Why is Sony Hiding PS3 Sales Figures?

NPD Sales results for the month of April were just released. For the second month in a row, Sony has asked the NPD not to publicly release the actual number of PS3 units sold. Sony has commented on the sales figures, saying these results show year-to-year sales of the PS3 are up 13% for the month of April, 2011 compared to April, 2010. But for the second month in a row, Sony has asked the NPD not to publicly release the exact sales figures for the PS3 console. The controversial questions is, what would Sony’s motive be for doing such a thing?

Although the year-to-year sales for the PS3 are improved by 13% for the month of April, the same apparently could not be said for the month of March. If the PS3 had produced impressive sales figures or seen a year-to-year rise in sales, Sony would have wanted to announce this publicly, as they did this month. But we will never know for sure, since Sony did not allow those numbers to be released publicly.

Now that it seems reasonable that the PS3 did not see a year-to-year improvement for the month of March, it means there was apparently a year-to-year decline for March. This seems like a logical motive for Sony to ask the NPD not to release sales figures to the public. This seems particularly true when you take into consideration that Xbox 360 sales in March saw a year-to-year improvement of 28% and sold a whopping 433,000 units! The Nintendo Wii sold an impressive 290,000 units this March.

For the month of April, both Microsoft and Nintendo allowed the NPD to release sales figures, as usual. The Xbox 360 sold 297,000 units, which was a 60% year-to-year gain compared to April of 2010. Only 172,000 Wii units were sold for April 2011, which is a large year-to-year decline in sales. For 10 of the last 11 months, the Xbox 360 has been the top-selling console, while the Wii has continuously seen declines in year-to-year sales.

Several websites online have been listing an April sales figure of 204,000 for the PS3. However, this is not based on anything that the NPD publicly released with Sony’s permission. The only reason this number of 204,000 exists is because Sony has said there was a 13% year-to-year increase in sales. We know that the PS3 sold 180,800 units in April, 2010, which would put April, 2011, at 204,304 units sold.

The controversial question many people want answered is why Sony is no longer willing to allow NPD to publicly release sales information based on exact numbers. Although a year-to-year sales increase of 13% for the PS3 is not as good as the 60% year-to-year sales increase seen by the Xbox 360, it is still something to be proud of.

As I said before, Microsoft recently announced that the Xbox 360 has been the top-selling console 10 of the last 11 months. But if you investigate and look at the sales figures during those 11 months, you see that the PS3 finished in last place each of those months, except this month! This month the PS3 was apparently able to finish in second place, outselling the Wii for the first time in years!

With that in mind, we need to ask ourselves why Sony isn’t willing to put a spotlight on their exact sales figures anymore. Some people have speculated that the recent problems experienced with the PSN outage is Sony’s motive for apparently not wanting publicity. But what about Sony’s motive for not sharing exact sales data for the month of March? Was Sony’s only motive for not wanting to release March sales figures the fact that the PS3 finished so far behind its direct competitor, the Xbox 360?

Statements made by Sony Computer Entertainment CEO, Jack Tretton, indicate that Sony uses a far more forgiving method of defining what a “sale” is than Nintendo and Microsoft. We know that Microsoft and Nintendo consider a unit sold when it has “Been shipped to a retailer or wholesaler that has made a purchase.” This doesn’t necessarily mean consumers purchased the units in stores, but it does mean retailers and wholesalers have purchased the units and have them sitting in stores waiting to be purchased by consumers.

Statements made by Sony executive, Jack Tretton, clearly show that Sony’s definition of a sale is very different. Sony considers a PS3 unit “sold” the instant it is “Produced and placed into inventory.” This means even if a retailer or wholesaler has not purchased the unit, Sony still classifies PS3 units as “sold,” even though they are collecting dust in inventory warehouses. This is a method of cheating – telling the public a unit is sold, even though it hasn’t been shipped to a retailer or wholesaler yet.

Using this form of definition to define the word “sold,” Sony can take credit for millions of units being sold in a very deceptive manner that produces inaccurate results. The best example of this situation occurred in 2006 at the E3 show, and was then proven in 2007 during an interview that Sony executive, Jack Tretton, was a part of. I will briefly describe what happened.

