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Games Analysts Weighs In On Console War
Gamaustra's latest in its 'Analyze This' series asks the question point blank: Which Console Will 'Win' 2007? The regular series puts weighty questions to business analysts who specialize in the games industry, to get a gestalt opinion on what's really going on. The well-respected Michael Pachter, of Wedbush Morgan Securities, had some of the most interesting comments to review. He says that Nintendo will 'appear' to win in 2007 because of its low price and innovative control scheme, but that Sony will be the winner in the long run. From the article: "My best guess is that Sony emerges as the winner of the movie format war in late 2008, and games start looking noticeably better in 2009. That's when Sony starts looking like the winner of the next generation battle. All of this is pretty far out, and a lot can happen with pricing to change things. For example, if Sony gets down the cost curve for Blu-ray and Cell processors, [the PS3] may be below $300 shortly thereafter. It's hard to say that this will happen before 2009, but it could. That would change everything."
I am actually more interested about new game styles than new game console. The WII has added some new possibilities and shows potential, certainly looking more reliable than the camera games on my PS2 (The NIKE game. I am a master in karate according to that game by just flapping my arms up and down, lighting is nearly impossible to get correct, and the distance which you need between camera and screen varies all the time).
My wife's sketchblog Blob[p]: Gastrono-me
But if Sony still has a couple of years to go before they get enough consoles out there, how will they hold on to developers and in particular exclusive titles? If a publisher can't count on selling half a million copies of an exclusive PS3 title to break even (games are costly to produce these days) by virtue of there not being enough PS3s out there to begin with (and you need far more than half a million PS3s of course), then that publisher will sign deals with Microsoft and Nintendo as well if not instead.
On top of that, with the money Sony is losing per console right now, they will have to sell a lot of games per console sold in order to break even. PS2 might be keeping SCE afloat, but I don't really see PS3 keeping a PS4 afloat at all considering how drastically the course of things would need to change.
I like basketball!!1!
On what criteria do we evaluate a winner? Consoles sold, games sold, profits? It makes a difference, does it not?
Directly contradicting this story, I read the print edition of the Wall Street Journal (expensive subscription required) and it said that in point of fact - as also backed by articles in Fortune and Forbes - that Sony is losing the format war to HD-DVD, due to low adoption rates by pr0n providers, low sales of the PS3 consoles, and labels shunning the format. Perhaps if someone were prognosticating back in October 2007, such a forecast might have seemed reasonable, but the post-Christmas sales figures in the US and Japan as well as worldwide show that adoption rates are sub-par.
But, live in a dream world if you must.
-- Tigger warning: This post may contain tiggers! --
I constantly see people mention that the console war is a "Marathon not a Sprint" which, from what I have seen, is completely wrong. The console war is a sprint to the point where developers simply are forced to heavily support your system; if you have enough of a lead at this point you tend to have support at the expense of other systems.
I don't know where the point is, and I don't know when any of the systems will hit it, but it is foolish to assume that the PS3 will have an easy time catching up in 2008/2009 simply because it has better graphics.
If sony actually managed to get a $300 PS3 out, it would change dramatically the number of sold consoles.
This is a true statement. Notice the street price in Japan has already been slashed, even before the EU launches, as they try to deal with lower console sales there. Prices haven't dropped in the US market, but the product isn't moving either, according to a number of online and print articles in various business sources - WSJ, CNN Business, CNBC, etc.
With the massive console losses already in place, it might be better to realize who the real competition is - Nintendo's Wii console - and fight them on price. Because, frankly, Sony has a better console at the same price point of the Wii, at least on graphics and speed, even if they don't have a full-fledged motion controller.
You fight the battle with the enemy that's there, not the enemy you lied to yourself would be there.
-- Tigger warning: This post may contain tiggers! --
All being an analyst means is that you pull things directly out of your ass and present them as news. It's actually a misspelling of Analist.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
With the massive console losses already in place, it might be better to realize who the real competition is - Nintendo's Wii console - and fight them on price. Because, frankly, Sony has a better console at the same price point of the Wii, at least on graphics and speed, even if they don't have a full-fledged motion controller.
