PS3 costs drive Sony's Q2 profit downwards

[dukmahsik]

Electronics giant Sony has seen a 46 per cent slump in its profit for the three months ended September 30th, with the enormous cost of developing the PlayStation 3 console fingered as a key factor in the decline.

http://www.gamesindustry.biz/content_page.php?aid=12563

because of this I don't think PS3 will debut anything lower if not higher than 360's price.

[Carl B]

This is for that:

Link (http://psinext.e-mpire.com/index.php?categoryid=17&m_articles_articleid=234)

...The games division, however, posted a 79% increase in revenue over the year-ago period, lifted by strong sales of the company's new PSP handheld and it's software (games and movies). In spite of costs associated with the launch of the PSP and large R&D costs associated with the PS3, the games division reported a profit of $73 million for the quarter. This contrasts with the slight loss experienced a year ago. PS2 sales were also strong, seeing an increase from 1.99 million units a year ago to 5.01 million units shipped in the most recent quarter...

[Xenus]

God you people are hopeless. R&D costs are just a drop in the buckect compared to what they stand to gain if the PS3 and Cell see broad acceptance. Oh and SCE's revenues are up 79%. The money being lost is from the other divisions.

[dukmahsik]

sony's overall profit is down

[EndR]

Yup.. the initial investments on PS3 will put some pressure on the finances but they are longtime investments. With time, Sony will be able to push prices and have more controll over margins etc etc...

but initially, PS3 will make some dents on Sonys financial situation..

[one]

Yeah the interpretation in that GI.biz article is questionable on the PS3 R&D (and dukmahsik's remark on the PS3 price too)

http://www.gamasutra.com/php-bin/news_index.php?story=6975
With notable losses for Sony's movie division due to disappointing theatrical revenues for movies such as Stealth, game division Sony Computer Entertainment (SCE) emerged as one of the company’s bright spots for the quarter, despite the enormous sums being spent on research & development for the PlayStation 3. The company has reported sales for SCE overall as increasing by 79.1 percent from the previous year. An operating income of ¥8.2 billion ($71.3m) compares well to a small operating loss in 2004.

Strong sales of the PSP in particular were cited, with the company increasing its worldwide shipment target for the handheld for this current business year from 13 million to 14 million. PlayStation 2 console shipment forecasts were also increased marginally, from 13 million to 14 million, though no comment was made on a possible release date or price for Sony's next-gen console, the PlayStation 3.

[Xenus]

Because they are restructuring there suppossed to reeport a loss for the year but SCE which is responsible for the PS3 had an increase of 79% which means this news doesn't reaaly effect the PS3 pricing unless you think they need to recoup losses from all divisions using the PS3.

[BlueTsunami]

Yup.. the initial investments on PS3 will put some pressure on the finances but they are longtime investments. With time, Sony will be able to push prices and have more controll over margins etc etc...

but initially, PS3 will make some dents on Sonys financial situation..

Which is logical. They won't be able to reap the benifits of the R&D until the product itself is released and does good.

[Shifty Geezer]

unless you think they need to recoup losses from all divisions using the PS3.Which is, more or less, true. After all if every other Sony division losses money, the company will be reliant on SCE to make enough profit to keep the company as a whole going. If the movie and CE divisions continually lose money, without the PS brand Sony would disappear. Hence it's the success of PS3 that'll the company going if they can't fix their other problems, and if they can sell the PS3 for more money without negatively impacting the sales and growth of PS3, they'll do it to fill the coffers.

With Harrison's talk it's unlikely divisions will be doing whatever they want regardless of impact on other Sony divisions, and will act in supprt of the greater good of the company.

[drpepper]

I'm surprised the PS2 console is selling so well. You'd think everybody who'd want a ps2 has one already. What I'm interested in is the next quarterly results. It would be interesting to see how the 360 affect sales, or how well the software will sell seeing as how a lot of anticipted games for the PS2 will be well into release for the holiday season.

You have to spend money to make money I guess. And i think they're banking on Cell and Blu-Ray to be their cash cow, the PS3 only being a vessel to introduce the tech.

[AlStrong]

How was Sony doing 6 years ago when they were developing the PS2?

[wireframe]

sony's overall profit is down
The trend has been going on for a while now. Sony is in a reverse situation to Microsoft in the sense that the Playstation is Sony's goose, laying golden eggs, while the rest of the company (consumer electronics) is becoming a money pit. Microsoft, on the other hand, is raking in cash from its Windows and Office products and the Xbox is the money pit (so far).

Overall, Microsoft is in a better position, but it looks like Microsoft is not done filling the video game console hole it opened with money from its coffers.

I think the idea here is that when "Playstation" needs more money invested in itself, for growth, money is taken away that could otherwise help patch up other, less performant divisions of the company. It is healthy that Sony is investing into Playstation instead of trying to balance itself. It's better to let the wounded parts bleed properly and lose a foot instead of risking having to amputate a whole leg.

I wonder how difficult it will be for Sony to regain favor in basic consumer electronics. I don't think it can be that difficult. There are so many brands out there that seem to get by, I don't see a reason why Sony cannot also.

[nelg]

Does anyone know if the PS3 cost have been expended exclusively to the games division?

[Carl B]

The semiconductor division is it's own division - aka Cell. I'm not sure when it split off or if it was formed that way from the beginning, but that is something to keep in mind. Of course a lot of SCE's costs will be wrapped up in that as well, but there is a measure of seperation between the two. The games division isn't paying for all these fab build-outs, for example.

FYI, until recently, Kutaragi was head of the semiconductor division as well. It was during the recent exec-shuffle that that post was reassigned. Chubachi (Sony president) has since assumed the head of semiconductors role, and they continue to press on with Cell investment.

[Shifty Geezer]

ChubachiBig hairy guy. Roars and pulls people's arms off if they beat him at chess...

[Mmmkay]

The semiconductor division is it's own division - aka Cell. I'm not sure when it split off or if it was formed that way from the beginning, but that is something to keep in mind. Of course a lot of SCE's costs will be wrapped up in that as well, but there is a measure of seperation between the two. The games division isn't paying for all these fab build-outs, for example.

FYI, until recently, Kutaragi was head of the semiconductor division as well. It was during the recent exec-shuffle that that post was reassigned. Chubachi (Sony president) has since assumed the head of semiconductors role, and they continue to press on with Cell investment.

