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Game Consoles – December 2011 NPD Sales Figure Analysis

Saturday, January 14th, 2012

Welcome to the December 2011 edition of our regular NPD US video game sales analysis. In this feature, we look at video game sales, both hardware and software, for the month of December 2011 based on data collected by the NPD. December is traditionally the most important period of the year, where a huge percentage of the entire year’s sales occur. And as a result, there is no month more important than December, and it’s a great way to gauge the general state of the video gaming industry. Last year, the Wii has the holiday time winner, easily beating the Xbox 360, and 12 month is a long time for a game console. Read on the find out if the Wii continued its tradition of holiday success, and whether the industry as a whole had a good holiday period. Or not.

As NPD no longer releases full hardware sales figures, this feature is reliant on the game companies, namely Microsoft, Nintendo and Sony, to release their set of figures and based on “statement math” (that is, arithmetically calculate missing figures based on statements made). For December 2011, these are the statements made by the gaming companies:

  • Nintendo did not reveal any figures for December 2011
  • Microsoft revealed “more than” 1.7 million Xbox 360 hardware units sold, with 46% of the home based console market share (source)
  • Sony did not reveal any figures for December 2011

With only the above information, it becomes impossible to work out the estimated numbers for both the Wii and the PS3. Luckily, analyst Michael Pachter again came to the rescue, via Twitter, stating the Wii sales were in fact 55% down from the same month a year ago. With this piece of crucial information, we are then able to deduce the Wii numbers, and from this and the 46% market share figure quoted by Microsoft, we are then able to estimate the PS3 numbers too.

And so the figures for US sales in December 2011 are below, ranked in order of number of sales (December 2010 figures also shown, including percentage change):

  • Xbox 360: 1,700,000 (Total: 30.9 million; December 2010: 1,860,000 – down 8.6%)
  • Wii: 1,060,000 (Total: 37.7 million; December 2010: 2,360,000 – down 55%)
  • PS3: 936,000 (Total: 18.9 million; December 2010: 1,210,000 – down 22.6%)
NPD December 2011 Game Console US Sales Figures

NPD December 2011 Game Console US Sales Figures

NPD Game Console Total US Sales Figures (as of December 2011)

NPD Game Console Total US Sales Figures (as of December 2011)

My prediction from last month was:

Same hardware ordering, and a software chart that looks very similar to this month’s, so there’s nothing much to add to that really.

While the software chart has a lot of titles that were there in November, the hardware ordering actually changed, with the PS3 dropping back down to third place, after finishing above the Wii last month.

Overall, looking at the figures above, and the “sea of red”, December 2011 has been nothing short of a disastrous month for video game sales, especially compared to last December. As mentioned earlier, a huge percentage of sales occur in December, but this last particular December did not even out do the previous month, when historically, this has almost always been the case. In fact, for hardware sales, the raw numbers were at its lowest since 2005.

Microsoft was probably the “winner”, if you can call it that (more like the smallest loser), with only an 8.6% drop in console sales, and level in sales with November. The NPD pointed to the strength of the Xbox 360 throughout the year, saying that the Xbox 360 platform accounted for nearly 40% of annual physical retail sales, across all categories. Still, if you count November and December together as one period, then 2011 has been good to the Xbox 360, with 3.4 million consoles sold, compared to 3.23 million a year ago. Microsoft probably had hoped the Kinect Star Wars game and console bundle would have made it in time, helping to push the console, and Kinect, to the next level, but the delay to the game means that there were no real A-list Kinect titles for this holiday period (unless you count Kinect Sports 2, and Dance Central 2, as A-list titles).

Despite finishing as the third most popular console, the PS3 was probably in second place overall, when you look at the year-to-year decrease figure, as well as performances across both November and December. Nearly 1.84 million PS3 consoles were sold during November and December, compared to 1.74 million consoles in 2011. So the good news is that, things are not that bad, while the bad news is that, the Xbox 360 appears to be pulling further ahead in the United States, where during the same period, it had almost twice as many sales (and more console sales during the holiday period, means more game sales for the rest of next year, and also means a strengthening multiplayer community, the growth of which relies on people using the same console as their friends).

So the real loser is, once again, Nintendo. The Wii, previously the unstoppable juggernaut during December sales, is no more, and is relegated to a distant second place behind the Xbox 360. For November and December, 1.92 million Wiis were sold, compared to 3.63 million in 2010 – in fact, more Wiis were sold in December of 2010 alone, than November an December of 2011 combined! A 55% year-on-year drop shows that the Wii is no longer the “must-have” video game gift, with some of the sales going to the Xbox 360 (not many, looking at the figures above), and possibly lots of sales going to things like tablets and smartphones, the new home of casual gaming.

And that’s probably the best way to look at things for the video game industry as a whole, for the most recent holiday period. The industry has benefited from the Wii becoming a must-have gift item for the last several holiday periods. Kinect has contributed to the same phenomenon, but it just hasn’t been the same. And with so many other gadgets to distract the holiday shopper, and also the economy, the decline can almost been seen as a return to normal, after a couple of years of extraordinary performance led by the Wii. Maybe the Wii U will bring back the same thing next year, but expectations must be readjusted.