The Wii is indeed killing them, and if there was sufficient stock, it would probably be killing the 360 as well. But considering the high-end technology used in the PS3, and the cost to manufacture, Sony quite frankly can't afford to fight the Wii on Price. At most likely we're looking at a minimum of 2 years before Sony can even come close.
By that time, nintendo should be able to drop there's to lets say even 2/3 of what the price is now. So you have $300 vs $175-ish. Without some seriously fun exclusives, Sony still can't compete on price, will be dropping hundreds of dollars still per unit sold, and while graphically superior, will probably not be able to compete with the Wii on the fun-factor.
I'm not saying Sony is doomed, but they're humped the dog on the PS3, and it will take some marketing genius AND developers jumping hard on board to save their ass.
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Are these people all getting paid by Sony, or something? Seriously. IANAGA, but it's not rocket science to be able to know the main driving forces behind the console gaming market. The _only_ customers the PS3 attracts are the techno-whores with lots of disposable income, extreme fans of a small handful of exclusives, and people who want a "cheap" Blu-Ray player while it still seems like it could end up being akin to buying a betamax player. The main factors that drive the console market: 1) Available games. The 360 currently leads the pack, and may continue to do so for some time. It may be passed by the Wii at some point, but is unlikely to be passed by the PS3. 1a) Ease of development. The 360 and Wii are a _hell of a lot_ easier to develop games for than the PS3, and cheaper, too. 2) Total cost of ownership. The 360 and Wii cost less (the Wii a lot less) and the Wii's games cost less. That makes them a lot more attractive to the average consumer thank the PS3. Exclusive titles, though a definite boost to sales, don't even really factor into the big picture. The Gamecube had several exclusives in franchises that had a great many fans, yet that didn't somehow propel them to the top last generation, and the GC was _cheaper_ than its competitors. Seriously, I can analogize this situation pretty easily: PC vs. Mac. Apple was top dog back in the pre-GUI days, and they went on to make the Mac. PCs, however, were cheaper, and had more third party support, and got more software. By the logic of a lot of these analysts, the Mac should have come out on top, which is pretty far from what actually happened. :P
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Apples and oranges. The environment around the PS2 is much much different than PS3. Look at what the PS2 had to face in the Dreamcast, Xbox, Gamecube. There wasn't much difference in game quality, so the PS2 wasn't surpassed by anyone. There wasn't much difference in gametypes (Wii), so you could treat the systems as equals. The Gamecube was cheaper, but not by half. Factor in PS2 locking in GTAIII, GTIV, FFX all in the same year, and you've got a slam dunk. There was no stopping the PS2, so the bottom line: why cut the price when you're selling like hotcakes? You never really know how much they were making off each one, but given that they didn't need to chop the price down, why bother? In this case, they'll continue to lose money on each system but the price can come down faster. There's also the component cost: DVD wasn't super commonplace in 1999, but it wasn't brand new either. It had been out a few years and definately wasn't as new as Blu-Ray. The initial price drops in components as adoption speeds up are much higher than later on the lifetime of a technology in terms of percenteges. So given that, I can definately see the price coming down a lot faster than PS2.
I was surprised by how good the analyst opinions were. They all pretty much said the same thing: Wii is doing well, MS is on track, and Sony is lagging a bit now ... but it's still too early to say who the long-term market leader will be. I think that's definately the right approach to take.
In contrast, here's a typical fanboy view of all the consoles:
Wii
Pro: Wii-mote rules! It's all about the innovation and gameplay. Sony and MS have none of that, so they're doomed! Who cares about HD? Look at the holiday sales! We are DEFINATELY going to win.
Con: The Wii was doomed from the start when they released the hardware specs. HD is the wave of the future. The "waggle" is just a gimmick, no one is going to want a "GameCube 1.5" months from now. Nintendo is DOOMED.
Xbox 360
Pro: First to 10 million baby! Also, see how Sony is losing exclusives left and right. Xbox Live all the way. Finally, Halo 3 babeeee! We are DEFINATELY going to win.
Con: M$ should go back to making Windows. 360 is failing in Japan, and red-lights are everywhere! M$ is DOOOMED.
Playstation 3
Pro: Blu-ray all the way baby! PS3 is the real next-gen and HD. Also, the PS2 is still selling like hot-cakes. Finally, you can't deny the power of MGS4 and FFXIII. We are DEFINATELY going to win.
