Wired Article - Sony Stumbles

http://www.wired.com/news/technology/0,70867-0.html?tw=rss.index


LOS ANGELES -- Sony, Microsoft and Nintendo put their cards on the table here this week in the high-stakes contest for control of the next-generation video-game console market. And, while all bets are still off, the challengers' hands look stronger than ever.

Much of the momentum comes courtesy of Sony, the current market leader, which suddenly seemed more vulnerable following a pricing bombshell of $600 for a fully functional version of its still-pending PlayStation 3 console.

"I think that (Microsoft) have their heads on straight....They've made a much truer gaming system than Sony has. They're not trying to define the next generation of media content. That's Sony's aim -- again," said Jerry Holkins of the gaming website Penny Arcade. "I think it's a very different person who is going to spend five or six hundred dollars on a console right now."

For Sony, which unveiled the full release details of its PlayStation 3 hardware Monday, the future is Blu-ray, the high-definition DVD format that promises vastly more storage for games (25 GB versus the 9 GB on an Xbox 360 disc) as well as true HD movie playback at resolutions up to 1080p.

Sony has stuck to its guns with Blu-ray even though the expensive new technology has jacked up the PS3's price. Two configurations of the console will launch in the United States on Nov. 17, and to get the full experience, players will have to pony up $600. That's for a PS3 with a 60-GB hard drive and all the trimmings.

A $500 package will also be available, but in addition to a smaller 20-GB hard drive, the cheaper unit won't support 802.11 wireless communication, Memory Stick media or HDMI output -- meaning that Blu-ray movies won't play in the much-vaunted 1080p high definition, but will instead be forced to run at a lower resolution.

Still, the pull of PlayStation-exclusive franchises like Final Fantasy and Gran Turismo, next-gen versions of which were shown at the Monday conference, mean that a critical mass of players is bound to buy the PS3 at any price.

There's no denying, however, that the announcement makes the similarly equipped $400 Xbox 360 package, which launched in the United States last November, look like a steal. And while Sony showed many PS3 game demos that were in an obviously early state, Microsoft's press conference highlighted plenty of second-generation Xbox 360 games, like the third-person shooter Gears of War, that were polished and looked close to done.

And Microsoft, too, is aware of the high-def movie revolution, although it has thrown its hat in with the competing format. On Tuesday, the company unveiled an external add-on drive that would let the 360 play movies in the competing HD-DVD format. Though it stopped short of revealing a price point for the unit, it called the device a "bargain."



Nintendo announced well over a year ago that its new console, Wii, would not support HD video in any form. The company instead set to work making a small, quiet, unobtrusive console with a unique controller, which senses motion, position and location. Although Nintendo shied away from announcing a price for Wii, most in the industry expect the console to retail for between $150 and $200.

Nintendo's media briefing was entirely focused on games. Pie charts and sales graphs were in short supply, as on-stage demonstrators whipped the Wii controller around in dramatic motions, slicing a samurai sword or firing a bow and arrow, all with realistic gestures.

Nintendo continues its relentless pursuit of casual players, non-gamers and former gamers with simple titles like Wii Sports, which combines tennis, baseball and golf, all featuring gestural control that mimics the real-life games. But the majority of games on show were directed at longtime gamers.

The Wii controller makes games like Super Mario Galaxy a lot of fun. You use the standard joystick to make Mario run and jump across a universe of tiny planets, but you can use the motion-sensing right-hand part of the controller to directly target onscreen objects and pick them up. You can jump on evil mushrooms, as always, but it's much more fun to wave the Wii controller around wildly, causing him to spin like a tornado and bash into them.

Sony's inclusion of motion-sensing functionality in the PlayStation 3 controller had some in the industry wondering why the biggest name in the business was playing follow-the-leader with Nintendo.

"Sony is really good at pretending to be innovative by taking things that other companies have done," said Jeff Kalles of Seattle-based mobile games developer Mobliss.

Indeed, the Sony controller doesn't even have all the functionality of the Wii remote: It can't sense the position of the controller relative to the television set, which is required if the player wants to pinpoint a certain onscreen location. This limits the functionality that the Sony controller can offer.

And only one PS3 demo on the E3 show floor, a futuristic aerial shootout called Warhawk, will use the motion-sensing function. Across the hall, however, all 27 of the Wii titles on display in Nintendo's booth will feature gestural control.

