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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.
Considering that the PS2 is shipping more units than the XBox 360, things are already weird. It would very embrassing to Sony if PS2 was selling more units than the PS3 (assuming that Sony doesn't cut production of the PS2 first). If Nintendo comes out on top, welcome to brightly colored weirdsville.
"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.
-EL
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.
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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.
Yes, Zonk, we know, sony is teh doomed and someday soon you will stand victorious upon the rubble of the bulldozed Sony headquarters, clutching your XBox 360 and laughing maniacally. We get it already, you don't have to keep ramming it into our heads.
Anyway, the article seems a bit dumb to me. It may be that the PS3 will slow sales when it's first out because consumers can't buy/can't afford one, and so will just opt to buy nothing at all since they can't have the biggest and most expensive thing-- but I don't think that many will have this response. After all, this winter will not be 2005's, when releases were mostly scanty. This winter it seems to me slightly more likely than consumers looking at this situation and realizing they can't afford or can't find a PS3 will just shrug it off and buy some of the great games coming out for the PS2 or Wii, both of which are cheap and will have actual games (i.e. not untold legends) coming out this winter.
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.
" 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. "
Based on the layout of that quote, I believe the editor said this. If they had actually read the link they quoted, they would know that 200,000 is a first run and Sony plans to produce 2 million units in October alone.
Wow.
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?
If there are shortages then that fellow really was right and the PS3 isn't selling at high enough a price.
I have a PS2 and a PSP, and I was expecting to buy a PS3 as soon as I could get ahold of one - primarily for a cheap blu-ray drive, but also for backward compatibility. I have plenty of other Sony products, and like the company's engineering and manufacturing quality control. But the company's arrogance over PSP homebrew and the poor game availability, combined with this ridiculous $600 price tag for a PS3 w/hdmi has convinced me that Sony is in a tailspin. I simply don't want to give them my money any longer.
I \*can\* afford it. I don't want it. Until Sony refocuses on the consumer again, I'm not giving them a dime.
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.
if you can write a 600-page report on it without resorting to repeating te words "Screw Flanders" over and over for the last 595 of them, then yes, you can have his job.
I never spellcheck and I freely admit it. Save your karma for more worthwhile "lol erorrs" replies
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.
http://teasphere.wordpress.com - A little spot of tea
Wow, Sony single handedly builds a console so expensive that the gravity of the error sucks the whole gaming industry into a black hole of doom.
Just possibly, people will buy or not buy the console and buy, or not buy, other things as well or instead of. You can either say "The PS3 is going to be really successful and thus people are going to have less money to spend on games", or "Not that many PS3s will sell and therefore there will be no market slowdown as people buy other systems". Yet this article seems to try to say both of those things at once, that the PS3 price is too high yet it will slow down the whole market.
Well which is it? Are people buying the PS3 or not? In reality, only time will tell.
As for Slashdot, we know where they stand - any Anti PS3 news you got, no matter now non-sensical - throw it their way!
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Is it the cupholders? I keep telling my boss that you can never go wrong with cupholders, but he always looks at me like I'm mad or something. I guess he just isn't a cup person.
Here is a simple question... If you were Sony and you anticipated that - at the quantity of consoles you could provide - they were going to be selling at $800-$1000 on eBay this Christmas season, then what price point would you set the console at? Why not price it higher and line your own pocket instead of someone else's? Sure some demand will drop off because its not priced at $300, but those people weren't going to shell out to get one at the holiday season anyway. Plus the components will come down and then they can (and will) drop the price. If executed properly this is a good strategy - a profit maximizing strategy. If executed poorly, then the 3 in PS3 will be quite apropo.
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.
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.
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.
You really think they are abandoning the PS2 anytime soon? Or perhaps do you think 1000 games are going to be available for the PS3 at launch?
Read your video game industry history. The PS2 will still be sold for the next five years. New games are still going to be created for it because it has the installed base.
The PS3 is the next generation where generations last 10 years and overlap previous and suceeding generations. Consoles are stable computers designed for games, they don't come out with new versions every six months like camcorders. It's expensive now because it has to be as powerful as possible so that it can be viable for ten years. Spend the big bucks now and be smug that you have the best system out there or wait five years and you can get it for $150. Your money, your choice.
Sony did their homework. You didn't.
Umm, I said the exact same thing as you are saying except mine is adjusted for the real world. Sure CD's are cheaper, and sure carts are more expensive up front... but the number of copied PS1 games far eclipses the knock off carts for the NES/SNES/Genesis. These are lost sales and a bigger cost to a company by far. But in typical console gamer land profitability and media cost are just arbitrary numbers that people think they understand. Take a glance at actual company profitability and earnings before trying to talk about an area that others people may just know a bit more about. But nah, that elementary profitability stuff that everyone seems to think is so profound is easier to spout off.
Yes, successful in the sense of dollars and quickly garnering market share. But UNSUCCESSFUL in many key areas, innovation, quality, customer satisfaction, etc. How many defective units and multiple sytem purchases did people need over the PS1/PS2 lifespan? Success in business is not measured by the here and now, it is not a sprint but more of a marathon. Nintendo made this mistake, Sony made this mistake, and MS has made them all. Because Sony did NOT lay a solid groundwork built on customers and innovation, they have stagnated and run out of road to go forward. The "more, better, faster" ideology has worn out, and the "FPS, GTA, RPG" one will too. But again, to only look at short term success as a basis for actual success is more your speed and most other console armchair analysts, it is just totally wrong. Take a look in every field for examples of this, not just consoles.
This "blatant fanboy" here worked for Sony for over 4 years, covering nothing but Sony. Oops. The fanboy card doesn't apply here, my current enthusiasm for Nintendo is exactly for the reasons I stated. They are the only one catering to the users, being innovative, trying to break out of this funk that gaming is in right now, and NOT trying to be "hardcore." Hardcore gamers are a fallacy, they are a very small (but dedicated) market. Industries can sustain but not grow in that environment, and that is what has been happening. Real growth comes from diverse markets and wide target audiences. But that means "kiddies" and women, and that means your console must be teh suxorz. To tell the truth I actually hate Zelda games, not a fa
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