PS3 To Slow Game Industry Growth?

simoniker writes "DFC Intelligence's game analyst David Cole has released a new report on the next-gen video game market, and he's especially harsh on PS3 plans: 'The high price of the PlayStation 3 is going to slow overall industry growth, especially for software,' and '...if Sony does not change its current strategy for the PS3 the system will probably end up in third place in installed base.' He also suggests that 'the PS3 would be more than 35% of the monthly household income' of average families in some world territories. When will the backlash end?" The bottom line is that, even if they ramp up to 200,000 units a month starting this month, they're still not going to hit their 2 million unit goal in time for a November launch. Shortages and the high price tag will mean this is going to be a very weird Christmas console season.

Comments

35%?

[elzurawka]

"He also suggests that 'the PS3 would be more than 35% of the monthly household income' of average families in some world territories."

At the prices ive seen suggested for this system, its going to more liek 350% of some world territories. Maybe they ment 1st world countries.

I dont think this will slow the market at all though. If anything all the people that have been waiting around for the PS3 will realize that they arnt going to get what they have been hyped up to belive. Once they have all the options before them, they will chose one, right now its Xbxo360 or nothing...so people are still waiting to see what the others offer.
There is no way that its going to slow down the market, xbox will drop in price, Wii will be out, sales may be bad for the PS3, but i think over all the industry will grow, just like in the past with new generations of Consoles.

You also cant forget how many people out there are buying the 3000$ TV's....they dont buy these so that they can watch their VHS tapes. They buy them because they have the money, im sure the PS3 will go like hot cakes. Just becase 90% of the world cant aford it, doesnt mean that they poeple that can(and there are LOTS of them) wont.

Simple!

[Lally Singh]

When will the backlash end

When the gaming media has real stories to go after, instead of more bitching about early adopter pricing or the technological risks sony's taking. And also when the competition stops paying for 'studies.'

Same old bullshit, different product.

Why would that be weird?

[brunes69]

If Nintendo comes out on top, welcome to brightly colored weirdsville.

I wouldnt' consider that weird at all, in fact, I anticipate just that. The Revolution/Wii looks like a truely innovative console, with some amazing games, and great gameplay. Nintendo is really doing the right thing here.

In my mind, the Wii looks poised to do what i haven't seen from a console since the NES/Super NES days - It's the type of console parent's will *want* to buy for their children for christmas, rather than the kind they are *asked* to buy by the children.

If the Wii falls anything short of first place after this season, I am convinced it would be because of the name change - I still hate it.

Re:Why would that be weird?

[Anonymous Coward]

If they were born after 1996, PlayStation may be the brand parents and kids are familiar with. I was an only child born into a house that already had an NES. SNES, N64, and Gamecube natrually followed suit. Unless you've been living under a rock, virtually everybody in any developed country has played a Nintendo game. It's what they grew up on and it's what they know. Sony just happen to come along- they were never been by any means an innovator in the game industry.

Hell, if I were a parent I'd probably put my kid up for adoption before spending a week's paycheck in buying them a PS3. There is absolutely no need for it. Even more than PS, $$$$$'s are something parents are more familiar with.

Unfortunately, the general public has bought into Sony's practice of throwing numbers at them ("We've got a triple core IBM Power102883 chip with 1800 million GHZ, 5trillion MHZ bus, and 1264 cupholders!"). I'm a computer engineer, and I could care less about what's under the hood of the system. I just want FUN GAMES. Sony never ever had that, and with the new system, I'm not betting they will.

Re:Why would that be weird?

[Stormwatch]

The Nintendo 64 and the Gamecube were profitable, and the Gameboy/GBA/DS line was never surpassed in the portable console biz.

Re:Why would that be weird?

[CastrTroy]

Well, Maybe there's lots of kids who were born after 1996, and don't know much about Nintendo, but I don't think you'll find too many parents who were born after 1996. I think that many parents just aren't willing to spend $600 on a game console. $250 (from what I hear) from the wii is a much better price point.

Re:Why would that be weird?

[Abcd1234]

How does going from the number one player in the biz to being matched or beaten by a complete newcomer to the industry *not* count as being trounced?

Re:It's already weird...

[YAMSYAMSYAMS]

"If Nintendo comes out on top, welcome to brightly colored weirdsville."

Hi!

This doesnt add up...

[grapeape]

So if people find the PS3 too expensive they will just choose to buy nothing or just hold out until prices drop? Prices normally drop when prodcution gets less expensive, sales have started to offset costs or popularity wanes. If sales are not generated that allow those things to happen then price cuts are generally a long ways off unless they console in jeopardy in which case people wont buy it anyway (i.e. dreamcast). That wont happen with the ps3, it will be successful its just a question of how successful.

I really dont thing any one console is going shrink the market, increase it maybe, but not shrink it. If a gamer wants to play games he is going to buy something, especially when his old console is no longer supported with new games, he/she just might not be buying the one he originally wanted. If this was truly the case wouldnt the market today be slowed by the death of Sega hardware due to all those Sega fans dropping out of gaming?

