Um, the iPod, the Zune, and every other media player out there already support non-DRMed formats. And non-DRMed media is the vast, vast majority of the media that gets played by them. Neither the iPod nor the Zune do anything to restrict your freedom.
Now, if you're stupid enough to actually purchase DRMed media - that's your own damn fault. But it has nothing to do with the devices that support playing that media.
The other major purpose of this is for historical benefit. Imagine, for example, that we had Geotagging+Timestamping on all the photos taken in the last 30 years, and they were shared on something like Flickr. You could focus on a particular place and build a timeline of photos to see how it changes over the years. Given the ubiquity of camera phones, digital cameras, etc, we could have a complete photo-historical record of, well, almost everything.
Personally, I've gone through all my "good" photos recently (over 500 of em) and geotagged them by hand with Picasa and Google Earth (and now I'm in the middle of the laborious task of replacing them all on Flickr) for no other reason than I think it's neat - I like being able to display them out on a map to show people. I think it's a much more interesting way of visualizing them than the standard coffee table photo album.
That and I can't tell you how many times I've gone through my Grandparent's photo albums and the conversation went something like this:
"Wow, when was this taken?" "Don't remember exactly. Sometime in the 60's." "Where was this?" "Arizona, I think. Or maybe it was when we went to California." "Who is this?" "Don't remember. Frank? Is that Frank? I think it's Frank."
Because there's no guarentee Blu-Ray won't have gone the way of the laser disc in 7-10 years? I suppose it's not that critical (my Uncle has an extensive laser disc collection, still good as long as he has a functioning player) but personally, I'm hesitant to sink any money into media that I don't believe will have long term viability.
As for your comparison:
The Terminator (Blu-Ray, from your link): $28.99 The Terminator (DVD, on Amazon): $9.25
Here's the problem with this line of thinking; the market for the PS3 and the market for Blu-Ray movies barely have any crossover.
Someone is only going to be buying blu-ray discs if they're an early adopter who has the requisite HDTV set up properly to take advantage of them. Otherwise, there's simply no reason to buy a Blu-ray disc over a regular DVD, especially as blu-ray is currently around 2-3x the price of the same movie on DVD.
Most video game consoles however are still set up in kids rooms, bedrooms, and dormrooms - not environments where the HD content would make a lick of difference. Very few teenagers and fewer college kids have their consoles hooked up to HDTV's.
So my guess is that there will be people who buy the PS3 for games, and a (much smaller) market of semi-early adopters who pick it up as a cheap blu-ray player sometime next year when there's actually an available supply of the units in stores, but you won't find all that many people who are buying both.
I compare the feature to the previous generation, when there was much made of the fact that the XBox had networking capabilities, but it wasn't until the very tail end of the console's life cycle that anything at all was made of it. Broadband penetration simply wasn't there yet for the lion's share of the console's market. I think it's the same thing this round with High Def - it's at least another three or four years before high def trickles down to the point where the average gamer can take advantage of it.
In the end, the best move would have been to not make such an expensive system.
Bingo. Just look at the history of the industry - there have been a few times when someone tried to introduce a console with bleeding edge technology at an inflation adjusted ~$600 price point (The Neo-Geo comes to mind). All have failed.
Sony seems to think that they're special and they'll succeed where no one else has because, well, they're Sony! And they're King of the video game industry! Which is a trap that both Sega and Nintendo found themselves caught in once upon a time.
Imagine how awful things would be if MS owned a bunch of "traditional" content (besides software.. which has grown up with "piracy" and the market understands how to deal with it..and the providers have grown up figuring out how to stay alive inspite of it)
Microsoft used to have a sensible attitude as that goes, seemingly accepting a base level of casual piracy of its software. Lately though they've been getting more and more draconian, first with their "activation" scheme and now with WGA. It seems they're now of the same mindset as the MPAA/RIAA... assume your customers are criminals unless the customer can prove otherwise.
To be completely fair, the impact of filesharing is still an X factor with regards to how it impacts sales of either CD's or Digital Music Stores. And even with the RIAA scare tactics, P2P sharing of unencumbered mp3's still dwarfs the whole digital music industry by leaps and bounds.
It's hard to say whether consumers are accepting or rejecting DRM because there's simply no way to isolate the variable. iTunes, CD's, and P2P networks all offer a different combination of price, quality, value, convenience, and DRM.