As for software sales, it was also down compared to December 2010. MW3 led the chart again, with Skyrim dropping to third after the resurgence of Just Dance 3. Interestingly, looking at total sales for 2011, the ordering of the top 3 was exactly the same as the December top 3, showing that Call of Duty, and perhaps surprisingly, Just Dance, were the top 2 franchises for 2011. Mario Kart 7 on the 3DS was the only new entry into the top 10 in December. Here’s the full software sales chart for December (new releases for December 2011 in bold):

  1. Call of Duty: Modern Warfare 3 (Activision, Xbox 360, PS3, Wii, PC)
  2. Just Dance 3 (Ubisoft, Wii, Xbox 360)
  3. Elder Scrolls V: Skyrim (Bethesda, Xbox 360, PS3, PC)
  4. Mario Kart 7 (Nintendo, 3DS)
  5. Battlefield 3 (EA, Xbox 360, PS3, PC)
  6. Madden NFL 12 (EA, Xbox 360, PS3, Wii, PS2, PSP)
  7. Assassin’s Creed: Revelations (Ubisoft, Xbox 360, PS3, PC)
  8. NBA 2K12 (Take-Two Interactive, Xbox 360, PS3, PS2, PSP, Wii, PC)
  9. Super Mario 3D Land (Nintendo, 3DS)
  10. Batman: Arkham City (Warner Bros, Xbox 360, PS3)

Predicting January is always difficult, as the post holiday lull will be here, and there would usually be stock issues (although with the low sales this year, maybe this won’t be an issue). I suspect, other than huge drops in console sales figures for all consoles, the PS3 will probably regain 2nd place, with the Xbox 360 still the top selling console. A subdued month as well for software sale.

See you next month.

Posted in Gaming, Nintendo Wii, Wii U, Switch, NPD Analysis, PS3, PS4, Xbox 360, Xbox One | 1 Comment »

Game Consoles – November 2011 NPD Sales Figure Analysis

Tuesday, December 13th, 2011

Welcome to the November 2011 edition of our regular NPD US video game sales analysis. In this feature, we look at video game sales, both hardware and software, for the month of November 2011 based on data collected by the NPD. The holiday period truly begins at November, with the Black Friday sales, it comes an important indicator as to how each game console will do during the entire Holiday period. Last year, the Xbox 360 narrowly beat a resurgent Wii, while the PS3 languished in a distant third. Will this year be any different, and will the best selling game in the history of video games, Modern Warfare 3, help hardware sales? Read on the find out.

As NPD no longer releases full hardware sales figures, this feature is reliant on the game companies, namely Microsoft, Nintendo and Sony, to release their set of figures and based on “statement math” (that is, arithmetically calculate missing figures based on statements made). For November 2011, these are the statements made by the gaming companies:

  • Nintendo reveals the Wii sold 860,000 units, with “more than 795,000” 3DS consoles, and “more than 350,000” units of DS (via PR email)
  • Microsoft revealed 1.7 million Xbox 360 hardware units sold, with 49% of the home based console market share (source)
  • Sony said that the PS3 hardware saw a “70% increase” in sales (via Patrick Seybold, Sr. Direcrtor of Corporate Communications at SCEA)

Luckily, all the statement maths added up this month, since from Microsoft and Nintendo’s statements, we can deduce the PS3 numbers to be around 900,000, and that falls into line with Sony’s “70% increase” statement (increase compared to the same time last year).

And so the figures for US sales in November 2011 are below, ranked in order of number of sales (November 2010 figures also shown, including percentage change):

  • Xbox 360: 1,700,000 (Total: 30.9 million; November 2010: 1,370,000 – up 24%)
  • PS3: 900,000 (Total: 18.9 million; November 2010: 530,000 – up 70%)
  • Wii: 860,000 (Total: 37.7 million; November 2010: 1,270,000 – down 32%)
NPD November 2011 Game Console US Sales Figures

NPD November 2011 Game Console US Sales Figures

NPD Game Console Total US Sales Figures (as of November 2011)

NPD Game Console Total US Sales Figures (as of November 2011)

My prediction from last month was:

It’s the holiday period proper, sales will be way up, and Modern Warfare 3 will help in this regard as it breaks all records. The Xbox 360, the preferred platform of MW3 and also with a new Halo game being released, will be the clear winner yet again, but it will be interesting to see if the Wii can have one last good holiday period, and there’s a new Zelda game too, so that always helps. The PS3 does have Uncharted 3 though. If I have to guess, I would say the PS3 will beat the Wii. The top games will be the ones I’ve already mentioned, plus Skyrim.

I think the above paragraph actually sums up November quite well.

The Xbox 360 was easily the clear winner, but the margin of victory was larger than most has expected. Most expected the Xbox 360 to be the best selling console, but with only moderate growth compared to the same month last year, the first holiday period for Kinect and the new “slim” Xbox 360. But Microsoft surprised everyone with a series of key price cuts, bundles, and sales, and just like how the Wii’s second holiday period was even better than the first thanks to its status as a “must-have” family gift, perhaps the Kinect is doing the same for Microsoft this time round. In any case, a 24% increase in sales compared to last November is nothing to be scoffed at, especially when last November was an amazing 67% up compared to the previous November. Here in Australia, Microsoft has also been super aggressive in discounting the Xbox 360, to prices that are practically half that of just a few months ago, and the Kinect bundle also seeing huge discounts at selected retailers. If this is the same strategy employed in other countries as well, then the Xbox 360 should have a great holiday period, and not just in the US (perhaps this is Microsoft’s response to PS3 sales that have nearly or already caught up to the 360 global sales numbers).

