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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."
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! --
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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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
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.
"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.
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
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.
"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.