High attach rate equals bad news for 360?

by Richard Mitchell { Nov 21st 2006 at 4:30PM }

The 360's high attach rate has been a big boasting point for Microsoft for some time now. After all, it's only natural to claim success when everyone who buys your console also buys an average of 5 games. It all sounds rosy, but according to the Susquehanna Financial Group, the 360's high attach rate may be indicative of its ultimate failure. "How the hell does that make sense?" you ask, and with good reason.

The Susquehanna Financial Group believes that the high attach rate could indicate that the 360 attracts more "hardcore" gamers and fewer "casual" gamers. Again, this sounds like a good thing, because hardcore gamers buy more games. However, if the 360 isn't attracting casual gamers (who far outnumber hardcore gamers), then its overall installed base will never grow. From a publisher's perspective, it's always better to have more potential customers. As the analysts at SIG put it, "a console with an attach rate of 8 and an installed base of 50 million is superior to a console with an attach rate of 12 with an installed base of 20 [million]." In other words, attach rates are less meaningful if the installed base isn't large enough to back it up.

Still, it may be a little early to declare that the 360 is the next Dreamcast, a failed machine with a dedicated following. The 360 is still young, and many people have been waiting for the Wii and PS3 to arrive before they made their decision. If anything, the new console war is only just beginning.

[Via Joystiq]

Tags: attach rate, AttachRate, console war, ConsoleWar, financials, statistics

Reader Comments (Page 1 of 1)

David @ Nov 21st 2006 4:41PM

you also failed to read the rest of what the Susquehanna Financial Group said.

They go on to say that they are expecting this to be an even larger problem for the PS3 with it's even larger price.

So your characterization that this group is suggesting that the 360 might get dreamcasted is pretty baseless.

Tim Marman @ Nov 22nd 2006 12:36AM

Could this high attach rate also be a factor that many people had to buy a bundle with 2-10 games to buy the system in the first place? :)

Killer @ Nov 21st 2006 5:12PM

At least the 360 is selling games, unlike the 0.98 games for each Ps3 sold. That's not even a full game!

yea @ Nov 21st 2006 5:12PM

too bad its the casual gamers that are buying up all of the games. Im hardcore and i just rent em. The hardcore only buy the "main" games like GoW, Halo's, GRAW, and such. The casual will buy a game if it looks cool and they end up gettin a bunch of games while the hardcore sit there with 3-4 games.

Olav @ Nov 21st 2006 5:33PM

I'm a big Xbox fan. I loved my Xbox and I love my 360. I was kind of involved in this next-gen-wars.

But now, after reading this, I've changed my mind. I don't mind if the Xbox 360 is the next-gen system that sells more than the others. I don't mind, because to me, it is the actual winner. I played Call of Duty 2, I played GRAW, I'm playing Gears of War, and I'll be playing Rainbow Six Vegas, Halo 3, maybe 4, Gears 2 and maybe 3, PGR4, hopefully Rallisport Challenge 3, Wolfenstein 360 and other amazing games. And I'll be playing them with my friends online, talking to them with the great wireless headset, and enjoying my time with all that.

Because I don't want a console that casual gamers want. I don't want a "casual driver's car". I want a Ferrari. And the 360 is a Ferrari to me.

I love my 360 and I just want the 360 to sell well enough so we can have an Xbox 720 or whatever.

ericdrum @ Nov 21st 2006 5:26PM

This only matters if the sales start slumping, which they aren't. A "hardcore" gamer is not going to get a 360 this Christmas. The "hardcore" gamer already has it. As the 360 gets older and the price comes down, more and more casual people will get the console. MS is in a very good spot right now with the 360.

@yea, us renters (i do gamefly) do end up bringing up the attach rate because they are buying games to rent to us. I also own 6 full games aside from doing gamefly by the way.

UptightRichard @ Nov 21st 2006 5:38PM

Admit it guys were all jealous that we can't play Gundam on our 360s yet.

Manu @ Nov 21st 2006 6:52PM

Did the Dreamcast also not fail due to the rampant piracy of their games?
All fanboy-ism removed, with the price of the consoles as high, how many "Casual" gamers are going to pick it up anyway? Fact of the matter is the 360's, the Ps3's are designed with gaming in mind, not Fusion Frenzies. Gamers buy them, and their friends if they are gamers will buy them as well. Hard to convince a Casual gamer to drop 400-600 for a console.

Tim @ Nov 21st 2006 6:28PM

Hmmm, seems like the Arcade is more geared towards the 'causual' gamers. Does this attach rate take into account how many titles have been downloaded, or just physical copies of software sold over the counter?

GLewis @ Nov 21st 2006 7:01PM

Fred @ Nov 21st 2006 8:01PM

Well, I guess that is one way to look at the glass half empty.

J.Goodwin @ Nov 21st 2006 8:20PM

The attach rate on 360s is good because of the stream of quality content.

