Soft PS3 sales spell trouble for EA, others

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http://www.joystiq.com/2007/01/25/soft-ps3-sales-spell-trouble-for-ea-others/
Soft PS3 sales spell trouble for EA, others
Posted Jan 25th 2007 2:35PM by Blake Snow
Filed under: Sony PlayStation 3, Business

Who's on the PS3 side, who? Lots. Historically speaking, brand PlayStation has had the best third-party support over any other platform. That's what happens when your first two consoles sell bajillions. A higher install base means more sales of games and a better chance for game developers to make money. So given such strong support for PlayStation systems in general, it's no surprise that EA and others were/are heavy backers of the PS3 from the start.

But according to Bank of America, soft PS3 sales not only spell trouble for Sony but for the many third-party publishers supporting the platform, namely EA. Based on recent channel checks at 50 stores, 78% had PS3s in stock. Hence, "disappointing PS3 hardware sales are an incremental negative for all the game publishers." So much, in fact, that 2007 publisher stocks could take a substantial dive this year as 21% of their total expected revenues were pinned on the PS3.

As you can imagine, continued blame for the low demand was placed on the PS3's price point and and "lack of compelling software titles." The take-away: unless PS3 demand increases in lieu of early mishaps, publishers could also be left in the cold. Maybe more than just gamers are rooting for early price cuts now. The pressure's on.
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It's so early in its life cycle but this doesn't sound good. Do you think a price drop will happen soon?
 
[quote name='jkam']It's so early in its life cycle but this doesn't sound good. Do you think a price drop will happen soon?[/quote]

I thought that Sony just came out and said that there would be no price drop at all, as everything in the PS3 was still too expensive. However that's prob just PR.

Personally I think the only way out of this is to drop Blu-Ray.
 
[quote name='sonderiaom']

Personally I think the only way out of this is to drop Blu-Ray.[/QUOTE]

Exactly. They should have made it an add on just like M$ did. But they built it to live or die by blu-ray. Right now, it's dying.
 
[quote name='sonderiaom']I thought that Sony just came out and said that there would be no price drop at all, as everything in the PS3 was still too expensive. However that's prob just PR.

Personally I think the only way out of this is to drop Blu-Ray.[/QUOTE]

An interesting idea, but they'd fracture their market: the non-Blu Ray enabled systems wouldn't play all of the games in development now. Not gonna happen. A price drop (no matter how hard it hits Sony in the wallet) is the most likely solution. They're already taking a massive loss, and getting Blu-Ray everywhere they possibly can is too important for them to dick around with. Drop it another $100 bucks, hope you break even by the end of the hardware cycle, and learn your lessons for the next gen.
 
Since when is bank of america into speculating on software/hardware cause and effect for Sony and 3rd party publishers? - and did they actually go and check that many stores so they could comment on the slow sales of the ps3?

Joystiq's crappy writing and "spin" on an old story are getting really annoying.
Why do people still read that site? It's mostly rumors and rewriting other sites' exclusives anyway.
 
Was just about the post this. The worst part of it is that this is YET another group thats done an indy study and shown PS3 demmand is low. This makes like 5 iv seen now. I almost feel bad for the developers because Sony will not cut blue ray out of the system, and Sony will not drop price for atleast a year...and more likly it will be atleast 2 years.

However....then I remember it was the developers who stupidly choose to make their games cost so much that they HAVE to sell a million copies just to turn a profit. And it was the developers who choose to put these pricey blockbuster titles on the most expensive system.

So, eh....fuck em.
 
Sony can either cut Blu-Ray or bite a few hundred dollars (more) for each console sold. The price is too high and it has to come down fast. The only alternative at this point is that the PS3 is DOA, cause it's turning out to be a disaster.
 
Hey guys, every car lot I went to today had at least 5 cars sitting there!!! There's no demand for cars at all, and you can't find a bicycle anywhere in town!

CARS ARE TOO EXPENSIVE AND NO ONE WANT'S ONE!!!! Cars are so totally going to fail.
 
