PS3 Bad for Gaming Industry

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It's been over a week since Sony revealed that the PlayStation 3 would launch in November at two price points--$499 for a stripped-down 20GB model and $599 for the tricked-out 60GB model. However, the news is still reverberating through the industry, with more and more analysts weighing in on the matter in the form of notes to investors.
The latest firm to join the fray is DFC intelligence, which predicts the PS3's steep sticker price could cost it--and the game industry--dearly. "The higher priced the hardware, the lower overall industry growth will be," read a report the company issued this week. "The video game business model has been to build an installed base of tens of millions of users in a very short time frame. A key factor in this model is relatively low cost hardware... Unfortunately, there is a sinking feeling that things may have spun out of control for Sony and thus price cuts will be slow in coming."
Indeed, DFC says that the PS3's high price will make--or has already made--many consumers side with a next-gen rival. "With a $200 price difference now announced, consumers that were sitting on the fence can feel free to go buy an Xbox 360," read the report.
Along with the price, DFC reasons that the 360's stout software lineup will be another factor possibly causing consumers to shy away from the PS3. "In terms of game software it currently looks like the Xbox 360 will be able to match the PS3 punch-for-punch in the important genres like shooting, RPGs, racing, sports, Grand Theft Auto IV and others," asserts DFC. "Will Sony's brand name alone explain a $200 price difference to the gaming audience?"
While a shrinking Sony market share will be music to Microsoft and Nintendo's ears, DFC worries it might have have long-term negative impact on third-party publishers and developers. "Hardcore video junkies may go for the PS3's Blu-ray capabilities, as $600 is cheap for a new high-end technology like Blu-ray," said the report. "But if those guys are not buying game software, that does not do game publishers any good."

http://www.gamespot.com/news/6151425.html

Damn you Sony! Damn you!!!! :D
 
[quote name='gokou36']Ya, lets believe everything an analysts say.[/quote]

You're right, let's disregard their foolishness. Their business expertise is nothing compared to your own personal feelings.
 
[quote name='Plinko']You're right, let's disregard their foolishness. Their business expertise is nothing compared to your own personal feelings.[/QUOTE]

you do realize that these so called analysts are wrong about half the time, right?! business expertise?! yea, right...............

here are two random examples of incorrect prediction

merrill lynch of japan predicted that the PS3 will launch at $399.99
http://arstechnica.com/journals/thumbs.ars/2005/6/30/605

analyst predicts that the ps3 won't launch until 2007
http://www.engadget.com/2005/08/04/analyst-calls-out-sony-on-2007-ps3-launch/
 
Do you guys realize what the word "prediction" means? Unless I missed something and these analysts described their thoughts as "guaranteed correct fortelling of the future." And who would have thought that a prediction of price or launch date made a year in advance based off of the limited data at that time would turn out to be off by $100 or a few months?

You know, when meteorologists predict the weather, they aren't always right and aren't always wrong. They just make an educated guess based on all of the data that they have collected.
 
[quote name='Giygas']Do you guys realize what the word "prediction" means? Unless I missed something and these analysts described their thoughts as "guaranteed correct fortelling of the future." And who would have thought that a prediction of price or launch date made a year in advance based off of the limited data at that time would turn out to be off by $100 or a few months?

You know, when meteorologists predict the weather, they aren't always right and aren't always wrong. They just make an educated guess based on all of the data that they have collected.[/QUOTE]

yep, but it seems that a lot of people used these predictions as facts.
 
[quote name='wbc1228']you do realize that these so called analysts are wrong about half the time, right?! business expertise?! yea, right...............

here are two random examples of incorrect prediction

merrill lynch of japan predicted that the PS3 will launch at $399.99
http://arstechnica.com/journals/thumbs.ars/2005/6/30/605

analyst predicts that the ps3 won't launch until 2007
http://www.engadget.com/2005/08/04/analyst-calls-out-sony-on-2007-ps3-launch/[/quote]

Its not 2007 yet...;)

On another note, they did predict it would not be relased Spring '06.
 
The PS3 can't hurt the industry. It can, and will hurt sony, however. There are other machines for consumers and developers to flock to. I'd like to see sony succeed, but I just can't believe people will line up to pay $600 for a PS3. It just reeks of american gluttony.

There looks like there's some good games for it, and it'll be fun, that price point just is disgusting.
 
[quote name='Giygas']Do you guys realize what the word "prediction" means? Unless I missed something and these analysts described their thoughts as "guaranteed correct fortelling of the future." And who would have thought that a prediction of price or launch date made a year in advance based off of the limited data at that time would turn out to be off by $100 or a few months?

