Is Sony killing itself?

scribe999

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I think the sports phrase "That's why they play the game" is appropriate here. We really can't tell exactly what will happen. A few educated guesses, however:

1) PS3 will be the hot item this holiday season, selling out because demand will outstrip supply due to the simulataneous worldwide launch.

2) Bundles are seriously going to be even more expensive than the 360 bundles a year ago. Sony has been mum on the actual cost of games themselves, and that's not a good sign. You can bet that the games themselves will at least match Xbox 360 titles at around $60...more likely being $70 since Blu-Ray discs are more pricey to manufacture.

3) Overall, the market for video games may slow down. Higher prices, greater choices and the weakening purchasing power of consumers in the U.S. market will lead to fewer retail sales going into next year until real wages can catch up or price drops become announced.

4) The PS2 will remain pretty popular since it is inexpensive and will have a number of choice titles still coming to the system even during PS3 launch. This could moderately cannibalize PS3 sales going into 2007, but the PS3 should remain hot well into the new year.

5) Nintendo will remain a comfortable, profitable 3rd place.

6) Europe will be the battleground Microsoft may have the best shot in competing with Sony as luxury electronics adoption is slower there than in the North American markets. Regardless of the heavy investment in wired and wireless technology throughout Europe, in a recent Businessweek article: "...only about 800,000 European households now receive HD programming, and only about 2 million homes own HD-ready TVs, compared with 11 million in Japan and 19 million in the U.S., according to German researcher GfK." Now, this may change this Christmas as a big marketing push in Europe has been leading up to a plethora of offerings in HD tech, but then that leads to a holiday conundrum for consumers. I don't think many Europeans (or many people for that matter) can purchase both a PS3 and an HD set.

What could all this mean for Sony? My expectation is that Sony will likely remain on top with a somewhat smaller market share as long as they remain patient. Things will be take longer for the PS3 to take off financially compared to PS2 with a number of third party developers themselves being careful fearing possible losses from a slower retail market. This would also mean that a 5 year console cycle is unlikely this time around as Sony is banking on future-proofing the PS3 to such an extent.
 

Darth_Jonas

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I was waiting for Scribe to weigh in on this one. I have to agree on some of the points. i do think Spuds is looking through the eyes of a diehard Sony fan. And even though I haven't had a good flavor for Sony in the last couple of years, I still cherish my PS games.

I think Sony has made the mistake some American auto makers made. They have come out with this "if we make it, they will buy it." attitude. They will make their blu-ray, charge exorbitant prices, and expect everyone to worship them. Some hardcore gamers will follow along like good sheep, but the casuals (who are the ones in question) won't mob the stores.

Sure there's a chance that everyone will whip out around $700 (after tax and game), but I think it's not a good a chance as Sony thinks. If it was going heads-up against the 360, then I would say "sure, they're going to do fine", but as was already pointed out, the Wii is on the scene. The big N has put together a system specifically designed for the casual and younger gamer markets. Couple that with the 360 being a comparable system as far as next-gen tech, AND the growing fan-base of xbl players. Now you've got a reason for Sony to be nervous.

Why would the casual gamer rush out and get one? What does the PS3 offer that that is so great that the casual gamer will have to have one? As someone who knows a coupla three things about marketing, they haven't done much in way of creating a frenzy. The casual gamer wants inexpensive and fun. Most don't have high def tv's, heck most hardcore gamers don't, so that isn't too great a seller. And who knows anything about their answer to xbl? they have to have an answer for that too.
 

scribe999

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Darth_Jonas said:
I was waiting for Scribe to weigh in on this one. I have to agree on some of the points. i do think Spuds is looking through the eyes of a diehard Sony fan. And even though I haven't had a good flavor for Sony in the last couple of years, I still cherish my PS games.

Heh...I actually weighed in on this in another thread under the Sony forum. It's definitely the "hot button" topic among gamers this summer.

