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Software tie ratio

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Estimated attach rate

The software tie ratio tells us how many games were sold for every console purchased. Put another way, the hardware to software tie ratio shows how many games a system owner buys on average. A system's tie ratio is Total Software Unit Sales divided by Total Console Unit Sales. Often a system's tie ratio goes up over time, though not linearly. The rate is used especially early on during the adoption period of any product and it gives a primitive analysis of software success on the platform. One way of using tie ratios is to compare the figures for two different systems with the same install based.

History shows having a high tie ratio and therefore high software sales are absolutely crucial in order for a console to be successful. Not only does software generate a large amount of revenue, high software sales encourages publishers and developers to release games for your console.

Given hardware sales and tie ratio, absolute software sales can be calculated easily by the following equation: Software units = tie ratio * hardware units. Take the hardware sales for a given period (say 400,000 PS3s a month) and multiply by the hardware to software tie ratio (say, 4.1). The result is 400,000 * 4.1 = 1.64 million software sales in a month. This same method can be used to calculate total software sales for a system using its LTD sales and tie ratio.

Its possible to have a lower tie ratio and move more software units. The Wii pushed a lot of software within its first 14 months on the market (more than 360's first 14 months), but because the Wii sold extremely well, it effectively brought its tie ratio down (ratio = software/hardware) (lower than 360's first 14 months).[1] Sometimes, what looks bad for software is probably actually a side effect of good news for hardware.

Using tie ratios, we could estimate how much revenue each system is generating from software, using approximate average software prices. However, tie ratios are not published every month and are only revealed periodically by insiders, analysts or NPD.

Misinterpretation of tie ratios:

  • the larger the userbase, the harder it is to have a huge tie ratio. The tie ratio on a console with larger install base can often be smaller.
  • software does not scale linearly with hardware.
  • while these sales trends are interesting from a predictions point of view, it’s the actual number of games sold that publishers ultimately care about.

Note: Bundled games are not included when calculating hardware to software tie ratios.

Attach rateEdit

An attach rate expresses approximately how many owners of a system also own another item for that system, such as a software title or an accessory. The attach rate for a software title, for example, is computed by dividing the total number of units of that software title sold by the size of the installed base for the system on which the software runs.

For example, if a game for the Nintendo Wii has sold 1 million units at the time when the installed base for the Wii is 10 million units, then the attach rate is said to be 10% (i.e. 1 million software units among 10 million hardware units).

An attach rate is often confused with a tie ratio. A general rule of thumb is the following: systems have tie ratios while software titles and accessories have attach rates. More importantly, an attach rate is a number between 0.0 and 1.00 (interpreted as a percentage) while a tie ratio is a number greater than 1.00.

Another example: Grand Theft Auto IV on the Xbox 360 version has sold 3,362,196 units as of April 2009 in the U.S., compared to 1,959,798 units for PlayStation 3. However, because X360 has a higher install base, GTAIV only has a 23% attach rate compared to 26.9% for the PS3 SKU (i.e., 26.9% of PS3 owners and 23% of X360 owners purchased the title). In brief, a console has a tie ratio while a game (or accessory) has an attach rate.[2][3]

Current generation software tie ratioEdit

[7] [8]


Others to note:

First 30 Months of Consoles Life - Attach Rate

  • Xbox - 6.8
  • PS2 - 6.5
  • Dreamcast - 6.4
  • GC - 6.3
  • PS - 5.2 (6.9 in Nov. 1999)[10]
  • N64 - 4.6

Previous generation tie ratiosEdit

ReferencesEdit

External linksEdit

Video game industry
Sales trends · Holidays · Price cuts · Launch price · Market research · Fiscal reports · Video game costs · Video game delays · Leaks
Dev kit · Attach rate · Gaming conventions · Recession · Rumors · Sales bumps · Casual and hardcore games · Game piracy · Grey market · Controversies · Developer disputes · Video game research · Game development
Europe · Japan · United States (NPD sales figures) · Costs (Most expensive games) · Best-selling games
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