Further to your post, I don't think one of these 'doom and gloom' threads would be right without this:
http://img286.imageshack.us/img286/3858/ps22wf.jpg (http://imageshack.us)

I can't possibly imagine what people were saying on the internet in 98/99 about Sony's financials.

[mckmas8808]

Honestly I know some people hate to hear it but, I think if Sony's next quater goes this well then we probably will see a PS3 lower than $400. I mean think about it. If SCE can turn a 73 million dollar profit while launching the PSP and having PS3 R&D wrapped in, then what will they do two years from now?

Two years from now Sony hopes that downloading music, TV shows, and movies will be happening from your PS3 and PSP earning them more dollars. Sony hopes that people keep buying UMDs (which are making them a TON of money) and hopes that they will buy Blu-ray disc too. They also hope more companies buy the CELL processor to do super fast calculations that are shown with PS3 demos, Toshiba demos, and IBM demos.

And I hope people here realize that now for the first time in history Sony will have 2 hardware systems that will sell 2 different fronts on software. The PSP will have games and UMD movies, while the PS3 will have games and Blu-ray movies. People will be crazy not to realize the possibilities that Sony has in their hands. Things can only get better from here. Oh and don't forget that Sony also is selling their own memory sticks that more people are buying due to the PSP. Now that we know the PS3 will accept Pro Duo sticks expect Sony only to make more money on that too.

If UMDs keep selling great and Blu-ray wins a quick victory over HD-DVD then expect the Sony to actually take over the world in 10 more years.:lol:

[BlueTsunami]

Further to your post, I don't think one of these 'doom and gloom' threads would be right without this:
http://img286.imageshack.us/img286/3858/ps22wf.jpg (http://imageshack.us)

I can't possibly imagine what people were saying on the internet in 98/99 about Sony's financials.

Great post! Theres alot of tech that Sony seemed to have invested in. The money that was invested does not magically come back to their pockets. Also, as has been already stated, the PS3 is big for SCEE. Not just for the gaming sector but for the Movie sector also. Blu-Ray is probably where its at, PS3 is the trojan horse.

[Mefisutoferesu]

<Literally stares with jaw gaping open>

3000 Oku... HOLY FREAKING!!! That's like 2.5 BILLION US!! On the PS2!?!?!?!

[avaya]

<Literally stares with jaw gaping open>

3000 Oku... HOLY FREAKING!!! That's like 2.5 BILLION US!! On the PS2!?!?!?!

Childs play.

Mostly on fabs though.

[Shifty Geezer]

In the long term, how much profit did PS2 actually make (forgetting for a moment it's still going?). 2-3 billion I guess. Nowhere near as profitable as content like...I dunno, and operating system and office software.

[mckmas8808]

<Literally stares with jaw gaping open>

3000 Oku... HOLY FREAKING!!! That's like 2.5 BILLION US!! On the PS2!?!?!?!

DAAYYUUM!!:shock: I didn't know the US dollar amount. And they only lost money for 1 and a half years? Well that should speak volumes for what Sony can do with PS3 pricing.

[<nu>faust]

Honestly I know some people hate to hear it but, I think if Sony's next quater goes this well then we probably will see a PS3 lower than $400. I mean think about it. If SCE can turn a 73 million dollar profit while launching the PSP and having PS3 R&D wrapped in, then what will they do two years from now?

Two years from now Sony hopes that downloading music, TV shows, and movies will be happening from your PS3 and PSP earning them more dollars. Sony hopes that people keep buying UMDs (which are making them a TON of money) and hopes that they will buy Blu-ray disc too. They also hope more companies buy the CELL processor to do super fast calculations that are shown with PS3 demos, Toshiba demos, and IBM demos.

And I hope people here realize that now for the first time in history Sony will have 2 hardware systems that will sell 2 different fronts on software. The PSP will have games and UMD movies, while the PS3 will have games and Blu-ray movies. People will be crazy not to realize the possibilities that Sony has in their hands. Things can only get like most pplbetter from here. Oh and don't forget that Sony also is selling their own memory sticks that more people are buying due to the PSP. Now that we know the PS3 will accept Pro Duo sticks expect Sony only to make more money on that too.

If UMDs keep selling great and Blu-ray wins a quick victory over HD-DVD then expect the Sony to actually take over the world in 10 more years.:lol:

many industry analysts and insiders agree that next-gen are going to be a much closer race than current gen's no matter who is going to be the market leader,so there is a high chance of sony's golden egg laying goose starting lay some silver ones instead. :)

i do think blu-ray will be the "winner" format but expecting it to be as popular as dvd in just couple of years is just nor realistic .(due to factors such as current format war, low hd-tv penetration in the world..etc)

and even if psp has been a l success so far no one can lets not forget that nintendo still controls %90 of handheld console market(they arehavent released the "true" successor of gameboy yet) ,also companies like apple decided to enter the portable video market so competion is heating up on that front too.

[mckmas8808]

many industry analysts and insiders agree that next-gen are going to be a much closer race than current gen's no matter who is going to be the market leader,so there is a high chance of sony's golden egg laying goose starting lay some silver ones instead. :)

i do think blu-ray will be the "winner" format but expecting it to be as popular as dvd in just couple of years is just nor realistic .(due to factors such as current format war, low hd-tv penetration in the world..etc)

and even if psp has been a l success so far no one can lets not forget that nintendo still controls %90 of handheld console market(they arehavent released the "true" successor of gameboy yet) ,also companies like apple decided to enter the portable video market so competion is heating up on that front too.


Perfectly correct statements but lets not forget that analysts got the retail price of the PS2 and PSP horribly wrong. And could any analysts see in 10 years Sony selling damn near 200 million consoles, while every other console in life including MS, Nintendo, Sega, and the weird others combined sold about the same amount in a 20 year timespan. But your comment is basically correct though.

[Nesh]

Some people tend to interpret reduction of profits as losses.

They are still making a profit.Losses are generated below average cost.They are still making profits so things arent that bad.

