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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."

22 of 293 comments (clear)

  1. The PS3 stands proudly by jdc180 · · Score: 4, Funny

    In the display cases of your local department stores.

    1. Re:The PS3 stands proudly by Anonymous Coward · · Score: 3, Funny

      Are you sure it wasn't a bunch of PS3's arranged to spell "Wii"? It's easy to confuse the two.

  2. make money? by brotherscrim · · Score: 5, Funny

    PH: That's videogame hardware 101."
    I guess Nintendo was the only one to actually pass that class.

    1. Re:make money? by brotherscrim · · Score: 4, Insightful
      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."

  3. wow by flyingsquid · · Score: 3, Funny
    They're in this to make money?


    Damn, Sony sure had me fooled...

  4. Problem with PS3 release was... by blahplusplus · · Score: 4, Interesting

    ... lack of killer system selling game or games. It has to be said if the games were there even the high price would not be such a barrier of there really was a killer app that made people throw their financial reason to the wind.

    1. Re:Problem with PS3 release was... by Solra+Bizna · · Score: 3, Interesting

      Honestly I think that's one of the worst things that everyone always brings up. "Resistance isn't worth $660! Motorstorm isn't worth $660! VF5 isn't worth $660!" and so on. Fact: You're not going to be buying only one game for any system. If there is only one game that appeals to you right now, and you don't deem it worth $660, then it's not a good time for you to purchase the system, I agree. But how about when there are 3 games you're interested in? How about 5 or 6? 10? Where do you draw the line. At some point you need to stop asking yourself whether one game is worth $660 and look at what you'll get from the system as a whole.

      "Am I willing to pay $720 to play X and Y? What about $780 to play X, Y, and Z? $840 to play X, Y, Z, and W?"

      Clearer now?

      Me, I'd rather spend that $840 to be able to play over a dozen games on my Wii. ...Actually, I can think of much better things to spend that much money on. Like more computer hardware. You can never have enough computer hardware!

      -:sigma.SB

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      THERE IS ANOTHER SYSTEM
  5. Vaporware by Cutriss · · Score: 3, Interesting

    "We have a hard drive, we have a commerce engine, it doesn't take a rocket scientist to figure out we will have that on the network very shortly."

    Define "very shortly". The PSP was supposed to have this functionality for music over a *year* ago. It's been delayed so many times that I think people have largely forgotten about it. Sony was always talking about being able to use Sony Connect to purchase music and possibly videos on/for the PSP (in order to posture the PSP as a competitor to the iPod), but that clearly has not yet taken place. Why should the PS3 be any different?

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  6. Cost reduction by rlp · · Score: 4, Informative

    Sony is selling the PS/3 at a loss. I've seen estimates as high as $300 (loss) per unit. Clearly their strategy is to get the manufacturing cost down ASAP and recover some of the loss via higher game royalty payments. They MAY even be limiting production - at least till they can further lower manufacturing costs.

    A risky strategy, when you consider the deep pockets of Microsoft (also selling their console at a loss), and that Nintendo is actually making a profit on their consoles. But it's still early in the cycle for this generation of consoles. Personally, I'm cheering for Nintendo. But it's MUCH to early to count Sony out of the game.

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    [Insert pithy quote here]
  7. The PS3 has it rough by Hott+of+the+World · · Score: 4, Interesting

    The problem is 50% perception, and 50% targeted market. Here's what I mean:

    "Perception": People see 600 - 800 dollars and no games. They see a huge Sony ego and laughable selling numbers. No one's buying it, no one wants one.

    Reality: It can be bought here in the US for as little as 499 if you want the 20GB model, and if you're patient by summer we'll have a healthy injection of new games on the PS3. They even have more demos and movie trailers available in the PS3 network for free. Games are coming, and patience is key. I'm not an apologist. This is just how new consoles tend to work.

    As for the ego, it's there. But it's not contempt for consumers, as most detractors would have you believe. It's confidence. They're saying, "we're number 1". Sony needs to be seen as confident in this console outing. You want them to say "Yeah it sucks, get an Xbox?"

