Where Does Videogame Sales Data Come From?

Every week, Siliconera publishes a column titled “This Week In Sales”. The purpose of this column is to keep track of the 20 best-selling games in Japan every week, along with productive discussion of their performance and what the future could possibly hold.

Now, sales is a fairly complex topic to discuss, and in order for one to discuss it effectively, some basic knowledge of the Japanese market and how it operates is necessary. The brief FAQ below is meant to provide some of this knowledge, and is based on data provided to us by industry professionals involved with analysis of the Japanese videogame market.

What is Media Create?

You’ll see this name pop up a lot in our sales column. “Media Create” is a marketing and sales-tracking firm that was established in 1994. For 20 years, the company has collected sales data on various consoles, games and trends in the Japanese market. It also tracks data on card games and general market trends, and carries out annual surveys for smartphone and online games. Their weekly sales numbers are what Siliconera uses in the This Week In Sales column, and are focused on covering console and handheld games.

Here’s an example of what a Japanese sales chart from Media Create looks like.

How does Media Create track videogame sales?

Media Create collects data from several retailers from all over Japan, including larger retail chains, general merchandise stores, electronic retail chains and smaller game stores. Media Create also tracks online retailers, but just which ones they take into account is unknown.

Using data they collect from these channels, they put together estimates for how games and consoles are selling on a weekly basis. This is displayed in the form of a top-20 software sales chart, which is made available every Wednesday, and we translate it in our This Week In Sales column.

Then, on Fridays, Media Create release a top-50 chart via their website, although they only publicly reveal sales figures for the top-20. Sometimes, this chart is accompanied by additional analysis and comments pertaining to certain games, and whenever we feel this information is relevant to analyzing the performance of those games, we translate Media Create’s comments in a follow-up report of our own. Here’s an example.

(People that pay for Media Create’s full report get a much more detailed report with sales numbers for every title, naturally.)

How do I know if a game has sold well or not?

It’s complicated. There are many ways to judge how a game has sold, and it doesn’t always come down to a simple sales number. Here are a couple of other factors that one needs to keep in mind when gauging sales of a particular title:

• Sell-through: Sell-through, or “digestibility” as Media Create likes to call it, is exactly what it sounds like. It refers to how many copies of the game in question the publisher sent out to retailers across Japan, and how many of those copies have actually been sold to customers, as opposed to sitting on store shelves. Sell-through is represented with a percentage, so a 70-90% sell-through is usually good while a 40-60% sell-through (or lower) is typically considered bad. Sell-through data is not always revealed to the public, but sometimes it is in Media Create’s Friday reports.
• The game in question: This comes down to common sense or just having a knowledge of videogames in general. If a Shin Megami Tensei game sells 150,000 copies in its first week, that’s pretty good, because SMT is a relatively niche franchise. However, if a Monster Hunter game were to sell that much in its first week, it would be considered a flop, since Monster Hunter games typically sell millions of copies at launch.
• Old or new?: Is the game you’re looking at a brand new title or a port of an older game? This, too, is a factor when gauging sales, as publishers don’t usually expect booming sales from ports of older games.

What happens if a publisher ships too many copies of a game and they don’t sell?

In that case, these copies sit on store shelves for a short while. If retailers notice they aren’t selling, they cut their price very quickly and toss them in the used games section. (See next question for related details on this topic.)

However, sometimes, depending on the size of the retailer and the game publisher in question, the retailer might be able to make the publisher buy all these extra copies back. However, this practice is far less common in Japan than in North America.

How much of a cut do retailers take?

Unlike America, retailers in Japan are far weaker when it comes to profit margins. Retailers get a mere 5-10% of the profits when they sell a copy of a new game, and in some cases, it can even go as low as 4-5% at specialty stores in the event that they need to cut price, in order to compete with other stores.

The majority of their profits, instead, come from used game sales. In the case of used game sales, retailers make a profit of 40-50% for each copy sold, since the game’s publisher has already received their money from the first time the game was sold to someone as a brand new copy. Once it’s a second-hand copy, the publisher gets nothing.

That’s crazy! Why do retailers stock new games at all, then?

Retailers stock new games simply to drive people to their stores. They aren’t expecting significant profits from sales of new games. The majority of profits retailers make is from sales of used games, and as a result the section of store space dedicated to new games is very small in comparison to the used games section.

In recent times, more retailers have begun stocking Trading Card Games (such as Pokémon or Yu-Gi-Oh) as their profits have been dropping even further due to factors such as digital sales over Nintendo eShop and PlayStation Network.

Are download/digital sales that prevalent in Japan?

No, not really. It depends on the game. Nintendo have made large strides in the digital sales department with games like Animal Crossing for various reasons, but most games sell very few copies digitally. Most of the time, when a game sells a large number of digital copies, it’s because there were shortages at retail.

Does Media Create track digital/download sales?

It’s unknown whether or not Media Create consistently tracks sales of Nintendo eShop download cards (POSA cards), which some games in Japan have, but they can’t track downloads made directly off the eShop or PSN or Xbox Live, because those services are privately operated by Nintendo, Sony and Microsoft respectively.

Common factors that can affect sales:

• Holidays: Holidays such as Golden Week, Christmas or even a long weekend can often boost sales of games to some extent, especially popular ones. Games on Nintendo platforms in particular tend to benefit significantly from such events.
• Pay-day: Pay-day is on the 25th of every month in the case of most Japanese companies. Sometimes, after pay-day, hardware sales—particularly those of the PlayStation format—see a slight increase.
• And others that we will add to this list as time goes by and trends continue to form.

And there you have it—the basic guidelines one needs to keep in mind while trying to understand and discuss sales data from Japan. You can keep track of Japanese game sales in our This Week In Sales column. That link includes both the weekly software sales charts, as well as any pertinent information related to sales, provided either by Media Create or game publishers.