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The biggest media launch of all time?

The news from all directions is that Halo 3 had a big day, with “first day” sales of $170 million, which actually includes advance sales as well. Let’s take the report from the XBox.com web site as the canonical version of the tale:

Microsoft today announced that Halo® 3 has officially become the biggest entertainment launch in history, garnering an estimated $170 million in sales in the United States alone in the first 24 hours. The Xbox 360™ title beat previous records set by blockbuster theatrical releases like Spider-Man 3 and novels such as Harry Potter and the Deathly Hallows.

I’m not sure who determines whether this is true or not “officially,” but before the boys at Guinness update their book, let’s examine.

Halo 3 is a video game. Spiderman is a film. Harry Potter is a book. These have very different sales models, so it is odd to compare them and declare one of them as “biggest entertainment launch in history”. But if you want to compare different media, then by what objective criterion can you exclude television? Certainly, TV is entertainment, right? Although the sales revenue in broadcast television comes from advertisers, not from the viewers, these are booked as sales nonetheless.

So, let’s take the Super Bowl, television’s annual blockbuster. In 2007, estimates are that CBS took in $162.5 million for in-game advertisements, a further $78.1 million in pre-game and post-game show advertisements. Local network affiliates took in an additional $42.2 million in local spots. This gives a total for Super Bowl XLI advertsing sales of $233.8. Also we need to factor in ticket sales. At $600/ticket (for legitimate tickets — let’s ignore the inflated secondary market) and with Dolphin Stadium having a capacity of 76,600, this comes out to an additional $46 million. So the total of tickets plus advertising for this one-day media event was $279.8 million, or 65% more than Halo 3’s first-day sales. Sorry, Master Chief.

So the claim that Halo 3 has “officially become the biggest entertainment launch in history” is unsubstantiated, in my opinion. The sales of Halo 3 are undoubtedly strong, but let’s drop the hype and give the gridiron its due.

{ 13 comments… add one }
  • Chris 2007/09/28, 02:47

    Rob, this is reminiscent of the Vista launch and subsequent licence sales. There Microsoft have announced new sales records compared to XP, and given that new Vista = new PC, the chip manufacturers geared up and the demand never happened. As we know, even today the new binary formats appearing on the web are paltry.

    In addition Microsoft Vista launch included advanced sales, and changing their revenue recognition model at the same time. The sales tactic is called ‘stuffing the channel’. Bet that’s happened here too.

  • Nate 2007/09/28, 03:05

    Deathly Hallows had to have been pretty close. There were 8.3 million copies sold in the US in the first 24 hours.

    Wasn’t the pre-order price close to $20?

  • Nate 2007/09/28, 03:13

    Oh, and Rob… any wagers on the strength of Halo 3’s SECOND weekend? Spider Man 3 did 58 million domestically.

    I wonder if the refund check for the defective Limited editions will reach $58 million?

    Well, at any rate, according to some fans, whatever is good about this is a credit to Bungee, not the distributor: http://www.johndavidhead.com/jhead/johnhead.nsf/dx/halo-3-arrives-…-master-chief-is-ready-to-take-over-the-world?opendocument&comments#anc1

  • Michelle D'israeli 2007/09/28, 07:55

    It should be noted that Microsoft Games, the division that published Halo 3 did offer a number of services to Bungie that they would have otherwise not had access to. There was an article published recently on the Wired website about the testing process they enabled to be used, which was quite unusual within the games industry.

    Yes, the whole launch sales has been overhyped to death. Most importantly, the sales models for games cannot be compared with films or television, because of the difference in revenue streams. The closest comparison is with books or DVD sales, which are single-purchase, multiple use products just like video games.

    However I must remind people that we live in a world which still often characterises video games as being ‘for kids’ or ‘less serious’ than cinema. Yet the majority of gamers are in fact aged over 30, and hold down jobs. Whilst overhypeing a launch is clearly wrong, the launch of Halo 3 does send a message that computer and video games are a serious business and revenue stream.

  • Rob 2007/09/28, 09:40

    Amazon pre-order price for Deathly Hallows was $18.89. So that gets you pretty close. The oddity there was that it never made the New York Times Best Seller List because it was deemed ineligible because it was a children’s book.