    The price is out of necessity, not arrogance. They're definitely losing more per console than Microsoft. Blu-ray was a risk, but not a totally harmful one. Prices will come down and the complaining will slowly go away

    "Target market" is the other aspect that's hurting the PS3.

    Not only do people not want to drop 500-600-800 dollars on a game system, they certainly don't want to pay more for the same games. That's the problem most 360 owners see with the PS3. They can't envy it any. Pay tons more for some future exclusives? Laughable.

    The PS3 is for people who want blu-ray, PS3, PS2, and don't have a 360 already, and are willing to spend at least 500 bucks for it, probably more. That's not a great subset of people.

    With all of that, it's a testimony to the power of Sony and its future exclusives that so many people are buying the thing.

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    1. Re:The PS3 has it rough by Chris+Burke · · Score: 4, Funny

      As for the ego, it's there. But it's not contempt for consumers, as most detractors would have you believe. It's confidence. They're saying, "we're number 1". Sony needs to be seen as confident in this console outing. You want them to say "Yeah it sucks, get an Xbox?"

      Obviously, but there's a point where confidence does become contempt. Or at least where it is seen as arrogance and presumption, and the customer is offended. As for me, that line was crossed by Sony's gaming division when they said that they thought people would get another job if they had to in order to get a PS3. It was the presumption that their shit was so hot that we would fall all over ourselves to get it, no matter what. That's not an appropriate form of confidence. It's the difference between "we will defeat our competitiors!" and Romero-esque "Ya'll are my bitches!"

      It's kinda like the dating scene. You need to be confident, right? Well there's a difference between going up to a beautiful woman in a way that suggests you are not intimidated by her, and walking up and saying "Hey babe, I'm the man of your dreams, you'll be sucking my dick by the end of the night, even after I do THIS!" and then slapping her.

      That might work sometimes (run screaming if it does), but it is hardly a good way to achieve broad market penetration, if you catch my drift.

      --

      The enemies of Democracy are
  8. Re:PS3 Kicking Ass On All Fronts by Cutriss · · Score: 3, Informative

    Rock solid defect free hardware - compared to the nightmare failure rate Microsoft still has going on with the 360.Really? I've seen a pair of them at a UPS Store being shipped back to Sony. I've also read reports from people back in December being told not to expect replacements for two months. Of course, I would assume that this estimate has since been revised, what with supply and all...

    Absolutely silent operation - bravo Sony engineering!

    Ah, yes...Sony engineering, which also gave us the Square button on the PSP and told us that we were wrong for not liking it. Also, the analog nub on the PSP freaking sucks. I'm glad there's only one, because the one that's there isn't very sensitive at all. You try making a circular motion with it sometime - it doesn't work. There are two speeds possible with it (all the way out and part of the way out), and the angular refinement is pretty shoddy. It's very hard to go from, for example, W to WNW to NW. You'll generally skip straight over WNW. Ever try web-browsing on the thing?

    BluRay has won the format war with only a couple months after the PS3 release BluRay already outselling the dying HD-DVD format 3-1. And one of the remaining HD-DVD studios just jumped ship to BluRay today. Pretty much all that remains is for Universal to throw in the towel.

    Nice for you not to provide a link here where you did everywhere else. Also, describing this as a format war is like calling the Falkland Islands War a war. The remaining 99.99% of the world didn't even notice it was happening. Also, Sony dumping its crappy back-catalog of movies into Blu-Ray, causing a large chunk of new titles to be made available, is not what I call winning - it's what I call "stacking the deck". Despite it's apparent capacity advantage, Blu-Ray is getting lower marks in the picture quality department, which, if you weren't keeping track, is kind of important to the people willing to drop $2000+ on a TV and $500+ on a high-def DVD player.

    PS3 has the top selling game in Japan now - Japan will be a fierce battle between Sony and Nintendo. Nintendo really needs to work on their release schedule. Wii owners are getting restless as the novelty of games like Wii Sports is wearing off.