Gamers crave the high-definition glitz promised by Sony and Microsoft, but Nintendo is hoping they'll pick up the considerably less graphically impressive Wii just because of the unique gameplay.

"If it's $150 or less, it's an impulse buy," said Kalles. "But it wouldn't be my primary gaming system."
 
Sony's inclusion of motion-sensing functionality in the PlayStation 3 controller had some in the industry wondering why the biggest name in the business was playing follow-the-leader with Nintendo.

"Sony is really good at pretending to be innovative by taking things that other companies have done," said Jeff Kalles of Seattle-based mobile games developer Mobliss.


Seems fitting:


http://www.grapheine.com/bombaytv/play_uk.php?id=1176798


:lol
 
Yamaha98 said:
Somehow I think they may be a 'price adjustment' prior to US launch.

Why? Sony knows they will sell out even at $600. If every company made rash business decisions based on E3 reactions the gaming industry would be entirely different.
 
Stupid ass reporting. Obviously more games will use the motion sensing feature in the controller. Damn Incog just got the damn controller a week ago.
 
Yamaha98 said:
Somehow I think they may be a 'price adjustment' prior to US launch.

They'll bleed the early adopters. Look at the 360 on ebay last holiday season. Sony knows they can get the money... Especially with only 4 million systems (supposedly) by the end of the year. Perhaps they'll announce a price drop at the next E3 once they rape the first wave... plus manufacturing costs should come down a little...

I'll kindly pass for now. I'll wait a couple years. Wait for the price drops, some greatest hits games, and then maybe I'll grab one....
I'm curious to see how often these things are going to break. Brand new tech, plus Sony's history of broken consoles... it's going to be fun to watch.
 
Ninja Scooter said:
Why? Sony knows they will sell out even at $600. If every company made rash business decisions based on E3 reactions the gaming industry would be entirely different.


Pretty sure X360 would have sold out last holiday at $600 too (people paying $1000+ on ebay), but can anyone agrue that it would have been a good long strategy? Early adopters will buy anything at almost any price. To win the war, you need casual owners. $600 outside range for these people.


And, for people saying price early price drop, it's going to piss off a lot of people, especially HC early adopters. And, that's not to stop Microsoft from dropping prices too. The difference in console prices will be around for years.
 
No price adjustment. They might soften the 'normal' adjustments that are made for overseas markets.
It will still sell out, but I think the public's imagination maybe really taken up by the Wii.
 
knitoe said:
Pretty sure X360 would have sold out last holiday at $600 too (people paying $1000+ on ebay), but can anyone agrue that it would have been a good long strategy? Early adopters will buy anything at almost any price. To win the war, you need casual owners. $600 outside range for these people.

sony guy #1: "OH HEY LOOK THERE ARE 100,000 UNITS ON STORE SHELVES"
sony guy #2: "HEY THAT MGS4 COMES OUT IN A MONTH"
together: "PRICE DROP GET"
 
So what are they going to do? Sell it at $600 for 3 months and slash it to $500? They end up looking like assholes.
 
I dont understand, everyone comes up with something different and leaves the competition to catch up and do one better which is what the DS3 has done by offering motion with the standard layout. Everyone has been innovating as well as building on other's ideas. Its called progress. How is it that some people can act as if this mode of opperation is new to the industry. Its been going on since day one.
 
Cooter said:
So what are they going to do? Sell it at $600 for 3 months and slash it to $500? They end up looking like assholes.

Drop the price to $500 after 1 year.
 
The mainstream press is liking this take on things, to kick you when you're down, especially when you've been leader for a decade, just heard a similar report from the BBC.
 
Drop the price to $500 after 1 year.

That sounds more reasonable. I think this price issue is serious trouble for Sony. You have got to figure there will be a good 2 years before this thing even see's the $300's.

Meantime, the userbase won't be there and third parties will jump ship. Everythings about profit.
 
Cooter said:
So what are they going to do? Sell it at $600 for 3 months and slash it to $500? They end up looking like assholes.

XBox dropped 100 dollars after being out 6 months. Hopefully Sony does the same thing and has a PS3 pricedrop late spring. Sony isn't stupid (I THINK. Maybe they are as they are selling a 500 and 600 dollar system!) so they know they need to get the PS3 down to 299 or 399 as soon as possible. I also don't think 600 dollars will fly after christmas rush is over.
 