At the 2006 E3 show, Jack Tretton predicted that the PS3 would sell 6 million units by the spring of 2007. But when the spring of 2007 arrived, only 1.4 million consumers worldwide had purchased the PS3. In fact, the PS3 never had a chance of selling 6 million units, since Sony was only able to produce 5.5 million units in factories. In this interview, you see a chart clearly showing that the PS3 had seen disappointing sales of only 1.4 million units worldwide, yet Jack Tretton is claiming that the PS3 was only “a half million” units behind Sony’s goal of 6 million units.

When you subtract a half-million (500,000) from 6 million, you end up with 5.5 million. This is the exact number of units that Sony says had been “produced” by the spring of 2007. Not even close to 5.5 million units had been shipped to retailers and wholesalers by the spring of 2007. This obviously means that Sony’s executives were claiming that all 5.5 million units that had been produced and placed into inventory warehouses were classified as “sold,” even though 4.1 million of them were still sitting in warehouses collecting dust.

Most people believe that the reason Sony started classifying sales in this inaccurate manner is because the PS3 saw such disappointing sales when it launched. Even in Japan, the PS3 has not sold well – even being outsold by the Xbox 360 several months during the first couple years of its life. Each time the Xbox 360 saw an exclusive launch of an RPG game like Blue Dragon, Lost Odyssey, Infinite Undiscovery, or Tales of Vesperia, it would produce a spike in sales that resulted in the Xbox 360 outselling the PS3 in Japan that month.

This is a surprise, because foreign products like the Xbox 360 usually sell very poorly in Japan – a market that always does its best to stay away from American products. If executives at Sony Computer Entertainment would have told Sony shareholders that only 1.4 million PS3 units had been shipped to retailers due to a lack of consumer demand, it would have caused management executives to be fired. This is probably why Sony executives started reporting the number of units “sold” in a way that was synonymous with the number of units “produced.”

In fact, Ken Kutaragi, the designer of the PS1, PS2, PS3, and PSP was asked to step down and instead take up the roll of Honorary Chairman. This is the Japanese cultural way of getting fired, since Japanese companies have a tradition of hiring an employee for life. The PS2 and PS3 were both criticized by developers for being difficult to program. As a result, Ken Kutaragi is no longer involved with the Playstation products.

Most people don’t realize that Sony still uses this form of deception when publicly announcing sales figures such as 50 million PS3 hardware units sold worldwide. Sony can get away with this because most of the world doesn’t accurately keep track of sales the way we do in North America. But in North America, Sony can’t get away with deception like this because the NPD sales data is so accurate. According to NPD sales figures, the Xbox 360 is outselling the PS3 at a large rate.

This is very important because North America is the largest videogame market in the world. This expanding sales gap between the Xbox 360 and PS3 is the reason why popular multiplatform games such as Crysis 2, Portal 2, and many others continuously see sales figures significantly higher on Xbox 360 – a console that has sold 53 million units. If the Xbox 360 has sold 53 million units while the PS3 has sold 50 million units, it is a difference of only 6%. With a difference of only 6%, it would not be possible for Xbox 360 versions of software to continuously outsell PS3 versions by such a wide margin.

For example, Crysis 2 is a highly rated game resistant to statistical outliers. Crysis 2 recently launched on both the PS3 and Xbox 360. But we saw the Xbox 360 version outsell the PS3 version by a ratio of 1.7:1. This would not have happened if the Xbox 360 had only a 3 million unit hardware sales advantage over the PS3. Thus, we can logically conclude there is obviously a bigger gap than 3 million units between the Xbox 360 and the PS3. I believe this is why Sony no longer wants sales data from NPD and other sales organizations released to the public.

I really do recommend you take a look at that interview here. This will help you to see what I’m talking about. Thankfully, the person on CNBC interviewing Sony executive, Jack Tretton, was not fooled or deceived, as you will see in this interview: http://www.youtube.com/watch?v=JFIDsTsWJHw

Please share your thoughts about why Sony is no longer allowing NPD to publicly release exact sales figures of the Playstation 3, even though the PS3 has done several impressive things this month.