EA supports every gaming platform, so I don't know that soft PS3 sales would hurt them particulary harder than anyone else. Although since they are the biggest 3rd party I guess dollars wise they probably will take the biggest hit, just as a ratio thing. Hell, they were actually developing a couple games for the freaking Gizmondo.

I'd say it's a bigger problem for Konami, since they are putting their sure-fire blockbuster (MGS4) on the PS3 exclusively. Unless they change that decision, of course.
 
Nasum, the "cars" argument, though inventive, is truely flawed. Cars are a mature item. PS2s's sell, yet you can get them everywhere. But, new electronics shouldn't be on the shelf, if for no other reason than image.

I'll be shocked if this truely hurts anyone. Let's be honest, I bet you most people in the industry still believe the PS3 will be at the top at the end. Sony is taking the hit now with Blue Ray. You won't get a price drop, because gamers won't buy it, people wanting Blue Ray will buy it. So, your taking a huge loss and you won't make it up in the games.

Overall, I think too much is being made of this. PS3 will be a slow seller, but I think it'll sell. I think it'll be another year or so before even rumors of anything drastic happen. Honestly, Blue Ray is here to stay. I hate the idea, I think it's a mistake (especially if the Japanese become willing to buy Xbox 360's), but we're going to get to see this experiment happen live over the next couple of years.

Wubb: I think you hit the nail on the head about Konami. They would have too much at stake in Sony's game here, so I think you can pretty much sense that MGS4 will make it's way, in some form, to the 360. Heck, VF5 already going, I'm sure there is room for it. I can't see Sony having any 3rd party exclusives right now, it just doesn't make any sense, unless Sony is paying a hefty price for the rights.
 
intentionally flawed to show the chicken little extremety of the claims of the downfall of sony and the PS3. Sure, the launch and following lull of software has been a disaster but if you think a checkbook like Sony's is all of a sudden in question you're out of your mind. You being no one in particular here.

Jollydwarf - where's the love? I never tread on your inane BS so feel free to not do it to me either.
 
[quote name='nasum']intentionally flawed to show the chicken little extremety of the claims of the downfall of sony and the PS3. Sure, the launch and following lull of software has been a disaster but if you think a checkbook like Sony's is all of a sudden in question you're out of your mind. You being no one in particular here.

Jollydwarf - where's the love? I never tread on your inane BS so feel free to not do it to me either.[/QUOTE]

Few people, and those are idiots, are calling for the downfall of the PS3 or Sony. But you cant argue that there is a HUGE suppy demmand problem...and not in a good way like Nintendo has. A new system should be sold out for the first few months, especially if that system has small numbers like Sony has. However the PS3 is not only not selling out, but its stock is actually backing up. We are not just seeing a PS3 or two at stores, we are seeing stores with stacks of them.

Like it or not Sony has a huge problem, and this isnt one that their checkbook can just instantly fix.
 
Let's look at this logically. One of the reasons for soft hardware sales is lack of compelling software. So EA and whoever else is in trouble have who to blame for their poor fortunes, exactly?
 
Speaking of checkbook:

[quote name='"April 06"']Sony Corp. has taken out an 80 billion Yen (545 million Euro) three-year floating-rate bank loan - marking the first time the company has borrowed funds in ten years.[/quote]
 
[quote name='botticus']Let's look at this logically. One of the reasons for soft hardware sales is lack of compelling software. So EA and whoever else is in trouble have who to blame for their poor fortunes, exactly?[/QUOTE]

I can see where you can think that, but I disagree. The Wii hasnt had great software support, infact at launch Sonys average score was higher then Nintendo's, yet the Wii has constantly sold out. The PS2 also didnt have the most amazing line up yet was sold out.
 
How would they even cut Blu-Ray now. The games are developed specifically on Blu-Ray discs. Yes I know that they can create games on DVD but wouldn't developers need new PS3 Kits? This would take so much time and its way too late for Sony to pull something like this. They are in dying need of a decent price drop and good line up of games or they will suffer even more.
 