Con: Batteries exploding, root kits, and constant PR fiascos. Also, PS3s sitting on shelves everywhere? $ony is DOOMED!
Certainly, there are lots of both truth and falseness to the statements above, which is why fanboys keep making them. However, it's still way too early to tell anything, especially when consoles generally last for years and perceptions change quickly. Remember how doomed many people thought Nintendo was when they first announced the "Wii" name? Or how silly the DS seemed, compared to the sexiness of the PSP? Or about how solid the PlayStation brand was a year and half ago?
Yeah, go figure.
-- jchenx
Popularity in google doesn't necessarily mean sales.
According to dvd empire and Eproducwars blu-ray is currently outselling hd-dvd, an effect widely attributed to Ps3 owners buying HD movies. The average blu-ray movie costs less than hd-dvd in amazon as well.
Here's Debbie does dallas in blu-ray, porn in 1080p and multiple angles.
In a objective comparison, both formats are about the same(excluding player costs which will eventually be similar), except for future catalog:
Blu-ray
HD-DVD
Anyone can do that. Being an analyst means you somehow convinced someone to pay you to do it.
One time I threw a brick at a duck.
If you change the search for PS3 instead of "playstation 3" and use "," instead of "." to seperate PS3 from Wii, the trend seem to be that PS3 is consistently above XBOX360, and almost identical to Wii. But in the very latest results, Wii has outrun PS3.
If you look at at the cities/regional/language bars below, PS3 is consistently in top for all cities, regions and languages, with Wii and XBOX 360 fighting for the second spot. However, Wii is seriously handicapped by being known under a different name for half the period.
"They consistently had better battery life in their portable products than their competitors." If this is not enough to convince you of a troll, you deserve to go up in flames.
It looks a little different when you get the punctuation right
t ion+3%2C+wii&ctab=1&geo=all&date=all
http://www.google.com/trends?q=xbox360%2C+playsta
Anyways, as was already noted, Google trends don't exactly indicate hard scientific data, and especially sales. The 360 outsold the Wii 3/2 in the US over the holidays and the PS3 3/1 yet it lagged behind both of them in the Google trends for that period.
Yes, but a couple of years is an eternity in a race to convince developers that your product isn't a flop. This is NOT a marathon, it's a snowball race. There's also a chance that in 2-years, there's about a 50% chance that the HD wars will be lost to HD-DVD, in which case, the blu-ray player is practically useless. Plus, don't hold your breath for the PS3 to fall to $300 in two years. They're already taking a loss far greater than any other console in history, they simply can't afford to drop it down much more. No console has slashed 50% in two years (other than Nintendo, who makes a profit on their consoles to begin with). And Nintendo and Microsoft aren't standing still, by that time, the Wii could be down by 50%, and Microsoft could pull the 360 down to $250. The other companies have more room to pull their prices down than Sony. The percentage gap is only going to widen.
In two years, this is, most likely, how the game is going to look (360 and PS3 projections are of the higher end model):
Nintendo Wii: $150
XBox 360: $250
Sony PS3: $450
Multiplayer Gaming (defined): Sitting around, discussing single-player games with my friends, at the bar.
With due respects to these "experts", the race for videogame supremacy will be over before 2008/2009. The next generation of consoles will probably be out in 2009.
I'm really surprised the "experts" have missed the obvious point here...
I think MS released the XBox360 about a year earlier than Sony anticipated. I believe Microsoft did this to force Sony to release a console 9-12 months before they were ready. Sony essentially abandoned the very profitable PS2 way too soon to push the PS3 and compete with the Xbox360. In my opinion, Sony managed in the space of 6 months to throw away a commanding lead in videogames. Now they're in 3rd place for the "new" generation. And it's going to be a tough hole to dig out of.
You can argue that the new PS3 has wonderful technology, you can talk about the wonderful WiFi, BluRay, and all of that is true. But people are going into stores and looking at $250 for a Wii (which is still hard to get), $300 for an Xbox360 (even if that price is deceptive), and then $500/600 for the PS3. I think it's a tough sale.
