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Sony, Analysts React To PS3 Launch
cdneng2 writes "Sony may be aware that something is just not right. There's a reshuffling of management occurring within Sony. Kazuo Hirai is set to head their videogame unit, as Ken Kutaragi has been bumped to the Sony board. Jack Tretton, former COO for SCEA, is now the president and CEO of that arm of the company. There's no word on the reasoning behind these position shifts. On the same day, Namco announced that they must sell 500,000 games to begin making profit on PS3 games. A Financial Times article confirms speculation on how hard it will be for Sony to make money, as analysts with UBS predict that 30 games must be sold per PS3 for them to break even." To add insult to injury, EA CEO Larry Probst has said PS3 numbers were lower than expected. Current thinking is that Sony managed to ship roughly half of the 400,000 units they were promising.
...and here I am, still unable to buy a nunchuk (not from an ebay scalper) Yes, I am nintendo's b****/fanboy
Why can't all fpga/microcontroller manufacturers just release free optimizing compilers???
Hey, now, to be fair, all they would have to do is drop the price tag down to 200 dollars and the system would be a rousing success.
I mean, they'd lose more money than M$ lost on the first XBox, and would almost certainly never turn a profit, and it might even be serious enough to damage Sony the company as a whole... but 10 years down the road, people wouldnt be looking back saying "PS3? Man. that was a mistake."
Of course... that wont happen, so you're probably right. But in my dreams, I own a 200 dollar PS3.
Not that I was going to get one anyways, I was still impressed with how far they were trying to push the envelope. Guess they pushed a bit too hard, and didn't get as far as they had hoped.
30 games to break even? It's completely doomed.
What are all these posts about how well/bad the PS3 is doing on here? First, we have discussed and read about it twice a day for a week now and second, it is all total BS. We can not and should not be saying anything yet because we dont know anything. It will take months, at the earlier to be able to gage what all three systems are doing in comparison to each other. The 360 is the only system that should have stories like this. This time next year I am all about reading how the PS3 really did bomb and how the Wii sold 60 million units. Right now though, it is retarded.. why? Everything is sold out everywhere the second it gets there. Let the market saturate, supply and demand to even out, give a year of manufacturering costs and shipments numbers to adjust, then we can talk okay?
Invexi - a Phoenix, AZ based web design and web development company.
30 games per PS3 is really a lot. Not being much of a console gamer myself, I don't know what the average games-per-console is, but that seems pretty high. Of course this figure depends on how much Sony can bring the cost of manufacturing down. Did the analysts assume that they would and factor it in, or did they assume a constant cost/console?
A Financial Times article confirms speculation on how hard it will be for Sony to make money, as analysts with UBS predict that 30 games must be sold per PS3 for them to break even."
As much as I would like to poke fun at Sony for this seemingly high mark, they can also make a profit by selling a combination of PS3 games and Blu-Ray movies. It is much more reasonable for someone to have lots of movies than lots of games. Assuming of course the purchase is made at a retail store so Sony gets the profit, rather than a used dealer.
How can Sony effectivly sit on its own balls in such a laughable manner?
Go Nintendo. 3 Zonk
What is particularly mind-boggling about Sony is that they continue to spend money advertising on Television to sell a console you cannot buy and a console that will require no advertising-induced desires to be able to sell any that Sony can manage to get on the shelves.
Plus, a 30 game attach rate to break even? That is mind-boggling and cannot be possible. Sony could not be that stupid.
Ken "nutjob" Kutaragi gets promoted? WTF is wrong with them? This guy is a walking PR desaster spewing comments like "we have created the most beautiful thing in the world" in response to the misaligned PSP button sensor issue or "people will want to get a second job to afford a PS3". Their situation is bad enough without rubbing it into people's faces with arrogant comments that show he doesn't even feel bad for screwing up like that.
Justice is the sheep getting arrested while an impartial judge declares the vote void.
It's simple logic: the console that 'wins' will have the most games made to work on it (and I don't mean just backwards-compatible). People don't want a loser, since it'll mean they have decidedly fewer games for later on.