As to the impact DRM has, it would appear that Yahoo has done the market research and concluded that their DRM is hurting sales, based on some of their public statements in recent months, although their pressures are somewhat different from Apple's, not having the iPod. But even in Apple's case, the DRM does inhibit one of the critical things people want to do with their music, which is share it with friends. People have done that since the first cassette recorders came onto the market, and later with CD Burners (much to the RIAA's shagrin). Apple's DRM hinders that, even if it doesn't make it impossible, thus lowering the value of Apple's product in some consumers minds. People are also aware - even the average joe - that iTunes music only works on iTunes and the iPod. Consumers are generally wary of lock-in, at least when other options exist.
But that's not to say that other factors might not be hurting it more. It could simply be a case of "established" vs. "new", as you point out, or it could be "free" vs. "not free" as the RIAA likes to argue when it comes to filesharing. It could be that CD's offer better value because most people still have CD players in addition to iPods. It could be that iTunes requires a credit card, which is still a barrier for a lot of teenagers. It could be that the impetus to buy when you're using iTunes is different than when you're standing in a store. Or maybe, despite evidence to the contrary, people do generally prefer to buy albums over individual tracks, and an "album" in their mind is something that comes on a CD. Or, most likely, it's some combination of all the above.
As a side note, this breakdown is misleading. I'd wager, the vast, vast majority of iPods have no iTMS music on them at all. Those that do probably have much more than 20 tracks. Some consumers obviously like Apple's service over other ways to get their music. Other consumers, the vast majority of them, have nothing to do with it. Whether that's because of DRM or some other factor or combination of factors is something no one here has enough information to say definitively.
For me it depends on the track. I don't hear a difference on a typical rock track, but on classical music it's pretty obvious (to me at least) if it's anything less than lossless.
1. Copyright law no longer reflects normal social behavior. 2. Copyright law no longer reflects the realities of modern technology.
There's two ways to read this: Either copyright law needs to be changed, or technology and behavior need to change.
As much as the RIAA et al wish to go with the second, ultimately it has to be the first.
My preferred solution? Legalize non-commercial file sharing. Make a strong distinction between commercial uses and non-commercial uses. The copyright holder looses his monopoly on distribution, but still retains the exclusive right to profit from the work. (A Creative Commons license, more or less).
I think that even in such an environment, there's still enough money to be made to provide incentive for corporate shitbags like the RIAA, and there are more than enough people willing to make creative works and give it away for free anyway to pick up the slack for any decline in industry.
That fixes everything without creating new regulatory bodies or censorship technologies or anything of the sort.
Del.icio.us handles this fairly well by simply adding a little "+" icon next to available subtags. No reason Gmail couldn't eventually add a similar functionality for visual navigation.
Personally, I hardly even use the labels though (coincidentally, for the same reason I really don't use del.icio.us all that much). It's easier to just search, especially since my labels are usually just keywords in the email anyway.
Why would the masses love having yet-another-device to plug into their TV sets (carrying a $200-300 price tag) whose only function is to play a proprietary movie format that's of lesser quality than the DVD's they get for the same price (and already have players for?)
And why the heck would Apple release something with a Tivo functionality? They want to sell you TV re-runs, not let you record them.
I see the masses continuing to buy DVD's for a long time coming, if these initial lame efforts at downloadable movies are any indication.
Alright, Napster is nothing I'd buy into myself, but I don't understand the antipathy that some people have for it.
It's no freaking different than XM radio except that you build your own playlists and decide what you want to listen to. It's not that much different from Netflix, either, except Netflix limits the amount you can rent at once. For some people, it's a model that fits them perfectly.
You subscribe, you get access to everything, you listen to what you want, when you want. If at some point you decide that the service is no longer worth your money, you stop subscribing, and you can no longer listen to what you want when you want. What's so wrong with that?
In the real world, what would happen in your scenario is that Wal-Mart would go to each and every farmer, rancher, and supplier of food and simply inform them that Wal-Mart would no longer buy from them if they sold to Wal-Mart's competitor. Then they'd go to farming equipment manufacturers and tell them not to sell to any farmer who would sell to a Wal-mart competitor. Then they'd go to the distributors. Then the marketing firms.
In short, Wal-Mart would have a complete vertical lock on the supply chain. No one could possibly hope to enter and compete at any point along that chain.