And again, listening to these experts talk about how the PS3 will come from behind in 2-3 years to take over the lead... it's never been done in consoles, I doubt it will happen now.
I'm really surprised at Sony. They know as well as anyone how easily the lead in videogames can be lost. And despite all that they threw that lead away.
If I was Sony, I'd cut prices by $100-150 across the board, get the cheaper unit into stores, get some games out there and advertise the heck out of the console itself. I think they're in trouble at the moment, and the game is MS's to lose right now.
You were mistaken. Which is odd, since memory shouldn't be a problem for you
You do realize that investment firms use analyst's data to make decisions on stocks and bonds worth tens of millions of dollars. These aren't some fanboys sitting around pulling data out of their ass. Unless what you think can move stock prices, I'm not too interested. They all pretty much said the same thing and their analysis seems to make a lot of sense. But hey, your "friends are all gamers", so obviously know more than guys who spend 10 hours a day studying the industry.
//TODO: Insert catchy phrase
I think it's funny that none of the analysts mention pre-installed base of portable units. The 'base station' aspect of these new consoles will play into the equation for sure.
Download services and hand-held integration hopefully will play a big part in this generation. A wireless Four Swords
would be great, and SOCOM3 has some unlockables when you plug
your PSP into a PS2 USB port. I also remember hearing that PS3 has a download service already in Japan.
If Sony and Nintendo can leverage their handheld sales from
the last year properly, they will make up ground they lost
from the Xbox360's head start.
Perhaps the real question is whether or not there will be a loser in this round. Whereas the previous generation had a real loser in the Dreamcast, will this generation see one of the "Big Three" falling down substantially?
Some people conveniently forget the Dreamcast and call the Gamecube the loser of the previous generation, but as you mentioned, this is a business we're talking about, and the Gamecube didn't lose Nintendo any money.
In this round, I see the possibility for Sony to lose big. Of course PS3's will sell better as the games improve in number and quality. The question is will the the games be enough of a quantum leap over the 360 to justify the cost differential and foster greater adoption?
...because the other consoles are purchased only by loser moron fanboys.
It is amazing how such false and misleading information was modded Interesting. Before you call "bullshit", it might help if you provided evidence using more accurate test variables to trend popularity.
3 60),+(playstation+3)+%7C+ps3,+wii&date=all&geo=all &ctab=2&sa=N
a b=0&geo=all&date=all
Firstly, many people refer to the "Playstation 3" as the "PS3". Secondly, it _might_ help your test results if you used "Playstation 3, Wii" instead of "Playstation 3.wii". So, let's take a look at the _real_ trend:
http://www.google.com/trends?q=xbox360+%7C+(xbox+
Finally, before trending the HD formats, it would make your argument more convincing if you spelt "Bluray" correctly:
http://www.google.com/trends?q=bluray%2C+hddvd&ct
If there ever was a good example of skewing of test results to conform to ones own opinion, it would be your misinformed post.
Do these people's opinions really matter? It seems like they speak with 10,000 analysts, get 40,000 diffrent answers, and when one is correct (suprise suprise) they tout it as some achievement, beacuse they guessed the right number.
Who cares who wins in 2007? I sure dont. If you like Wii, you'll go Wii. if you like PS3, guess what, you'll go PS3. Xbox? Do a little dance and make a 360!
The only true winner is the consumer, because they have a choice, IMHO. Analyze that.
There are three analysts on TFA and the first two basically don't declare a winner. It's far too early in the game, so it is better if they don't risk such estimates based on wild speculation.
:)
Now there is the third, "respected" analyst. Example argument from TFA:
"If I'm right, Sony will end up winning the high-definition format war, and once there are millions of Blu-ray enabled PS3s floating around, I think we will see sharper graphics on PS3 games compared to Xbox 360 games."
Where does he base this? Because maybe just because the PS/3 touts "1080p"? Or because Blue Ray "is larger so it can fit sharper graphics... and stuff". Any hardware geek (like several here), just looking at the specs can see that the 360 has a more capable GPU (compare unreleased R600 level GPU to previous gen G70...), and a CPU which is easier to use effectively.
Not to mention that by 2009 when the PS/3 will have become "affordable", it will no longer be a nexgen system, so it will only sell if it already has a huge base (thus developer support).