The PS3 also had a great November, although nowhere near as good as the Xbox 360, with the 360 almost selling twice as many units. The 70% increase compared to last November looks spectacular, but one has to take into account that last November, the PS3 sold fewer units than in 2009 (25% down actually). Compared to 2009, PS3 sales are up around 26%, so at the very least, last year’s trend has been reversed with the key price cut that came in the middle of the year. Sony also promoted the fact that PS3 software sales are up 30%, and that, more so than hardware numbers, is what Sony really likes to see (although hardware numbers obviously do help to raise the software numbers, and that’s more of a case now than the first few years of the PS3, when many used it as a cheap way to get a Blu-ray player).

It looks like 2010 was the last great holiday period for the Wii. While sales are not bad this year, they’re nowhere near the million+ figures from yesteryear. And this will be the last holiday period for the Wii as Nintendo’s lead console anyway, with the Wii U set to play a key role this time next year. Still, to label the Wii as a “loser” or “dead” is doing the console a disservice, since it still nearly outsell the PS3, and nobody it calling it a “dead” console.

On to software. As expected, MW3 completely dominated the sales charts, with incredibly, 9 million units of the game selling on all platforms, with over a billion dollars in sales. Battlefield 3 fell to 3rd place as a result, but it’s still the best selling Battlefield game in the series. Skyrim, the game many are already calling game of the year, managed to get second place and that’s probably quite impressive for a game in this genre, and certainly in the Elder Scrolls series, where it’s only taken a month for the latest installment to sell without half a million of the last installment’s lifetime sales number. Assassin’s Creed: Revelations, Saints Row: The Third contributed to the strong software line-up for November, making it the best November on record, despite recent trend suggesting that wouldn’t have been the case. For platform exclusives, Uncharted 3 did extremely well to get up to 7th place with 700,000 units sold, ahead of the new Zelda game at 600,000. Super Mario Land 3D and Halo: Combat Evolved Anniversary didn’t make the combined platforms top 10, but would have easily made the top 10 separated by SKU. Here’s the full software sales chart for November (new releases for November 2011 in bold):

  1. Call of Duty: Modern Warfare 3 (Activision, Xbox 360, PS3, Wii, PC)
  2. Elder Scrolls V: Skyrim (Bethesda, Xbox 360, PS3, PC)
  3. Battlefield 3 (EA, Xbox 360, PS3, PC)
  4. Assassin’s Creed: Revelations (Ubisoft, Xbox 360, PS3, PC)
  5. Just Dance 3 (Ubisoft, Wii, Xbox 360)
  6. Madden NFL 12 (EA, Xbox 360, PS3, Wii, PS2, PSP)
  7. Uncharted 3: Drake’s Deception (Sony, PS3)
  8. Saints Row: The Third (THQ, Xbox 360, PS3, PC)
  9. The Legend of Zelda: Skyward Sword (Nintendo, Wii)
  10. Batman: Arkham City (Warner Bros, Xbox 360, PS3)

My prediction for December? Same hardware ordering, and a software chart that looks very similar to this month’s, so there’s nothing much to add to that really.

Except for the obligatory, “see you next month”!

Posted in Nintendo Wii, Wii U, Switch, NPD Analysis, PS3, PS4, Xbox 360, Xbox One | 3 Comments »

Game Consoles – October 2011 NPD Sales Figure Analysis

Tuesday, November 15th, 2011

Welcome to the October 2011 edition of our regular NPD US video game sales analysis. In this feature, we look at video game sales, both hardware and software, for the month of October 2011 based on data collected by the NPD. As we approach the holiday period, some big name releases are and will be coming out, and a lot will be riding on a successful holiday period, especially due to the otherwise subdued year in sales that 2011 has been. Nintendo will hope for a good holiday period for the Wii, the last major holiday period for the console that traditionally does great during this time. Sony will hope that the PS3 can at least keep up pace with the Xbox 360 following the recent price cut in the US, even as global sales are catching up if not caught up already for the only console on the market with Blu-ray capabilities. For Microsoft, the holiday period is about maintaining and extending their sales lead in 2011. And so, October becomes an important month, made more so by the release of the mega-hit Battlefield 3.

As NPD no longer releases full hardware sales figures, this feature is reliant on the game companies, namely Microsoft, Nintendo and Sony, to release their set of figures and based on “statement math” (that is, arithmetically calculate missing figures based on statements made). For October 2011, these are the statements made by the gaming companies:

  • Nintendo reveals the Wii sold nearly 250,000 units, more than 250,000 3DS consoles, and nearly 180,000 DS (via PR email)
  • Microsoft revealed 393,000 Xbox 360 hardware units sold, with 44% of the home based console market share (source)
  • Sony did not reveal any hardware figures

With only a rough estimate for the Wii numbers, it’s hard to come up with an exact figure for the PS3, but assuming Nintendo’s “nearly 250,000” is much closer than 250,000 than 240,000, then combined with the Microsoft released data (if 393,000 is 44%, then 100% is  893,182, and taking out the Wii and 360 numbers from this), we get roughly 250,000 units for PS3 sales.

And so the figures for US sales in October 2011 are below, ranked in order of number of sales (October 2010 figures also shown, including percentage change):

  • Xbox 360: 393,000 (Total: 29.2 million; October 2010: 325,000 – up 21%)
  • PS3: 250,000 (Total: 18 million; October 2010: 250,000 – no change)
  • Wii: 250,000 (Total: 36.8 million; October 2010: 232,000 – up 8%)
NPD October 2011 Game Console US Sales Figures

NPD October 2011 Game Console US Sales Figures

NPD Game Console Total US Sales Figures (as of October 2011)

NPD Game Console Total US Sales Figures (as of October 2011)

My prediction from last month was:

I think the hardware situation will remain largely the same. Games wise, Batman: Arkham City and Battlefield 3 go head to head, with Forza 4 on the Xbox 360 possible making the top 10 as well as a platform exclusive.