[<nu>faust]

Perfectly correct statements but lets not forget that analysts got the retail price of the PS2 and PSP horribly wrong. And could any analysts see in 10 years Sony selling damn near 200 million consoles, while every other console in life including MS, Nintendo, Sega, and the weird others combined sold about the same amount in a 20 year timespan. But your comment is basically correct though.
the thing is i belive that sony gotta step up its game cos' no matter what kinda market they are in the competiton is heating up. I can remember how "cool" was my first walkman, how our sony tv was top quality, how good sony customer service was..sadly they are not the old sony aymore. Other than playstation(which came at a point when competition decided to hand the leadership on a silver platter with their stupid management ) they havent had a leader product in last 10 years, as far as im concerned they havent come up with any kind of technology that is visonary or ground breaking(i know iuknow there has been some exception but all minor imo), where is the company that made millions of ppl admire the japanese engineering and design? Lately samsung has been making better tv's, apple's been making better portable music players,ms had better online strategy...what's going on

[Carl B]

I think Sony'll come back on the CE front soon enough. They just have to get their TV and MP3 player acts together - and I already have reason to believe the TV's are starting to shift for the better. A trip to a Sony Style store recently left me pretty impressed with some of their newer TV's, and I know it's only going to get better. And on the side, I think their cell phone joint venture is going great; SonyEricsson phones are some desirable phones! :)

[mckmas8808]

the thing is i belive that sony gotta step up its game cos' no matter what kinda market they are in the competiton is heating up. I can remember how "cool" was my first walkman, how our sony tv was top quality, how good sony customer service was..sadly they are not the old sony aymore. Other than playstation(which came at a point when competition decided to hand the leadership on a silver platter with their stupid management )

Well first of all the competitors DID NOT give Sony the leadership with the Playstation. Sony earned every bit of it. Secondly, besides that I agree 100% of everything else that you said.:smile:

[<nu>faust]

Well first of all the competitors DID NOT give Sony the leadership with the Playstation. Sony earned every bit of it. Secondly, besides that I agree 100% of everything else that you said.:smile:
well you are right; the way i said "giving the leadership" is not appropriate to describe what happened during the transtion period of videogames from 16 to 32 bit.First of all i must say;I agree that sony did an excellent job with ps1(a good powerful system,easy developent tools,excellent marketing,supporting securing quality software) but at the same time i belive that if sega's(loosing customer trust prior with sub-par products like segacd&32x, relasing saturn $100 more expensive than its competiton,creating the hardest to develop machine in the history of gaming,not being able to support the hardware properly software wise) and nintendo's(not supporting cd format thus losing some of the biggest gaming franchises that were previously exclusive to big n to its competitor,pissing every 3rd party outhere and limiting console's capabilities result of it,delaying the launch of the system for about 2 years , promising cg qulaity graphics and delivering subpar expensive games) mistakes weren't that big, sony wouldnt be able to capture the leadership of the market on their first try,their disadvantages were too big at the time.

[TrungGap]

Well first of all the competitors DID NOT give Sony the leadership with the Playstation. Sony earned every bit of it. Secondly, besides that I agree 100% of everything else that you said.:smile:

I agree 100% of what you saying... :) Sony didn't get to be #1 in game console and consumer electronics because it was given that title. Sony worked hard at it. But unfortunately what <nu>faust said true, regarding that Sony been slacking off. Their (CE) product is not inovated. It's not head and shoulder above others anymore. And isn't price competitive. Samsung and LG are brands I'm starting to look for when I want quality and reliability. I went out of my way to buy a Samsung's VCR, just because all the Sony's mid/low-ends suck so bad.

Sony CE loosing money isn't fatal for Sony, all it means is they don't have the flexibility they might want. And to what degree PS3 will senergize their CE? I don't see much beside BR. Com'on show us some cool stuff you could do with PSP and PS3 interface. Don't talk about pie in sky stuff...show us some stuff.

MS gotten really good using one product to sell another. For an example, MS consulting. Sometimes they're offer that service at cost so they can sell more MS products. And you see that all the MS consultants really pushing MS products. Look at x360 trying to push MS MCE. Look at how the 360 interact with mp3 players (pimping out PlayEnsure). Look at the interaction between 360 and Live, and see how Live touches other aspect of MS technologies. Somehow, to me MS seems to have a concert plan. I hope Sony got one too.

[thatdude90210]

Sounds like the PS3 launch would be the perfect time for MS to get Sony into a price war. :)

[Xenus]

No it wouldn't the PS3 will sell out on launch unless it is around $1000. Starting a price war then would only hurt Microsoft.

[mckmas8808]

No it wouldn't the PS3 will sell out on launch unless it is around $1000. Starting a price war then would only hurt Microsoft.

Yeah MS can't afford to just charge whatever they want. I'm sure MS would want to sell their next-gen system at normal price for at least one year.

[wco81]

I saw on Yahoo Finance I think it was that the lower profits were attributed to lower TV and digital camera sales.

[Deepak]

http://news.yahoo.com/s/nm/20051027/tc_nm/sony_targets_dc

[PARANOiA]

Yeah MS can't afford to just charge whatever they want. I'm sure MS would want to sell their next-gen system at normal price for at least one year.

I agree that they want to, but I actually think people underplay MS's shrewdness. They've taken over a lot of industries by undercutting the competition at a loss, then recouping once they have a monopoly.You also shouldn't underestimate the amount they've spent on the Xbox project as a whole (both the first and the 360). Rather that seeing it as a black hole, I see it as a big red cross on the balance-sheet they have "invested", and expect to make back. Big companies make money through huge investment in seemingly silly losses, only to win it back big time. That's how they win - the little guys can't fight back!

Now, Sony on the other hand obviously have a hell of a lot here to play with too. I'm actually really enjoying the console race from a number of different angles, most critically "out-MSing" Microsoft at their own game (being market dominance).

Thanks for the slide above to the poster. Very interesting, but I'd love to see it updated with losses on the PS3 so far. From what I understand, Sony has a taken very, very big risk on it and Cell, much more that they have in the past. Anyone know approximate costs (and anyone interesting in charting it for my sake ;)) ?

[ihamoitc2005]

God you people are hopeless. R&D costs are just a drop in the buckect compared to what they stand to gain if the PS3 and Cell see broad acceptance. Oh and SCE's revenues are up 79%. The money being lost is from the other divisions.

According to IBM powerpoint presentation, CELL development cost = $400Million

Sony is investing additional $350M for development of 65nm CELL manufacturing process by IBM.