    "Top-selling" is hardly the way to put it. With over double the install base of the 360, it hasn't managed to come close to outselling Blue Dragon. Watch next week, as Virtua Fighter 5 drops back to the mid-20's, while Wii Sports and Wii Play continues to sell the same amount each week (which proves that the novelty isn't exactly wearing off).

    Early previews are going gaga over Motorstorm with another online win for Sony with another completely lagfree game.
    http://www.hardforum.com/showthread.php?t=1103341 [hardforum.com]


    No...RECENT previews are saying "Hey, this doesn't suck anymore". Early previews said it was complete and utter shit. Oh, and hey - that's the one the Japanese got! I'm sure they love the PS3!

    The Playstation Network is cranking out all sorts of very cool indy games like Flow and GripShift and we are only a couple months into adding content.

    No...the PlayStation Network is releasing a port of a Flash game that's been out for over a year, and another not-so-great Sony-first-party junker. Oh yeah - and the rubber ducky game.

    The one issue with HD tvs and PS2/PS1 games has been fixed and PS3 owners have rock solid 99 percent backwards compatibility with the giant library of PS2 and PS1 games.

    It's not 99%. Closer to 90%. Music games are still broken. Also, the "one issue" is actually two issues, one of which has been fixed. Ask a 720p-set owner if they're happy that they can't play in 1080i anymore.

    Virtua Fighter just about to hit the shelves.

    It did hit the shelves in Japan. It landed with a thud. See above.

    GDC sounds like Sony is going to have some pretty big announcements with even more

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    "Mod, mod, mod...and another troll bites the dust."
  9. Re:PS3 Kicking Ass On All Fronts by UbuntuDupe · · Score: 4, Informative

    Christmas was more than a few days ago.

    *please mod informative, please mod informative*

  10. Re:PS3 Kicking Ass On All Fronts by twistedsymphony · · Score: 4, Interesting

    I consider myself to be a hardcore gamer and for me the Wii novelty wore off after about 2 weeks.

    The problem for me is games like Wii sports are just lacking the depth to really hold my attention, and for games like Zelda the use of the Wii remote is just rather "meh". IMO it didn't add anything to Zelda and I would not have enjoyed the game any less using a Wavebird.

    so about a month past buying the Wii it's started collecting dust and I've gone back to playing Xbox 360 games. IMO if the Wii wants to get past being a gimmick they need games that have the compelling depth of Zelda combined with the unique and value added controller usage of Wii Sports. So far the only title that really delivers that is Trauma Center, but I've already played that title... on the DS (widescreen support would have been nice too), Red Steel was close but the buggy game mechanics killed what uniqueness the Wii Remote added to it. I'm sure they'll come but as of right now I don't consider the Wii to be much more compelling then the PS3 is right now, if anything it serves as a nice show piece and entertainer when friends and family visit, and I'm sure there will be better games down the road... right now though, and I think the same holds true for many other hardcore gamers, there just isn't enough substance.

  11. Re:Must be doing something right, or are they? by WillAffleckUW · · Score: 3, Insightful

    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 ...

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  12. First game is here by mechapanda · · Score: 3, Interesting

    A bit of context:
    I'm a long term Sega fan, and when I first moved to Tokyo 12 years ago spent up to 3 hours a night in my local arcade playing Virtua Fighter 2, Fighting Vipers, and Virtua On Oratorio Tangram, and played all three in competition.

    The release of the Dreamcast meant that I got to get the "arcade experience" at home, Soul Calibur with the official Sega arcade controller, and Virtua On with the Twin Stick controller was the best an arcade gamer could could buy.

    Until now:)

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    Yesterday the first of the games I bought my PS3 for turned up, Virtua Fighter 5 and the Sega arcade controller.

    The controller is simply amazing, cost a fortune but an hour after unpacking it I was online ordering a second! It's currently sitting next to my Dreamcast official arcade controller which , well, looks a little tired.