[quote name='wubb']EA supports every gaming platform, so I don't know that soft PS3 sales would hurt them particulary harder than anyone else. Although since they are the biggest 3rd party I guess dollars wise they probably will take the biggest hit, just as a ratio thing. Hell, they were actually developing a couple games for the freaking Gizmondo.

I'd say it's a bigger problem for Konami, since they are putting their sure-fire blockbuster (MGS4) on the PS3 exclusively. Unless they change that decision, of course.[/quote]

The problem with EA is they forecasted 21% of their revenue for PS3 sales - this was probably based on strong system sales. The company won't fold, but it will affect their stock price if their PS3 sales fall short. The market is just too finicky to forgive a siginificant revenue shortfall.

All Sony needs is that one exclusive title and a lot of people will forget about the price tag.
 
Jollydwarf - where's the love? I never tread on your inane BS so feel free to not do it to me either.

If I'm full of it, please feel free to call me out on it. If you're tired of my wordiness or perceived pomposity, well, join the club. Just because many others have an attitude of permissiveness about flawed logic* doesn't mean I am obligated to. If anything, it makes me feel even more compelled to not look the other way.

*--So as "to so not be an uptight prick, brah"...that seems to be the psychology behind it all over the Internet.
 
[quote name='kell']The problem with EA is they forecasted 21% of their revenue for PS3 sales - this was probably based on strong system sales. The company won't fold, but it will affect their stock price if their PS3 sales fall short. The market is just too finicky to forgive a siginificant revenue shortfall.

All Sony needs is that one exclusive title and a lot of people will forget about the price tag.[/quote]

Resistance: Fall of Man is a high quality, exclusive title yet it ain't exactly selling systems (or copies, for that matter - last time I heard it only sold a little above 60,000 or so).
 
My opinion is that Sony really wants to win the HD disc format war and decided to use the PS3 to help achieve that goal. If they succeed there they probably don't care if the PS3 doesn't dominate in the same way the PS1 and PS2 did their gens, but of course they'd still like to maintain the 1000 lb gorilla status if they can.

I hold no allusions that this is a particularly inciteful conclusion.
 
[quote name='wubb']My opinion is that Sony really wants to win the HD disc format war and decided to use the PS3 to help achieve that goal. If they succeed there they probably don't care if the PS3 doesn't dominate in the same way the PS1 and PS2 did their gens, but of course they'd still like to maintain the 1000 lb gorilla status if they can.

I hold no allusions that this is a particularly inciteful conclusion.[/QUOTE]

I think that was Sonys intial intent. However now with that new player out that plays both Blue Ray and HD DVDs, as well as the fact tht half the studious have sided with HD DVD....I think Sony needs to start worrying about the Playstation brand and not pushing a format that is fighting a pointless war.
 
[quote name='Rozz']Resistance: Fall of Man is a high quality, exclusive title yet it ain't exactly selling systems (or copies, for that matter - last time I heard it only sold a little above 60,000 or so).[/quote]

1 game that isnt from a dynastic series (i.e. GTA, Halo or Final Fantasy) Will not sell 600 dollar systems.
 
[quote name='MSI Magus'] as well as the fact tht half the studious have sided with HD DVD....[/quote]

When did this happen?
 
[quote name='MSI Magus']I think that was Sonys intial intent. However now with that new player out that plays both Blue Ray and HD DVDs, as well as the fact tht half the studious have sided with HD DVD....I think Sony needs to start worrying about the Playstation brand and not pushing a format that is fighting a pointless war.[/QUOTE]

Half the studios have not sided with HD-DVD. Only one studio has fully sided with them, while other support HD-DVD and blu ray. The hybrid player has also been delayed because of LG's shitty HD-DVD portion.
 
imo a price drop isn't happening any time soon and didn't third party developers have bad 4th quarters last year. The problem for ea is the lack of installed base on both the wii and ps3. Yes the wii was very tough to come by since in launch up untill the end of the 4th quarter, but that doesn't mean there is a decent base of customers to sell to. 3rd party support for the ps3 may drop as according to namco, they needed to sell 600k units to break even on ridge racer.
 
