@BrianK

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The $600 PS3 was not a winner and didn't fit in well with the consumers.

Not with all consumers, that would be a more objective observation. We also do know the extras the 600 dollar PS3 provided resulted into it greatly outselling the 500 dollar model.

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At $300 it's now quite a deal. What was the result of a $600 approach?

From a technical standpoint the 600 dollar PS3 was also a great deal. The result of a 600 dollar PS3 probably was that Sony's losses were reduced (at a lower pricing, production costs would have outweighed retail pricing even more) and that people who are technically aware or people for whom pricing isn't a crucial factor were early adopters.

For example I myself would have loved a 1200 dollar PS3 to have been available a year early (if a quality product that is, not one that was such a risk of breaking like the XBox 360 launch units).

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Loss of profit - Sony lost most if not all the PS2 profits to try to fight for 2nd in the market?

I feel confident Sony is aiming both for profitability and 1st place with the PS3 for the long run.

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Great for the hardcore rich gamer. Not a good approach if you want a #1 market position, not a good approach if you want mass acceptance, not a good approach to be losing money for Sony.

Well, first of all I consider myself a hardcore gamer and secondly 3DTV support does not damage anyone, even SDTVs with monosound are still supported as well.

Last edited by MikeB on 12-Jun-2010 at 04:54 PM.

@MikeB

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Not with all consumers, that would be a more objective observation. We also do know the extras the 600 dollar PS3 provided resulted it to greatly outself the 500 dollar model.

The discussion has been around the popularity of the PS3. A model of an expensive console does not drive one to #1 in the market. This is why the $600 price point was a failure. Using your example here and insert 3DO. The comparision is the same. The market does not sustain a $600 price point as the winning console. Seriously Mike even Sony demonstrated they knew this. Otherwise they wouldn't have cut features, to cut manufacturing, to cut price to consumers.

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pricing isn't a crucial factor were early adopters

How incredibly manipulative to Sony fans was this idea! Sony sold the $600 console knowning it wouldn't be popular due to price. So instead it kept the idea because it knew it could fleece the Sony technophile crowd. Egads. No wonder many people hate Sony.

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and 1st place with the PS3 for the long run

It'll be interesting. The reasons the PS2 is still selling is because it was the most popular platform ever and #1, aka popularity. The #2 and #3 consoles of that generation are no longer made. The shoe is now on the other foot for the PS3. It's not the most popular. It is not #1. It is #3 and fighting to be #2. Thinking the PS3 will repeat the PS2's showing of 10 years is more optimism than realism. Will it hit #1? Definitely not prior to the Wii2 or Xbox3 launches.

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secondly 3DTV support does not damage anyone

Duely noted but also note that 3DTV was never cited as damaging. It was cited as an expensive feature to get into. This means while it's 'cool' it is not a factor driving the console mainstream. A few more sales? Certainly. #1? Not anytime soon.

BTW, Microsoft needs to do better marketing. Avatar and Batman: Arkaham are both 3D even though they're on a HDMI 1.2 capable connection. Microsoft should have pushed this more and showed how Sony was the 'late comer' to new features.

...
Think how cool it could have been if the PS3 had the dual HDMI outputs once claimed by Sony? It could drive 2 screens in 3D. Place them at angles to each other and use the Move. There could be some nice Virtual Reality Sim gameplay. Alas the announced feature was cut.
...

@ BrianK

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What was the result of a $600 approach?

Jack Tretton:

"According a survey, PS3 owners are most likely to have their system connected to a high definition television, a surround system, and use their console as their primary dvd player compared to other consoles. He described PS3 owners as “voracious technophiles” who are the early adopters, and who are ready for the next step in home entertainment."

I think it would also be correct to add, the PS3 isn't a friendly system for software pirates. Also despite the PS3 is a family console/entertainment system for many people, unlike with other gaming platforms at this point early teens and preteens usually aren't console owners / primary user.

@MikeB

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"According a survey, PS3 owners are most likely to have their system connected to a high definition television

Once again due to the high price it made the PS3 an exclusive for technophiles that spend money. It was not an approach for the mass consumer. Thanks for the Jack Trenton supporting data there!

@BrianK

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This is why the $600 price point was a failure.