Because this generation requires such a huge investment, people want a decision to be made in the console war quickly enough that they can avoid buying a 'losing' console and wasting their money.
If you can find a way to solve this, let us know.
Good lord, just how many new games do they think the average gamer buys? At $50 a pop that's $1500. I have that much disposable income, but I'd certainly not blow it on paying top dollar for games. I'm sure I don't have more than 20 games total for my PS2, and all but 2 of those I fished out of the bargain bin.
I am so happy I own no Sony stock, and even more optimistic about having bought Nintendo stock.
Do what you can, with what you have, where you are.
Most folks that bought PS/3's bought them to sell on eBay. 100% of the poeple I know bought the PS/3 with the intention of eBaying the console. They did not buy any launch titles--just the PS/3. Another newsflash--the auctions are closing on the PS/3's in the thousands of dollars--but no one is paying for the auctions. One of the folks I know ebaying a PS/3 was estatic when his auction closed for $5,000. ($5K!! Damn--you could have bought a PC in 1981 for that kind of cash!) The win bidder though seems to have dropped off the face of the earth. All the hardcore gamers I know have picked up a Wii and rave about how much fun they have with console. Time will tell the true victor in the console wars. Personally I have 360 now, plan to get a Wii before Christmas, and will wait until until there is amply supply of PS/3's and several top rated titles before spending my cash.
Given the amount of truely idiotic and genuinely hostile things Sony has done to consumers, they deserve nothing more than utter failure.
Sadly, way too many people have short memories and don't care that computers were scrambled by willfully malicious sony music CDs.
Or the fact that they love to sue music cust^H^H^H^Hpirates into submission. "Don't even have a computer? Give us money anyway cause we KNOW you've been pirating!"
Hell, the last sony laptop I got my hands on, had so much advertising crap on it that it actually *slowed down* the machine significantly, until I uninstalled all of it.
I'm sure I'm forgetting plenty of examples of Sony's heinous, arrogant behaviour.
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... or not ... but Please (for the love of god) stop bitching
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Please find good news about Sony and submit it
Dare I suggest that the PS3 is more deserving of the "miserable failure" moniker than George W. Bush?
I'd hardly call a product that can't remain on the shelves a failure! Actually, I think Sony should have raised the price! Anytime that a product can not be produced fast enough to meet demand, the price should be raised. The goal is to have the last person willing to pay the price buy the very last unit from the shelves. When more units are produced, they should lower the price to whatever point it needs to be to achieve the same goal.
Don't flame me, it's economics!
Speaking of a booming economy... don't bring GWB into this. This is not meant to be a political discussion. Go to Daily KOS or DU or whatever.
There is no "I disagree" mod for a reason. Flamebait, Troll, and Overrated are not substitutes.
PS3s are snapped up the second they hit stores shelves, eBay prices continue to very high for the system
The same can be said for Xbox 360's and Wii's, except they shipped 2 and 3 times as many consoles respectively. The fact that you can't find a PS3 anywhere isn't necessarily indicative of the console's success in this case, it's indicative of the fact that Sony is having too many production problems. Meanwhile all that money that would have gone to Sony if they had managed to produce the numbers they promised is instead going elsewhere (likely Nintendo and Microsoft) during the biggest shopping season of the year. The PS3 may well turn out to be a fantastic system, but they failed their launch miserably.
sony could very well go belly up. 30 games per system!?!?!?? thats insane. i am a hardcore gamer with no brand loyalty(although, i have to admit sony has been pissing me off since socom3) and have owned every system starting with the NES with the exception of a few(neogeo, jaguar, cd-i). i have never owned any where near 30 games for any one system. and i think i can safely say that this flat-out will not happen....it won't even come close to happening. over the life of the system, i would expect the average attach rate to be about half that and that is a generous estimate. however, i hope that this math is wrong and is not factoring in hardware revisions. after all, as most on this site would agree, nothing good comes from a market monopolized by microsoft. granted, the 360 is the most well thought-out, polished and put together console to date. however i feel that if left the lone HD console on the market, the innovation MS has shown up to this point through system/live updates will come to an end. the more i think about it, the last 2 developments in the industry i would want to see are as follows:
99. Sony's PS3 "winning" this generation.
100. Sony failing miserably, leaving microsoft alone at the top.
as much as i love the thing, the wii does not, can not, and will not compete with the HD systems.