[quote name='help1']1 game that isnt from a dynastic series (i.e. GTA, Halo or Final Fantasy) Will not sell 600 dollar systems.[/quote]

well halo 1 helped sell the original xbox...but then again it wasn't a $600 system :roll: :roll:
 
[quote name='ryanbph']well halo 1 helped sell the original xbox...but then again it wasn't a $600 system :roll: :roll:[/quote]

Thats why I snuck that 600 dollars portion in there. Oh wow!
 
The high price of the PS3 makes it a product that is almost exclusively for adults. While some parents will buy their kid a $600 video game system, most will not. This makes it hard to move units, particularly when there are two cheaper viable options on the market (360 and Wii). I don't know what the marketing studies say, but I have to believe that video game industry is still somewhat dependent on kids buying the stuff.

Sony's ridiculous entry price point will be their downfall. If blu-ray is still that expensive to produce, they should have waited (or as someone else suggested, made it as an add-on). What they're doing now seems poorly conceived. This and the whole battery-exploding recall thing from a couple months ago has me wondering about the decision making over there.
 
Sony needs to do something, hell if for no other reason than to counter the negative perception of their system being overpriced and unwanted. The fact of the matter is that the climate for them has changed, they may not view Nintendo as direct competition, but they better view Microsoft as a competitor or they could be in trouble. It seems well within in Microsoft's grasp to capitolize on Sony's current dilemma. If handled properly Microsoft could easily propel themselves over Sony, in America at least. This could already be happening with all the talk and speculation of PS3 exclusives being released later on the 360. If MS could land MGS4 and FFXIII it would be a decimating blow to Sony.

All I know is that apparently the magic maximum selling point for a console seems to settle around $400 if history is to be believed, and it seems to be true in the present.
 
[quote name='rodeojones903']Half the studios have not sided with HD-DVD. Only one studio has fully sided with them, while other support HD-DVD and blu ray. The hybrid player has also been delayed because of LG's shitty HD-DVD portion.[/QUOTE]

Yeah last I heard Blu Ray had many more studios than HD-DVD. But I don't really follow that closely as I don't care too much which side wins. Hell I don't even have a need for a HD player now anyway. (No HD TV.)
 
well hasn't msft done that so far..they have a decent lead already, and there is no way in hell that sony will more then double there sales in the first 6 months. (in order for sony to catch up by next january they will need to at least double the sale of the 360.) When msft launches halo 3, I hope for sonys sake they have some big news to counter, as I would imagine halo 3 will move a ton of systems espically if msft drops the price on there system.
 
[quote name='ryanbph']well hasn't msft done that so far..they have a decent lead already, and there is no way in hell that sony will more then double there sales in the first 6 months. (in order for sony to catch up by next january they will need to at least double the sale of the 360.) When msft launches halo 3, I hope for sonys sake they have some big news to counter, as I would imagine halo 3 will move a ton of systems espically if msft drops the price on there system.[/QUOTE]

Ya most of Sonys big guns are being delayed into next year or also hitting the 360 now. I cant imagine what its going to be like when Halo 3 hits or Nintendos big guns like Mario and SSB start dropping.
 
[quote name='ryanbph']well hasn't msft done that so far..they have a decent lead already, and there is no way in hell that sony will more then double there sales in the first 6 months. (in order for sony to catch up by next january they will need to at least double the sale of the 360.) When msft launches halo 3, I hope for sonys sake they have some big news to counter, as I would imagine halo 3 will move a ton of systems espically if msft drops the price on there system.[/QUOTE]

That's what I'm saying. MS is a huge company and they make video games. Sony has never really had to contend with a company like that in the past (at least in the video game business), and now given their precarious and unenviable position they need to do something quick if they don't want to falter too badly, or perhaps even fail miserably. Their on top, and everyone loves seeing a giant fall.
 