Mrbob said:
XBox dropped 100 dollars after being out 6 months. Hopefully Sony does the same thing and has a PS3 pricedrop late spring. Sony isn't stupid (I THINK. Maybe they are as they are selling a 500 and 600 dollar system!) so they know they need to get the PS3 down to 299 or 399 as soon as possible. I also don't think 600 dollars will fly after christmas rush is over.


Totally different scenerio. Xbox drops because PS2 dropped prices. Microsoft want same price point. For it to be same, X360 and PS3 both started at $399, Microsoft drop to $299 before E3 2007, and PS3 follow. Definitely, not the case here. Bad example.
 
This has nothing to do with the press jumping on. The thing is $600. Most people don't have that kind of money to spend on playing a game. It is a game, remember? Games are for everyone but the PS3 doesn't seem to be. I bought my NES with piggy bank money. No really, I did. The average child is going to have to save 3 years allowance just to afford the system let alone a game.

Unless the price changes I don't think there is anything Sony can do. They dug thier own grave.
 
mckmas8808 said:
Drop the price to $500 after 1 year.

I can't afford that. None of the gamers I know can afford that and even if they could, for the same money they could get a Wii or a 360 and a stack of games. Take the Wii for example, let's say it costs $200. For $500, that means I could get a Wii and at the very least six games. Super Smash Bros. Brawl, Final Fantasy: Crystal Chronicles, Super Mario Galaxy, Twilight Princess, Metroid Prime 3 and Resident Evil all sound pretty good to me. Similar deal for the 360, the 360 will be $299 by the time the PS3 is $500.

Sony have dropped the ball. I own a PS2 and really enjoy it. But it will be a long time before I'll be able to say the same about a PS3.
 
Cooter said:
This has nothing to do with the press jumping on. The thing is $600. Most people don't have that kind of money to spend on playing a game. It is a game, remember? Games are for everyone but the PS3 doesn't seem to be. I bought my NES with piggy bank money. No really, I did. The average child is going to have to save 3 years allowance just to afford the system let alone a game.

Unless the price changes I don't think there is anything Sony can do. They dug thier own grave.

How much was the NES? I remember mowing lawns to earn $200 for the SNES.
 
knitoe said:
Totally different scenerio. Xbox drops because PS2 dropped prices. Microsoft want same price point. For it to be same, X360 and PS3 both started at $399, Microsoft drop to $299 before E3 2007, and PS3 follow. Definitely, not the case here. Bad example.

Well I'm just saying it could happen by looking at the past.

Also, I'm not so sure there will be a X360 pricedrop this xmas anymore. Not with the PS3 at 500 dollars for the base model and limited availablity. MS will probably hold off until spring 2007 to drop the price now. If they drop the 360 premium to 299 in spring 2007, it would force sony to react and drop the price of the ps3 by 100 bucks. This is my hope at least. ;)
 
Cooter said:
This has nothing to do with the press jumping on. The thing is $600. Most people don't have that kind of money to spend on playing a game. It is a game, remember? Games are for everyone but the PS3 doesn't seem to be. I bought my NES with piggy bank money. No really, I did. The average child is going to have to save 3 years allowance just to afford the system let alone a game.

Unless the price changes I don't think there is anything Sony can do. They dug thier own grave.

yeah. I think Sony forgets that it's a game console, all that convergence stuff have gone to their head. PS3 is the result of an engineer-led project that lost touch with what's it actually for.
 
Timbuktu said:
The mainstream press is liking this take on things, to kick you when you're down, especially when you've been leader for a decade, just heard a similar report from the BBC.

They're not kicking them when they're down, they're reporting on the fact that they are down. No-one in their right mind thinks pricing a console at $600 is a smart move.
 
Cooter said:
This has nothing to do with the press jumping on. The thing is $600. Most people don't have that kind of money to spend on playing a game. It is a game, remember? Games are for everyone but the PS3 doesn't seem to be. I bought my NES with piggy bank money. No really, I did. The average child is going to have to save 3 years allowance just to afford the system let alone a game.

Unless the price changes I don't think there is anything Sony can do. They dug thier own grave.

you are comparing the market now to 1985? You think the average child pulled $400 to get an xbox360? Yet those flew off the shelves.

just look at this past gen. Gamecube was consitently cheaper than the competition by far, even the most "kid friendly", yet look where that got them.
 
Sony will drop the price slowly, but then Microsoft will too. MS can drop prices all day long... Sony doesn't have that luxury.

