xbox Series. For units, the ranking is Switch, then Xbox Series with PS5 third. PS5's are crazy expensive.
 
Home stretch...

Astral_lion02 asks:
1) 20 years ago Nintendo DS launched in North America what do you remember of that system ?
Do you believe in the success of this console in 2004 back then against the aggressive PSP ?
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Completely botched launch followed by a quick and responsive recovery. Ended up being quite the beast for kids games like LEGO.

MarcoP90 asks:
1) Circana has long ago shifted from reporting and rankings based on unit sales to ones that are revenue-based instead; now, I understand the reasoning behind the change since we live in a world where, thanks to digital storefronts, games can witness such massive timed discounts to greatily alter their sales by copies sold / downloaded and in the process "distort" the market picture (to give an example of games from a specific series that saw massive sales boost because of the combination of low prices and a successful tv series adaptation: think about Fallout), but is there any chance that in the future we could get the return of public releases of units-based rankings alongside the dollar ones? This question comes from the fact that I think charts based on revenue aren't completely safe from the "distortion of the market picture" phenomenon, even if quite differently from unit-based rankings: more precisely, I'm referring to the fact that, by following such a criteria, not only games with higher price points and especially premium-priced special editions can be "overrepresented" in the charts compared to the units they actuall sell to their audience, but also games retailing at lower prices (I'm referring to titles in the $40-to-60 range, not to those that go through heavy discounts) are consequently underrepresented. Long story short, I think that a better representation of the state of the market and where it's going would see both revenue and units taken into account, and I would love to see Circana showing a little more openess on the units side of the story as well.

2) While obviously you can't go much into detail, even when accounting for the greater digital discounting activity, looking at the ecosystems-specific monthly rankings, what kind of changes (if any) have you seen in terms of game sales by units in the Top 10s across the last five years during non-Holiday months, but also in terms of the amount of sales necessary to get into the Top 10s?
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1) We use revenue-based title charts as this is what was approved for use by the digital panel participating publishers. Any public facing ranking must reflect only consumer spend per those agreements. I try to mix in unit looks where I can.

2) huge shifts in unit rankings will be almost entirely driven by promotional pricing. If a game gets a 90% digital price discount, for example, units will spike massively. Sure, there's a lot of detail when you really drill down, but when it comes to what hits the top 10s for units, it's the big games and whatever had a huge sale on a digital storefront. More or less.

Terrell asks:
1) What are the most appreciable differences you can recall between the US and Canadian markets? I’m thinking things like physical/digital splits, consumers’ platform preferences (including PC), genre or publisher over-performances, market size per capita… whatever is easy info to recall, wouldn’t ask for a deep dive (though I wouldn’t turn my nose up at a deeper look, either) For example, the ESA Canada charts give the appearance of Nintendo software performing stronger in Canada comparatively (relative to the sizes of each market of course), but that could just be a mirage we’re witnessing, better to get a confirmation what I and others interpret from the limited data we have is real.

2) Some data that’s managed to shake out over the years suggests that attach rates for software in Canada are low and recently wrote how I believe that the Canadian market is a growth opportunity if publishers considered it as such and didn’t rely on treating the country as the 51st state. In your professional opinion, would you consider Canada a console/PC market with a lot more room to grow, or has that part of the market matured as far as it can and will only mature/shrink in line with the industry as a whole?
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1) While there are differences between the two markets, and while Canada should absolutely be treated separately from the US (particularly in terms of pricing, where all kinds of shenanigans have taken place over the years) - the two markets remain more similar than most others. And, hate to say it, but taking some base % extraps of the US market can get you pretty close to the size of the Canadian market. Not perfect, obviously, but pretty close. And there are some differences in things like console adoption, and some franchises are stronger there than in the US. But they're ballpark. We do have local folks in Canada of course, and they look at the Canadian gaming market in detail and talk to all the Canadian publisher and retailer offices. I'll see if I can't dig into some deeper detail about the Canadian market to share.

2) I don't have the detailed knowledge base with which to answer that question effectively. I'll have to dig in more.

Damage2 asks:

1 - Theres a lot of discussion about Final Fantasy going multiplataform being the saving moment for the series, with all the data that you have, do you feel that theres an audiences or good sales for these games outside of the Playstation plataform?

2 - The JRPG genre have been growing a lot in the west with the recent sucesses of games like Nier Automata and Persona 5, what are you seeing with the data that you have and how do you feel if theres a growing market in the genre?( can you post a top 10 JRPG in revenue if its possible? no Pokemon included because it would be just Pokémon xD)
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1) Absolutely. There's a huge potential market for games like Final Fantasy and others you mention across the US market, and not just on PlayStation. This is a potential market that seems to be growing in potential and popularity as well.

2) Ohhhhh boy, defining a JRPG is like trying to define what an indie is. Not sure that the definitions are all that tight or that everyone would agree that Pokémon would be included to begin with. Let me just say that yes, I think this market segment is growing and has a ton of further potential. Making the games more available and accessible across platforms and device types will certainly help.
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Alright, think I hit them all!

Wasn't expecting to spend this much time tbh, but hey the questions were all really good and I enjoyed digging into them.

Hopefully you thought so too. If not, well, that's cool too.

Cheers all!
 
Thank you for all the answers you provided @Mat Piscatella . I just have one follow-up that I got curious about. You said Circana covers all of the Americas, does that mean you also track South America console sales? If that's the case, could you share a YTD ranking for Brazil? Curious how consoles are doing here and we usually have no info.
 
Greetings @Mat Piscatella , great to see you here!

I wish I had been aware of a QA days prior, I would ask if in your opinion the Dreamcast had a tough road as @Welfare NPD archives shows it was selling better than the Saturn but still below the 64.
 
Thanks Matt, that was insigthful.

I wanted the top 10 JRPGS in revenue, but i can understand that is a hard thing to categorize xD
 
Thansks a lot. Mat. I missed my opportinity to ask about the decline of the middle class and the hyper-concentration of sales in a few publishers and IPs :(
 
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The madlad actually said it. He actually admitted it!

His favorite Pokémon is Squirtle!

Seriously though @Mat Piscatella thank you for your time and dedication. I hope you and your family have a wonderful Thanksgiving!
 
Mat Piscatella said:
I'll see if I can't dig into some deeper detail about the Canadian market to share.
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Thank you so much for the consideration of doing that. I thought I might be reaching a bit out of your regular wheelhouse there, but had to try. Whenever you find the time to look at it further (and there is no rush), I’ll take anything you have to share, be it here, the monthly Canada sales thread or something more convenient to you.
 
MegaXZero said:
Thanks Mat. Great answers and insights.
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Truly, one of the best days on the forum since it started!

Most interesting thing here was the info on Mexico. Seeing Smash Bros after so many years being so high without digital was insane. Also, Switch being number 1 in units was also just as insane. He said PS5 was 3rd in units due to price, as long as Switch 2 is Mexican equivalent of $400, it could literally dominate the market.
 
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