Mat Piscatella, analyst at NPD shares his thoughts regarding microtransactions in the past year, Game Pass, and future sales performance of consoles.
When we look back at 2017, it’s easy to see that there were some great games across all the different platforms. However, the past year also had its share of controversies such as the one revolving around microtransactions and loot boxes. Now, 2018 is off to a strong start with some great games already having been released and with a large number of titles still scheduled to launch in the remainder of the year.
To learn more about the future of different platforms and their manufacturers, services such as Game Pass and much more, Gamingbolt spoke to Mat Piscatella who is the US Video Games Industry Analyst at NPD. Check our our entire Q&A below.
"Recurrent spending mechanics in video games has been proven to be a positive thing in many games, and have received criticism in others. It’s all part of the process of discovering what players want and what makes the in game experience better. Like any product development, lessons learned help in making improvements."
To begin with, can you please introduce yourself and your role at NPD?
I’m Mat, I’m the video games industry analyst at NPD, covering the U.S. market. Previously I was in video game publishing for a bunch of years at both WB Games and Activision with roles in analytics and planning. Now I get to go around and chat games with Publishers, Retailers and Fans. My 12 year old self is stoked.
I wanted my first question to be about the recent trends about loot boxes and microtransactions. The entire drama with Star Wars Battlefront 2 really took the industry with storm. Do you see this trend continue in 2017 and do you think this is something that impacts sales in the long run?
Recurrent spending mechanics in video games has been proven to be a positive thing in many games, and have received criticism in others. It’s all part of the process of discovering what players want and what makes the in game experience better. Like any product development, lessons learned help in making improvements. When done well, these mechanics help add potentially hundreds of hours of playtime for those playing that game and can extend the life of a game for years. So it’s a question of discovering what works and what doesn’t.
2018 continues to be a great year for video games. But if there is one game that is anticipated by many gamers, it has to be Red Dead Redemption 2. It’s obviously going to sell well but do you think it will get close to GTA 5 level of sales?
The potential is certainly there, but I don’t know enough about the game to make that type of prediction. I expect it to be right there at the top of the best-sellers list at the end of the year, but outside of that I’ll just wait and see.
The PS4 continues to sell well (I believe it’s close to 75 million at this point). Do you think it will reach a 100 million sold 2019 end?
Hardware units are mainly driven by content and pricing strategies. I’m interested in seeing how the PS4’s price point changes over the year both in base price as well as in promotional pricing. I do expect the PS4 to have another great year of sales, but I do expect it to be down versus 2018.
"The Switch set a record setting sales pace in the US, selling more units than any other console over the first ten months in market. Will that pace hold? Tough to say. But it’s certainly off to a great start."
This leads me to this question. When do you think will be the right time for Sony to launch the PS5?
2020 is what I have in my forecast. The data suggest there’s no need to do it earlier. But I’ve been surprised before so I’m as interested in this as anyone.
The Switch has bought a resurgence in Nintendo. The system is doing really well, backed up by some great 1st party support and increasing 3rd party support. Do you think it has the potential to outsell the PS4 during its life time?
I don’t know… I don’t really do these kinds of comparisons as I don’t think they’re particularly helpful. The Switch set a record setting sales pace in the US, selling more units than any other console over the first ten months in market. Will that pace hold? Tough to say. But it’s certainly off to a great start.
2017 was the year of Zelda and Mario. Do you think Metroid 4 and Nintendo’s 1st party line-up of 2018 will be able to see the same amount of success that they did with Zelda and Mario?
I don’t think we know Nintendo’s full 1st party line up for 2018 yet. But I expect Switch sales of both Hardware and Software to grow significantly, and for it to lead in both Hardware and retail Software sales in the year.
"I think the folks behind both the Xbox One and the PlayStation 4 are doing a superb job of playing to the strengths of the systems and serving the audience in different ways. But both are finding success."
This brings me to the Xbox One. They recently announced big changes in Game Pass wherein all their 1st party games will be available day one on Game Pass. In light of this, how do you think this impact their software, hardware sales and their relation with retailers?
I think this depends on the retailer. The console continues to sell well in the US, and Microsoft has been smart and aggressive in its pricing and promotional programs. Bringing PUBG to retail and seeing the success the retail version of that game has had suggests that they will find ways to ensure retail is involved and seeing return on its investment in retail space and inventory.
Interestingly, Xbox One outsold the PS4 in December . Do you think the Xbox One and Xbox One X will see this trend continue in 2018?
I think the folks behind both the Xbox One and the PlayStation 4 are doing a superb job of playing to the strengths of the systems and serving the audience in different ways. But both are finding success. But there are a number of variables around content, promotion and pricing to try to rank how these consoles will do over the longer run or on a month to month basis. Right now, things look pretty good for both, so we’ll see how that goes.
As a closing question, which console do you think will sell the most in 2018?
My forecast has Switch here due primarily to cyclicality. But we’ll see how the other consoles are priced and promoted throughout the year. Maybe one could surprise.