Nintendo and Microsoft are boosting their advertising a lot more, according to this report.
Beyen Reports Q1 Ads for Videogames, Consoles Up; Prices Down
Nintendo, Sony, Microsoft Lead the Push toward Lower Prices For Videogames
Retail ads for videogames surged 38% and retail videogame console ads climbed 49.4% in the first quarter of 2003 relative to the same period in 2002, according to the latest data from Beyen, a retail ad tracking company based here.
Microsoft saw a quadrupling of its retail console advertising in the period. The company also led the charge to lower price points with 43.7% of Microsoft videogame ads hitting a relatively new, for Microsoft, $19.99 price point. By comparison, 90% of Microsoft retail videogame software ads hit the $49.99 price point in Q1 '02.
Nintendo joined Microsoft in driving the console advertising increase. While Microsoft tripled its Q1 retail ad share to 26.3%, Nintendo boosted its retail ad share to 29.3% with a tripling of GameCube ads. Sony saw a 14.2% reduction in retail console advertising and fell to a 44.4% ad share, down from 77.9% Q1 2002.
"The advertising gains for Microsoft and Nintendo reflect their intense battle for second place in the console market," said Roger Lanctot, director of advertising analysis for Beyen. "The shift to lower price points for software should stimulate sales throughout the category."
Sony's sales mix shifted dramatically in Q1 with 26.4% of retail ads coming at the $19.99 price point up from 14.8% in Q1 '02. The company simultaneously folded the $49.99 price point, which fell to 3.0% of retail ads from 71.2% in Q1 '02, and boosted the $39.99 price point to 62.6% of ads from 12.6% in Q1 '02. Sony represented more than half of the videogame ads in the $19.99 category.
National retailers Best Buy and Circuit City combined with regional player Fry's Electronics to account for 70% of total retail ad volume in the category, up from 55% in Q1 '02. Consolidation also hit software where Best Buy, Circuit City and Target Stores captured more than three quarters of all retail videogame software ad volume, up from 65% in Q1 '02.
The data reported here is based on the tracking of retail preprint and run-of-press advertising drawn from 102 daily newspapers encompassing 85 U.S. metropolitan areas. Beyen's North American headquarters is in Niagara Falls, New York, with its corporate headquarters in Dusseldorf, Germany. For further information contact Roger Lanctot, director of advertising analysis at (905) 374-4596.
