Where the PS3 Stands Now

Phil Harrison and 1up's Luke Smith had a chat about the current positioning of the PlayStation 3, and it makes for some interesting reading. A quietly confident Harrison discusses the future of game distribution online, their attitude towards competition in the console market, and clarifies a few things about the potential for PS3 price cuts. The previous discussion about price cuts was apparently a big misunderstanding. "PH: Well, do you know what [Takao Yuhara] said was, cost reduction, not price drop, and there's a big difference between cost reduction and price drop. So, that I believe is where the confusion came from. Obviously, we are investing our money in making PlayStation 3s cheaper to manufacture -- that's part of our business plan. 1UP: You're not going to pass the savings along? PH: When we can, when there are savings to pass along to the consumer, we would obviously choose to do that. That's the business model. 1UP: Wait? You guys are doing this to make money? Really? PH: That's videogame hardware 101."

Comments

Re:make money?

[brotherscrim]

You know, the Ps2, Xbox, Xbox 360, and (especially) the PS3 were/are being sold at a loss, for at least the first year or two the system was/is out. Only Nintendo refrains from such behavior, selling all of their hardware at a profit.

So when Phil Harrison says that making money off of the sale of a console is "videogame hardware 101," It's obvious that there's only one game company with a passing grade in that class. But I guess saying so is "flamebait."

Re:Must be doing something right, or are they?

[WillAffleckUW]

So while you can find them in some stores, the PS3 must be doing something right if people are willing to pay $100 above retail to get them through Amazon.

Of course, Amazon ships to countries where they won't let you buy a PS3 at retail yet ...

Sprint, not Marathon

[LKM]

Apart from R:FoM, what does the PS3 really have? Until better games come out, there isn't going to be an increase in demand at this point.

I'm wondering whether that will be enough. It took the PSP quite a while to come out with some decent games, and it seems to be too late. The console war is more of a sprint than a marathon. Your console needs to achieve critical mass quickly in order to get good third-party support. If that doesn't happen, a few good games a year later won't move enough boxes to change the course.

It seems that third-party devs are already moving support from the PS3 to the Wii, even after only a few months of sales. That could spell disaster for Sony.

What could help the PS3, though, is Bluray. If (and that's a big if) people want to move away from DVDs, the PS3 may yet reach a market. Even then, however, it's unclear whether that market would also be interested in games.