[Nesh]

No it wouldn't the PS3 will sell out on launch unless it is around $1000. Starting a price war then would only hurt Microsoft.
I disagree.MS has huge capital reserves.Not only X360 could be a lot cheaper to manufacture but they have huge reserves so they can still operate with X360 generating losses or less profit (or even not affecting at all their profitability).
Sony doesnt have the reserves MS has.PS3 is most likely to be very very costy to manufacture.
A price war will force Sony to have losses that will be hard to cover.Something similar happened with the Sega Saturn and the Sony PS1.
The sega saturn was a very expensive hardware for Sega.On the other hand PS1 was cheaper to manufacture and Sony had more capital reserves under their disposal.Sony could easily reduce its price, while Sega was forced to reduce its price to remain competitive but that created many problems to them.Higher price generated less losses per console sold, but being less competitive ment less sales so it was harder to cover the losses per games sold with each console.Having a more competitive price ment more sales but at the same time more loss per console sold so it was harder to cover the losses with capital reserves.

[hey69]

if MS really really wants, (if everything is possible and pigs fly... ) MS could release the valupack xbox360 with 3 extra wireless controllers + a 27" hdtv +20 games for only 49US$ and swallow the costs. (wooww) from day one, fuck Sony and Nintendo in the a$$ .and when Sony and Nintend are dead they can start clean over with xbox720 for full price.


But somehow.. i dont see this going to happen :p

[Druga Runda]

Which is, more or less, true. After all if every other Sony division losses money, the company will be reliant on SCE to make enough profit to keep the company as a whole going. If the movie and CE divisions continually lose money, without the PS brand Sony would disappear. Hence it's the success of PS3 that'll the company going if they can't fix their other problems, and if they can sell the PS3 for more money without negatively impacting the sales and growth of PS3, they'll do it to fill the coffers.

With Harrison's talk it's unlikely divisions will be doing whatever they want regardless of impact on other Sony divisions, and will act in supprt of the greater good of the company.

well if all other divisions are loss makers they need to sell off and focus on the working core of the company which in theis case would be SCE. Relatively simple way to satisfy the shareholders and to make the company healthy again. Sell off other "bad" parts to chineze/taiwanese who will be able to compete on cost in commodity markets, in a similar way IBM sold of HDD and PC divisions.

[Shifty Geezer]

well if all other divisions are loss makers they need to sell off and focus on the working core of the company which in theis case would be SCE. Relatively simple way to satisfy the shareholders and to make the company healthy again. Sell off other "bad" parts to chineze/taiwanese who will be able to compete on cost in commodity markets, in a similar way IBM sold of HDD and PC divisions.That's assuming they can't turn the bad parts good, which is what they hope with Cell and broader content distribution it seems. Sony grosses a large amount of cash, but just manages to spend as much too!

[Carl B]

According to IBM powerpoint presentation, CELL development cost = $400Million

Sony is investing additional $350M for development of 65nm CELL manufacturing process by IBM.

I think those later millions are to help - and have a stake in - IBM's East Fishkill 65nm line. Nagasaki is using a 65nm process developed jointly between Sony and Toshiba if I'm not mistaken, with IBM's SOI technology thrown into the mix.

[jvd]

Yeah MS can't afford to just charge whatever they want. I'm sure MS would want to sell their next-gen system at normal price for at least one year.

All other parts of ms make money. Ms has billions in the bank .

Sony only has one part that makes money and has long term debt .

Yet u feel sony can take losses on the system and ms can't afford too ?

Its actually in ms's favor to enter into a price war . The more money ms can make sony loose the longer it will take sony to make it back or turn even a profit . This will put sony into a very bad postion during the gen and the next gen .

But regardless ms has two skus . One is a cut down system and one has many of the things people are going to want . They can modify these skus or add to them at any time .

I.e when sony launches ms can move the core system to 200$ . They can create a gamer edition that comes with a wireless controller a hardrive and a head set for 300$ and then a 400$ version that comes with a bigger hardrive and perhaps 1 or 2 launch titles . There will be alot of casuals ready to buy at the 200$ mark and don't need to watch streaming movies on thier tv or the other features of the hardrive and when they are ready to upgrade to a hardrive ms will recoup some of the losses .


So i really think a price war is in ms's favor

[Carl B]

Games division isn't Sony's only profitable division. How can that rumor continue to persist? I mean for god's sake - ~$250 million in net profit when Games division pulled in ~$70 million this last quarter. That's some whacked out math to reach that conclusion.

Anyway obviously if they wanted to, MS could be the ultimate determiner of a price war outcome. But from their initial price points, that's not a game they're willing to play yet at least.

[EpicZero]

Games division isn't Sony's only profitable division. How can that rumor continue to persist? I mean for god's sake - ~$250 million in net profit when Games division pulled in ~$70 million this last quarter. That's some whacked out math to reach that conclusion.

Anyway obviously if they wanted to, MS could be the ultimate determiner of a price war outcome. But from their initial price points, that's not a game they're willing to play yet at least.
Last year, their movie division made over $500 million in profits. Their cellphone division (or joint venture) is profitable as well. Their financial arm (bank, insurance) are moneymakes too, I believe.

[Platon]

One think I ownder bout is not so much the price point they willintroduce their system with, but rather what they have said about not reducing the price in the same manner as they have done before and they will be selling the consoles at the launch price for much longer, with smaller price cuts that are far between.

Sure they will sell all the consoles they can produce at launch and near launch, but if I remember correctly most of the consoles are being sold when the price cuts start to happen. For example they are now selling the PS2 really cheap, and still making money, even enough to hide the huge investments they have been doing on the PS3 R&D.

What kind of effect will that have for them if they introduce the next PS at 400$ and keep that price much longer than ever before...

[Shifty Geezer]

If the console doesn't sell they will drop the price. No two ways about it.

[jvd]

Games division isn't Sony's only profitable division. How can that rumor continue to persist? I mean for god's sake - ~$250 million in net profit when Games division pulled in ~$70 million this last quarter. That's some whacked out math to reach that conclusion.