You know, when meteorologists predict the weather, they aren't always right and aren't always wrong. They just make an educated guess based on all of the data that they have collected.[/QUOTE]

But disregarding the many misses in order to emphasize the few hits is complete nonsense.
 
[quote name='the3rdkey']Regardless of what any fanboys or analyst say or predict I still am getting a PS3 and Wii to sit next to my 360.[/QUOTE]


That's not really the point. As a hardcore gamer, you may be getting one but most casual gamers can find something better to spend $600 on.

One of the major reasons that the Saturn and 3DO were not commercially successful was because of the high launch price tag. Anyone remember the PSX?

Personally, I was hoping that Sony would drop the Blu Ray for this generation in order to cut costs. Everyone points to the DVD in the PS2 as a major selling point however, DVDs were well on their way to being a successful media well before the PS2 even came out. Hopefully the technology will drop in price quickly or this could be a rough generation for Sony.
 
[quote name='niceguyshawne']That's not really the point. As a hardcore gamer, you may be getting one but most casual gamers can find something better to spend $600 on.

One of the major reasons that the Saturn and 3DO were not commercially successful was because of the high launch price tag. Anyone remember the PSX?

Personally, I was hoping that Sony would drop the Blu Ray for this generation in order to cut costs. Everyone points to the DVD in the PS2 as a major selling point however, DVDs were well on their way to being a successful media well before the PS2 even came out. Hopefully the technology will drop in price quickly or this could be a rough generation for Sony.[/QUOTE]

Yeah, but tell anyone who owned a Saturn those $400 weren't worth it....

I remember being so excited about Saturn, I remember seeing the first pics of the console in late 93/early 94 and hearing rumors fly around of the cartridge slot being able to play genesis games with an adapter..

I remember watching videos of Panzer Dragoon..

Playing Virtua Fighter for the first time at an import game store..

Sitting at a Daytona USA machine and thinking I'd have it at home soon..
 
Too bad the Virtua Fighter and Daytona for Saturn were awful looking ports that barely resembled their arcade originals.

Okay wll Daytona played really well and I spent hours with it cause its one of my favorite arcade games ever, despite it's saturn ugliness, but VF was a big failure for saturn.
 
[quote name='jer7583']Too bad the Virtua Fighter and Daytona for Saturn were awful looking ports that barely resembled their arcade originals.

Okay wll Daytona played really well and I spent hours with it cause its one of my favorite arcade games ever, despite it's saturn ugliness, but VF was a big failure for saturn.[/QUOTE]

And Virtua Fighter Remix looked better than the original Virtua Fighter arcade, and Daytona CCE looked better than the original Daytona.

Saturn wasn't ugly at all, I've always thought the PSX's textures were better but the Saturn looked a lot more 3d..a lot more real..than PSX.
 
[quote name='sarausagi']Yeah, but tell anyone who owned a Saturn those $400 weren't worth it....

I remember being so excited about Saturn, I remember seeing the first pics of the console in late 93/early 94 and hearing rumors fly around of the cartridge slot being able to play genesis games with an adapter..

I remember watching videos of Panzer Dragoon..

Playing Virtua Fighter for the first time at an import game store..

Sitting at a Daytona USA machine and thinking I'd have it at home soon..[/QUOTE]


I remember those days well and yes, the $400 was worth it to me too.
 
[quote name='gokou36']Ya, lets believe everything an analysts say.[/QUOTE]

We should believe everything that you say instead.
 
Whether or not the PS3 was going to be $600, the gaming industry would be shrinking in this time period. Generation shifts always mean consolidation and smaller profit maragins for a period. A $600 price point for the industry leader probably exacerbates things though, even if it only effects Sony.
 
[quote name='evanft']But disregarding the many misses in order to emphasize the few hits is complete nonsense.[/quote]
As I was saying, a prediction is hardly ever 100% right. Are you disregarding any value that comes out of industry speculations just because they never hit the nail perfectly on the head?
 
[quote name='Plinko']You're right, let's disregard their foolishness. Their business expertise is nothing compared to your own personal feelings.[/QUOTE]

If they have any business expertise at all, they'd be running industry movers and shakers instead of 'analyzing' them. These are the same people that have been predicting industry crash year after year...
 
[quote name='LinkinPrime']Its not 2007 yet...;)

On another note, they did predict it would not be relased Spring '06.[/QUOTE]


So did I. I also predicted it would ship standard w/ a hdd and that it would launch for about $499 (which is partially true, since the $499 model will suite most people just fine since most ppl can't use the hdmi port).

So since my guesses are about as accurate as these "experts", you guys might be interested to hear that I'm predicting the PS3 will be sold out until at least March or so of next year, and that by the end of holiday 2007 season its sales will have overtaken those of the 360.
 
