Software tie ratio

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). 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 rate

See also: Best selling game consoles

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.

Software sales is usually a stronger indicator of a console's success than hardware sales. Since most consoles usually sell the hardware at a loss and the software at a profit, it is mostly software sales that drives a console's profits, while the purpose of hardware sales is to establish an install base to sell software to. A console's success thus depends more on the software sales than the hardware sales.

Consoles

The following table lists the number of software units sold, and the software attach rate (software units sold per console), for each console.

The consoles with the highest number of software units sold are Sony's PlayStation 2 and PlayStation, each with software sales exceeding 900 million units. The consoles with the highest software attach ratios are Sega's Master System and Mega Drive/Genesis, each with at least 16:1 attach ratio.

Manufacturer	Platform	Released	Software sales (million units)	Attach ratio (per console)	Source
Sony	PlayStation 4	2013	>1,538	8.76
Sony	PlayStation 2	2000	1,537	9.81
Nintendo	Nintendo Switch	2017	1,200.10	8.25
Sony	PlayStation 3	2006	999.4	8.92
Sony	PlayStation	1994	962	9.43
Nintendo	Nintendo DS	2006	948.61	6.16
Nintendo	Wii	2006	919.81	9.05
Microsoft	Xbox 360	2005	630	7.5
Sega	Sega Mega Drive / Genesis	1988	576.16	16
Nintendo	Game Boy	1989	501.11	4.22
Nintendo	Nintendo Entertainment System	1983	500.01	8.08
Sega	Sega Master System	1985	422.47	20.9
Nintendo	Super Nintendo Entertainment System	1990	379.06	7.72
Nintendo	Game Boy Advance	2001	377.42	4.63
Nintendo	Nintendo 3DS	2011	364.89	5.03
Sony	PlayStation Portable	2013	331	3.88
Nintendo	Nintendo 64	1996	224.97	6.83
Nintendo	GameCube	2001	208.57	9.59
Microsoft	Xbox One	2013	204.36	6.55
Microsoft	Xbox	2001	165.12	6.88
Sega	Sega Saturn	1994	150	16.74
Sony	PlayStation Vita	2011	130	10
Atari	Atari 2600	1977	120	4.8
Nintendo	Wii U	2012	102.01	7.52
Sega	Dreamcast	1998	85	8
Coleco	ColecoVision	1982	9.5	4.75
Mattel	Intellivision	1979	9	3
Atari	Atari 7800	1986	3.77	3.77
Atari	Atari 5200	1982	1.04	1.04

Companies

Console software sales by company

Company	Home console software sales	Handheld software sales	Total software sales	Home console attach rate	Handheld attach rate
Nintendo	2,605.51 million	2,235.43 million	4,840.94 million	8.44	4.89
Sony	5,036.4 million	461 million	5,497.4 million	9.34	4.72
Sega	1,233.63 million	>14.4 million	>1,248.03 million	12.18	–
Microsoft	999.48 million	–	999.48 million	7.2	–
Atari	125.64 million	>1 million	>126.64 million	4.63	–

Previous generation software tie ratio

See also: Best selling game consoles

Seventh generation of video games:

• Wii - 8.99 LTD and 3.0 at U.S. launch
• Xbox 360 - 7.5 LTD and 3.9 at U.S. launch (1.27 million sw / 325,902 hw)
• PS3 - 4.6 LTD and 1.5 at U.S. launch

Others to note:

• Japanese launch tie ratios - PS3 - 0.98 and Xbox 360 - 0.91 and Wii - 1.69
• December 07 - Wii - 8.11; PS3 - 5.04; Xbox 360 - 7.76
• Software tie ratios for March 2007 and February 2007
• It may be possible that people are buying the PS3 primarily for its blu-ray functionality, which might influence its system tie ratio.

First 30 Months of Consoles Life - Attach Rate

• Genesis - 16 (in 1997)
• Xbox - 6.8
• PS2 - 6.5
• Dreamcast - 6.4
• GC - 6.3
• PS - 5.2 (6.9 in November 1999) [14]
• N64 - 4.6

Previous generation tie ratios

• Xbox - launch 2.4
• PS2 - 12.4-1 (January 2004) (4.5 early on)
• GC - 5.7 (Jan - Aug 2003)
• PS1 - 15.9 to 1

External links

• next-gen.biz on hardware to software tie ratio
• Exclusive Analysis: Console Tie Ratios Reveal Market Dynamics (April 2009)