Anyway obviously if they wanted to, MS could be the ultimate determiner of a price war outcome. But from their initial price points, that's not a game they're willing to play yet at least.

what does thier initial price show ? It only shows no one else is in the market . By all acounts in most teritorys ms will have about a year diffrence between when they launch and the next system launchs . So thus they can charge a premium while they are the only next gen game in town. Loosing less money in the short term before they take larger losses entering a price war

[Carl B]

what does thier initial price show ? It only shows no one else is in the market . By all acounts in most teritorys ms will have about a year diffrence between when they launch and the next system launchs . So thus they can charge a premium while they are the only next gen game in town. Loosing less money in the short term before they take larger losses entering a price war

I'm not even arguing the console prices at all - just your claim that Sony only has one proftable division. I agree that Microsoft can milk the 360's price as long as it is the only game in town, and then lower it to - real(?) - levels once PS3 launches.

[jvd]

I'm not even arguing the console prices at all - just your claim that Sony only has one proftable division. I agree that Microsoft can milk the 360's price as long as it is the only game in town, and then lower it to - real(?) - levels once PS3 launches.

dunno about real lvls . I doubt we will see a price drop when sony launches in the states . It will be the holiday season and sony will mostl ikely have supply issues (as i'm sure they will sell out what they can ship ) and so ms in turn will sell well . I expect a price drop around that march . I really think they are going to drop the core to 200$ . I also think they will introduce a 40-60 gig drive as an upgrade giving those core users a used 20 gig option (as i personaly would trade in my 20 gig towards the price of a 40 or a 60 )

[Carl B]

Uh... wait, are we talking about Sony's profitable divisions, or something else?

Because I really am not trying to have a discussion hypothesizing the price drops of the 360. I would believe PS3 launch, Christmas of next year, or March of the following year, sure. Any and all seem reasonable and with arguments to be made on their behalf.

[Platon]

If the console doesn't sell they will drop the price. No two ways about it.

Yep no doubt, but what will that do to Sony economically? I mean after a certain loss there is no way they can make back the money. Look at MS this gen. They have been selling the console at a loss the whole generation, no matter how good the attach ratio of the games is, they will not be able to make their money back. Now I am not saying that Sony will be selling the console at a loss for the rest of this generation but this time around they might have to take much larger losses when selling the hardware than ever before...

[threepac3]

Yep no doubt, but what will that do to Sony economically? I mean after a certain loss there is no way they can make back the money. Look at MS this gen. They have been selling the console at a loss the whole generation, no matter how good the attach ratio of the games is, they will not be able to make their money back. Now I am not saying that Sony will be selling the console at a loss for the rest of this generation but this time around they might have to take much larger losses when selling the hardware than ever before...

Sony is risking a lot more then they ever have before with the Playstation Brand. Sony is trying to get the Cell some name recognition as to allow them to expand its use into many different and varying devices. Sony is also banking on PS3 making Blu-Ray a success, if these factors pan out for Sony they will make up for there R&D costs.

[Shifty Geezer]

Yep no doubt, but what will that do to Sony economically? I mean after a certain loss there is no way they can make back the money. Look at MS this gen. They have been selling the console at a loss the whole generation, no matter how good the attach ratio of the games is, they will not be able to make their money back. Now I am not saying that Sony will be selling the console at a loss for the rest of this generation but this time around they might have to take much larger losses when selling the hardware than ever before...There's always lots of IFs. IF it doesn't sell as well, and Sony need to drop the price, then...um...they lose money! Such is business. You win some, you lose some. And if they lose billions they'll need to restructure the company, maybe sell some bits off. And if their Cell fabs are hit by an earthquake and wasted, that'll do them a nasty too ;)

[jvd]

The only way the ps3 wont sell out is through a combo of things . Mainly really bad launch titles and to high of a price .

Of course sony can't just drop the price as they will loose face

[PARANOiA]

Shifty,

There are plenty of IFs. However, I think the point trying to be made is that Sony are in a much riskier position than ever before with the Playstation. Your sarcasm is noted, however I think you'd have to agree here that it's not going to be an easy win for PS3 this round.

[Johnny Awesome]

Personally I think Sony has enough brand power that MS can't quite go all out on a price war for fear of looking desparate. MS is better off matching price and using the extra money to fund franchises that will sway PS gamers to their console. If the Xbox ever achieves the same mindshare/branding that PS has, then MS can go in for the kill and lower pricing such that Sony can't afford to be in the business anymore.

That probably won't happen in this generation, mainly because Japanese studios are still going to favor the PS3 for development due to the fact that MS has no traction in Asia. That means that PS3 will have a few key franchises like MGS, FF, DMC etc... that should stop MS from dominating.

You also have to remember that Sony's 1st party division is still better than MS', until such time that MS can churn out more hits than just Halo, Fable and Project Gotham Racing. GT3, God of War, The Getaway, TM, Wipeout, R&C, J&D, Sly, etc... have all been pretty well established in the minds of gamers. Rare is the big wildcard. Can they bringout Kameo, PDZ, Banjo, etc... to rave reviews and fill all the holes in the 1st party lineup? That's why MS acquired them, but only time will tell...

[Carl B]

I don't think PS3 is all that risky. Putting the console war and the rest of it aside, assuming that PS3 ends up profitable for Sony this gen, that's all that really matters. If there were a chance that this gen ends up being unprofitable for Sony, well then that would be a risk. And of course that risk always exists, but I think the risk is relatively low for Sony. Stringer and the boardroom gang aren't there hoping for Games to pull them along - they want every division of Sony to be profitable and they'll be going ahead with their restructuring plans regardless.

Games exists in it's own little protected world, and Kutaragi - despite demotion - carries a lot of clout in that company. (and is still a rumored contendor to succeed Stringer, though the chances are lower now that it seems the Ohga faction has diminished clout)

[Johnny Awesome]

Sony certainly has more risk this generation. They can't afford to lose too much marketshare to MS. As soon as gamers are ambivalent between Xbox and PS, MS can force Sony into a price war they won't recover from. They have to protect their brand image above all else.

This will be harder this time than last time, because MS is pushing harder with things like better aesthetics, Xbox Live enhancements, Rare acquisition, funding for consistent studios like Bioware and Silicon Knights, Halo already established etc... It's almost inevitable that Sony will lose mind/marketshare, but the question is how much?

[PARANOiA]

Putting the console war and the rest of it aside, assuming that PS3 ends up profitable for Sony this gen, that's all that really matters.