I think you don't understand, cheaper would have either meant bigger losses for Sony or the PS3 wouldn't have been so highly specced as it is (less futureproof).

Understand?

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How incredibly manipulative to Sony fans was this idea! Sony sold the $600 console knowning it wouldn't be popular due to price. So instead it kept the idea because it knew it could fleece the Sony technophile crowd. Egads. No wonder many people hate Sony.

You sound like a raving fanboy /newbee here... Everyone knows Sony would like to sell HDTVs, 3DTVs, surround audio sets, Blu-Ray discs, etc, etc. Consumer electronics is their primary market!

You seem to pretend everyone who bought a PS2 did so day one, no my friend the PS2 did not hit a 145 million install base in the first couple of years. PS3 pricing will go down further, premium releases today will hit the second hand / bargain bin next year, etc, etc.

Remember when people had to upgrade from their yesteryear's PCs to play games such as Doom and Quake? Well luckily due to players on the market such as Sony (starting with the PS1) this has changed for the better!

The PS3 install base will be about 50 million at the end of Sony's current fiscal year.

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Definitely not prior to the Wii2 or Xbox3 launches.

IMO the sooner the better!

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Duely noted but also note that 3DTV was never cited as damaging. It was cited as an expensive feature to get into. This means while it's 'cool' it is not a factor driving the console mainstream.

I clearly have a very different way of thinking than people like you. The way I look at this is all the games adapted today for 3DTV are games I will be able to take advantage of in the future when I buy a 3DTV (others buying a PS3/3DTV a couple of years from now will be able to buy 3D supporting PS3 games at budget pricing / second hand).

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TW, Microsoft needs to do better marketing. Avatar and Batman: Arkaham are both 3D even though they're on a HDMI 1.2 capable connection.

That has been talked about earlier within this thread.

@MikeB

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I think you don't understand

I don't think you understand. The reason the PS3 is NOT #1 this generation is because it was expensive and marketed to the top end of gamers. It missed the core of gamers that the PS2 hit. The PS3 is nearly a year and a half behind the PS2 sales, aligning launches.

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You sound like a raving fanboy /newbee here

Or you might more properly mean I don't sound like a Sony raving fanboy. Instead I look at Sony's postion, #3. Their profits, which is so hugely negative it cost Sony all PS2 profits. And their future -- betting on Move and 3D. Each is an additional cost to the console as people have neither the controller nor 3DTVs today. Then I listen to Sony's speak where they want to see a 10 year lifespan and think they'll win #1 by then. I look at the competition and see they are winning now and likely to launch a new console before the 10 years is up. Sony is behind this generation and has a LONG road ahead. I'm not overly optimistic on Sony recovering. Again I thing you don't understand or accept that this isn't a pretty position to be in.

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You seem to pretend everyone who bought a PS2 did so day one, no my friend the PS2 did not hit a 145 million install base in the first couple of years

The PS2 did sell better in the same time period which in the end helps build to the 145M base quicker.

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The PS3 install base will be about 50 million at the end of Sony's current fiscal year

This means the PS3 will have to sell more than 15M in the next year. It's doable and still behind the PS2 or Wii for timeframes. Do remember the Wii has to sell 0 to best this. The 360 has to sell 2/3 what the PS3 does to best this. Even if it reaches 50M probability is high is that it's still the #3 console.

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IMO the sooner the better!

You really want harder comptition to come out against the PS3? You need a mirror to really see who the true fanboy is.

I somehow missed the 360 bring 3D out prior to Sony to the thread. Clearly a statement that neither Microsoft nor the MSM have publicized to date. We'll see what E3 brings.

Last edited by BrianK on 12-Jun-2010 at 09:25 PM.
Last edited by BrianK on 12-Jun-2010 at 09:19 PM.

@MikeB

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MikeB wrote: @Lou Quote: You missed the point about requiring a $2500 investment from the consumer... From a narrow mind perspective you may come to such conclusions. But if you look at the grand perspective from a 10 year plan, then 5 years from now due to mass production costs will have dropped dramatically. We have seen complaints with regard to the pricing of Blu-Ray players, Blu-Ray disc replication costs, HDTV, surround audio sets and what not in the past. That's all now become very affordable for hardcore gamers.