Fairly close to the reality, I suppose, although the strength in which Battlefield 3 sold probably surprised everyone, despite the hype suggesting it was always going to do well. And the only other “surprise” is the PS3 numbers, and how close it came to actually selling fewer units than the Wii (and it may have done so too, since our “statement maths” above isn’t too accurate based on roundings and precision errors).

Starting with the healthiest number, the Xbox 360 had another amazing month, as not only did it managed to easily beat the other two consoles, it also managed year-on-year growth compared to October 2010 – no mean feat considering we had the “Slim”, price cut and Kinect to give sales a bump, and nothing like that this year. But 21% growth is nothing to be scoffed at, and it’s clear that, at least in the US, the Xbox 360 is the dominant console of this generation, despite Wii still having quite a large lead at the moment (but if you look at the number of active players, the number of hit games, the online multiplayer scene, the multimedia hub features – the Wii is not in the same league as the Xbox 360). Global Xbox 360 sales, while still leading the PS3 probably at this point, may give up its lead sometime soon, but if you have to pick a clear winner for this generation, then based on the growth of the platform and the long term effects on the next generation and beyond, the Xbox 360 is a clear winner.

The PS3 is by no means a loser, and if Sony keep to their word of a 10-year product life for the console (and Microsoft follow Nintendo’s lead and release a new console before then), then the PS3 might still end up being the best selling console of this generation, at least in global sales. But compared to the last generation, in which the PS2 outsold the Xbox by more than a 6-to-1 margin (and outsold Nintendo’s GameCube by even more), then you can’t but feel that while PS3 may eventually “win”, the victory is somewhat hollow when you consider the decline from the totally dominating position the PlayStation platform was in the last gen. Of course, this kind of dominance would never really be long lasting (just ask Sega, or Nintendo before the Wii), but the company’s lack of focus on online gaming, too much focus on Blu-ray and the subsequent delay to the release of the console, the relative developer unfriendly platform (which was always going to be to Microsoft, a software company’s, advantage), the lack of attention to family/social gaming (the Wii sucks, but here’s Move, our version of it), and various setbacks including the recent PSN hack, were all mistakes that could have been prevented or at least mitigated. So coming into the holiday period, with sales flat compared to the same month last year, and battling the Wii to be a distant second place, it’s not where Sony wanted to be (they had hoped most PS2 owners would have upgraded to a PS3 by now, but instead, the Xbox 360 and the Wii stepped in to fill the “hardcore” and “family fun” void).

The Wii, for what it was, and what it has achieved, is also a huge success. Sure, most Wii consoles are now gathering dust somewhere (guilty as charged), but for a slightly enhanced version of the GameCube with a new innovative control system, it has done amazingly well. But much of it has been at the expense of losing all hardcore gamers to the other platforms, a situation Nintendo wants to address with the graphically powerful Wii U (because hardcore gamers keep playing, and keep buying games, not so much casual gamers who get distracted easily as soon as a new tablet or smartphone hits the market). If the Wii was about getting Nintendo back in the game, and a game where they were close to “going the way of Sega” in the last gen (the Xbox sold more units than the GameCube, despite it being a clunky first effort by a company that has never done console gaming, compared to the pro that is Nintendo).

Don’t know why this analysis has turned into a “look back at” type of deal, considering this generation still has a long way to go, but it just felt appropriate for some reason, as this may be the last holiday period where these 3 consoles compete in.

Let’s move on to game sales. Battlefield 3 broke all records (before MW3 will do the same this/next month), which is no surprise. BF3 fever affected me personally as well, having played and be completely pwned in the beta, I was out for more punishment and so bought a copy of the PC version. In fact, I was so caught up in the fever, I actually bought two copies (long story)! With 10 million copies shipped (as in to retailer, with 5 million of these actually “sold”), it’s a success. Batman: Arkham City, in any other month, would have been the clear winner, oh well. Again highlighting the dominance of the Xbox 360 in the US, two platform exclusive titles, the newly released Forza 4 and last month’s Gears of War 3, were in the top 10, a difficult proposition for single platform releases, as they were up against all platforms combined sales figures for the multi-platform games. Also interesting is that Just Dance 3 managed a top 10 entry, despite not being available on the PS3 until December. Ubisoft hasn’t said why the PS3 version is delayed, but I’m sure Microsoft will notch it up as a victory for Kinect over the Move. Here’s the full software sales chart for October (new releases for October 2011 in bold):

  1. Battlefield 3 (EA, Xbox 360, PS3, PC)
  2. Batman: Arkham City (Warner Bros, Xbox 360, PS3)
  3. NBA 2K12 (Take-Two Interactive, Xbox 360, PS3, PS2, PSP, Wii, PC)
  4. Rage (Bethesda, Xbox 360, PS3, PC)
  5. Just Dance 3 (Ubisoft, Wii, Xbox 360)
  6. Dark Souls (Namco, PS3, Xbox 360)
  7. Madden NFL 12 (EA, Xbox 360, PS3, Wii, PS2, PSP)
  8. Forza Motorsport 4 (Microsoft, Xbox 360)
  9. Gears of War 3 (Microsoft, Xbox 360)
  10. FIFA 12 (EA, Xbox 360, PS3, Wii, PS2, PSP, 3DS)

Time to make my usual prediction. It’s the holiday period proper, sales will be way up, and Modern Warfare 3 will help in this regard as it breaks all records. The Xbox 360, the preferred platform of MW3 and also with a new Halo game being released, will be the clear winner yet again, but it will be interesting to see if the Wii can have one last good holiday period, and there’s a new Zelda game too, so that always helps. The PS3 does have Uncharted 3 though. If I have to guess, I would say the PS3 will beat the Wii. The top games will be the ones I’ve already mentioned, plus Skyrim.