C'mon, this is Slashdot. Examples abound of abusive monopolies here. Incidentally, what I just described is exactly what Microsoft got in trouble for doing in the 90's, threatening potential distributors of competing software.
Look at the RIAA as another example; how many times have they gotten caught fixing prices now? Prior to the internet, how easy was it for any artist to reach millions of fans without going through the RIAA?
This particular case isn't likely, but take Adobe as an example.
Imagine for a moment that they used this logic with regards to Photoshop: Why develop a Mac version when the Windows version suffices for everyone? (Like I said, unlikely, given that most pro users of PS are Mac users, but just hypothetically).
Do you really expect that someone would then come along and make a native Mac equivalent? This isn't like a small shareware app that was created by a couple of developers; it's one of the more complex software packages out there. Any competitor would have to face the fact that they're targeting a 3% marketshare and the fact that Photoshop *is* an industry standard, which means most Mac users would grumble, but have to get the ported version of Photoshop anyway, further limiting the market potential for this competitor.
So given that, who'd develop it? I can't imagine any commercial vendors out there would do it; it's possible the open source community might get some version of the GIMP up to par but I don't think it can seriously compete yet, at least not on Windows (don't know about any Mac versions of GIMP).
Your logic might hold for small freeware/shareware type applications; but at the complexity and development costs of a software package grows, it would get less and less likely that any vendor would embark on the project.
Sure - some artists will value their independence - but how many, when a company dangles serious money and fame in front of them - will say "No thanks, I'll stick with a few bucks a month from You Tube?"
Because they can stand to make a lot more money sticking with MySpace and YouTube.
The RIAA takes the lion's share of the profits from any album; were an artist to maintain control of their own stuff, they could make more money even if they don't sell as much as they would have otherwise.
And who's to say they won't sell as much without the RIAA? The labels used to be the kingmakers; it's not unreasonable to think that MySpace will become the new kingmaker over the next couple of years.
1. What are the odds that the 40% of households that *don't* have internet access are likely to be buying any console at all? While I don't have any references to back this up, I'd be willing to bet that the segment of the market that plays games has a high crossover wth the segment of the market that doesn't just have internet, but broadband.
2. You're seriously underestimating the number of people (especially parents) for whom video game consoles are still "Nintendo's". Nintendo is still a lot more synonymous with gaming than "Playstation" will ever be.
3. In either case, you're overestimating the value of a brand; historically, it doesn't mean much from one generation to the next. If it did, we'd all still be playing Atari. Sega wrested control of the Video Game Market from Nintendo with the Genesis, and was king of the hill when it released the Saturn (which quickly crashed and burned). Nintendo's brand was unarguably huge when it released the N64, but that wasn't enough to save the system or stop another newcomer (Sony) from coming in and kicking ass. The once powerful Sega was forced out of the console business entirely, and Microsoft (which is arguably a *terrible* brand) managed to make a decent showing with the X-Box and is picking up steam with the 360. The moral of the story? Brands don't count for much from one generation to the next.
4. Back catalogs are a nice value-added feature, but people don't buy consoles so they can play old games, they buy them for the new ones. No one is going to buy a PS3 because they can play PS2 games on it (especially given that these people would logically already have a PS2 that plays those games just fine). Even in Nintendo's case where the back catalog carries a significant nostalgia factor, it's not going to sell the system in the absence of compelling new content.
5. Sony is duplicating a lot of the mistakes typical of failed systems (3DO, Jaguar, Saturn, N64, to name a few) that have come before; the high price point, the expensive, proprietary format, immature technologies, lots of negative buzz, and most importantly...
6. "It's the games, stupid." Sony is going to take big hits this round because they're loosing developers and exclusives left and right. It's the same thing killed Nintendo with the N64 generation (and arguably why the Sega Saturn failed as well); the system was unappealling to developers who flocked to the PS1, and the gamers followed. Currently, many of the exclusive franchises that drove the success of the first two playstations are either migrating to the XBox or otherwise going cross platform. The success or failure of the PS3 will ultimately depend on Sony's ability to keep developers on board. So far, they're not doing a good job of that, but I'll stop predicting doom and gloom for the PS3 should Sony manage to turn that around.
7. By that token, RE:the PSP vs. DS; the PSP has a total of 3 games that shipped a million units vs whereas the DS has 15, which I think it more indicative of the overall health of the systems than straight hardware units sold.