Yes and perhaps in 5 years I'll buy a 3D monitor just like I bought a bluray player for my PC last week...though as $96 for the player+dvd burner combo, I could have waited another year...but it was my birthday so...

@MikeB

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MikeB wrote: @Lou Quote: It costs nothing to support SD. Sorry Lou, but I take the words of a highly acclaimed games developer such as Mark Cerny way above yours (first video on the linked page). http://www.1up.com/do/feature?pager.offset=2&cId=3178907 "Base level 3D support is actually easier than keeping SD TV support going" Also check out the rest of the interview, he's well balanced and competent, you might learn a thing or two.

I fail to see how supporting less resolution clashes with base 3D support that is going to be unaffordable to the mass market until 2015...

Also, forcing 3D on everyone might give some people medical issues especially when the exact way to universally display 3D has not been established yet. I'd hate to buy one television and then not have softare that supports it.

3D display technology could turn into the next format war. I'll pass until a standard is established - thanks!

@BrianK

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The reason the PS3 is NOT #1 this generation is because it was expensive and marketed to the top end of gamers. It missed the core of gamers that the PS2 hit.

Why not look at the big picture?

Why would the PS3 per se need to attract the casual / kid market early on in the game like the PS1 and PS2 did? The PS3 already outsold the #2 of the last gen by many millions, it's still outsold the PS1 taking equal timeframes.

The PS3 considerably outsells the XBox 360 taking equal timeframes despite many PC gamers being pressured to buy the console and it provides the cheapest entry pricing (no matter the actual costs in the end usually makes this console the most expensive).

The Wii is more like a last gen console, it has been a big success but the PS3 is likely to compete with a new Nintendo home console instead. The Wii is unlikely to beat the PS2 and I think a WiiHD is unlikely to beat the PS3.

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I'm not overly optimistic on Sony recovering.

Sony is performing much better than most other Japanese consumer electronics companies, I think the PS3 has a positive effect on this from the grand perspective. As Sony execs say the PS3 plays a criticial role in moving the market forward, much more so than the PS2 was for them.

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You really want harder comptition to come out against the PS3? You need a mirror to really see who the true fanboy is.

Wanting the market to move forward makes me a fanboy? I am a tech enthusiast, I really would like to see a XBox with a higher capacity storage format, I also would like to see a new Nintendo console which adopts good support for modern technology.

@Lou

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Also, forcing 3D on everyone

The PS3 will not force 3D on anyone, just like the PS2 did not force Eyetoy on anyone.

@MikeB

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Why not look at the big picture?

My big picture is bigger than yours. It seems you ignore losses and the competition.

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Why would the PS3 per se need to attract the casual / kid market early on in the game like the PS1 and PS2 did?

PROFITS. From 2007 to now Sony lost nearly $6B on the PS3. This doesn't take into account the money lost on cell development prior to 2007. Luckily Sony sold manufacturing of the Cell which recovered a bit of those losses. In short the PS3 better have a healthy next 5 years. It's got nearly $1B/year on average in profits to make to just break even.

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Sony is performing much better than most other Japanese consumer electronics companies,

Certainly but this isn't due to the PS3. Even with the cut down features and cut down costs. It continues to see big losses. It'd due to a better than expected LCD TV sales and profits. Of course, like all previous years, the Sony President came out prediction PS3 first year of profits. Will it for 2010? We'll see.

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Wanting the market to move forward makes me a fanboy?

Of course not but your guess was the wrong one. Having the competion move forward and Sony remaining stagnet yet predicting Sony to prevail in that condition makes you a fanboy.

PS3 vs Wii. Clearly Nintendo did it. They predicted the market better than Sony and are basically printing money. A clear win from last gen as they own the #1 position. If the Wii stopped selling today Sony would, at your estimated 15M/year, need better than 3 years to take the #1 spot.

PS3 vs 360. Microsoft clearly did it's job. Microsoft wanted a better market position and to knock down Sony. It did so. Clearly it's market pressure pushed Sony to go with the PS3. Which is good for us that have a PS3 but encouraged large PS3 losses. It helped encourage Sony to chip away it's PS2 profits. Of course Microsoft's big failing was reliability. The PS3 was minor impact compared to how Microsoft simply beat itself.