Lower sales of 3rd party games could lead to more developers for Nintendo in Japan. Especially, if the Wii catches fire like the DS.
Big names (MGS4, FFXIII) could get ported to the 360 to pick up sales... anything is possible at this point.

Look what happened to the market leader around 1995/6...
Nothing is for certain. Sony is trying to do too much...
 
Polari said:
They're not kicking them when they're down, they're reporting on the fact that they are down. No-one in their right mind thinks pricing a console at $600 is a smart move.

Bad wording i guess, what I meant to say is that they like to see those at the top fall, especially those that have been there for so long, it makes a great story. It's like all the UK papers reporting the Blair is the worst Labour PM ever yesterday.
 
That isn't the case anymore. Cooter. The demographics have changed (someone post a link pls ) a fair few of the people buying a PS3 will be buying for themselves or someone above 20.
 
you are comparing the market now to 1985? You think the average child pulled $400 to get an xbox360? Yet those flew off the shelves.

The 360 isn't exactly creating a frenzy in this country and until it lowers it's price, true mass market potential is not an option. This was about the PS3 however, and if you think parents are going to shell out $700 at Christmas you are delusional. Kids will get laughed out of the room if they ask for a PS3 and MGS4 for the holidays or a birthday.
 
After getting punched in the face and kneed in the gut people are still defending the price and holding out hope that there may be last minute price adjustments so they will fele lest bummed out about Sony's stumbles?

$500 core pack and a $600 premium pack is a high price no matter how you spin it. Even the faint hope of an immediate price cut, which will only serve to annoy the early adopters, will maybe move it down to $500 /$400 at best, and that price will likely sail into the 1st real Christmas season in 2007 (2006 doesnt count). That price is still way to high for the mass market consumer.

A high starting price simply means it will take Sony longer to get down to the mass market price, if they get there at all. Knowing Sony, they may attempt a Giganto PS3 pack for $700 next year when they decide to gouge your wallets even more.
 
Fresh Prince said:
Wii can sell on just being 'cool'. I think Nintendo is hoping for an iPod effect to happen.

Nintendo selling on "Cool"? Nobody liked Nintendo during the last two generations. Nobody will like them in the next one.
 
Lord Helmet said:
They'll bleed the early adopters. Look at the 360 on ebay last holiday season. Sony knows they can get the money... Especially with only 4 million systems (supposedly) by the end of the year. Perhaps they'll announce a price drop at the next E3 once they rape the first wave... plus manufacturing costs should come down a little...

I'll kindly pass for now. I'll wait a couple years. Wait for the price drops, some greatest hits games, and then maybe I'll grab one....
I'm curious to see how often these things are going to break. Brand new tech, plus Sony's history of broken consoles... it's going to be fun to watch.

But the problem is the price won't drop fast enough. You're not going to see any dramatic price drops. The ps2 is at ~40% of its original price after 6 years. IF sony uses that for the PS3, it'll be 250 in 6 years. The questions are. 1) what price are MOST casual gamers willing to pay for it? 2) When will it reach that price? and 3) How long will third parties support it waiting for it to reach that?

Edit: Meant the ps2 is at 40% sorry!
 
I think MS is more likely at this stage to bundle games rather than drop the price.

I do think they will do something at PS3 launch to increase the value of the product or maybe just maybe a slight price drop.
 
Cooter said:
The 360 isn't exactly creating a frenzy in this country and until it lowers it's price, true mass market potential is not an option. This was about the PS3 however, and if you think parents are going to shell out $700 at Christmas you are delusional. Kids will get laughed out of the room if they ask for a PS3 and MGS4 for the holidays or a birthday.

they will all be sold out to gamers and enthusiasts before the parents even get a chance to go christmas shopping anyway. I agree that they aren't reaching the "mass market" yet, but that never happens at launch, or even in the first year. This isn't a problem for Sony right now, it becomes a problem if they aren't aggresive with their pricing strategy a year or two down the line. If in fall of 2007 the PS3 is still $500-600, then they have a problem.
 
That isn't the case anymore. Cooter. The demographics have changed (someone post a link pls ) a fair few of the people buying a PS3 will be buying for themselves or someone above 20.