There is a bit of jealously involved though, when people get paid to predict things, and these people dont actually...well...know anything.

I think individuals here, or maybe collectively all of us, know the game industry much better than these analysts.
 
[quote name='Dr Mario Kart']There is a bit of jealously involved though, when people get paid to predict things, and these people dont actually...well...know anything.

I think individuals here, or maybe collectively all of us, know the game industry much better than these analysts.[/QUOTE]

I think it would be more fair to say that they're approaching things from a different angle than gamers like us. They might not be gamers and may not have a strong engineering background, but does that make them completely unqualified to comment on the game industry? I wonder why a clown like Yamauchi was leading Nintendo for so many years then!

Besides, it doesn't look like the article is saying anything different than what a good part of gaming fandom has been clamoring about ever since E3.
 
While a major disaster is unlikely a slower than intended rate of adoption for the PS3 could cost the overall value of the industry for a while. OTOH, Microsoft and Nintendo could gain if large numbers of people who had been reserving judgement on the PS3 until they could try it for themselves decide it just isn't worth it until the price is substantially lower.

There is a point to the hypothetical wherein HDTv enthusiasts with little gaming interests go for the Blu-ray aspect of the PS3 while buying few or no games. But this would have to be a large percentage of buyers during a period when the machine is in short supply. So long as they buy a lot of movies it keep Sony's cashflow in good shape while their game library imporoves and more gamers have access to a PS3 purchase. The hit on the game industry would be in single digits and short lived.

After all, a certain number of people in Japan bought the PS2 purely as a low priced DVD player, yet there were no reports of severely disappointing software sales in the Ps2's launch period. Some really disappointing software but that is another issue.
 
Hahaha, analysts and thinktanks are today's snake-oil salesmen. They make 10 times more money than I by bullshitting their way through the day.
 
[quote name='epobirs']While a major disaster is unlikely a slower than intended rate of adoption for the PS3 could cost the overall value of the industry for a while. OTOH, Microsoft and Nintendo could gain if large numbers of people who had been reserving judgement on the PS3 until they could try it for themselves decide it just isn't worth it until the price is substantially lower.

There is a point to the hypothetical wherein HDTv enthusiasts with little gaming interests go for the Blu-ray aspect of the PS3 while buying few or no games. But this would have to be a large percentage of buyers during a period when the machine is in short supply. So long as they buy a lot of movies it keep Sony's cashflow in good shape while their game library imporoves and more gamers have access to a PS3 purchase. The hit on the game industry would be in single digits and short lived.

After all, a certain number of people in Japan bought the PS2 purely as a low priced DVD player, yet there were no reports of severely disappointing software sales in the Ps2's launch period. Some really disappointing software but that is another issue.[/QUOTE]
The high cost of producing the PS3 means that price drops will likely be few and far between if Sony wants to be able to make money on the hardware eventually. Non-gamers buying PS3s will affect 3rd party developers much more than Sony itself. Having a large installed base means nothing to a developer if its games won't sell proportionally. If 3rd party games don't sell well on the platform, they will move on to other, more profitable platforms where their titles will sell (see also: Gamecube).

Having the PS3 priced well below any other announced Blu Ray players will give it an advantage in the HD movie market, whereas having it priced well above any other announced game console will give it a disadvantage in that market.
 
I think there are issues here with analysts. Analysts could care less if there is a great game on the system or something, only if it will sell to the masses.

Come on, if there are people on Video Game message boards claiming they are waiting for price drops on the system, don't you think casual gamers (the ones that only play Madden on their system) aren't going to double-take at the price?

I don't think anyone is predicting PS3 won't sell out of the gate, it will. But, I think they bring up an interesting point, who's paying the $600 for it? Is it gamers or is it people who want a Blue-Ray? Because, if your buying it mainly for the Blue-Ray technology, how many games are you going to buy? Not many.

Now, will this hurt the industry long term, I doubt it. Maybe for a year or so, but not for much longer. I think as the Xbox 360 gets big game after game that gamers want to play, people won't be waiting for the PS3, they'll just spend their money there. Also, don't underestimate what Nintendo could do if the Wii is advertised correctly (and, I think it will).

Remember, it was one mistake that cost Nintendo it's dominance (going cartridge instead of CD on N64, which lost it the Final Fantasy series). This mistake could easily cost Sony its dominance.
 