See you next month.

Posted in Nintendo Wii, Wii U, Switch, NPD Analysis, PS3, PS4, Xbox 360, Xbox One | 1 Comment »

Weekly News Roundup (13 November 2011)

Sunday, November 13th, 2011

Welcome to another edition of the WNR. Coming up with an introduction to the WNR is actually the hardest part of writing it, and I just cannot get my brain to come up with anything this week. I guess I would mention that the NPD stats for US video game sales in October has just been released, but I haven’t written up the analysis yet, so that’s that. Better get on with it then.

Copyright

Let’s start with the copyright news, we start with the music industry lobby’s full attack on opposition to the Stop Online Piracy Act (SOPA).

The controversial SOPA, if passed, will give the music industry, amongst others, to avoid pesky things such as actual evidence when it comes to forcing the likes of PayPal or Mastercard from cutting off service to websites that the industry sees as a threat, as long as they can come up with some sort of explanation that the site is primarily involved in piracy. In fact, they don’t even have to do that. As long as the website is merely suspected of potentially wanting to hide their infringement activities, then SOPA will allow the rightsholders to intervene, even if at that point, it’s not even clear, let alone established by a court of law, that any infringement has even occurred. So potentially, all the industry have to say is that “I don’t like the look of that website”, and they can deal a potential death blow to that website. So no wonder opposition is coming in from all directions.

Wikileaks Logo

Remember how PayPal and others screwed Wikileaks? The RIAA wants the same, but for every website, not just Wikileaks.

But RIAA says that all of this nothing more by hyperbole, and that the music industry needs these changes to survive. Survive from mass piracy, or survive the move from CD albums sales towards digital tracks, they don’t say of course, but SOPA could very well be used to destroy innovation by an industry that’s obviously not looking towards the future. Imagine a new start-up that offers a brand new service that hurts the existing business model of the music industry, the RIAA can use SOPA to fire off an infringement notice to say the financial providers of the start-up website. Trying to avoid trouble, the financial providers cease support for the website, and the website dies a quick death. Sure, the owners of the website can sue the financial providers, but that would require money, which at that point, the start-up probably doesn’t have much of. This may very be an extreme, but no law should give so much power to one side, against the other, and to replace civil court matters with agreements and dealings behind closed doors by private corporations. And with the economy the way it is, the country can ill afford to allow old business interests to kill off new innovations, that are really at the forefront of job creation.

And the RIAA have been busy not only defending “their” SOPA bill, but also attacking the old DMCA, which if you can remember, was their work as well. Apparently, the “safe harbor” provision that was added to protect online businesses is working too well and actually offering protection to online businesses, which the RIAA says was not the intention behind the provision at all. They blame it all on judicial branch of the government, the branch that’s the hardest to corrupt via lobbyist money, for interpreting “safe habor” wrongly. In particular, they want ISPs and websites to be the judge, jury and executioner and to take proactive action against infringing content, what they call “red flags”, which is a very vague notion of “you’ll know (it’s piracy) when you see it”. Except these types of actions will open up ISPs and web businesses to potential lawsuits for removing the wrong content, and it’s difficult to judge what is right and what is wrong when you don’t even know what content belongs to whom, without the rights holders getting involved. The RIAA says this shouldn’t be a problem, and it isn’t, for them! It seems web piracy is the gravest problem facing the music industry, and at the same time, it’s a problem that the industry shouldn’t have to do anything about – because the government, tax payers, web businesses should be doing all the work, taking all the risks, while the rights holders  receives all the theoretical and perceived benefits.

Google DMCA Notice

Google says a lot of DMCA complaints are invalid, and most are being used to attack competitors

But then maybe it’s a good thing, because whenever the rights holders are given carte blanche rights to remove infringing content on the Internet, they tend to abuse those rights. Google revealed a few years ago that a third of all DMCA complains filed with the company were invalid, and the latest example is Warner Bros. abusing Hotfile’s infringing file removal tool. Despite being sued for promoting piracy, Hotfile actually had one of the stronger anti-piracy tools for rights holders, allowing them to basically delete any hosted files they want without any real limitations. Unfortunately, WB, when given access to the tool, abused it by deleting content that didn’t belong to them and even open source software, and this is not just Hotfile’s allegation – WB this week admitted to pretty much all of it as part of legal proceedings between the company. Once again highlighting why automated, technical solutions to piracy filtering doesn’t work, WB admitted that their piracy filters removed content that only shared a partial name to the content they were trying to remove. And doing a simple file name check implies WB definitely didn’t download the files and check whether it actually contained infringing content or not. WB also admitted to deleting a popular, open source downloading tool that they obviously had no rights to, and they justified it because the tool helped to speed up downloads, and of course, all downloads equals piracy in the eyes of Warner. And WB admitted to all of this “collateral damage”, and it seems they’re not too fussed about it either, as they’re still asking the judge to throw out Hotfile’s lawsuit against the studio for the allegation that the studio abused the DMCA, which Warner appears to have just confirmed.