    In any case, the different pricing models make comparisons across different media types very difficult. For example, a ticket to a film costs $10 or so while a video game costs $50 or so. But a movie studio will make a significant portion of their revenue from later pay-per-view and DVD sales and foreign distribution rights. Also, movies tend to open on a Thursday or Friday — a work day — so first day numbers are not that interesting. The industry tracks opening weekend sales as their primary metric.

    For a novel, there is the eventual paperback version, translations, and the inevitable movie.

    The prospect of these future revenue streams determines the pricing model. If films had only theatrical releases and no further possibilities for revenue, then tickets would cost you $50 or more.

    But what does a video game have to look forward to? After the initial pop, sales diminish. Eventually a secondary market opens up and those who did not buy initially end up getting a second-hand copy. Entirely different models.

    Because the per-unit pricing models are taking into account the different revenue stream prospects for different media, I’d look more towards counting unit sales when comparing one media to another. That is the more fair comparison.

    So for Halo 3, I’m hearing 2.45 million units sold in the first 24 hours, including pre-sales. The latest Harry Potter sold 8.3 million in the first 24 hours,including pre-sales. Spiderman 3 had around $150 million in receipts the first weekend, so let’s say that is around 15 million tickets sold. But Super Bowl XLI, drew 93 million viewers, and this is only the 3rd most watched Super Bowl.

    So by this metric, arguably a fairer metric, Halo 3 comes out well behind what people are comparing it to.

  • Uri 2007/09/28, 10:28

    It’s “official” because it was announced by Microsoft. How much more official do you need?

    A good explanation of official matters:
    http://dr_saaron.blogspot.com/2007/06/quote-of-day-2007-06-15.html

  • Anonymous 2007/09/28, 15:47

    Well, Halo is the XBOX’s flagship product as best I can tell. So Microsoft is putting all their muscle behind it to hype it as far as it can go in the hopes that their games division will eventually turn a profit.

  • Chris Ward 2007/09/28, 17:50

    So how much IBM Lotus Symphony http://symphony.lotus.com/ are we shifting ? And how do you measure ‘success’ ?

    Direct revenue is zero, of course; what do you expect if you make something available with a price of $0 ?

    But it does have the Superbrand name.

    Is the whole Internet singing in tune yet ?

  • Sam 2007/09/28, 19:24

    Rob-

    They’ve had a terrible month. Halo3 is, well, just a bone. They’ll need a few more thrown their way if the current seance (Microsoft-wide blog silence) doesn’t yield a big bright idea to get straight and still survive the advent of Free Software.

  • Rob 2007/09/29, 21:03

    100,000 downloads of Lotus Symphony in the first week. There were no pre-sales, no public pre-announcements, no anticipation, no buzz, no hype, nothing. This went from no one knowing about it to 100,000 downloads in a week. This is a good sign, I think. In any case it indicates the degree of pent-up demand for alternatives in this market.

  • Anonymous 2007/10/02, 11:11

    Who would ever call an american football game an entertainment launch.
    If there was a launch then that was like 40 years ago or so ?
    I bet the superbowl did didn’t score a 170 million revenue then. Plus

    But then again if you want sports events to really be on the list of entertainment then you probably should consider the Olympics Games and the Football World Cup to be the big events making several billion dollars in revenues around the world allthough the US TV rights sales to the olympics already are bigger than an entire superbowl edition

  • Rob 2007/10/03, 10:05

    Of course, by that line of reasoning, Halo 3 is not an entertainment launch, since it was preceded by Halo 2 and Halo. But I think it is fair, that if we consider each new release in the Halo franchise to be a new launch, then each new Super Bowl is also a new launch.

  • Stefan Wagner 2007/10/06, 17:50

    The football (soccer) world cup final 2006 had more than 700 million watchers:

    “Unsurprisingly, the most-watched match was the final Italy v France with a global cumulative audience of 715.1 million viewers.”

    Here is a small link:
    fifa

    While in fact the olympic summergames reach more people in total, I guess, they don’t produce such a peak like a soccer final.

    Most money is made by selling the tv-rights years before the event, and bundled for many, if not all games for different countries.

    Since gnus and penguins aren’t allowed to qualify for this sportevents, we should, perhaps, focus on quality, not quantity.

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