Every month or two, we've had a great title to play. The last month has been insane and it's not stopping yet.

FFS: Gears of War just sold a million units in under two weeks:

http://gamerscoreblog.com/team/archive/2006/11/21/539037.aspx

BklynKid @ Nov 21st 2006 9:58PM

Are we that hardcore segment? I own 11 games.

When I got done counting I couldn't believe it myself. That's like $600!

epobirs @ Nov 22nd 2006 12:54AM

This reminds me of the old gag about the baby's diary. The entry on his second birthday has him very worried because his age doubled in a year. At this rate he'll be 64 by his 6th birthday!

That is what happens when there is data that is accurate but incomplete. Everything the analyst say could come true or...

It could just be typical behavior among the early adopter audience that buys a new console in its first year. Until the Xbox 360 installed base growth begins to drop off severely the analysis has no value. It's just blue skies supposition. Every time that base grows by a million without a drop in the attach rate, that only serves to make the Xbox 360 all the more attractive to publishers.

Not that publishers with any confidence in the wide appeal of their product should have any difficulty targeting the platform at the anticipated 10 million user level. That is 500K unit sales by just reaching 5% of the installed base.

But it seems rather improbable the growth will come to a screeching halt any time soon. There remain numerous products in the Xbox 360's future that promise to draw substantial new users. A rather large audience is holding off on their purchase until Halo 3 arrives, along, they hope, with a price break. Blue Dragon has already shown indications of more than doubling the installed base in Japan, and its stablemate Lost Odyssey may reach still more in that region. Both titles should give the console sales a boost in Europe and the US.

Price remains another enticement. How many potential customers regard $300 as their magic price point for the Premium System, especially when combined with a growing library of hit titles falling to Platinum Hit pricing?

Reports indicate that the big launch week for the competition went very well for Microsoft as well. The Best Buy software promo seems pretty well advised now, doesn't it. Shades of when the Genesis sales boom when Nintendo couldn't meet Xmas demand for the freshly launched SNES.

See, we can speculate, too, and with equal validity. Yuo just start with some facts and make up the rest as you go along.

mike @ Nov 22nd 2006 2:09AM

Great post epobirs you should work at joystiq

Pulse @ Nov 22nd 2006 6:39AM

I have to agree and disagree with some things.

1. I'm no fan of 360, but I'm no biased fanboy idiot either, and to say the 360 will drop like the Dreamcast is stupid, 360 is a very good competitor, and should PS3 keep itself up this gen, Xbox will continue to be its competitor into the future until, another console is made and takes them both over with originality.

2. I must agree with the article to say that the Xbox apart from its low price point does little or nothing to attract the non or not so hardcore gamer. All the games aim at real gamers and no one else, there is no appealing paltformers to attract the young, there is no games that promote family activity, if anything most of the games on Xbox are in the "16+" Catagory. The best games that is.

The PS2 had games to appeal to all last gen, Kingdom hearts for disney and ff fans, GTA for anyone wanting a go (even my mum tried it out, wasn't so keen on the swearing, but she thought the game was fun), MGS for hardcore stealth fans but others can get involved too, then there was Jak and Rachet and clack atteacting younger gamers, I haven't even gone into the solo games yet or the rest of the list.

Nintendo has gone for the wider audience of family fun, teens and kids, it appeals to even the old. The Xbox's audience is too small, and if it reamins that way, it will give others less reason to buy, I mean, the best genre is shoot em up, DOA is perverted and does nothing to attract fangirls like Tekken does. It is these issues that MS needs to pay attention to, it seriously needs to broaden its variety in genres because ppl such as I have seen so many FPS games that it is beginning to bore me, and without FPS games, there isn't much else to play on Xbox that appeals to me.

Shamma Banks @ Nov 22nd 2006 10:25AM

#16 I tend to agree with you. The FPS is being overdone. I want to see some old style games re-done with updated graphics. Anyone ever played Real Fishing for the PS1? that was a great game. I think developers are using up too much processor power in 3D games. I would like to see some 2D games with lifelike graphics.

Kenter @ Nov 22nd 2006 9:34PM

I don't think it is a sign of a Dreamcast disaster. If you think about it almost all the hardcore gamers have already paid for a 360. Which means that the recent 360 being baught show that casual gamers are interested in the 360 too. Just because people are buying many games dosen't say only hardcore gamers buy 360's. Now I can't say that for the ps3. With the price of the machine i feel it will only appeal to hardcore gamers. What 10 year old is going to want a 600$ machine when they can get a wii. I no for a fact! People come over to my place all the time just to play with my "Wii". I love my "Wii". four people can play with my "Wii" at a single time. I brought my "Wii" over to my girlfriends house last night and we "Played with my "Wii" all night long"...........Yes im done with the "Wii jokes" No hard feelings Wii fanboys. :)