Crazymoogle said:
What it all boils down to:
-Sony taking the biggest bath per unit in the history of the business.
-Sony using the most powerful accounting scheme ever devised to hide costs from regulators.
-Ken using his relatively new boss powers to convince Sony brass that they should take the hit.
I've still got issues of Edge and Nextgen where the american heads of Atari and Sega threatened to bring every ounce ot legal muscle against Sony for pricedumping on the PlayStation if it happened too fast. This time, by blowing billions on in house production, the company is basically untouchable and, for better or worse, only has to answer to their own bottom line.
Weakness or not, I would be surprised if the DS launches without a pricedrop.
The year was 1999. The same stuff was being said about another Sony system, the PS2.
[Deadmeat]This is impossible. The PS2 costs $500 to make, and they are losing more money than they are bringing in.[/Deadmeat]
Flash forward about a year and a half and Sony's not only already created an installed base of over 20M eager game buyers, but they're also starting to turn a profit. Flash to present and they are killing it. It's not even a competition. They'll lose money on the launch hardware, but they won't take a bath. The largest (or 2nd largest depending on the market) consumer electronics company in the world isn't cooking its books, and isn't gonna take a risk that will sink them into financial ruin. Unlike Sega and Nintendo, they have more to lose overall, gaming's just another industry for them. The low price creates the excitement and the userbase which may cost them millions of dollars, but will reap them billion in the long-term. It's an order of magnitude turn around in like two years. When that price puts 20+M PSPs in the pockets of gamers by '06, they'll have the last laugh. Ken Kutaragi is quite possibly the best thing to have happened to Sony, ever. The guy knows the gaming industry. He's been second-guessed by everyone every time. From the PS1 to the PS2 to the PSP now, and he's made the doubters look foolish everytime. I'm not gonna doubt that this is the business model they need to go forward with. They're gonna get me to buy one, and I don't like handhelds. But the PSP is quite cherry.
PEACE.