Over to Europe and two ISP, and The Pirate Bay, related cases that could have implications everywhere else. With UK courts giving the okay for ISPs to start blocking websites for anti-piracy reasons, the BPI, UK’s branch of the RIAA, wasted no time in asking the same ISP, BT, to start blocking The Pirate Bay. Calling The Pirate Bay a “huge scam” (I would argue against that, since a website that has the word “pirate” in its title and domain name is not trying to fool anyone as to what the website is about), the BPI fearmongering engine went into overdrive. If you visit The Pirate Bay, apparently, your computer will get infected with viruses, trojans and herpes, your identity will be stolen, and you may even see “inappropriate content”. The BPI wasn’t clear what “inappropriate” meant, but since BPI specifically asked BT to use their child porn filter to filter out The Pirate Bay, the implicit suggestion is probably pretty clear. And of course, given the economy today, the talking point of “they toor ur jobs” was bought up, against suggesting that piracy destroys jobs, while creating none (and yet, the industry says ISPs, web businesses and individuals are making too much money off piracy).

The other story was in Dutch-land, where BREIN is at it again, this time asking two ISPs to also block The Pirate Bay. But the ISP, having already won a preliminary court case against this very matter, say that the proposed blocking method, by IP address and DNS, won’t work and may actually kill their network.

How DNS Works

How DNS Works

But before we get into the details, a little background info may be needed here. The way the web works, each server has one or more IP addresses assigned to it, and the server software can present the right website for you based on the IP address (sometimes, a single IP address can host several websites, and the server software can tell which site to serve up via the domain name you used to get to the IP address). Domain names are matched to IP addresses via Domain Name System  (DNS), which is basically thousands upon thousands of servers world wide that stores a constantly updated database of domain name to IP address translations (as well as mail server information, and all sorts of stuff). When the website owner starts a new website or changes the IP addresses, he/she changes his primary DNS server’s information, and that change is propagated to every other server on the Internet to ensure all data is synced. If data is not synced, and this does happen, then you may see different websites depending on which DNS server you connected to.

So back to the BREIN case. They want both an IP address/range ban, and also a DNS filter put into place so that if subscribers of these ISPs type in The Pirate Bay domain name, the DNS server would not return the right results. The first one is problematic because, to avoid filters, TPB could change IP addresses every couple of days, and this means the ISPs have to constantly track the IP addresses. And because IP addresses can be recycled/re-assigned, they may end up blocking the wrong website if they’re not quick enough with their detection, thus opening themselves up to lawsuits. The DNS filter method, which is also the one being proposed in the US by Protect IP and one that has come under much attack by anyone who knows how the Internet works, breaks the Domain Name System by destroying the sync between DNS servers, and slow down or stop the propagation of DNS changes, which will cripple the entire Internet. Net neutrality, which the FCC fought for and lost, would become law under PROTECT IP, as each ISP will now be able to tell you which websites you can and cannot visit, and may even redirect one domain name to another website (for example, thepiratebay.org ends up going to mpaa.org). But for the two Dutch ISPs, Ziggo and Xs4all, the immediate problem with both IP and DNS filtering is the effect on their own networks, with the constant changes requiring network reboots that can bring down the entire network. But BREIN doesn’t really care, and I’m just going to copy/paste what I wrote earlier, “because the government, tax payers, web businesses should be doing all the work, taking all the risks, while the rights holders receives all the theoretical and perceived benefits.”

Game publishers, especially PC game publishers, like to complain a lot about piracy, but it always seemed odd to me that they never actually listen to the people that may know a thing or two about what makes consumers buy games – the retailers! Steam, in particularly, has been talking a lot about DRM and pricing (maybe less talk, and more action on security would have helped … I kid). And this week, it’s Good Old Game’s turn to diss DRM. Nothing we haven’t heard already though, DRM only affects legitimate paying customers, it doesn’t stop piracy … all the usual things you’ve read on here. But it seems publishers have it in their head that they need to make it as hard as possible for the pirates by using DRM, which kind of makes sense, but “hard” is a relative thing and it’s mostly quite easy for the piracy groups to crack DRM. The other ways is to tie in non-intrusive DRM with value-added services, such as in-game browsing, chatting, cloud saves, and achievements, which is what Steam has done with success. A lot of success it seems, as GOG also revealed that even for games published by their own company, Steam sells many more copies than on the official GOG service, 5 times as many and 20 times more than all the other digital distributors combined. But even with their power, publishers still hold a lot of power over Steam, particularly in terms of pricing (and regional pricing), so the next time you complain about something being too expensive on Steam or the overseas version of the store carrying cheaper prices, the publishers are to blame, not Steam, which has time and time again presented evidence that cheap games => more revenue.

GamingSkipping HD/3D, and moving quickly onto gaming, mainly because the next story is also about Steam, and it’s not a good one for the company. Steam was hacked over the last week, at first it was only the forum, but it seems the hackers have got into the main Steam database as well and accessed, possibly not downloaded, the database including user details, hashed/salted passwords and even encrypted credit card numbers.

Obviously, getting hacked isn’t good, but with Steam relying on a third party forum software (vBulletin), it was always going to be a risk. But the emerging details seems to show that the database was at least somewhat secured, with both hashed/salted passwords and encrypted credit card numbers. The former simply means that the password, unlike with the PSN database, was not stored as plain text and stored as a hash, a supposedly unique representation of the password, but unlike encryption, it’s one way and (theoretically) cannot be reversed. A salt was also used to make the hashing much harder to reverse back to plain text, if at all possible. And the CC number encryption, assuming it was strong enough, should prevent hackers getting any meaningful data, which is probably why they didn’t bother to download the database.