[quote name='epobirs']There is a point to the hypothetical wherein HDTv enthusiasts with little gaming interests go for the Blu-ray aspect of the PS3 while buying few or no games. But this would have to be a large percentage of buyers during a period when the machine is in short supply. So long as they buy a lot of movies it keep Sony's cashflow in good shape while their game library imporoves and more gamers have access to a PS3 purchase. The hit on the game industry would be in single digits and short lived.[/QUOTE]

I just don't see Sony having the supply problems with the PS3 that Microsoft had with the 360. They clearly learned how to launch a system with the staggered release of the PSP. There were *initial* shortages with the system, but within 2-3 weeks, the console was easy to find. Perhaps at the time of the system's release it seemed like a tragic misstep, but relative to the 360 release, it's nothing.

At any rate, I firmly believe that, barring a major manufacturing problem, they will have ample time to provide all the systems they need for launch. On top of that, the hypothetical you present above is immensely unlikely to happen (though I don't think you're arguing anything about its likelihood). What's more, eBay profiteers are, perhaps, far less likely to drop $600 for a quick turnaround of big money. The reason isn't the cost of the system (since it happened in massive proportions with the 360), but rather the availability of the system. If it's readily available in a steady supply (which, given the pricepoint, really diminishes the number of willing early adopters and thus reduces demand), it just won't move.

I don't think the PS3 is bad for the gaming industry - anyone who predicts a market *shrinking* is foolish (at this point). This isn't Hollywood, where people are downloading movies, buying DVDs, and watching them on surround-sound systems and HDTV screens that replicate the theater in your home - the movie market didn't shrink, it shifted over to home theater. I'd say the same thing with games; people won't *abandon* gaming, but rather shift to another console. They only monetary dropoff will be as a result of those sad bastards (myself) who typically buy every console, but won't this generation. I imagine that we obsessive-compulsives are but a small fraction of the market. Y'know, like people who don't buy "Madden."
 
[quote name='mykevermin']
This isn't Hollywood, where people are downloading movies, buying DVDs, and watching them on surround-sound systems and HDTV screens that replicate the theater in your home - the movie market didn't shrink, it shifted over to home theater. [/quote]
PS3 is not Hollywood, indeed: Hollywood is run by elitist liberals. And as my man mykevermin had pointed out, the increased piracy that is visible in and around Hollywood area doesn't make the market shrink: it makes the market appeal to home audiences. What he is saying, is that piracy facilitates family values. You know that is not true in a flip-flopping place like Hollywood, where people download movies as well as buy DVDs. That's just stupid.

Consider this: some people claim that CDs are generally overpriced, and do not meet quality standards that they ought to. So, those people begin to pirate things. Don't be confused: piracy does not facilitate family values like mykevermin said: it destroys families! All this nonsense about "customer choice" is ruining our capitalism, facilitating more immigrant workers than ever before.

Now, I suppose these people are hoping that if they do not BUY something, then the companies will review their pricing strategy and change it accordingly... The answer is "no." Just like Mykevermin said, the only thing that unreasonably high prices will facilitate is the emergence of home theater market that will be even more overpriced than the not-home theater! In other words, this is the new tagline for not just American, but WORLD market: "When your Intellectual Property is not worth paying for, they will always need some hardware..." I applaud Sony on their additions to such deep seated conservative mentality (which is hard to find in the business world these days) with the release of their PSP, and soon to be released PlayStation 3.

[quote name='mykevermin']I'd say the same thing with games;[/quote]
The next step for PS3: We're going to make video games a Home Experience. Revolution begins: Novemeber 2006.
 
[quote name='mykevermin']I just don't see Sony having the supply problems with the PS3 that Microsoft had with the 360. They clearly learned how to launch a system with the staggered release of the PSP. There were *initial* shortages with the system, but within 2-3 weeks, the console was easy to find. Perhaps at the time of the system's release it seemed like a tragic misstep, but relative to the 360 release, it's nothing.

At any rate, I firmly believe that, barring a major manufacturing problem, they will have ample time to provide all the systems they need for launch. On top of that, the hypothetical you present above is immensely unlikely to happen (though I don't think you're arguing anything about its likelihood). What's more, eBay profiteers are, perhaps, far less likely to drop $600 for a quick turnaround of big money. The reason isn't the cost of the system (since it happened in massive proportions with the 360), but rather the availability of the system. If it's readily available in a steady supply (which, given the pricepoint, really diminishes the number of willing early adopters and thus reduces demand), it just won't move.