Sony is about to learn the same lesson as Nintendo

[Bloodwine77]

Nintendo
--------
Console #1: NES = popular. Nintendo does the Hammer Dance with glee.
Console #2: SNES = uberpopular. Nintendo plans world domination by crushing everybody with their giant ego
Console #3: OOPS!! Where'd everybody go?! WE ARE #1, DANGIT!! YOU CAN'T LEAVE US!! MUHAHAHA!! *CRIES*

Sony
----
Console #1: PlayStation = popular. Sony does the Hamster Dance with glee.
Console #2: PS2 = uberpopular. Sony plans world domination by crushing everybody with their giant ego
Console #3: OOPS!! Where'd everybody go?! WE ARE #1, DANIT!! IT'S A COMPUTAH! COMPUTAH!! MUHAHAHAHAH! *CRIES*

Nintendo is just now recovering from their egomaniacal fall and is poised to get back in the game and they are no stranger to the #1 spot.

If Sony follows Nintendo, it'll be another generation or two before Sony gets their act back together.

There are other similarities, such as Nintendo falling down because they stuck with proprietary cartridges instead of jumping on the CD/DVD bandwagon. Sony is now pushing proprietary Blu-Ray technology.

Re:Sony is about to learn the same lesson as Ninte

[rAiNsT0rm]

While you are almost correct, there are some glaring problems with your analysis and it is a bit too oversimplified. Nintendo really wasn't looking around for customers so much as developers... that was who they alienated and the consumers left as a result. The cartridge is actually what _helped_ Nintendo, not hurt it. They are damn near copy proof (within reason), have no load times, have no moving parts which lower failure, raise battery life in portables, lower power consumption in consoles, and make them very sturdy and tough.

Sony was only an entrant into videogames due to the Nintendo/CD debacle. They were not interested in the consumer or providing great new innovative games. They wanted to capitalize on the work they had already done and make a quick buck as a big FU to Nintendo. It was successful to some degree. They tried so hard to manufacture a mascot like Mario or Sonic, and it never worked. They succeeded because it was cheap and easy to produce games for it and the profit margin was higher than with Nintendo. That wasn't going to last forever, and is now starting to show. They tried to ride on their more, better, faster philosophy too long and it is now catching up to them.

Microsoft was an almost mirror of Sony as far as intentions. They shot themselves in the foot from the getgo. They continue to do so every day. The 360 is actually a pretty decent console, but it is floundering with a total lack of quality games, price, and unpopularity.

Not to sound overly pro Nintendo, but they have been consistently the only true innovator in console gaming for over 20 years now. They are not simply "cashing-in" but creating a market and then selling to it. Sure, they are not some benevolent company either, but their intentions and products are as close to it as you will find. That is what real gamers should support, even if it isn't the cool thing or doesn't push 90gazillion polys per nanosecond, they are the only company that has the real gamers interests in mind and not just dollar signs. For a group like Slashdot, where "community" and Linux and ideals are supposedly so strong, you would think it would be a no-brainer.

Re:Sony is about to learn the same lesson as Ninte

[Manmademan]

the cartridge is actually what _helped_ Nintendo, not hurt it. They are damn near copy proof (within reason), have no load times, have no moving parts which lower failure, raise battery life in portables, lower power consumption in consoles, and make them very sturdy and tough.

er, no. The cartridge model was extremely developer unfriendly. Carts are MANY, MANY times more expensive to manufacture than CDs, could only be manufactured by nintendo itself (this is not the case for CD based media) and had to be paid for up front- if a game failed to sell, the developer would be stuck with a lot of very expensive unsellable bricks. Make no mistake, Devs LOVE the CD model.

They wanted to capitalize on the work they had already done and make a quick buck as a big FU to Nintendo. It was successful to some degree. They tried so hard to manufacture a mascot like Mario or Sonic, and it never worked.

Successful to some degree? Sony was a first time entrant to the market and the Ps1 ended up doubling the sales of both the SNES and the Genesis, and exceeded the sales of the previous all time seller (the NES) by a good 25 million. It also drew in older gamers in a way that Nintendo, Sega, and Atari never had. It's successor was ALSO a blockbuster success and outsold it, based largely on favorable impressions of the Ps1. make no mistake, Sony's first console was a VERY big deal. As for "trying so hard to manufacture a mascot like mario or sonic..." This is a fallacy. never happened. All of the "mascots" that people associate with the Ps1 (crash, lara croft, klonoa, solid snake...etc) were made by third parties. Sony never made the attempt to market their console this way.

Not to sound overly pro Nintendo, but they have been consistently the only true innovator in console gaming for over 20 years now. They are not simply "cashing-in" but creating a market and then selling to it. Sure, they are not some benevolent company either, but their intentions and products are as close to it as you will find...

Blatant fanboysim at its very finest. When nintendo was market leader it's monopolistic tactics in the console market matched or exceeded microsoft's behavior in the desktop market. For instance, if you wanted to make a game for the NES, not only could you not port the game to any other system, third parties couldnt make ANY games for ANY competitor or be blacklisted. Nintendo is a company out to make money any way it can, make no mistake.