PS3s are snapped up the second they hit stores shelves, eBay prices continue to very high for the systemBecause there are very few of them.
gamers are raving about these epic 40 player lagfree free online Resistance matchesBecause there are very few people hitting the servers. Wait until there are a whole lot more people. I'd be willing to bet there'd be some lag on 40 player games.
the reviews of the PS3's BluRay features and playback are absolutely gushing and calling it the best player on the marketGot a link or something to back that one up? I've heard nothing either way.
none of the massive hardware failures people were claiming would plague the system like the 360 have come to pass.It's only been a couple weeks. Give it a few more months and then we'll talk.
And Zonk continues his one man crusade against the PS3. What exactly is the point? Because whatever it is it clearly isn't working.And you and all the other Sony fanboys continue your crusade for the PS3. What exactly is the point? Because whatever it is it clearly isn't working.
Everything I say is a lie. Except that... and that... and that, and that, and that, and that... and that.
Sony releases new PlayStation model and people stand in lines for a week or so to buy it and it sells out in 10 minutes; the machine plays cutting edge games AND BlueRay movies; sony has lots of game exclusives; and Sony produces lots of movies, so we concluded that it is doomed. Right. Makes sense to me.
I don't even like sony and I think they are going to spank butt. I'm predicting that Sony will take most of the market, that Nintendo will double it's marketshare, and the Xbox will shrink its marketshare drastically. Check me in three years and see if I am right.
the Xbox 360 has been out a year and still no Halo 3. The graphics are great, but there are no compelling games and the backwards compatilibty is a kludge as is the HD-DVD compatibility. Now, right before Christmas, the 360 is selling for $100.00 many places. If it is doing well, the price would stay high until after the first of the year.
I'd hardly call a product that can't remain on the shelves a failure!
You're right. Companies strive to produce a product that loses money hand over fist.
I'm also tempted to link the relevant VG Cats strip, but it's just too obvious.
What does this even mean? We have a blu-ray disc that holds lots of data, sure, and accordingly scaled up textures; but in any sort of process like this you are continually downscaling from practically any 'artistic' original source to begin with. Why does this cost more to downscale less than you were originally? Is it just harddrive space? That seems historically low.
And this doesn't even seem to take into account the idea that some games have different budgets? Why can he not make a game for both the Wii and PS3 that uses basic motion sensing? I think its a good idea if multiplatform games look as uniform as possible, and after all, "its not about the graphics anymore", right? Seriously, I'm asking, if any one can credibly enlighten me as to why Namco would say this? (I am a graphic designer by trade but I do not work in the game sector.)
If Jesus wants me it knows where to find me.
exactly. They are already having massive shortages. They probably should have RAISED the price. If they truly only shipped 200,000 units then they easily could have sold them for over $1,000 a piece. That is still less than the average price on e-bay for the premium units. I know there is more to pricing a console than straight supply and demand, but if you are going to have such a big shortage, at least give yourself a chance to avoid riots in the street. You know the "must have a new system" folks buying on e-bay would have paid it.
Profit is not everything with the initial console. The majority of console launches the console losses money. Why? because if they sell consoles for 600 dollars and it costs 1000 to make but they make blue ray discs for 40 dollars and sell for 70 eventually their will be a profit. Also when manufactoring costs go down and the system price goes down, more people will buy the system and more people will want to buy games for that system.
Companies strive to produce a product that loses money hand over fist.
Yeah, but they'll make it up on volume!
Oh, wait...