Heh. I was at my brother's friend house the other day, the two of them were playing a PS2. The mom yelled for them to "Stop playing Nintendo and get down here".
Nintendo is a lot more synonymous with gaming than "Playstation" will ever be.
If reports are true, Sony is actually loosing $200-300 bucks per console even at the $600 price point. Presumably, they think it's worth it to establish Blu-ray as the dominant format (I'm sure licensing fees would more than make up for it if they actually won the format war).
But what it means for gamers is that it'll be a long, long time coming before the PS3 sees any significant price drop. Sony's going to want to significantly reduce their loss on each system before they start passing on the savings from manufacturing efficiencies to consumers.
The DS did go head to head with the PSP, which was the first credible competitor in the handheld market for years. And I don't think the GBA has much to account for the DS's success; the DS doesn't carry the "Game Boy" brand and at the time of release, Nintendo was still actively supporting the GBA (presumably, so they could simply wipe their hands of the DS if it flopped).
There's a lot of parallels you can draw between the DS vs. PSP and the Wii vs. PS3.
The problem here is that copyright grants a monopoly, and copyright holders in this case abuse the monopoly just as you'd expect a monopolist to abuse it.
If I want a copy of Star Wars, I have to go to George Lucas for it. There's no competitor who's allowed to sell that product, that's what copyright grants. So there's absolutely no opportunity for the market to set the price for Star Wars, there's no chance for the market to decide how it wants to consume Star Wars. If an entrepreneur wants to fill the demand for an iPod formatted Star Wars, or a HD version, or an altered version in any way: George Lucas gets to sue him out of existence. If George Lucas decides that he wants to sell it for $1000, there's no opportunity for someone else to come undercut that price.
The RIAA and MPAA act exactly as you would expect monopolists to act. One would even think that the founding fathers realized this and that's why they granted it for a limited time only. Of course, that limited time has now been extended to over a century, which is another part of the problem. If the original 28 year term was still in tact, Star Wars would be public domain right now.
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Um, the iPod, the Zune, and every other media player out there already support non-DRMed formats. And non-DRMed media is the vast, vast majority of the media that gets played by them. Neither the iPod nor the Zune do anything to restrict your freedom.
Now, if you're stupid enough to actually purchase DRMed media - that's your own damn fault. But it has nothing to do with the devices that support playing that media.
Well said.
The other major purpose of this is for historical benefit. Imagine, for example, that we had Geotagging+Timestamping on all the photos taken in the last 30 years, and they were shared on something like Flickr. You could focus on a particular place and build a timeline of photos to see how it changes over the years. Given the ubiquity of camera phones, digital cameras, etc, we could have a complete photo-historical record of, well, almost everything.
Personally, I've gone through all my "good" photos recently (over 500 of em) and geotagged them by hand with Picasa and Google Earth (and now I'm in the middle of the laborious task of replacing them all on Flickr) for no other reason than I think it's neat - I like being able to display them out on a map to show people. I think it's a much more interesting way of visualizing them than the standard coffee table photo album.
That and I can't tell you how many times I've gone through my Grandparent's photo albums and the conversation went something like this:
"Wow, when was this taken?"
"Don't remember exactly. Sometime in the 60's."
"Where was this?"
"Arizona, I think. Or maybe it was when we went to California."
"Who is this?"
"Don't remember. Frank? Is that Frank? I think it's Frank."
So yeah, I think metadata is a good thing.
Because there's no guarentee Blu-Ray won't have gone the way of the laser disc in 7-10 years? I suppose it's not that critical (my Uncle has an extensive laser disc collection, still good as long as he has a functioning player) but personally, I'm hesitant to sink any money into media that I don't believe will have long term viability.
As for your comparison:
The Terminator (Blu-Ray, from your link): $28.99
The Terminator (DVD, on Amazon): $9.25
Almost exactly 3x the cost.
Underworld Evolution (Blu-Ray): $32.99
Underworld Evolution (Amazon): $14.99
Just over 2x the cost.
Here's the problem with this line of thinking; the market for the PS3 and the market for Blu-Ray movies barely have any crossover.
Someone is only going to be buying blu-ray discs if they're an early adopter who has the requisite HDTV set up properly to take advantage of them. Otherwise, there's simply no reason to buy a Blu-ray disc over a regular DVD, especially as blu-ray is currently around 2-3x the price of the same movie on DVD.