I don't see such a bright future for the PS/3, unless something big happens (half price anyone?), but if Sony wins the HD wars, they will probably not really care. Royalties from Blue Ray will bring more money
You're absolutely right on the misspelling of "Blu-ray", except you spelled it wrong too! Check it out:
c tab=0&geo=all&date=all
http://www.google.com/trends?q=blu-ray%2C+hd-dvd&
Now who can say HD-DVD has the uncontested Google Trends lead (however much that means), looking at that graph with both terms spelled correctly?
Actually, I have a slightly different take on this.
Lets assume HD TV adoption really takes off in the next year or two, to the extent that by, say, 2010, SD sets are a real minority (-30 percent of sets).
Lets also assume, and it's probably not too far from the truth, that MS has a bottomless pit of money, and are willing to do prety much anything to bury Sony.
Now, lets stop assuming things and look at stuff we know. The X-box had a four year life cycle (2001 - 2005). The PS3 is being sold at a loss, so sony need it to have a nice long life cycle in order to recoup their investment. They have publicly stated that they expect the PS3 to have 10 year life cycle. Nintendo on the other hand, make money on every Wii they sell.
OK, time for some more suppositon. Suppose MS decides to stick to four year turnaround, and X-box 3 launches in 2009. This would put Sony in a virtually impossible position. They would have only had three years of PS3 at that point, would be unlikely to have a PS4 ready to launch any time soon, and if the new X-box was significantly better than the PS3 and started to steal its sales, they might be looking at taking a loss on the PS3 overall
Nintendo, on the on the other hand, probably wouldn't care. They don't sell the Wii off the back of power or pretty graphics. The X-box 360 is already more powerful than the Wii, so if X-box 3 was even more powerfull, who cares? And if it really became an issue, if the market was really demanding an HD Wii, well OK. Nintendo aren't selling at a loss, they are likely to have made plenty of cash off the Wii in three years time, so they could just shrug their shoulders, move to four year structure themselves, and launch the Hii Dii in 2010.
Of course that's probably all bullshit.
Maybe I could be an analyst too.
"I realise this is not a very popular opinion but it's the truth, and there for needs to be said" -Bill Hicks
"Sony is hanging by a thread financially."
That's not in any way true. Multiple Apple's sales by 3, and their profit by 4, and you got Sony. Sony has $32B in short term assets. Sony is quite healthy, financially. I don't know where you got your information.
I don't respond to AC's.
The reasons so many people are going with consoles instead of computers are:
Multiplayer on one system (thus more directly social)
Larger screen (and increasingly, equal resolution to PC)
Easy setup/compatibility (plug it in, put the disc in, it works)
Simple controls
Easy online play (at least for the Xbox/360.. PS3 is still a question mark)
Consoles are not aimed at "people who can not afford full fledged open hardware", they are aimed at people who want an easy, fun gaming experience. No matter what your personal experience, the PC is the most complicated gaming platform there is. There is still no easy way for a mother who knows nothing about games to walk into a store and know if their computer can play any given PC game. On the other hand, they know that a game for PS2 will always play on PS2.
If sony drops thier price do you think it will go unaswered by either nintendo or Microsoft??? Its very very likely that Microsoft would follow suit and do the same if not being the market leader in doing so... In wich case Sony will be grasping at the possiblity of making some sort of profit... Even though the cheap ps2 is making them a killing at the moment. I work in the gaming industry... My prediction at the pricing of consoles over the next year maybe two years is that Xbox will have a newer model out that includes HDMI bigger hard drive, gigabit ethernet and possibly wireless installed (If not they will sell 802.11n adapters)that will be competitively priced at 349.99-449.99 the current xbox premium system will drop to 249.99-349.99 and the current xbox core system will drop to 149.99-249.99... Nintendo of course will follow suit and drop thier current system down to 149.99-199.99 to compete with the 360 at the lower price range.. But they will also introduce Wii Premium to stay at the higher price of 249.99 this will include better graphics, media center functions, more memory, ect... Sony of course will have to follow suit if they have any hope of doing well and drop the ps3 by 100 dollars at the very least. This is all elementry stuff here.. Anyone makes a move in price the others will follow..