PS3s are snapped up the second they hit stores shelves
Release low enough numbers of something, and it's bound to sell out
eBay prices continue to very high for the system
Directly related to your first point - when you're 10,000 miles away from meeting demand, there's going to be a premium
gamers are raving about these epic 40 player lagfree free online Resistance matches
I'm surprised they can even find 40 plays to play with. But, let's see if there's any lag after Sony ships 10 million consoles.
going nuts over the Motorstorm demo
So, for a gamer, the compelling reasons for a gamer to buy a PS3 right now are one game, and a demo?
the reviews of the PS3's BluRay features and playback are absolutely gushing and calling it the best player on the market
Great, so at least I can buy some Blu-Ray movies at twice the cost of an HD-DVD movie and watch it on my PS3 when I've finished playing the one game worth playing, and the demo for an unreleased game.
none of the massive hardware failures people were claiming would plague the system like the 360 have come to pass.
Well, that's good news, though I think it's too early to be claiming there are no massive hardware failures. How long before the optical drives start to fail, in typical Sony fashion?
"Failing upwards, I see."
the reviews of the PS3's BluRay features and playback are absolutely gushing and calling it the best player on the market
If I'm not mistaken, the PS3 is only the 2nd Blu-Ray player on the market... There's the Samsung player, which has been out for a little while now, the PS3, and the Sony one won't be released until just before Christmas, I believe. Pioneer and Philips should have players... eventually... but for now they're getting screwed over by the already short supply of blue lasers going to the PS3. I'm sure the main reason the Sony BD player has been delayed so much is also because of the blue laser shortage.
Given the fact that the Samsung player is already running into Blu-Ray discs it can't play, and the Sony Blu-Ray player is going to need at least 2 firmware updates to play certain discs and to use the Java interactive features when it does finally launch, I'd say there's not much competition for the PS3 in the current market.
But then I'd be surprised if a $500/$600 dollar game machine can be a better BD player than a dedicated $1000 machine, too... I'm sure the PS3 will have its share of BD problems.
Damn. I would consider myself a rather big fan of the Gamecube, it is the console I own the most games for, and I own far less than 30. It's more like 18 or so. I only have 6 or 8 PS2 games. I don't know how Sony is going to pull themselves out of this mess, but they better think fast...
--The universe will not be altered by forum threads, even those which are very wry. --Tycho Brahe (Penny Arcade)
Apparently the "experimental threading" stuff includes javascript moderation too, but it bugged out and put in a mod that I didn't want. So here's my unmoderate ;)
Let's take a look at where the article is getting this 30 games number:
By one analyst's calculation, which assumes that Sony makes about $10 in revenues on each game whether produced by itself or a third party, 30 games must be sold per PS3 console - compared with eight for the PlayStation2 - to make up for the losses which Sony will incur over the next few years before the hardware itself achieves break-even.
That's 30 games not to turn a profit, but to make up for the losses before they turn a profit on the console. The summary is definitely a bit misleading IMO. One more thing -
They assume that you're going to make $10 per game. Here's the problem, as this article points out - the console is selling for different prices in different regions.
Recent reports by independent engineers who have stripped the PS3 to its component parts suggest that each unit is currently costing Sony a little over Y90,000 ($763). This in turn causes the company a loss of about Y30,000 every time a PS3 is sold in the US or Japan.
But based on analysts' assumptions that the high-end PS3 will be sold at retail for about 590euro ($757) in Europe and Britain, Sony will be losing less than Y3,000 per unit when the revenues from those markets are translated back into yen.
This part is a bit messy. It costs them supposedly $763 per console in the US and Japan, and they're selling for $600. So they lose $163 per console in the US and Japan. In GBP, they're selling for $757, so they're only losing about $6 per console.
So by UBS's calculations, they need to sell one game for every PS3 sold in Britain and 17 games for every PS3 sold in the US and Japan. The only cost left is R&D, which is hard to quantify and might justify the extra 15 games sold in the US and Japan, but that definitely requires a lot of speculation.
In fact Sony could probably have charged more then $600 for the PS3, still sold out and made more/lost less money. As shown by e-bay people are willing to pay large amounts of money because of the limited supply, so it could have made sense for Sony to make as much as possible on each system.
Of course such an action would have damaged their reputation badly, Sony are not exactly the first people you think of when it comes to 'value', and look how people reacted to the $600 price tag. Sony seem to be playing a 'long game' trying not to alienate people and make them think that they'll never afford a PS3 so might get another console.