    The game is purely for fight game fans, nothing here for the mass market, but for anyone who spent hours in an arcade playing the various Virtua Fighters it is an absolute must have.

    I don't want to even think about much a HDTV, PS3, and controller cost but I'm happy so it was money well spent:)

    Forget the console wars, if you are a arcade fight game fan, you need this game, the Tekken download, two Sega controllers, and a PS3. Sell blood if you have to, but get it.

    1. Re:First game is here by EGSonikku · · Score: 4, Informative

      You do realize Virtua Fighter 5 is being released on the XBox 360 as well though right? So I don't really see this as reason to buy it on the PS3 for $100 - $200 more than it would run you on the Xbox 360. And if the past is anything to go by, the 360 version will have nice online play and voice chat...does it on the PS3?

      http://xboxyde.com/news_3903_en.html

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      - "Scientia non habet inimicum nisp ignorantem"
  13. Re:Landed with a thud? At number 1 by HappySqurriel · · Score: 4, Informative

    The "Thud" comment is (reasonably) justified ... According to VGCharts.org Virtual Fiter 5 sold 49,500 in it's first week

    Last week Lets Make a J-League Pro Soccer Club 5 sold 108,250 and Harvest Moon: The Island I Grew Up On sold 81,000 in their first week ...
    The week before Grand Theft Auto: San Andreas sold 220,750 and Romance of the Three Kingdoms Wars DS sold 81,750 in their first week ...
    And the week before that hack G.U. Vol. 3 sold 132,750 and Wario: Master of Disguise sold 94,000 in their first week ...

    These are very 'average' games in Japan selling 2 to 4 times as much as Virtual Fighter 5 did ... Another way to look at it is that Virtual Fighter 4 sold 367,500 in its first week. At this pace Sega will be lucky if Virtual Fighter 5 sells 100,000 to 200,000 copies in it's lifetime.

  14. Re:PS3 Kicking Ass On All Fronts by Rycross · · Score: 3, Interesting

    I'm really kind of annoyed at the number of "Collection of minigames" games that are comming out for the Wii. Wii sports was fun, dunno about long term staying power though. Thats not a dig on the game, its just my tastes.

    But then you get recommendations like Wario Ware and Raving Rabbids. More games of minigames. Theres Elebits and Zelda, and Trauma Center, but what else? Red Steel blows. I'm looking forward to Metroid Prime 3 and Smash Brothers.

    I hate to say it, but the one thing Sony Fanboy has been right about is that the lineup of Wii games have been a rather dismal succession of PS2/GC ports and minigames so far.

  15. Re:PS3 Kicking Ass On All Fronts by Rycross · · Score: 3, Interesting

    Unfortunately, I haven't seen much of that going on. Mostly just ports and "hey lets throw a bunch of nifty minigames together!" sort of games. I'm hoping this is a repeat of the DS situation, where developers took a while to get up to speed and really start making good use of the new features.

  16. Re:PS3 Kicking Ass On All Fronts by MeanderingMind · · Score: 3, Informative

    PS3 has the top selling game in Japan now - Japan will be a fierce battle between Sony and Nintendo. Nintendo really needs to work on their release schedule. Wii owners are getting restless as the novelty of games like Wii Sports is wearing off.

    Virtua Fighter just about to hit the shelves.


    The hidden contradiction here is that the top selling game in Japan this past week was Virtua Fighter, it's not just about to hit the shelves.

    More importantly, it only sold ~3000 more copies than Wii Sports. Wii Sports has been on the market for 11 weeks now, and on its release week sold slighly most than three times as many copies as Virtua Fighter did. If the novelty of Wii Sports is dying, we can only assume that the novelty of the first four incarnations of Virtua Fighter is as well.

    I will grant you the point that Nintendo does need to work hard to keep their release schedule flowing smoothly, but this is true of any system with or without a special controller.
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    Thunderclone: ONE MAN ENTERS! TWO MEN LEAVE! ONE MAN ENTERS! TWO MEN LEAVE!
  17. Sprint, not Marathon by LKM · · Score: 4, Insightful

    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.