Steam Guard

The much-maligned Steam Guard may have limited the damage hackers could have done to Steam

And if you use Steam’s Steam Guard service (I know, the one everyone hates), your account should be even more secure as the hackers would need access to your email account to access your Steam account. Not that it isn’t possible, because if you used the same password for both Steam and your Steam associated email account, then that’s how a hacker might get in, in the small chance that they could reverse the password hash (quite easy if you’re using a dictionary word, I’m told). So if you value your Steam account, and we currently have a poll asking you how many games you have on Steam, then it might be wise to change your password, remove any stored credit card numbers on the Steam system (just enter it every time instead of saving it, if you’re like me and likes to shop online, you’ve got it memorized anyway), and maybe have a bit more respect for Steam Guard. Just a bit more, mind.

And, we’re already over the word limit, but I would just like to offer a preview of the October US video game sales analysis. The Xbox 360 won again, Wii sold nearly 150,000 units less than the 360, and Sony refused to divulge any data again, but from statement maths, the PS3 either just narrowly beat the Wii, or was actually slightly behind, not great going into the holiday period. Battlefield 3 killed everything other game like a level 43 camper against a team of rushing noobs, with a record 10 million copies shipped on all formats (but Modern Warfare 3 might have something about this next month). The full analysis will be upped in the next day or so.

Alright, that’s enough words from me. See you next week.

Posted in Computing, Copyright, Gaming, News Roundup, Nintendo Wii, Wii U, Switch, PS3, PS4, Xbox 360, Xbox One | Comments Off on Weekly News Roundup (13 November 2011)

Weekly News Roundup (16 October 2011)

Sunday, October 16th, 2011

Welcome to yet another edition of the WNR. Another rather quiet week news wise, so this would otherwise be a short WNR, except I might spend a bit of time talking about the latest NPD results later on in the gaming section.

Copyright

We start with copyright news as we usually do, and we start with a quite unusual story, one that I still don’t really know what to make of.

PC gaming piracy is a big problem, I think everyone can at least acknowledge this fact (whether ever more intrusive DRM is the solution to the problem, I think, is where the debate is at the moment), but if the goal of anti-piracy is to increase revenue, and intrusive DRM doesn’t seem to be producing, why not try something else?

Vigilant Defender Questionnaire

A sample result from the Vigilant Defender questionnaire, which shows that DRM not only does not really help encourage pirates to buy games, it may even drive them to pirate in the first place

Except, I probably wouldn’t try what startup anti-piracy firm, Vigilant Defender, has tried – to actually help the spread of pirated content. Yes, you heard right, the first step in Vigilant Defender’s experiment is to actually help seed a leaked beta version of the hit game, Deus Ex Human Revolution. The second step is slightly tricky, as the version of the beta they seeded was slightly modified to drop out of the game after the first few levels, and direct users to an online questionnaire, in which they were asked questions about why they decided to pirate the game. While data collection is essential to solving the piracy problem, especially given the industry’s often biased “research” on the matter, the key question asked of gamers was “what would you be willing to pay for this game”. Not only will the answer to this particular question prove useful in finding out just why people pirate, and what price point can influence the same people to go legit, Vigilant took this one step further and proceeded to offer downloaders the opportunity to buy the full game at a price determined by average answer to this particular question. And amazingly, 8% of all those who downloaded the modified leaked beta actually went on to buy the game, at the user voted average price of $24.99 (half of the retail price) and that’s actually quite a high rate of return for games, especially when the target demographic is often described by the industry as “criminals” and “freeloaders”.

In my opinion, what Vigilant Defender tried to do was very clever, even if they went about it perhaps in too much of a roundabout way. What they’re actually advocating is a system where users vote for the price they want to play, and where pirated versions of games actually become demos of sorts. The gaming industry may not want to believe it, but a lot of gamers do use pirated games as an extended demo, and many, I’m not saying all (or even anything close to a majority), to end up buying the full version if they like the game. Game publishers, on the other than, would rather prefer people buy games they don’t like by making sure they can’t test it fully before they buy it, and perhaps that’s how it used to work before Internet piracy became ubiquitous, this kind of business model no longer works. But on the other hand, by offering downloaders cheaper version of games, it’s perhaps encouraging downloads, and this kind of distribution model would be a hard sell for game publishers. But there’s definitely something here, and perhaps a little bit of tweaking could bring us a new distribution model that takes advantage of P2P networks such as BitTorrent to not only distribute the games, but to promote them. Imagine if games came with a thin layer of unobtrusive DRM that simply nagged users to buy the game from time to time, a DRM so not annoying that release groups don’t even bother to have it (so it remains in the pirated versions floating around the net). Users would then be given an offer to “upgrade” their pirated version to the full legit version for a discounted price, but the caveat is that their save games/profiles would no longer be compatible with the full version unless they pay the full price, or some kind of incentive that still makes buying games at full price an attractive proposition. And if you want pirates to help you sell games, then let them join some kind of commission based affiliate program, where for each downloader that “upgrades”, the seeder would get a small commission for their “help”.

The even easier alternative is to lower game prices and improve services for legitimate customers, so that piracy becomes more trouble than its worth.

For Vigilant Defender though, they have a slight problem on their hands at the moment since this Deux Ex experiment was not actually approved by the publishers of the game, Square Enix, which could land the anti-piracy company in a bit of bother with anti-piracy laws.