Most video game consoles however are still set up in kids rooms, bedrooms, and dormrooms - not environments where the HD content would make a lick of difference. Very few teenagers and fewer college kids have their consoles hooked up to HDTV's.
So my guess is that there will be people who buy the PS3 for games, and a (much smaller) market of semi-early adopters who pick it up as a cheap blu-ray player sometime next year when there's actually an available supply of the units in stores, but you won't find all that many people who are buying both.
I compare the feature to the previous generation, when there was much made of the fact that the XBox had networking capabilities, but it wasn't until the very tail end of the console's life cycle that anything at all was made of it. Broadband penetration simply wasn't there yet for the lion's share of the console's market. I think it's the same thing this round with High Def - it's at least another three or four years before high def trickles down to the point where the average gamer can take advantage of it.
Bingo. Just look at the history of the industry - there have been a few times when someone tried to introduce a console with bleeding edge technology at an inflation adjusted ~$600 price point (The Neo-Geo comes to mind). All have failed.
Sony seems to think that they're special and they'll succeed where no one else has because, well, they're Sony! And they're King of the video game industry! Which is a trap that both Sega and Nintendo found themselves caught in once upon a time.
Microsoft used to have a sensible attitude as that goes, seemingly accepting a base level of casual piracy of its software. Lately though they've been getting more and more draconian, first with their "activation" scheme and now with WGA. It seems they're now of the same mindset as the MPAA/RIAA... assume your customers are criminals unless the customer can prove otherwise.
To be completely fair, the impact of filesharing is still an X factor with regards to how it impacts sales of either CD's or Digital Music Stores. And even with the RIAA scare tactics, P2P sharing of unencumbered mp3's still dwarfs the whole digital music industry by leaps and bounds.
It's hard to say whether consumers are accepting or rejecting DRM because there's simply no way to isolate the variable. iTunes, CD's, and P2P networks all offer a different combination of price, quality, value, convenience, and DRM.
As to the impact DRM has, it would appear that Yahoo has done the market research and concluded that their DRM is hurting sales, based on some of their public statements in recent months, although their pressures are somewhat different from Apple's, not having the iPod. But even in Apple's case, the DRM does inhibit one of the critical things people want to do with their music, which is share it with friends. People have done that since the first cassette recorders came onto the market, and later with CD Burners (much to the RIAA's shagrin). Apple's DRM hinders that, even if it doesn't make it impossible, thus lowering the value of Apple's product in some consumers minds. People are also aware - even the average joe - that iTunes music only works on iTunes and the iPod. Consumers are generally wary of lock-in, at least when other options exist.
But that's not to say that other factors might not be hurting it more. It could simply be a case of "established" vs. "new", as you point out, or it could be "free" vs. "not free" as the RIAA likes to argue when it comes to filesharing. It could be that CD's offer better value because most people still have CD players in addition to iPods. It could be that iTunes requires a credit card, which is still a barrier for a lot of teenagers. It could be that the impetus to buy when you're using iTunes is different than when you're standing in a store. Or maybe, despite evidence to the contrary, people do generally prefer to buy albums over individual tracks, and an "album" in their mind is something that comes on a CD. Or, most likely, it's some combination of all the above.
As a side note, this breakdown is misleading. I'd wager, the vast, vast majority of iPods have no iTMS music on them at all. Those that do probably have much more than 20 tracks. Some consumers obviously like Apple's service over other ways to get their music. Other consumers, the vast majority of them, have nothing to do with it. Whether that's because of DRM or some other factor or combination of factors is something no one here has enough information to say definitively.
For me it depends on the track. I don't hear a difference on a typical rock track, but on classical music it's pretty obvious (to me at least) if it's anything less than lossless.
I see this and read two things from it:
1. Copyright law no longer reflects normal social behavior.
2. Copyright law no longer reflects the realities of modern technology.
There's two ways to read this: Either copyright law needs to be changed, or technology and behavior need to change.
As much as the RIAA et al wish to go with the second, ultimately it has to be the first.
My preferred solution? Legalize non-commercial file sharing. Make a strong distinction between commercial uses and non-commercial uses. The copyright holder looses his monopoly on distribution, but still retains the exclusive right to profit from the work. (A Creative Commons license, more or less).
I think that even in such an environment, there's still enough money to be made to provide incentive for corporate shitbags like the RIAA, and there are more than enough people willing to make creative works and give it away for free anyway to pick up the slack for any decline in industry.