This long game plan is proabally why they're still advertising, they want people to know its there, you might not be able to get one now, but with the price they'd probably need to save up anyway.
I suppose the advertising could be just because marketing believeing the numbers of PS3's Sony originally said, which would mean they're would have been more available (assuming they'd have released more before Christmas too).
As for the '30 game rate to break even' 30 games isn't that many (Should imagine they're are quite a number of people with 30+ ps2 games), and don't forget Sony get money on Blu-ray discs too.
What? After all the good decisions they made over the past year? I think they could be that stupid, or to say it 'politically correctly' They are "over-confident".
Sorry, stories about people liking the SixAxis and also positive comments about future games and the system often get passed over. Yes there are negative stories around as well and they are equally good to report - so why don't we see any about the 360? Or about Wii controllers being thrown at screens (more funny than negative anyway).
It's not like people are not submitting these things.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Sorry, I stopped right there. My tinfoil hat wouldn't let anything else in.
As the subject says...
You shouldn't have stopped. He goes on to suggest sony might make a Wii-ray. And that it'll only be about $50 more then a normal wii.
You know I think this might be the real deal. Who else but someone with connections would make such a stupid comment.
Think I'm just going to wait until someone can decide what the criteria are for judging who wins a contest like this before I try and make my predictions. Some thoughts...
Microsoft have had a full year selling the Xbox 360, which overall has undeniably been very succesful. It's online service is highly regarded, and we're now starting to get games which are pushing the console. In all those respects, it's a winner. However, they're still losing money on each unit sold, and they're backing one of two Hi-Def standards, and it may be the loser, but at least they've made it optional, so if it fails it's not going to taint the machine as a games console. If I was a serious gamer, I'd already have an Xbox 360. People know exactly what it can do, and whether they want one or not. Very few people will buy an Xbox 360 and be disappointed, it's already relatively mature and lack of novel user interfaces aside, the others are going to be playing catch-up for the next two years.
No matter what anyone says, Sony have made a phenominal number of mistakes with the PS3. However, many simply boil down to marketing goofs, and a "they'll want what we tell them" attitude which has certainly made them no friends. They're using the console to push other technologies of their own, and that is by far their biggest risk, and also the thing that's likely to keep the component price of the console high for longer. All that said, once the less than stellar launch is forgotten (that'll be around January), there's stock on the shelves, and we start seeing well written games which make use of the phenominally powerful hardware (probably in around a years time), and after whichever price drop brings the high-end console down to around half of its launch price, I'll probably get one. However, I suspect there'll be many people who are disappointed with what the machine achieves within its first 12 months of public life. It's the sort of console that if you owned one you'd want to show it off and shout about. It's a nice looking piece of consumer electronics and there are going to be some impressive looking games, but it's very much like the flash cars you see at shows (you know? The ones that cost more than your house) that you want to just stare at. You'd try and encourage a friend to buy one, so you could go for a spin in it every now and again, but you'd never consider buying it yourself, even if you could afford it.
I'll openly admit however, that my personal enthusiasm is for Nintendo's Wii. But then I'm not a hardcore gamer, and what excites me may well not excite the next man in line. I think the technology is easily good enough to give me games which are visually stunning, that sound good, are innovative (which is something I've come to appreciate more as I get older) and are fun to play. When I get around to buying a Wii in the New Year, I think it's also very likely I'll start getting Virtual Console games on a regular basis, as I'm of an age that I remember them the first time around, and there are a good handful of full games which I'll be looking to pick up when they launch. Nintendo have a good business plan, which all but ignores the other two players. It's practical, manageable, and it also means that they make money every step of the way, instead of losing a lot now, and trying to claw it back over time. The Wii does not set itself against the competition, simply alongside. It doesn't promise the earth, and then struggle to deliver, because all along Nintendo have played down what the machine is capable of and re-itterated that it's all about the games. Until the DS showed how effective that strategy can be, I doubt anyone believed them.
