Don’t read too much into the PS4’s million day-one sales

Friday was a banner day for Sony’s video game division, with the company announcing over the weekend that it sold 1 million units of the newly launched PlayStation 4 in North America during its first 24 hours on store shelves. By our reckoning, that’s the best first-day performance ever for a video game console on this side of the pond, easily besting the 600,000 Wiis Nintendo sold in its first eight days on North American store shelves in 2006.

Still, we recommend a bit of caution before looking at those numbers and assuming that the PlayStation 4 will be a long-term, market-leading hit. A quick look at the history of console launch sales numbers shows little correlation between early sales numbers and longer-term success.

For instance, in 2000, the PlayStation 2 sold about 500,000 units in its first 24 hours on its way to capturing a huge majority of the console market in the coming years. In 2001, Nintendo’s GameCube and Microsoft’s Xbox sold 500,000 and 550,000 units, respectively, in their first week on store shelves, but neither console maker was able to ride launch sales to PS2-level post-launch success.

The Xbox 360 sold through a healthy 326,000 units in the US in the two weeks following its launch, according to NPD. Sega’s Dreamcast, on the other hand, sold a larger 372,000 units in just four days of US sales, Sega said (in what was arguably a smaller market for video games at the time). Yet the Xbox 360 went on to be one of the most dominant consoles of its generation, while the Dreamcast languished on shelves and ceased production just over a year after launch.

The Wii U provides another good cautionary tale here. The system sold a solid 400,000 units in the US in its first week on store shelves last year, a figure that rose to 890,000 by the end of 2012, with Nintendo talking up retail shortages and sellouts at many retailers. When 2012 transitioned to 2013, though, the Wii U fell into what is increasingly looking like a death spiral of poor sales, poor support, and poor impact on the market.

The reality is that every console this side of the Ouya sells out in its first days on the market. If the console maker is doing anything right, there should be more than enough demand from early adopters to eat up as much hardware as the company can produce for weeks after launch, especially during the feeding frenzy of the holiday season.

The real question is whether a company can ride that early success to continued sales through the next spring and beyond, when consumers have tried out the system at their friends’ houses and gotten a better idea of what its software lineup actually brings to the table. In short, selling out on launch day is a necessary, but it’s not a sufficient condition for a console’s medium- and long-term success.

True, Sony’s million-in-a-day sales number dwarfs all those previous console launch sellouts in scale, and selling that many units so quickly is definitely a strong sign of potential momentum. But that raw number is likely as much a matter of Sony’s production and distribution capacity as it is of higher-than-normal demand. Inflated auction resale prices and preorder sellouts have long suggested that the main constraint on how many PS4 units Sony could sell on launch day was how many it could get into stores.