Re: OT: Sony first party exclusives flopped
- From: Doug Jacobs <djacobs@xxxxxxxxx>
- Date: Tue, 30 Jun 2009 16:30:54 -0500
The alMIGHTY N <natlee75@xxxxxxxxx> wrote:
If by "OK" you mean "not dead but a shell of its former self," then I
agree with you. Retail sales are *way* *way* *way* down - nowhere near
what they used to be - and sales on Steam and similar services don't
make up for that.
It's doing OK in that it hasn't died off completely and has found some
stabilization with things like Steam or other digital distribution systems.
If anything, it's gone back to the state it was in back in the late 80s
when downloadable demos were becoming all the rage with companies like
Apogee, and Epic. Small indie workshops pumping out shareware. It wasn't
until iD released Doom (as a shareware title) that things started to
Die hard PC gamers who claim that the PC market is strong or who go so
far as to claim that the PC market is *stronger* than the video game
console market can only point to games like World of Warcraft and
Bejeweled to substantiate their claims.
I agree. It's definitely not like the early and mid-90s when the usenet
boards were clogged with posts about the latest (retail) game, and your
choices were broader than just casual titles, WoW, or Crysis... Granted
things aren't THAT bad now, but the PC market has definitely lost a lot of
its biggest genres and the major releases are down to a just a handful per
year - as opposed to maybe 3 or 4 a month at its peak.
Video game consoles are a much more attractive gaming option for
consumers these days. Plenty of people flocked from high-end PC gaming
to console gaming this generation as it became clear that consoles
were "good enough" but few people who have been video game console
players their whole lives look at the Xbox 360 and PlayStation 3 and
say, "I need even better graphics and want to spend hundreds of
dollars for that."
No arguments here. I find it funny that so many industry experts
poo-poo'd the "Good enough" concept in computing and electronics. Yeah,
you COULD spend thousands of dollars on a big fancy system...or spend a
the same amount of money that your video card cost, and get a gaming
system that can handle HD. The gap between gaming PCs and consoles has
never been closer. Even the game libraries are becoming more and more
similar, with more games releasing on PC and console simultaneously.
My friend made his PC his primary gaming platform. I chose the consoles.
For the most part, either choice will play most of the same games.
The problem I see is that this would be a large gamble. So they drop the
PS3 by $100. That would, once again make the low-end PS3 a viable
competitor for a dedicated blu-ray player...at least until Christmas / Jan
2010 when sub-$300 players become the norm. However, people buying a PS3
as a blu-ray player aren't the type of customers Sony needs. Sony needs
folks to buy games more than they need folks to buy blu-rays.
You ignore the fact that such a price drop would also make the low-end
PlayStation 3 a viable competitor in the video game market as well.
While I don't think there are tons of people still left who are going
to buy a console just because it's made by one manufacturer or
another, there will still be people who do follow that "logical"
upgrade path. Further, there are some people who simply prefer the
PlayStation 3's exclusives. You can't count any of these people out.
Yeah, I forgot that point.
However, dropping the price $100, would mean that new PS3 buyers would
have to buy a minimum of 7 or 8 PS3 titles to cover the loss just from
buying the PS3. The PS3's attach rate just isn't that high. Even if it
did increase with the introduction of a cheaper PS3, and the long-overdue
introduction of the PS3's Greatest Hits budget releases, I don't think the
attach rate would improve that much.
I don't doubt that a $300 PS3 would cause an increase in sales of hardware
and software, I just doubt that the increase would counteract the larger
amount of debt that Sony would be looking at.
Beyond that, and as you just pointed out, a $300 PlayStation 3 is not
only a viable game console but also a viable Blu-ray player. At the
$300 and $400 price points, you're not only paying $100 more for a
PlayStation 3, you're paying $400 for a console. That's a lot of money
any way you slice it. However, at the $250 and $300 price points, you
not only halve the price disadvantage but also have an option to get
both a video game console and a Blu-ray player for just a total of
A $300 PS3 would basically reset the playing field to 2007 when the PS3
and 360 were priced closer in price. But the argument of the PS3 as a
blu-ray player wouldn't hold as much power this time as blu-ray players
have caught up with the PS3 and will most likely be cheaper than it by the
time the PS3 price drop occurs.
I agree Sony has really reached a do-or-die point here, but at the same
time they may just decide to let the PS3...die, rather than risk going
even further into debt.
Sony hasn't reached the point where this is their situation. They have
been very vocal about keeping the PlayStation 3 around for 10 years
regardless of the introduction of a new console. If Sony instituted a
$100 price drop this year, they would still have 7 years of more price
drops and higher adoption. They won't see anywhere near the success of
the PlayStation 2 or even approach the success of the Xbox 360 or the
Wii, but it's not black and white where you can either enjoy
tremendous success or be a miserable failure.
Yeah, I know Sony has said that, but whether or not they can realistically
pull that off remains to be seen.
Right now, based on what we've seen for the PS3 so far, do you think the
PS3 has any chance of lasting more than maybe a year or 2 after the launch
of the PS4? Especially if the PS4 is BC with PS3 games? At that point,
why would you buy a PS3 when for a $100-200 more, you could buy a PS4,
play your PS3 games and still be ready for the PS4's library.
In any case, such an assumption makes no sense whatsoever. It's simple
logic that if Sony cuts the price of the PS3 by $100, there will be a
significant increase in console purchases. This increase in console
purchases will result in an increase in software purchases. How many
games do you think it takes for Sony to make back the *loss* on each
If Sony makes ~$20 per game sold (someone mentioned that was what Sony
makes from licensing fees and whatnot...), drops the PS3 by $100 meaning
their loss is now around $145/console, that would put it at about 7 or 8
games - at a minimum - to erase the debt from just one console.
Let's say you're right that Sony loses $150 per console. They earn a
profit of about $7 per game sold. Sony would therefore need a
particular console owner to purchase 22 games during the lifetime of
the console in order to *just* make a tiny sliver of profit. A gamer
will likely have a console for a good 5 years or so, maybe more now
what with everyone talking about how manufacturers shouldn't put out a
new generation until 8+ years after launch.
Problem is, Sony isn't even seeing 4-5 games per console.
And remember, there's still the debts from the earlier PS3s when people
were definitely buying a PS3 as just a blu-ray machine. Even those people
aren't ncessarily buying movies, however. They're probably getting
titles from Netflix, which doesn't make Sony any money beyond the sale of
the copy to Netflix.
Conservatively, then, a console owner would only need to purchase or
receive 5 games per year for Sony to not lose money on that console
sale. That's not unreasonable. That's also assuming that said console
owner will never buy or rent any Blu-ray movies or download any
content from PSN for the entire lifespan of the console.
Actually, 5 games a year is still quite a lot of cash. Most PS3 games are
still $60. The exclusives from the PS3's launch library...are still $60!
Yes, cross platform titles are more reasonable. Orange Box is $20 on the
360, and it's $20 on the PS3 as well. But then there's also the deal with
people buying more and more games used, which again means no money goes to
the console maker. I know for myself, I've only bought 2 or 3 titles
new. Everything else has been bought used. Well, I've bought a handful
of games and add-ons from XBLA and PSN, so they get some money from
It's not broken. It's...advanced.
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