Bad news for Australians lately on the copyright front. Only a couple of weeks ago, we got our first taste of mass copyright lawsuits, and this week, our government signalled changes to our existing copyright law which would make it even easier for mass copyright lawsuits to happen. Namely, the Attorney-General wants to make it easier for rights holders (or agents of them) to match IP addresses to real identifies, by “streamlining” the legal process. In other words, due process has to go out the window to make Hollywood and the RIAA happy. Even the idea of a ‘graduated response’ system was mentioned, at a conference sponsored by the copyright lobby, of course. Still, there were some other proposed changes that were positive, such as extending “safe harbour” to protect more types of Internet businesses, rather than just ISPs – search engines like Google and Bing will benefit the most with this proposed change. But as long as politicians still continue to believe that a single IP address is evidence enough of a “crime”, and that the “crime” itself is costing the creative industries insane amounts of money and jobs, then politicians will always be on the side of the copyright lobby, made more likely by the uneven spreading around of lobbying cash from both sides of the issue.

High Definition

In HD/3D news, this week could prove an important one for advocates of managed copy, who want legal alternatives to “ripping”. UltraViolet has been talked about quite a lot, and this week, we finally get our first taste of this “in the cloud” based managed copy system. Unfortunately, the taste is not quite palatable.

Green Lantern UltraViolet via Flixster

UltraViolet from Warner Bros. is being distributed via Flixster, and it isn't a very convenient user experience

Warner Bros. released Horrible Bosses and Green Lantern with UltraViolet digital copy included, but the way Warner has decided to deploy UltraViolet is the biggest problem at the moment. The current WB process requires users to enter in a 12-digit redemption code online, which in itself is annoying, and then users will have to sign up to Flixster, and then install the Flixster app on the device they wish to view the UltraViolet copy. And it’s all wrapped up in various layers of DRM, as you would expect.

And as WB owns Flixster, and to add to the problem, when other studios release their version of UltraViolet, they will use their own distribution network. So right now, if you asked me on which devices an UltraViolet digital copy works on, I can’t tell you, because it will depend on each studio, and this is absolutely the wrong way to go about it. For UltraViolet to be viable, I think it really has to either tie in with iTunes, NetFlix, Amazon or one of the existing players in video distribution, or all the studios have to come together and come up with a single distribution method, with all of the major devices supported (the iDevices, Android system, game consoles and Blu-ray players, at least). And then, streamline the process so it’s as simple as scanning a QR code, or just a matter of inserting the UltraViolet Blu-ray or DVD into a UV compatible player – none of this 12 digit code nonsense, or having to figure out each studio’s UltraViolet system and having to have an account for each.

A two parter Sony related story, the first part goes here in the HD section I suppose. Sony has had to issue a massive recall/repair for 1.6 million LCD TVs they produced since 2008, apparently due to a fire risk in a faulty component. It’s not exactly what the company needs at the moment, but the “good” news so far is that there haven’t been any reports of actual injuries, and that the damage so far has been restricted to the TV set itself.

GamingLess costly for Sony, financial wise, but perhaps more costly in terms of image is the news that a further 93,000 Sony online network accounts have been “hacked”, in the latest security breach.

Fortunately for Sony, the breach which led to hackers gaining access to 93,000 accounts on the Sony Entertainment Network (SEN), PlayStation Network (PSN) and Sony Online Entertainment (SOE) networks appears to have originated elsewhere. According to Sony, hackers managed to source the email/password combinations for an unspecified (non Sony) online service, and proceeded to use the same login combination to try their luck on the PSN, and managed to get access to the 93,000 accounts. Sony have disabled 33,000 SOE accounts, while have forced password changes for the rest. Sony says that credit card info was not accessed during this attack, but personal information may have been.

While Sony is right that the data breach occurred elsewhere, the security issue here still lies with Sony, because allowing hackers to launch this type of massive attack can easily be prevented. Simply limiting failed login attempts from any individual IP address or range, which is standard practice, could have prevented the 93,000 accounts from being accessed. And some kind of “CAPTCHA” system, or human verification, would have prevented the hacker’s bot based login attempts. Both of these are common techniques used to prevent dictionary based attacks. And once again, it took Sony days to spot the unusual activity on their networks, when it really should be a matter of hours if not minutes.

NPD Game Console Total US Sales Figures (as of September 2011)

Life to date Xbox 360 sales in the US (in green) is catching up to Wii sales (in blue), but the PS3 (red) languishes in third place

But while Sony’s security problems have been highlighted recently, it doesn’t seem to have seriously affected the fortunes of the PS3, as price, as always, seems to be the main driving factor behind sales. So Sony’s $50 price cut to the PS3 in the middle of August has seen PS3 sales rise, although as the September 2011 NPD US video games sales analysis shows, the rise was not big enough to really endanger the Xbox 360’s position as the best selling console in the US. The gap has closed, however, between the PS3 and the Xbox 360, while the gap between the Wii and every other console seems to be widening. If the gap remains as big as it was during September, the Xbox 360 is set to overtake the Wii as the best selling home based console of this generation (in the US) within 39 month – but it will be well after the Wii U is introduced, so that’s what Nintendo are holding on to at the moment.

Alright, that’s enough for this week I think. Hopefully more of a newsworthy week this next one, and I have a feeling it will. Have a good one.

Posted in Copyright, DVD, Electronics, High Definition (Blu-ray/HD DVD/4K), News Roundup, Nintendo Wii, Wii U, Switch, PS3, PS4, Xbox 360, Xbox One | Comments Off on Weekly News Roundup (16 October 2011)

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