The market has put Sony's console in a race #2 and one that a 10 year life isn't Sony's choice but mandatory if Sony wants to recoup it's loss.

Both Sony and Microsoft are trying to reach the casual market. It's a recession worldwide still. Is it time for the casual players to give up on the Wii and move onto HD? We'll see.

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I am a tech enthusiast

Great. Then you should fully realize that as the new consoles are released the Tech Enthusiasts move to them. If Sony stagnates on the PS3 while the #1 and #2 positioned consoles move to next gen we will see the Tech Enthusists away from Sony. This market pressure will be greater on the PS3 as the 'Tech Enthusiast' will move along to the newer consoles.

PS4? Ken claimed he'll come back but I disagree. His revolution is over. PS1/PS2/PS3 all in their own ways were revolutionary. PS3 didn't set up the financials in a way to encourage this. My bet is the PS4 will be evolutionary. Looking at the present market I see Microsoft and Nintendo strong leads to control how and if Sony enters with the PS4.

Last edited by BrianK on 13-Jun-2010 at 03:45 PM.

@MikeB

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MikeB wrote: @BrianK Quote: The reason the PS3 is NOT #1 this generation is because it was expensive and marketed to the top end of gamers. It missed the core of gamers that the PS2 hit. Why not look at the big picture? Why would the PS3 per se need to attract the casual / kid market early on in the game like the PS1 and PS2 did? The PS3 already outsold the #2 of the last gen by many millions, it's still outsold the PS1 taking equal timeframes.

Technology leaps do not co-inside with console generations. Is the TG16 a 16 bit gen system or 8 but because of it's processor?

Fact: Wii was released this generation.
Fact: Wii is outselling 360 & PS3

You ignore that PS2 lead my such and overwhelming margin and the difference between #2 and #3 was less than 2 million units...so with the market more balanced now, it doesn't take much to outsell #'s 2&3 last gen.

By the hypotethical time and PS3 outsells the 360 and Wii, neither of the competition will have been on the market for some years and it will be a 'last-gen' system.

It's easy to win a race when you're the only competitor...

Also, with regards to Sony's sales of the PS2, I've stated before the numbers were inflated due to out of warranty failures. Xbox's and Gamecubes were very reliable. I doubt that the PS2 would have sold more than the 50 million the Wii has now if it were as reliable...and the total software sales really backs that up. Wii software sales have far exceeded PS2 software sales already. This means there are more active Wii users than there ever was active PS2 users. All the experts agree that Nintendo has expanded the market. You look at actual software sales and you get the real picture.

Look at a game like WiiFit which has sold 22 million units. The Wii has sold 50 million units. That's a 44% adoption rate. The best PS2 title sold something like 15 or 17 million compared to 130 million hardware units sold. That's about 13% at best. So either the PS2 had the worst tie ratio in history or it's actual active market was really only 40 million users...which goes back to the units failing out of warranty and people buying a replacement encouraged by steady price drops.

I'm sure you'll try to twist things, but everyone knows someone who had to buy more than one PS2. My brother bought a couple before he switched to Xbox. His best friend bought 4. Sony saw their cash cow dropping when they released the PS3 with PS2 backwards compatibility and dropped that as well. That is the main reason PS2 sales maintain the level they did for the last couple of years.

But these situations are why Nintendo never releases a console at a loss.
If people by the old hardware - profit.
If people by the new hardware - profit.
Sell software.
Sell more software.
Keep customers happy. Keep shareholders happy.
Rinse.
Repeat.

@BrianK

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My big picture is bigger than yours. It seems you ignore losses and the competition.

I am neither a Sony shareholder nor a Sony fanboy, so short term profits aren't that important to me, as long as Sony does not cut down on game development (not the case).

And I don't ignore the competition, I'm am excited to learn more about Nintendo's 3DS.

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It continues to see big losses.

Not really big losses at this point for a company the size of Sony and next fiscal year will most likely be profitable. Most of the unforeseen problems relate to weak dollar vs strong yen.

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Clearly Nintendo did it. They predicted the market better

I don't think Mr Kutaragi wanted to release a PS2.5, shareholders may have liked that. I am not a shareholder but rather a gamer/tech enthusiast. So personally I applaud Mr Kutaragi.