[quote name='help1']1 game that isnt from a dynastic series (i.e. GTA, Halo or Final Fantasy) Will not sell 600 dollar systems.[/quote]

GTA3 was not a big series and it helped sell PS2s and Halo 1 was not part of any type of series.
 
[quote name='Blitz']Exactly. They should have made it an add on just like M$ did. But they built it to live or die by blu-ray. Right now, it's dying.[/quote]No, dropping blu-ray would have been a retarded move. Kojima needs the space for his game, FFXIII is looking to use more space than a DVD9 can hold, and even Resistance uses around 13-14GB. Blu-ray is a must for a next generation console, due to extra disc space. That's why Sony included it in the first place.

I'm not taking jkam seriously since he likes to spread FUD about Sony all because he chose 360. He just won't admit PS3 is better than his PoS Wii.
[quote name='Rozz']Resistance: Fall of Man is a high quality, exclusive title yet it ain't exactly selling systems (or copies, for that matter - last time I heard it only sold a little above 60,000 or so).[/quote] Wrong, the game already sold 100k in Japan alone right now. That 60,000 was how many sold at launch. Resistance is now up to around 400k. The European launch should help it. Eventually, the game will be at 1 million.
[quote name='botticus']Let's look at this logically. One of the reasons for soft hardware sales is lack of compelling software. So EA and whoever else is in trouble have who to blame for their poor fortunes, exactly?[/quote]EA has ONLY brought Madden and Fight Night to PS3. That isn't exactly much right now, which have been out for a while on other consoles.
 
[quote name='ryanbph']imo a price drop isn't happening any time soon and didn't third party developers have bad 4th quarters last year. The problem for ea is the lack of installed base on both the wii and ps3. Yes the wii was very tough to come by since in launch up untill the end of the 4th quarter, but that doesn't mean there is a decent base of customers to sell to. 3rd party support for the ps3 may drop as according to namco, they needed to sell 600k units to break even on ridge racer.[/QUOTE]

Your logic is fine, but the facts are a little off; Ubisoft, for example, had a better than expected quarter, because of Vegas and Double Agent on the 360 and Red Steel and Raving Rabbids on the Wii (which were the second and third best selling games on the system). In fact, the Wii games were something like 21% of the added profit in that quarter, and the 360 games 28%, which isn't a massive difference considering the size of the installed bases. Point is: the installed base for the Wii is just fine right now.
 
[quote name='The Mana Knight']No you retard, dropping blu-ray would have been a retarded move. Kojima needs the space for his game, FFXIII is looking to use more space than a DVD9 can hold, and even Resistance uses around 13-14GB. Blu-ray is a must for a next generation console, due to extra disc space. That's why Sony included it in the first place.[/QUOTE]

Sure.
 
[quote name='The Mana Knight']No you retard, dropping blu-ray would have been a retarded move. Kojima needs the space for his game, FFXIII is looking to use more space than a DVD9 can hold, and even Resistance uses around 13-14GB. Blu-ray is a must for a next generation console, due to extra disc space. That's why Sony included it in the first place.

I'm not taking jkam seriously since he likes to spread FUD about Sony all because he chose 360.

Wrong, the game already sold 100k in Japan alone right now. That 60,000 was how many sold at launch. Resistance is now up to around 400k. The European launch should help it. Eventually, the game will be at 1 million.
EA has ONLY brought Madden and Fight Night to PS3. That isn't exactly much right now, which have been out for a while on other consoles.[/QUOTE]

Then maybe they should either
1. Not make the game so big.
2. Learn to conserve space
3. make it across multiple disks as we hve seen developers do many times.

Honestly, these developers bitch and whine about rising prices of game cost and yet keep making stupid descions to inflate it more.
 
[quote name='trq']Sure.[/QUOTE]Need me to bring up the article about Kojima wanting a dual-layered blu-ray disc to be ready for MGS4?