What it should really boil down to is which consoles are of interest to us personally, and that will ultimately depend on which game genres and series appeal to us, and how strongly they are represented on each platform. Let's not forget that the PC is now a very strong gaming platform, much more so than when the last generation of consoles launched, and that will divert some
I think the main problem was that Sony failed to ship more than just a DRM-enhanced Sony PS3, they forgot to add that sweetener of the month, the Sony Rootkit, and set it to infect any device it came in contact with.
Without the rootkit, all anyone wanted to buy the PS3 for was to turn it into a Sony-subsidized Linux graphics server.
-- Tigger warning: This post may contain tiggers! --
You don't even have to read the article. Understand that these are economic analyst, well analyzing the financial situation of the gaming arm of the Sony Corp.
Sure they may not be taking into account cuts in production costs. But cuts in production usually happens once you are deep into production, and I think the point they are making is that this part of Sony will not make a profit in the foreseeable future because of the cost of production vs retail cost, and the lack of volume in the market. Sure they are flying off the shelves, but the only way to make a profit is to gain market share, which equals game purchases.
Sony is not doomed, but when will Sony as a company decide that the gaming division is gushing too much money? With the management shuffle, we may soon see.
... easily could have sold them for over $1,000 a piece. That is still less than the average price on e-bay for the premium units.
Maybe I have odd timing but lately when I search eBay for 'PS3' I see that most of the PS3 units with less than 10 minutes remaining on the auction have bids in the $700-$800 range for 20GB model and $800 to $900 for the 60GB model; most of the auctions that have starting bids at $1000 or higher end without a single bid on them. Now, I don't doubt that some systems have sold for more than $1,000 but I think that those are becoming the exception not the rule.
If Sony set the MSRP at higher than $1,000 it would have been a disaster even if the system sold out initially because for the next 2 to 3 years any advertizement on TV that showed a PS3 game people would think "I don't wat to spend $1000 for that;" even if they reduced the price when supply went up (and advertized it heavily) all people would think is "The PS3 went from $1,000 to $600 in 6 months so it should be down to $300 by next christmas. I can wait for that before I buy the system". I believe it was Iwata who said that it wasn't a good idea to reduce the price of a system too early or too often because customers would begin to anticipate price drops.
Fished in!
That was too easy.
Thanks.
Go fuck yourself you piece of garbage.
Scum like you are the shit on the shoe of the gaming world.
Actually I did, and Nintendo has spiked since their E3 showing.
Nintendo have a good business plan, which all but ignores the other two players. It's practical, manageable, and it also means that they make money every step of the way...
Which as an investor I REALLY appreciate. However what sold me on the system was talking with my parents. (both ~60, and as Non-gamer as you can get). Both love WiiSports and after playing it over thanksgiving, they want one. As a gamer I was happily amazed. As an investor, I bought more stock. Nintendo is definatley on to something.
Okay, how many fewer games are being bought because of the low supply/high demand/eBay mark-up trend? The money to purchase games for the console has to come from somewhere, and I'd suspect it is all going towards just getting a PS3 console into a home.
Should Sony go after eBay resellers for damages? Could they?
Just because you can, does not mean you should.
So far I haven't seen an article that anyone got a fully bricked Wii through the update. All the 'Bricked systems' reported have only affected the online function, but you can still play games until Nintendo Support sends you a new system (since the Firmware according to Nintendo, exposed a hardware problem that needs fixing.) Now I'm not saying it isn't possible, I just haven't seen it. All the 'Bricked' articles I read were still offline functional, if you have a link of a completely bricked system (in all seriousness) I'd be interested in reading it.
Thanks.
> As for the '30 game rate to break even' 30 games isn't that many
> (Should imagine they're are quite a number of people with 30+ ps2
> games), and don't forget Sony get money on Blu-ray discs too.
I don't know... "quite a number" I will grant you. But more than half? More importantly, all things considered, does the mean work out to 30 or more? I would seriously doubt that.
You have a point on Blu-ray, but it may be a catch-22: Sony intended for the PS3 to rocket Blu-ray to the top as the new standard. If the PS3 fails, though, Blu-ray may not end up meaning much more than UMD.