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Microsoft wanted a better market position and to knock down Sony. It did so.

Not really. PS3 is growing from strenght to strenght.

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The market has put Sony's console in a race #2 and one that a 10 year life isn't Sony's choice but mandatory if Sony wants to recoup it's loss.

Sure, but this was known long before the PS3 launched.

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Great. Then you should fully realize that as the new consoles are released the Tech Enthusiasts move to them.

Some will if the product is more powerful/feature rich (remains to be seen and may take some time), but that won't stop Sony from tapping the kiddie/teen/casual markets.

Last edited by MikeB on 13-Jun-2010 at 06:07 PM.

@MikeB

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I am neither a Sony shareholder nor a Sony fanboy, so short term profits aren't that important to me

Seemingly long term profits are improtant to you. You may want to neglect the short term but a lot of damage can come quickly. Especially in the case of the PS3. The $6Billion loss may be 'short term' as it's been the last 3 years. Such a heavy short term loss makes profits in the long term even more difficult to acheive.

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Not really big losses at this point for a company the size of Sony

The largest losses Sony has seen in the last 14 years have coincided with the PS3 losses. So historically yes this is impacting.

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and next fiscal year will most likely be profitable

Which is what Sony said about the PS3 last year and the year before. It wasn't able to acheive profitablity with feature and price cuts. Though I agree Sony had little choice to do this else the PS3 would have been even less competitive. The last 2 years Sony claimed PS3 profitablity was around the corner. It wasn't. This starts to look like guessing. A profitable year for the PS3 will be good. They have a $6Billion hole to start filling.

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Not really. PS3 is growing from strenght to strenght

Yeah really -- $6Billion in losses costing all of last gen's profits is not a win.

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Some will if the product is more powerful/feature rich (remains to be seen and may take some time), but that won't stop Sony from tapping the kiddie/teen/casual markets

In the 7th Gen we've already seen that less powerful and less feature rich can win if the pricing is right. The Wii has sold 2:1 over the PS3.

I'm not sure why you believe more powerful will take some time? It already exists today in CPU and GPU. Tesla+hexacore and soon dodecacore trump the Cell. And you should know this as we've discussed how IBM's newly announced fastest supercomputer is not Cell based but many core CPU + Tesla. The only problem here is cost, which is one we know Moore's Law fixes. I expect the cost factor to be fixed by the 8th gen console launches, probably in 2012.

@BrianK

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The largest losses Sony has seen in the last 14 years have coincided with the PS3 losses. So historically yes this is impacting.

The losses of all those other Japanese consumer electronics companies must be due to the PS3 as well...

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I'm not sure why you believe more powerful will take some time?

As Rome wasn't built in a day. Having more powerful hardware is one thing, getting your game engine and assets up to that level is another (remember I also said with regard to PS3 it would take time).

@MikeB

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The losses of all those other Japanese consumer electronics companies must be due to the PS3 as well

Mike you're conflating a statement about PS3 losses to that of all losses of Sony. No one ever said all Sony losses are due to the PS3.

And if you want to be flip let's take a look at another Japanese consumer electronic and see their impact during the same time. Nintendo is a good choice as it's main industry is gaming. 2006 profitable growth. 2007 even more profitable growth. 2008 huge profitable growth. 2009 smaller profits but still profitable. Oh and they are gaming focused like the PS3 which saw shrinking losses but still significant losses.

You can help Sony blame the Yen if you want. Realistically, at the same time Sony's competition, also in Japan, was in the most recent year, making about $3Billion in the profits.

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Having more powerful hardware is one thing, getting your game engine and assets up to that level is another.

Not only is hardware surpassing the Cell here today the software you are worried about is in process. See Windows is here, DirectX11 is here. Developers can be working on methods to leverage the technology today even without knowing what the Xbox3 will be. Why? Because they know the foundation will be Windows and DirectX.

Project Natal is now KINECT
250GB SLIM 360 w/wifi built-in

E3 is here...

@BrianK

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Nintendo is a good choice as it's main industry is gaming.

Nintendo isn't considered a consumer electronics company, but exclusively a video game company. Nintendo has to worry about a lot less factors, actually consumer electronics progress coming to a standstill would be an advantage for Wii sales.

