A Chat With Phil Harrison
Next Generation sat down with Phil Harrison after the Sony keynote last week, and they discuss the PS3, the PlayStation Network, and Harrison's place in the company. From the article: "Q: Aren't retailers going to be slightly annoyed that they're selling this hardware for next-to-no margin, just so the software can ultimately be sold directly via downloads? A: I completely disagree with that. The software business for PlayStation 3 will continue to grow. PlayStation 2 has more software on it than PlayStation 1 - more units sold in more countries to a wider demographic of consumers. PlayStation 3 will continue to grow the market and will generate a bigger opportunity for everybody - retailers, developers, and publishers alike. So I do not accept your statement that retail is going to be in any way affected by this other than positively."
I don't think Sony can afford to have much(if any) complete works distributed as digital download. Think about it, they're using this thing as a trojan horse for BluRay. How is that going to work if you can download stuff without using BluRay at all?
And there's a lot more hardware than just the base console for retailers to sell...3rd party controllers, skins, faceplates, etc. I'm sure they have a better markup than the actual consoles.
Looks like Sony is banking on increasing market penetration. (At the price they'll be charging? Are they insane?). Nintendo says that the market is pretty much tapped out and a new market needs to be targeted in order to grow.
(Yeah, -1 for obviousness, but I find it interesting.)