That's the big debate though isn't it :wink: Nintendo were profitable last generation, but if the PS3 ended up being the Gamecube of next gen, I think many, many people would see it as a failure, even though it made money.
I think:

Sony has to win in both the "mindset", as well as on the chequebook.
MS has to win in mindset, chequebook is secondary (and can come once they dominate the market, eg Windows, Office, etc)
Nintendo has to win in the chequebook, mindset is secondary.That's one man's opinion of course. If you disagree I'd be interested to see why.

[Carl B]

If you disagree I'd be interested to see why.

Well, I do disagree in a way. IMO as long as the business makes sense to continue running as a business, then it's a 'success.' Sure, relative to prior or future performance one could say a certain year, model, or generation 'failed,' but in the larger scheme of things profitability is the ultimate determiner.

That being said though I so see where you're coming from with your listed criteria there, for Sony Nintendo, and Microsoft.

Viewed in that context (the relative context) I agree with your conclusions, except to say that I think you reversed it with Microsoft: this gen profitability is their number one, and mindshare is secondary. It just stands though that the road to the former will likely be paved with the later. But if Microsoft doesn't turn profitable this gen, mindshare aside, I think that will qualify as a *relative* failure for them.

[Shifty Geezer]

I think PARANOIA's right in general. Sony have invested an awful lot of money in support of PS3 and related technologies. If PS3 doesn't do as well as people are expecting (emulating it's older siblings' successes) Sony are going to be out of pocket, which'll reflect badly on their books and damage investor relations I'm sure.

As for an easy/hard round for Sony, I've no idea. I don't think anyone can actually with confidence predict a likely outcome. So far UMD's have done well despite everyone of sense saying the public would neven go for it. At the end of the day, though marketting firms would like the companies they service to think otherwise, the mainstream buying public can be amazingly unpredictable. There's no way of knowing which thing will become the latest fad. I remember a few years back a program of Christmas presents and what would be the big seller. Experts were tooting Pogo sticks (following on from Scooters and other mobile entertainments) and I've never seen one out since. Similarly authors and musicians approach countless publishers and agents who turn them away thinking they won't amount to anything, only suddenly for their book/music to get taken up by an unknown are fly to the top of the Fads and Crazes list. All these agents etc. have a job only to predict what will sell, and they get it wrong as more often as not. You can't create a craze deliberately (except boybands :p). You just shovel your wares out there and maybe one will take off. Next gen Sony are in a strong position, but for all we know suddenly Nintendo get the cred and whizz to the fore? Or Maybe Sony can still ride the wave of the PlayStation brand in the same way Apple continue with iPod's sales success despite there being other better rivals.

I'll be surprised if PS3 doesn't reign supreme, but at the same time I'm not making any predictions!

[jvd]

I think all of us can agree if sony is forced to take larger losses while selling less units than it did with the ps2 they will be introuble .

If there is no growth that is a bad sign esp if ms or nintendo starts to make more inroads . If ms can get 30-40% of the global market this round (or more ) it will be a huge blow to sony .

[Shifty Geezer]

Why is it dependant on Sony shifting hardware? What if MS and Nintendo make inroads (pretty likely IMO) but Sony triples software and content income through downloadable msuic, movies and whatnot? As long as they make the money, that's what's important to them. I'm sure given a choice between making $500 million profit a year with 90 million PS3s, and $2 billion profit with 20 PS3s, Sony would willingly choose the latter.

The concern is not 'will Sony lose market share?' but 'will Sony's earning power be reduced?'

[mckmas8808]

Shifty,

There are plenty of IFs. However, I think the point trying to be made is that Sony are in a much riskier position than ever before with the Playstation. Your sarcasm is noted, however I think you'd have to agree here that it's not going to be an easy win for PS3 this round.

It wasn't a easy win the last two darn rounds. Sorry for sounding pissed but I am. Sony had to bust their butts to be where they are now. Before the PS2 came out plenty of people talked about the launch games and stated what the Sega DC could do and how they had great games. Now the DC is a in no mans land. The GC was cheap, small, and cute and people talked about how that was Nintendo return to the top. The Xbox was super powerful, had a HDD, and had the obvious best online in console history.

But what happened? Sony creamed all of them. Even with Mario 64 and GoldenEye the N64 got crushed by the PS1. My point is Sony has always stepped up to the competition. And each and everytime they had very good competition. Everytime.

[Phil]

As I have already stated numerous times, mind-share will play a big factor. In addition, Microsoft though undoubtedly in a better position at glance still lacks key-games to make a big impact into Sony's marketshare. Millions of Sony owners enjoy the software they're used to for the last 2 generations. As long as those key-selling franchises are still on the Sony platform, it is left to be seen if they feel tempted enough by what Microsoft is offering.

From how I see it now - and ultimately, I am a PlayStation owner and the ones Microsoft wants to see buying their console - there's little that sparks my interest. PGR3 all sounds nice and dandy, but in all honesty, it's not exciting me any more than the previous two games did. Why would I get all excited about them now? Same goes for Halo. Undoubtedly great game, yet part 1 and 2 weren't reason enough for me to get an Xbox so why would part 3 change any of that? Answer: it doesn't, and I'm betting tousands if not millions think the same.

As for graphics - well, undoubtedly Xbox360 will have the advantage of having the best graphics around for over a half year - but why get all excited about it when I know that PS3 visuals will be just as good?

As I said, I'm sure Xbox360 will enjoy an excellent launch and will be bought by many of its own followers (today Xbox owners), but really, to think that millions of proud PlayStation owners will just drop everything and go and buy an Xbox360 knowing PS3 with all their favorite franchises is around the corner is really pushing it.

[Shifty Geezer]

From how I see it now - and ultimately, I am a PlayStation owner and the ones Microsoft wants to see buying their console - there's little that sparks my interest. PGR3 all sounds nice and dandy, but in all honesty, it's not exciting me any more than the previous two games did. Why would I get all excited about them now? Same goes for Halo. Undoubtedly great game, yet part 1 and 2 weren't reason enough for me to get an Xbox so why would part 3 change any of that? Answer: it doesn't, and I'm betting tousands if not millions think the same.For me, the way I see it what is XB360 going to have genre-wise that PS3 won't? It's got PGR and racers, but PS3 will have GT and racer. It's got FPSes, and so will PS3. It's got platformers like Kameo, and PS3 will have platformers like Jak/Ratchet.