Darth_Jonas said:
II think Sony has made the mistake some American auto makers made. They have come out with this "if we make it, they will buy it." attitude. They will make their blu-ray, charge exorbitant prices, and expect everyone to worship them. Some hardcore gamers will follow along like good sheep, but the casuals (who are the ones in question) won't mob the stores.

The analogy with luxury auto makers is fairly apt. What has the bigger market share after all: Humvee or the Honda Civic? The only difference is that car manufacturers make a profit on each unit sold whereas console makers require a wide installation base to make a profit on the software. This makes market share more critical to a company like Sony or Microsoft.

Also, really, really wanting a PS3 more than anything else in the world doesn't necessarily translate into actually being able to get one.
 

thunderking85

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I'll buy a PS3 when there is some kind of price drop. I have a 360, and plan on getting the nintendo Wii when it comes out. $600 system is not in my budget right now. It not that I don't want a PS3, but I don't want to hand out $600 and there might not even be enough systems to go around to everyone.
 

Taku

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I am largely of the view that the PS3 is rather expensive because of the Blu-Ray technology, not because Sony is getting "cocky". It's probably pretty expensive to produce. Who knows.

And I think Spud was making the allusion that $600 per month was low. Indeed if over here in NY you can find a one bedroom apartment for $1000 a month that's good pie. Yes pie.

I don't get why everyone seems to think Spud is some Sony fanboy. Just because he seems to be the only one who doesn't seem to think they are screwed on this forum doesn't mean he's a fanboy =\.

We do have to consider Blu-Ray will most likely roflstomp HD-DVD xp. At least IMO.
 

scribe999

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Taku said:
I am largely of the view that the PS3 is rather expensive because of the Blu-Ray technology, not because Sony is getting "cocky". It's probably pretty expensive to produce. Who knows.

And I think Spud was making the allusion that $600 per month was low. Indeed if over here in NY you can find a one bedroom apartment for $1000 a month that's good pie. Yes pie.

I don't get why everyone seems to think Spud is some Sony fanboy. Just because he seems to be the only one who doesn't seem to think they are screwed on this forum doesn't mean he's a fanboy =\.

We do have to consider Blu-Ray will most likely roflstomp HD-DVD xp. At least IMO.

Well, I think all big tech companies have to be a bit cocky, but in the case of Sony, the Blu-Ray technology is their own proprietary format. They, of course, already knew that it was going to be inordinately expensive, so it could still be argued that Sony was being a little arrogant. However, if arrogance can be backed up (see, Michael Jordan) then I guess it's just supreme self-confidence.

I also lived in Manhattan for five years, and a $1000 is cheap for an apartment in NYC. However, on average, middle-class salaries and wages in NY are higher (adjusted for standard of living) than in other parts of the country. A job that may pay $50K before taxes in NY might get you about $30K in, say, Indianapolis. In any case, it's all comparable...$600 for a young adult in NY who isn't something like a lawyer or an investment banker might be a bit high.

As for Spud...he's made it clear that he's not a Sony fanboy repeatedly. I think his opinions could be correct that Sony will succeed especially based on past success with the PS1 and PS2. I'm just not entirely sold that Blu-Ray will stomp all over HD-DVD just yet. One of the reasons why Blu-Ray DVDs are so expensive is because it is an entirely new format that requires complete factory refittings in order to manufacture. HD-DVDs can be produced from slightly modified DVD plants. The path of lowest cost is always tempting for third-party support...already there's a lot of grumbling within the video game and movie industry that the Sony strategy may not create the install base that they would like for maxing out their profit margins. Note some of Sony's other attempts at backing new media formats (Betamax, DAT, Mini-Discs and UMDs) failed to create a great deal of third-party zeal. With that kind of track record, you can't automatically hand the new crown of all media formats over to them.
 

ATomasino

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I for one have always liked PS over competitors but at the end of the day price is king IMHO. At the end of the day at the price point they are talking it will appeal to the upper echelon but the quantity of systems in homes is what drives the overall value of a system.