That fixes everything without creating new regulatory bodies or censorship technologies or anything of the sort.
Del.icio.us handles this fairly well by simply adding a little "+" icon next to available subtags. No reason Gmail couldn't eventually add a similar functionality for visual navigation.
Personally, I hardly even use the labels though (coincidentally, for the same reason I really don't use del.icio.us all that much). It's easier to just search, especially since my labels are usually just keywords in the email anyway.
Why would the masses love having yet-another-device to plug into their TV sets (carrying a $200-300 price tag) whose only function is to play a proprietary movie format that's of lesser quality than the DVD's they get for the same price (and already have players for?)
And why the heck would Apple release something with a Tivo functionality? They want to sell you TV re-runs, not let you record them.
I see the masses continuing to buy DVD's for a long time coming, if these initial lame efforts at downloadable movies are any indication.
And when in history has DRM ever accomplished this end?
Protect the artist from what, exactly?
Alright, Napster is nothing I'd buy into myself, but I don't understand the antipathy that some people have for it.
It's no freaking different than XM radio except that you build your own playlists and decide what you want to listen to. It's not that much different from Netflix, either, except Netflix limits the amount you can rent at once. For some people, it's a model that fits them perfectly.
You subscribe, you get access to everything, you listen to what you want, when you want. If at some point you decide that the service is no longer worth your money, you stop subscribing, and you can no longer listen to what you want when you want. What's so wrong with that?
Um, the number 2 online music store on the net is eMusic, which:
1) Doesn't use DRM
2) Doesn't deal with the RIAA.
In right wing fantasy land, perhaps.
In the real world, what would happen in your scenario is that Wal-Mart would go to each and every farmer, rancher, and supplier of food and simply inform them that Wal-Mart would no longer buy from them if they sold to Wal-Mart's competitor. Then they'd go to farming equipment manufacturers and tell them not to sell to any farmer who would sell to a Wal-mart competitor. Then they'd go to the distributors. Then the marketing firms.
In short, Wal-Mart would have a complete vertical lock on the supply chain. No one could possibly hope to enter and compete at any point along that chain.
C'mon, this is Slashdot. Examples abound of abusive monopolies here. Incidentally, what I just described is exactly what Microsoft got in trouble for doing in the 90's, threatening potential distributors of competing software.
Look at the RIAA as another example; how many times have they gotten caught fixing prices now? Prior to the internet, how easy was it for any artist to reach millions of fans without going through the RIAA?
This particular case isn't likely, but take Adobe as an example.
Imagine for a moment that they used this logic with regards to Photoshop: Why develop a Mac version when the Windows version suffices for everyone? (Like I said, unlikely, given that most pro users of PS are Mac users, but just hypothetically).
Do you really expect that someone would then come along and make a native Mac equivalent? This isn't like a small shareware app that was created by a couple of developers; it's one of the more complex software packages out there. Any competitor would have to face the fact that they're targeting a 3% marketshare and the fact that Photoshop *is* an industry standard, which means most Mac users would grumble, but have to get the ported version of Photoshop anyway, further limiting the market potential for this competitor.
So given that, who'd develop it? I can't imagine any commercial vendors out there would do it; it's possible the open source community might get some version of the GIMP up to par but I don't think it can seriously compete yet, at least not on Windows (don't know about any Mac versions of GIMP).
Your logic might hold for small freeware/shareware type applications; but at the complexity and development costs of a software package grows, it would get less and less likely that any vendor would embark on the project.
Because they can stand to make a lot more money sticking with MySpace and YouTube.
The RIAA takes the lion's share of the profits from any album; were an artist to maintain control of their own stuff, they could make more money even if they don't sell as much as they would have otherwise.
And who's to say they won't sell as much without the RIAA? The labels used to be the kingmakers; it's not unreasonable to think that MySpace will become the new kingmaker over the next couple of years.
A few points:
1. What are the odds that the 40% of households that *don't* have internet access are likely to be buying any console at all? While I don't have any references to back this up, I'd be willing to bet that the segment of the market that plays games has a high crossover wth the segment of the market that doesn't just have internet, but broadband.
2. You're seriously underestimating the number of people (especially parents) for whom video game consoles are still "Nintendo's". Nintendo is still a lot more synonymous with gaming than "Playstation" will ever be.