The only thing I can see coming to XB360 that isn't yet listed for PS3 is Oblivion, and I don't know what western style DnD class RPG's PS3 will be seeing. I do expect a lot of original concepts (not just IPs) on PS3, like Okami, ICO/SotC, Katamari etc. It's the old 'it's all about the exclusives' argument, but for me it's not the brands that are as important as the ideas. They'll all have their fair share of genre exclusives with slight variations on a theme. It's the new and exclusive gameplays that'll sell the console to me.

[Josh378]

It comes down to ONE GAME to proclaim who wins this console war:


GRAND THEFT AUTO :D

(j/k....But if Sony once again secures the GTA series with a timed exclusive and the gameplay and graphics are mind-blowing....it may be PS2 all over again. BUT, I have to see what PDZ and Halo 3 is looking before I get a 360. Also, I'm skeptic since I only mentioned 2 games for 360 that I truly want (either than the next NG game), I hope MS can come with alot more exciting games than 2 FPS of my tastes.)

Franchise games....will I ever move on to more innovative and unique games?

-Josh378

[Phil]

For me, the way I see it what is XB360 going to have genre-wise that PS3 won't? It's got PGR and racers, but PS3 will have GT and racer. It's got FPSes, and so will PS3. It's got platformers like Kameo, and PS3 will have platformers like Jak/Ratchet.

Oh I wasn't trying to imply that Xbox360 lacks genres and games that are on PS2 and will be on the PS3 eventually - what I was specifically saying is that Xbox360 currently isn't offering something that will make PlayStation owners magically drop their console of choice and run out to stores.

But let me start differently now that I have a bit more time on my hands for a longer reply:

Consider the following:

At the beginning of a consoles launch - beginning as in launch + initial year of the consoles debut - its consumers are made up of

1.) hardcore gamers,
2.) loyal platform supporters (fans) and
3.) casuals out to buy a new toy that's considered to be cutting-edge new and will last them a couple of years.

I'm obviously guessing here, but I think it's fair to assume that the largest part of initial buyers are the ones made up of hardcore gamers & loyal platform supporters. The rest ( 3 ) will probably make up for below 30% of those initial buyers.

As the months pass, I'd say it's reasonable to assume that the casuals gain more and more importance over the hardcore gamers & loyal platform supporters. This is attributed especially to the increase in software but also price drops and the fact that they too would want to use their consoles for around a 5 years cycle.

Now, considering the above, I will safely assume that the Xbox360 when it will launch at the end of this year, will be predominantly bought by hardcore gamers and its own set of loyal Xbox supporters. Casuals will, as with any console, be of a very small percentage - if even less than expected because many of them will have just have bought a PStwo not too long ago and won't be rushing out to shops to buy an expensive new console.

The time when the group of casuals will slowly pick-up is when, as mentioned above, there are price-drops, more software and their old console start to become outdated. I'm not sure anyone can make accurate as to when this happens, but I wouldn't think within the first year of the Xbox 360s launch. Now, if we assume that this shift occurs around 1 to 1.5 years after the console's debut, the PlayStation 3 will have already been launched - and it too, will have sold heaps in that time, thanks to hardcore gamers and especially loyal platform supporters. If we look up to when PS2 launched, we will see that Sony managed to sell roughly 10 million units within the first year. This is unparalleld so far in console history and I see especially one reason: mind-share. At the time PS2 launched, PSone enjoyed sales of over 70 million units world-wide - a big percentage of course being casuals, but also many casuals that over time of being happy PlayStation owners transformed into loyal supporters. Loyal supporters that then went out and bought a PS2 within that first year, despite an impressive Dreamcast at the time.

Now if we fast forward to December, we'll see that with the launch of Xbox360, there will be roughly 95 million PS2owners (http://www.scei.co.jp/corporate/data/bizdataps2_e.html) outthere, many of which I expect to be happy owners as well - many of which will have turned into loyal supporters as well.

If we go by current sales numbers, we have roughly 20 million Xbox owners and roughly 20 million GameCube owners outthere (actually, I'm not quite sure about the current number, but for the sake of the point, it should be accurate enough).

If we subtract that from the PS2 userbase, we're left with around ~50 million of PS2 owners that appear to be exclusive to the PlayStation brand at the moment (and this is best-case scenario as I'm sure not every Xbox & GameCube owner owns a PS2).

Now, obviously, we don't know how many of the above mentioned 50 million PS2 owners are casuals, hardcore and loyal supporters, but also here, I'd expect a fair part of them to have become at least somewhat supporters as well, if not for the fact that they enjoy the games they're playing and will be looking out for franchises they know next generation.

Thing is, once Xbox360 will start to gain popularity among casual gamers, PS3 will almost certainly be on the market for a while as well, enjoying rising sales of its own. The question I think is the important one is if those casuals, those 50 million PS2 owners today, are they going to go out and buy a Xbox360 or a PS3? To answer that question, I think software will play a significant factor - software that yet isn't around.

I suppose it's my opinion, but I think if Microsoft seriously wants to get a big fat chunk of those 50 million to convert over to their console, they need more of the same kind. The games Microsoft over will have to be better than the PS3 ones, more innovative and simply different to make people want to change. If they fail to deliver on this, I don't see why many of the today's exclusive PS2 owners would shift. In fact, what they need IMO are key-exclusives that are appeared on PlayStation this generation. Final Fantasies, GTA's.. you name it. Or they need to build new IPs that grow to similar successes and will make an impact.

[jvd]

Why is it dependant on Sony shifting hardware? What if MS and Nintendo make inroads (pretty likely IMO) but Sony triples software and content income through downloadable msuic, movies and whatnot? As long as they make the money, that's what's important to them. I'm sure given a choice between making $500 million profit a year with 90 million PS3s, and $2 billion profit with 20 PS3s, Sony would willingly choose the latter.

The concern is not 'will Sony lose market share?' but 'will Sony's earning power be reduced?'

Sonys software tie in ratio is just not that good . To continue growing thier busniess they need to continue expanding thier user base . Esp for a company thats game base is largely third party .

[Shifty Geezer]

Or improve their software tie ratio. And software can be more than just games. That can include media content. eg. PSP's software tie ratio is augmented by UMD sales.

[jvd]

Phil . Your missing a key point . Casual gamers that make up a huge portion of sonys 90m users will buy what has the hype and what they can afford.