While I do agree there aren't many people who will buy 30+ games, I would think that a large portion of those people are the people buying a PS3 now. $600 (or more on eBay) for a console is a lot easier to justify if you plan on buying a lot of games for it.
I was basing that on this slashdot posting: WiiConnect24 Causing Issues for Wii Owners. The linked article uses the term 'breaking systems', which may not mean that they were fully broken, but that was my impression. The article is rather scant on details, so it's hard to say for sure. Comments on the article seem to indicate varying degrees of malfunction, from what you described, to being able to boot to the menu but not being able to play any games. Either way, I understand this is a fairly rare problem, I was citing it as an example of how the little bad press there is about the Wii does actually make it on to slashdot.
The whole notion that they are selling the machines at a massive loss pussles me. The analysts use retail or whole sale values for their estimated prices but Sony produces almost all the parts in house. Wholesale is still 40-100% over the cost of manufacturing and retail is often 200-500% over basic costs. Sony has never said they are selling it at a loss and they have traditionally never done so. The only console confirmed to sell at a loss is the Xbox. All other consoles were either profit or break even propositions. Sony is likely taking a loss initially as some have said they did with the PS2 for the first few months. Since they do the majority of manufacturing in house their cost per unit drop quickly as their yeilds get higher ect... Right now it's still too early to say the PS3 is dead. It had a terrible start and it needs to get some new management (which they sorta did).
I think it has the potential to lose the #1 spot but may be 2nd fiddle to WII or XBOX360. I'm waiting till 3 mo after their first hardware revision to get one.
"There are more things in heaven and earth, Horatio, than are dreamt of in your philosophy."
When was the last time an Analyst said something about a Sony product that was actually true? "ZOMG PSP IS GOING TO BE $500" "ZOMG PS3 IS GOING TO BE $1000+"
Remember, that '30 game rate to break even' means games sales for which Sony gets some money. Admittedly I'm a pretty casual gamer, but I used to buy a *lot* of my gamecube games either off eBay, or from second-hand stores. If I had a PS3, I think its pretty unlikely I'd buy 30 full price games.
ant.
Sure you'll see a few negatve stories on the 360 - at launch. Did you see a spate of them for about nine months PRIOR to the 360 launch? Because that's what we've seen here. Just a few months for Zonk to fall for the 360 and then it was all downhill from there. Nor will you find many anti-360 stories in all those interviening months.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
If things continue to go badly for Sony I think it's entirely possible the PS3 will be the last console they produce. Maybe they'd then focus strictly on games, perhaps putting the emphasis on PC gaming. Maybe... Just speculating.
Sony Music were the ones with the root kit.
Sony Electronics are the ones who made your Vaio laptop.
Sony Computer Entertainment are the ones who make the PlayStation and most of their games (ignoring groups like Sony Online Entertainment that're a division of Sony Pictures).
The odds that the idiot who approved the root kit passed that information up even as high as the head of Sony Music are pretty minimal. That the head of Sony Music told Ken Kutaragi as head of Sony Computer Entertainment and gave Ken the slightest chance to question it are minimal in the extreme. That whoever approved a ton of advertising on your Vaio had absolutely nothing to do with SCE is pretty much guaranteed.
The truth is, Sony's a huge entity. Some parts do communicate - like the PS3 being as much about trying to win the next gen DVD wars as it is about gaming - but more parts have absolutely nothing to do with each other than do. Even were people to boycot the PS3 as a protest about the root kit, the odds the guy at Sony Music will ever feel the slightest suffering for it are pretty small.
If it makes you feel better, you can go right ahead and wish venom upon them. At the end of the day, it's about productive as wishing ill upon every last soldier because a rogue few committed an atrocity. More likely than not, those who committed the atrocity won't give a damn that you made life hell for upstanding people they've never met and who likely disagreed just as strongly as you do.
that 30 games / console figure is such an oversimplification ... few things you forgot there:
counting all the above, they prolly need only 2-3 games / console ... plus, they do need 30 games / console NOW... as the component prices are goingf down they wont need that much... and i guess the fact that they lose so much money on each console now has quite a lot to do with the small numbers of available units
"There is nothing more frightful than ignorance in action." Johann Wolfgang von Goethe
What's facinating is that all the hype about the strength about the console is based on the Cell. But if you read the article that has the cost breakdown, the Cell is $89, and the RSX is $129. The PS3 isn't expensive because Sony is arrogant, or they tried to make it too powerful. It's expensive because of Blue-ray.