Obviously the market has changed but I and I'm sure many others question just how many millions of people there are that will spend up to $700 for a PS3 and a game? I'm sure there are millions but not 10's of millions.
 
karasu said:
Nintendo selling on "Cool"? Nobody liked Nintendo during the last two generations. Nobody will like them in the next one.
That's because anyone who felt that way did so primarily because GC and N64 were going after the same gamers, with similarly focused consoles as the competition. Now that they gone in a very different direction, they won't be compared.
 
they will all be sold out to gamers and enthusiasts before the parents even get a chance to go christmas shopping anyway. I agree that they aren't reaching the "mass market" yet, but that never happens at launch, or even in the first year. This isn't a problem for Sony right now, it becomes a problem if they aren't aggressive with their pricing strategy a year or two down the line. If in fall of 2007 the PS3 is still $500-600, then they have a problem.

I propose to you that even a best-case scenario where Christmas 2007 the price is $500/$400 they are still in trouble because Christmas 2008 the price will still be $400/300 (best case scenario). Developers are not going to wait around and lose money while the PS3 reaches a mass market price in late 2009.
 
GreenGlowingGoo said:
But the problem is the price won't drop fast enough. You're not going to see any dramatic price drops. The ps3 is at ~40% of it's original price after 6 years. IF sony uses that for the PS3, it'll be 250 in 6 years. The questions are. 1) what price are MOST casual gamers willing to pay for it? 2) When will it reach that price? and 3) How long will third parties support it waiting for it to reach that?


No argument here. :)
No skin off my back if they don't drop. Drop, or lose. That is their option.

I like the MGS series. I'd like to play MGS4, but $700 plus to play a game... no.
Final Fantasy... I haven't enjoyed since 9. I don't forsee a return to glory anytime soon.
GTA4? I can get that on 360. Gran Turismo? Forza... What have you got for me Sony?
I can get two great systems for your asking price.
I'm not taking a chance on your traditionally crappy first party games (most, save a couple).
Your 3rd parties will end up on the other two... for what little exclusives you already have....
Try again next time... your arrogance will bring you down just like it did Nintendo.
 
mckmas8808 said:
Stupid ass reporting. Obviously more games will use the motion sensing feature in the controller. Damn Incog just got the damn controller a week ago.
Are you posting from prime-time network television?
 
2007 = Halo Movie + Halo 3 + GTA for 360 :) At this point MS could increase their price $50 and still sell well....

At the bestbuy I work, I've never seen a 360 shipment come in while there was still product on the shelves..

The Wii60 is a two headed dragon Sony will come to fear :)
 
I dont think sony can afford to lower the price...all they can do is add an hdmi port on the tard version. They are going to be losing money on every unit sold, so if they lower the consoles 100 dollars right now that will add 600 million in loses nov-march from the 6 million launch systems.

No way in hell they could do that...that 600 million in losses is on top of what they were willing to lose at launch already.
 
WarLox said:
2007 = Halo Movie + Halo 3 + GTA for 360 :) At this point MS could increase their price $50 and still sell well....

At the bestbuy I work, I've never seen a 360 shipment come in while there was still product on the shelves..

The Wii60 is a two headed dragon Sony will come to fear :)


you work at a best buy in so cal? the best buy here in my town never has 360's in stock cept for the sundays they have an advert.
 
Norse said:
I dont think sony can afford to lower the price...all they can do is add an hdmi port on the tard version. They are going to be losing money on every unit sold, so if they lower the consoles 100 dollars right now that will add 600 million in loses nov-march from the 6 million launch systems.

No way in hell they could do that...that 600 million in losses is on top of what they were willing to lose at launch already.
I really wonder how much influence Stringer (new CEO) had to do with the pricing decision. I suspect he was pushing for lower up front losses as he executes his reorganization of Sony. Their other divisions are not making enough to soak up large losses and still have Sony be profitable overall, ala Microsoft.
 
If I really went back and studied some sales threads I could be much more accurate, but for sake of example I'll make some bad estimates and generalization.

PS2 has ranged in price from 130-300, but for my purposes I'll say the average one cost $200.
What's the attach rate? 10-ish? I'll go with 10.
What's the average price of a purchased game, considering the popularity of Greatest Hits, as well as chaper non-GH games? Not sure, but for my purposes here I'll figure on the high side and say $40.

So by my awful guesstimations (fill in accurate numbers if you wish), the average PS2 gamer spends 200+10(40)= $600 over the course of the entire generation.

Rur0ni said:
DS @ $129.

Wii will not be $149.
GBASP being $99 didn't stop GCN from being $99.
 
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