Also, look at Blue Dragon on 360, taking up three DVD9s. Enchanted Arms was suppose to have some high quality, HD CG cutscenes, but they had to be removed due to the limitations of the DVD9. Even Team Ninja wanted to include a HD intro for DoA4, but could not due to DVD9 not having enough space. The only reason MS made HD-DVD an add-on was because it wasn't out when Xbox 360 was out. If HD-DVD could have come out a year earlier, I guarantee the 360 would have been using it as a disc format.

I don't care about HD-DVD because blu-ray is the superior format in every way.
 
[quote name='MSI Magus']Then maybe they should either
1. Not make the game so big.
2. Learn to conserve space
3. make it across multiple disks as we hve seen developers do many times.

Honestly, these developers bitch and whine about rising prices of game cost and yet keep making stupid descions to inflate it more.[/QUOTE]Would you want to switch disc in a game with a very large environment, just to move on? I don't think so.
 
[quote name='The Mana Knight']EA has ONLY brought Madden and Fight Night to PS3. That isn't exactly much right now, which have been out for a while on other consoles.[/QUOTE]

Wait, do people not realize that Tiger Woods 2007 and Need For Speed Carbon are out as well? Is that why they aren't selling as well as EA had hoped? Quick EA, get the word out!
 
As with big RPGs, you know thats not how it works. The vast share of the total accessible environment is on each disc. What differs then is the smaller content depending on where you are in the game.

You pick a convenient turning point in the story to change discs. Its not like you come to a loading screen on the overworld map which prompts you for a different disc.

It is sometimes convenient for a developer to throw more space at a problem, rather than do anything such as coding efficiently.
 
[quote name='shipwreck']Wait, do people not realize that Tiger Woods 2007 and Need For Speed Carbon are out as well? Is that why they aren't selling as well as EA had hoped? Quick EA, get the word out![/QUOTE]Oops, I forgot about them. I actually plan to get NFS Carbon, for PS3.
 
[quote name='The Mana Knight']Oops, I forgot about them. I actually plan to get NFS Carbon, for PS3.[/QUOTE]

Exactly, so stop blaming other people for not liking your system of choice and get out there and support that bitch!
 
[quote name='The Mana Knight']Would you want to switch disc in a game with a very large environment, just to move on? I don't think so.[/QUOTE]

1. Id have no problem switching disks. I did it on half the RPGs I played on the PSX.
2. Developers have stated that they feel certain companies are just sloppy at compressing data, it means that people are probally just slopping data on right now because of the amssive size of these disks and because they are new tech versus properly compressing.
3. Again you ignore the argument that this is only an issue for companies pushing huge blockbuster epics which push tech to its max. This isnt a problem for the 100s of other smart developers.
4. Blue Ray isnt superior in every way. Its price is a HUGE downside, one that only PS3 and tech fanboys are ignoring.
 
[quote name='Dr Mario Kart']As with big RPGs, you know thats not how it works. The vast share of the total accessible environment is on each disc. What differs then is the smaller content depending on where you are in the game.

You pick a convenient turning point in the story to change discs. Its not like you come to a loading screen on the overworld map which prompts you for a different disc.

It is sometimes convenient for a developer to throw more space at a problem, rather than do anything such as coding efficiently.[/QUOTE]It becomes annoying when you start up an RPG, and it tells you "Please insert disc 2". Along with that, it becomes more painful for developers because they have to find ways to divide content (you just cannot divide a disc in half), because you have to make sure you can access what you want, on each disc. There were many PS2 RPGs that used two disc. I guarantee they'll need more space than that with HD cutscenes, when many get sequels on PS3.
 
[quote name='The Mana Knight']Would you want to switch disc in a game with a very large environment, just to move on? I don't think so.[/QUOTE]

So, you're saying you hated switching disks in FF7? Xenogears? Did it ruin your gaming experience? May be from the past, but as long as you don't have to keep switching back and fourth, I don't see it as a problem.
 
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