Sony was willing to loose money on the PS3 as they have a much wider set of goals (like winning the Blu-Ray movie format war and providing people reasons to advance their consumer electronics). The losses were more than anticipated due to yen vs dollar conversion issues.

Everything I wrote above is common knowledge, I don't understand why you insist on ignoring the big picture.

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See Windows is here, DirectX11 is here.

I doubt Nintendo will be using Microsoft's DirectX11 for the next console and I don't think DirectX11 does much for game engine compexity. Developing with PS3 developing principles in mind should be more valuable for preparing for nextgen than worrying about DirectX11 support.

The list of DirectX11 supporting games is still very small (4 multiplatform games and 2 windows exclusives so far) and they are basically the same compared to their DirectX10 version and as versions on non-DirectX based patforms (which do not use Microsoft's middleware). I actually prefer developers developing for open standards such as OpenGL instead.

Last edited by MikeB on 14-Jun-2010 at 09:38 AM.

@MikeB

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Nintendo isn't considered a consumer electronics company, but exclusively a video game company. Nintendo has to worry about a lot less factors, actually consumer electronics progress coming to a standstill would be an advantage for Wii sales

We're focusing on losses for Gaming and Entertainment. It's a great choice as this is their focus. They don't have the ability to miss predicting the market or their whole company will be gone.

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Sony was willing to loose money on the PS3 as they have a much wider set of goals

Mike you're missing the subtlety here. It's not that Sony wasn't willing to accept some loss, they may have been. I find it incredibly unrealistic that someone believes the management, I assume this would be Kutagari, purposed to the board that Sony should accept a 4 year loss of more than net 10 years of profits of the most profitable console in history to make the 7th gen. And that in turn they really convinced Sony that the 6 years after this they'd make up the difference.

What I give for evidence is before the end of the fiscal year Kutagari was 'promoted' to a position of no products, no reports, and no budgets. Sony came out and let us know of Ken's pending retirement as Ken tried to be the Terminator by saying = "I'll be back", for the PS4, PS5, and PS6. More evidence? Last year Sony said the PS3 would be profitable. The year before Sony said the PS3 would be profitable. You are contending Sony wanted to lose money at the PS3 while they were telling the public they were going to make money instead? I believe Sony missed the PS3 profitability marks as Sony claimed they would hit. Claiming to be profitable in the PS3 but knowning they wouldn't is much less likely an occurance. And if true then someone needs to investigate Sony's Board for stock manipulation.

Sorry you talk about the big picture -- here it is.

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I doubt Nintendo will be using Microsoft's DirectX11

So do I but then again I never said this. But Nintendo does stand to benefit too as all developers won't be stagnet. Handling multicore CPU + CUDA GPU is something developers can learn and translate to a new platform. I'm sure you'll agree Nintendo is one to leverage off the shelf technology and not try something radically new, such as the Cell.

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I actually prefer developers developing for open standards such as OpenGL instead

What developers use have little concern. The overall quality of a product is more of a concern.

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The list of DirectX11 supporting games is still very small

And the list of OpenGL4 supporting games is still very small too. However, this wasn't the point. You were worried about the software getting up to speed with the new technology. Well it's here so don't worry. Developers be it OpenGL4 or DirectX11 have a couple of years to work with the technology prior to the shipment of the 8th Gen consoles.

Last edited by BrianK on 14-Jun-2010 at 02:01 PM.

@BrianK

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BrianK wrote: @MikeB Quote: Nintendo isn't considered a consumer electronics company, but exclusively a video game company. Nintendo has to worry about a lot less factors, actually consumer electronics progress coming to a standstill would be an advantage for Wii sales We're focusing on losses for Gaming and Entertainment. It's a great choice as this is their focus. They don't have the ability to miss predicting the market or their whole company will be gone.

This is typical. He says he is a gamer and doesn't care about Sony profits only about the benefits of the PS3 gaming vs. other devices but then when you tell him Sony can't sustain losses like the PS3 he talks about Sony's long term goals and rules out comparisons to other companies in the gaming industry.

You can't win an arguement because he simply changes the argument on the fly.
It's a constant game of rock, paper, scissors.