In terms of the success of the console, it Blue-Ray becomes the standard, then the PS3 is a success. Case closed. If they win that battle, and every High-Def DVD player made over the next 10 years sends $10 Sony's way, then the PS3 is a success, even if it only sells 10 million consoles.
Then again, if HD-DVD wins, Sony will be in a pretty sticky situation. Sony looks to me like they've put all thier chips on the table and are betting the company on Blue-Ray.
$600 (or more on eBay) for a console is a lot easier to justify if you plan on buying a lot of games for it.
I wouldn't be so quick to credit any rational justification process to anyone willing to spend a huge premium on ebay just to get it a few months earlier.
Take into consideration the 30 attach rate probably includes Blue-Ray DVD's too, which Sony is 100% banking on being a success. IF they aren't, Sony's going to be in deep financial doodoo.
The advertising isn't mind boggling at all. What better way to keep hype rolling for a product than to tease consumers with constant advertisements for things they can't have.
Dropping the price isn't a good idea, but not for the reason you site. At $1000 a console, Sony would still sell them out. It would severely hurt the future of the console, though, as they would be priced out of the market. It would clearly work for Sony, because there would be no attach rate to break even (although there would be little chance of actually turning much profit and developers, who care greatly about attach rates, would turn their nose up to sony), but consumers would loose and their wouldn't At $400 a console, Sony would claim a fast and furious victory over MS and Nintendo before the "war" even got started, possibly even if MS countered by dropping the 360 core unit to $200; however, Sony would risk never breaking even on the product at that price point, although the attach rate would certainly be higher (at least at the beginning). At $600 a console, Sony's floating in uncharted territory. They still rely on a (high) attach rate to make profit and even the cheaper version of the console is priced out of "impulse buy" territory. I think that Sony's main problem was providing two different versions of the console at launch. Had sony focused on the Core system, threw in more or less a disc of "tech demo" type mini games (similar to what Nintendo did), and cut the price an extra $50 to $450 ("oh, this is the same price as buying a 360 with a game AND it comes with Blue-Ray out the box...hot damn!"), I believe they would be onto something. As it stands now, even though there is a $500 version of the console available, it still has the stigma of being the $600 console...which hurts.
Wise men say, "Forgiveness is divine, but never pay full price for late pizza."
I still read IGN, and that does a good job with reporting what works and what doesn't with the PS3. Just recently they have a great article describing the installation and experience of running YDL (Yellow DOG Linux) on the PS3, for example - they also had an article dedicated to various editors thoughts on the PS3 controller.
If people really didn't like it why are eBay prices still so high? After all, the many tens of thousands of people who have bought systems on eBay already are using them today, they wouldn't make anything by selling them again.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
My in-Laws, and more recently, Uncle's reaction to the system had me convinced that Nintendo had a winner on their hands. However, there's still a BIG question as to whether or not their enjoyment of the console, or dozen or so hours of play time I've had with family members over the past two weeks, will translate into a single sale. Will they decide that the system is something that would be just as fun playing at home by themselves, or will they simply look back at fond memories they had spending time with us?
I love my grandmother's meatloaf, but I don't make it myself. It's just not the same.
I doubt they are under any delusion that they will break even through game sales on these early systems. They are counting on manufacturing costs to come down and make enough money on future systems (both the hardware and the game sales for them) to make up for the losses today. Remember how much they were losing on the PS2 and everybody talking about how they had to sell 7 or 8 games to break even? In the end, they turned a profit on just the console before you even count games and accessories. You just need a long term view... (It also means that if the PS3 flops, it'll flop *hard*).
I would be shocked if (assuming sales stay strong) they didn't figure out how to produce the system for less than the sale price by the end of year two.