I don't think the PS3 is bad for the gaming industry - anyone who predicts a market *shrinking* is foolish (at this point). This isn't Hollywood, where people are downloading movies, buying DVDs, and watching them on surround-sound systems and HDTV screens that replicate the theater in your home - the movie market didn't shrink, it shifted over to home theater. I'd say the same thing with games; people won't *abandon* gaming, but rather shift to another console. They only monetary dropoff will be as a result of those sad bastards (myself) who typically buy every console, but won't this generation. I imagine that we obsessive-compulsives are but a small fraction of the market. Y'know, like people who don't buy "Madden."[/QUOTE]

All of the word I get from guys whose lives revolve around semiconductor issues is still that yields on the Cell are lousy. It might not hit its price and volume targets until a 65 nm version is in full production, which won't happen until long after the launch period.

Don't count out the eBay profiteers. Anybody with a decent credit rating can manage to secure as many PS3 as are offered and flip them before his next credit card bill comes due. A good transfer offer to another card can add a month before the bill must be met.

Back when Best Buy was blowing out all of their Saturn games for $9.50 and under I went on a major buying spree because I knew where I could turn over my inventory for a serious profit quickly. I put about $2700 on a Discover Card in two days covering every Best Buy then existing in Southern California. The Discover folks became worried and called me at home to verify this was genuine activity on my part. I also found out that the maximum number of items the then Best Buy point of sales system would allow on a single invoice was fifty.

I was a lot more willing to spend a day driving several hundred miles for such a quest back then and there was a lot less competition organized by sites like this. After my expenses and the games I kept for my own Saturn library, I cleared around $2,000 in profit. I could easily have used far more credit if the opportunity was there to exploit. If I was inclined to put PS3s on eBay I could easily manage up to $45K in immediate debt for the brief time it would take to unload them if by some miracle I could somehow buy so many machines.

I'm not nor have ever been wealthy. I've never had over $50K reportable income in any year of my adult life. But a good credit rating makes many things possible.
 
How many consoles is Sony saying for worldwide release anyway? 2 Million? I say 1.5 if they are lucky, probably less.
 
There is no way there won't be a launch shortage. It wouldn't make sense for them to not have a launch shortage. It's launching at christmas, worldwide!

They're doing a worldwide launch as the #1 seller two generations running. The thing could be priced at $1500 (which I won't be surprised to see on ebay by day two or three of release) and it'd have shortages. Besides, shortages are good for any launching system. It looks good in press releases, it makes people want it more, and it lets the producer of hardware more accurately gauge hardware demand.

It's a real sad thing, but it's true. No matter what, the ps3 will be sold out on day one. and month one. Probabaly longer than 360s were sold out for.

I just can't wait to see the failure rates on the PS3, what with all the complicated crap they're throwing in there. If they couldn't do a CD/DVD drive well, I have NO hopes for them pulling off a CD/DVD/Blu-Ray/PS1/PS2 drive. (yes I know PS1 and PS2 games are DVD/CD, but I've known of PS2's that read music CDs, but not PS1 games, and DVD games, but not movies)

A lot of people are going to be pissed when their shiny new cribs machine gets the DRE in 6 months.
 
[quote name='jer7583']Besides, shortages are good for any launching system. It looks good in press releases, it makes people want it more, and it lets the producer of hardware more accurately gauge hardware demand.
[/quote]

That may be so, but it's only good for the company, not the customer. They should be MORE concerned with serving the customer.
 
[quote name='Vegan']That may be so, but it's only good for the company, not the customer. They should be MORE concerned with serving the customer.[/QUOTE]
I don't really think it's good for a company either. I might be wrong here, but it seems to me if Microsoft had had all the units they have right now available on launch day, they'd be sold out. Instead, once people saw that their lives hadn't ended after not getting a $400 console on day 1, they decided they can wait, and consoles actually sit on shelves.

I'm not sure how big of an impact that might have, but the hype of your product being sold out can only last so long before people give up waiting.
 
True that it's a fine line, but I won't argue against the fact that shortages can generate appeal. You're right, it doesn't last forever.

I think the best scenario is one in which there is no shortage at all. That's from the point of view of a customer, though.

A shortage CAN be good for a company, but we should come before the company, and that makes company loyalty which can prove to be more valuable in the long-term; more companies need to realize that.
 
[quote name='Vegan']That may be so, but it's only good for the company, not the customer. They should be MORE concerned with serving the customer.[/QUOTE]

LOL.. we're talking about sony here.. when have they been concerned with serving anyone but themselves..
 
I don't see how it could be bad for the gaming industry... I think that's just a bold stretch.

Bad for the health? Yeah. Bad for the wallet? Ch'yeah.

Competition is never bad. If it weren't for Sony, Nintendo may have never took the path they're currently taking...

I'm not going to buy Sony, this generation, (made that mistake last generation)... I don't want Sony to go away simply because competition pushes innovation, standards and whatnot. ... that's not to say I want them to hurt a little, though. ;)
 
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