What you're really talking here is demographics. If you're selling to mothers, the Wii has a great story to tell. Low price, easy setup, and games that won't make her eyes turn really big and make her whack the box with a fireplace poker. Plus, she may even enjoy some of the games herself.
But have we forgotten there actually still exists a market for a certain demographic that has come to be known as the "hardcore gamer"? Yes, I've heard lots of arguments that Wii players are "real" gamers and are "dedicated to gaming." So be it. But they're not the moms. You can't have it both ways. Either moms are driving sales or they're not. I think they are, and by your comments you certainly think they are, too. If "hardcore gamers" were driving sales, they wouldn't care about stuff like how hard it is to setup a damn console.
So we have the other hardcore gamer. Theses are the guys who want cutting edge graphics, very large pixel counts, full anti-aliasing and games they'd refer to as "bad-ass." These are not moms. They are not competing with moms. They will not buy the Wii as anything other than a novelty. It will most certainly NOT replace their main gaming machine.
And what is that machine? Well, it could be a PS3 or Xbox. These have very cool graphics, plus they hook up to the bad-ass HDTV with the bad-ass 60" screen. But the problem with these boxes is that PC games are already starting to beat them in graphics. Crysis is a monster. There are others. Two years from now the cream of the crop are going to be something the PS3 could only dream of.
Consoles are cool. I broke down and bought one and I actually like it. It really is less of a hassle than the PC. But the Wii is never going to be so much less of a hassle that I'd choose it for Far Cry over a PC. I would not play BF2 on a PS2. Though I've gotten to the point where the Dual Shock is usable, it will never beat keyboard and mouse.
Hard core gamers will absolutely compare bad-assedness. Note that I didn't say, "fun-factor", "cost," or "easy of use." When shear thrill is what a "hard-core" gamer is looking for, he's going to look at Gears of War, Crysis and Oblivion. He might play Mario Galaxies and he might even have fun with it, but he won't get a heart thumping thrill like he will when running for his life through the almost perfectly rendered jungle, leaves rustling by him as he moves through the underbrush, bullets whizzing overhead and a frag grenade going off to his right rear on the surround sound as the game goes into slow-mo as he's just about to die, but just makes it behind a rock. That is a thrill. All I've heard about the Wii is that it's "fun."
Will the Wii win. Probably. If you're talking dollars, it'll make a boatload. Not only will your mom buy it for you, but even hard-core gamers like to have a little fun now and then. But hard-core gamers will never be satisfied with the Wii alone, and if they're not married to the idea of a console, they're going to find the realism of some of the new PC games very hard to resist. If they do want a console, both the 360 and the PS3 will give them a big thrill. Nintendo may "win," but there's no way in hell they can crush the rest of the market, because they simply cannot compete with the rest of the market. They chose "fun." That's the best they're going to give you. Many people will want more than that, and they'll keep everything else kicking just fine until gen. 8, including the humble PC. If you doubt this for a second consider that Grand Theft Auto was, I believe, the top selling game on the PS2, which totally dominated the last gaming cycle. Though it's not my cup of tea, many people clearly loved it. They will not forget that they loved it. They are more likely to see live executions on Sesame Street than to see this game show up on the Wii. The mom's wouldn't like it.
You kidding me? Racing has been done right, Excite Truck is fun and exciting, the only thing that really hurts it is no solid multiplayer options, there should have been online support for it.
Red Steel was a broken game that should not have been on sale, that was Ubisoft being retarded, and while Call of Duty 3 has people complaining about not being able to play for more than an hour before their left arm gives in and they cannot keep their direction set right - Nintendo does advise regular breaks from console usage.
And online is no niche, it's the future, it is the biggest thing lacking from current games coming for the Wii. It is what hurt Call of Duty 3.
I'm sick of following my dreams - I'm just going to ask them where they're going and hook up with them later.
Developers move like the wind - the system that makes money attracts them. Right now the Wii looks like it's doing well, and so does the 360. But that's not to say that in 2 years it will be the same. If the install base catches up, a game development business isn't a fanboy and will go along with whatever system makes them the most money, regardless of what their developers think. If the PS2 was so hard to develop for, how did it win the last generation? Because it had the largest install base and guaranteed the largest return.