3. In either case, you're overestimating the value of a brand; historically, it doesn't mean much from one generation to the next. If it did, we'd all still be playing Atari. Sega wrested control of the Video Game Market from Nintendo with the Genesis, and was king of the hill when it released the Saturn (which quickly crashed and burned). Nintendo's brand was unarguably huge when it released the N64, but that wasn't enough to save the system or stop another newcomer (Sony) from coming in and kicking ass. The once powerful Sega was forced out of the console business entirely, and Microsoft (which is arguably a *terrible* brand) managed to make a decent showing with the X-Box and is picking up steam with the 360. The moral of the story? Brands don't count for much from one generation to the next.
4. Back catalogs are a nice value-added feature, but people don't buy consoles so they can play old games, they buy them for the new ones. No one is going to buy a PS3 because they can play PS2 games on it (especially given that these people would logically already have a PS2 that plays those games just fine). Even in Nintendo's case where the back catalog carries a significant nostalgia factor, it's not going to sell the system in the absence of compelling new content.
5. Sony is duplicating a lot of the mistakes typical of failed systems (3DO, Jaguar, Saturn, N64, to name a few) that have come before; the high price point, the expensive, proprietary format, immature technologies, lots of negative buzz, and most importantly...
6. "It's the games, stupid." Sony is going to take big hits this round because they're loosing developers and exclusives left and right. It's the same thing killed Nintendo with the N64 generation (and arguably why the Sega Saturn failed as well); the system was unappealling to developers who flocked to the PS1, and the gamers followed. Currently, many of the exclusive franchises that drove the success of the first two playstations are either migrating to the XBox or otherwise going cross platform. The success or failure of the PS3 will ultimately depend on Sony's ability to keep developers on board. So far, they're not doing a good job of that, but I'll stop predicting doom and gloom for the PS3 should Sony manage to turn that around.
7. By that token, RE:the PSP vs. DS; the PSP has a total of 3 games that shipped a million units vs whereas the DS has 15, which I think it more indicative of the overall health of the systems than straight hardware units sold.
Heh. I was at my brother's friend house the other day, the two of them were playing a PS2. The mom yelled for them to "Stop playing Nintendo and get down here".
Nintendo is a lot more synonymous with gaming than "Playstation" will ever be.
If reports are true, Sony is actually loosing $200-300 bucks per console even at the $600 price point. Presumably, they think it's worth it to establish Blu-ray as the dominant format (I'm sure licensing fees would more than make up for it if they actually won the format war).
But what it means for gamers is that it'll be a long, long time coming before the PS3 sees any significant price drop. Sony's going to want to significantly reduce their loss on each system before they start passing on the savings from manufacturing efficiencies to consumers.
How much marketshare did Sega lose between the Genesis and Saturn? Hmm...
How about Nintendo, between the SNES and N64?
Did those 100 million PS2 owners run out and buy a PSP?
Maybe you can't necessarily count on your market one generation following you to the next.
The DS did go head to head with the PSP, which was the first credible competitor in the handheld market for years. And I don't think the GBA has much to account for the DS's success; the DS doesn't carry the "Game Boy" brand and at the time of release, Nintendo was still actively supporting the GBA (presumably, so they could simply wipe their hands of the DS if it flopped).
There's a lot of parallels you can draw between the DS vs. PSP and the Wii vs. PS3.
They're offering something that's less valuable than a DVD for the same price or more. Yeah, that'll go far.
The problem here is that copyright grants a monopoly, and copyright holders in this case abuse the monopoly just as you'd expect a monopolist to abuse it.
If I want a copy of Star Wars, I have to go to George Lucas for it. There's no competitor who's allowed to sell that product, that's what copyright grants. So there's absolutely no opportunity for the market to set the price for Star Wars, there's no chance for the market to decide how it wants to consume Star Wars. If an entrepreneur wants to fill the demand for an iPod formatted Star Wars, or a HD version, or an altered version in any way: George Lucas gets to sue him out of existence. If George Lucas decides that he wants to sell it for $1000, there's no opportunity for someone else to come undercut that price.
The RIAA and MPAA act exactly as you would expect monopolists to act. One would even think that the founding fathers realized this and that's why they granted it for a limited time only. Of course, that limited time has now been extended to over a century, which is another part of the problem. If the original 28 year term was still in tact, Star Wars would be public domain right now.