Despite this all, time will tell.
 

PrinceLUDA21

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Wow and yet again we have another Sony bashin topic or as Scribe has said it's a very hot topic. So i following everyone else of saying the same thing we have said since I have joined and E3 was about, we all have the same views and still have not changed our opinion on the subject.

Spud you hate Sony yet still you continue to defend them and stick up like Sony will be victor this console generation.

I'll state this becuse it's been on my ind lately I want a PS3. We all want one regarless of prince or Blu-Ray. We all know there will be gams on the PS3 that we can only get on the PS3. I will try to get one on launch because I will cry and bitch about how i'm not one of the lucky few. I will dish out the $800 or so ( i'll get 2 games and a ekr controller) just because if the convo came up I can gloat and say "Yea I have a Ps3 and it sit's there".

Sony has mad I big mistake in thinking that it wil out shadow the 360 or Wii. Blu-Ray is the only fire power the PS3 has over the others. Backwards games - 360 an Wii, Music on system - 360, High Def graphics - 360, Wireless everything - Wii & 360, So really what will be the diff. Other than games thats it. And again even their rice is not worth it sometimes.
 

Darth_Jonas

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Spuds is a closet Sony man.

I wonder why Sony tried this approach? With the PS2 vs. Xbox, it seemed like they had the less expensive, yet wider spread console. The psOne was similar. This time around they seem to be moving past where they stand with TV's. They usually aren't the most expensive, but are right there at the top. Now they're just the most expensive.
 

spudlyff8fan

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I'm not a closet Sony man. They stole my 2d fighting games. The PS2 was indeed my objective favorite console of that generation, with it's awesome games in every genre. Lately, though, I've been playing ALL Xbox and Xbox 360.
 

PrinceLUDA21

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I think it's because MS came out as the bigger system on the block we have more than you. And to everyones suprise MS becaem a threat to Sony's crown. The 360 just proves the theroy more. Give the consumer more and they will love you for it. Problem is Sony thinks that by giving more it's going to work. I say give more but not too much leave room to expand. The PS3 is packing too much into one thing and it's not about what the system can do or how much power it has.

I see this like the Handheld market.One of the reasons the Gameboy did so well is because it gave the consumer just enough to get buy. Everyone who tried to out do the gameboy and say well we have this and now you can do this. There good ideas but it’s just not what the consumer is looking for right now. You must leave room to add more. That’s what MS did with the Xbox. I’m sure they could have added tons of crap to the system but look at XBL it is small but growing. There is room for change and add-ons. Nintendo does this but has not been great at doing it. But with the Wii they have a chance to do great things. I wont knock Sony for the PS3 just kinda pissed that they are taking the Bigger is Better route.
 

Darth_Jonas

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Having seen plenty of tech geeks rush out and get the latest version of Blackberry-type gizmos, I've learned that it isn't always the best product that wins, but the most usable. Blackberry was/is king, but there were plenty that accessed secure sites better, ran smoother, connected cleaner, and were all-round better gadgets. One guy who invested in one of these alternate ones had to get a Blackberry too just because his work was using those instead.

Of course no one knows whether or not a product will be the one adopted by the mass market for 6, 12, or 18 months+, so we won't know whether the blu-ray abilities will mean anything more than a better game for a long time.
 

PrinceLUDA21

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spudlyff8fan said:
I'm not a closet Sony man. They stole my 2d fighting games. The PS2 was indeed my objective favorite console of that generation, with it's awesome games in every genre. Lately, though, I've been playing ALL Xbox and Xbox 360.

I think you are Spud. Denial is the first step or is it something else. Anyway just come out the closet Spud. We all know your trapped in there. It's okay just say this. " I Spud love Sony to death, I and a HARDCORE SONY FAN". It's not hard I'm a Nintendo Fanboy for life. But I have been playing my 360 a hella lot lately.