There is a reason why most consoles are sold at the 200$ and under price point and it has more to do than just the amount the system itself costs .

I believe through ms's core unit they will hit 200$ mark way before sony does and with it will have a host of 20$ games .

Most gamers don't care if they are playing gt5 or froza 2 . Just as long as it has the features they want .

[jvd]

Or improve their software tie ratio. And software can be more than just games. That can include media content. eg. PSP's software tie ratio is augmented by UMD sales.

It could be . But where are they going to increase thier software tie ratio ? Xbox live market place doesn't exist in sony land . They don't even have a working online model for it as of now .

Umd is working well because there are simply no good games hitting the psp . Will umd sales stay high if the owners have a choice between quality games or movies ?

Lets nto forget that whatever sony does with the ps3 its going to require huge investments . A multimedia content delivery system doesn't just sprout out of thin air

[mckmas8808]

I suppose it's my opinion, but I think if Microsoft seriously wants to get a big fat chunk of those 50 million to convert over to their console, they need more of the same kind. The games Microsoft over will have to be better than the PS3 ones, more innovative and simply different to make people want to change. If they fail to deliver on this, I don't see why many of the today's exclusive PS2 owners would shift. In fact, what they need IMO are key-exclusives that are appeared on PlayStation this generation. Final Fantasies, GTA's.. you name it. Or they need to build new IPs that grow to similar successes and will make an impact.

I'm sorry I just don't see 50 million+ people switching over to buy a Xbox360 or Nintendo Rev exclusively. And with the PS3 having its BC with its hundreds of millions of games, it's just wow.

[Carl B]

...And with the PS3 having its BC with its hundreds of millions of games...

I think you want to revise your scale there Mckmas. ;)

[Xenus]

Yeah its more in the tens of thousands.

[mckmas8808]

I think you want to revise your scale there Mckmas. ;)

:lol: No I was referring to games sold, not total amount of titles. It's is funny if I did mean the other way though lol.


Umd is working well because there are simply no good games hitting the psp . Will umd sales stay high if the owners have a choice between quality games or movies


jvd you are just WAAAY off with this remark. UMD movies are not working because of this "lack" of good games. Game sales are doing good compared to the number of units that are out. And if the PSP doesn't have any good games then explain to me why by the end of August the PSP had more total games sales than the DS in the U.S.? The whole "PSP doesn't have good games" thing is old so just drop it will you? Thanks.

[Shifty Geezer]

Lets nto forget that whatever sony does with the ps3 its going to require huge investments . A multimedia content delivery system doesn't just sprout out of thin airTrue. I was just saying it's a possibility. Rather than having to invest in getting more hardware sales, it's an option to get more content sales. And we have been hearing here and there of content delivery being developed for Sony. They seem very slow on this front IMO. PSP's been out a year-ish without a proper content platform, and you'd have thought they'd have started work on that the moment they started PSP. Could be internal wranglings, arguing over various aspects between Sony music and films. And perhaps they're cahooting with other publishers which'll slow everything down. Still, if within a couple of years there isn't an integrated content portal for PSP and PS3 I'll be quite surprised.

[jvd]

:lol: No I was referring to games sold, not total amount of titles. It's is funny if I did mean the other way though lol.



jvd you are just WAAAY off with this remark. UMD movies are not working because of this "lack" of good games. Game sales are doing good compared to the number of units that are out. And if the PSP doesn't have any good games then explain to me why by the end of August the PSP had more total games sales than the DS in the U.S.? The whole "PSP doesn't have good games" thing is old so just drop it will you? Thanks.


Hmm could it be that there are more psps than ds's in the states ? Why not compare world wide and see the diffrence.

Number 1 complaint about the psp that gamestop hears "No games that apeal to me"

We will see psp game sales go up again with gta 3 .

[PARANOiA]

If we subtract that from the PS2 userbase, we're left with around ~50 million of PS2 owners that appear to be exclusive to the PlayStation brand at the moment (and this is best-case scenario as I'm sure not every Xbox & GameCube owner owns a PS2).
I'm interested in what makes you think they're "exclusive". It's possible to own one machine without buying the next iteration. Otherwise the PS1 couldn't have beaten both Sega and Nintendo.

I actually have never bought a console's successor... I had a Sega Megadrive (Genesis to those in the US), bought a Sony PS1, then a Sega Dreamcast, and then an Xbox. Do you think I'll be exclusive to Xbox?

[Fafalada]

Hmm could it be that there are more psps than ds's in the states ?
No, by last count DS still had ~200k more hardware units out then PSP in US.

[jvd]

No, by last count DS still had ~200k more hardware units out then PSP in US.

last count i read in the ign forums had more psps sold in the states than ds's

[Edge]

The PSP has already outsold the DS!!! That's amazing!

[Mmmkay]

last count i read in the ign forums had more psps sold in the states than ds's

I think the lesson here is don't read IGN forums ;)

http://www.ga-forum.com/showthread.php?t=66633

NDS
HW = ~2,250,000
Tie Ratio = 2.08

PSP
HW = ~2,050,000
Tie Ratio = 2.30

I'm gonna have to put the dissenting 'no games' comments down to a vocal minority myself. The current tie ratio certainly supports that.

[jvd]

NDS Software NPD LTD: (through Sept/05)
HW = 2,240,895 (Note - this is best info I have, although a couple months of the data have not been confirmed)
Tie Ratio = 2.08

heh

[sirplue]

Phil . Your missing a key point . Casual gamers that make up a huge portion of sonys 90m users will buy what has the hype and what they can afford.

There is a reason why most consoles are sold at the 200$ and under price point and it has more to do than just the amount the system itself costs .

I believe through ms's core unit they will hit 200$ mark way before sony does and with it will have a host of 20$ games .

Most gamers don't care if they are playing gt5 or froza 2 . Just as long as it has the features they want .


You paint a picture of casual gamers being monkeys that just take to whatever is pretty, cheap (if that held any truth Gamecube would be doing gangbusters, not dying a pathetic death), the hype tells them to (if that was true XBOX would have sold better), and have no sense of brand-loyalty whatsoever. I'm sorry, but no. With casual gamers looks and price may play a role, but when the brand they have had before still has most of what they were interested in going for it (looks to their liking, hip-factor, etc.) and the only thing standing in their way is price, they will wait for it to fall before they completely jump ship. And even then, if it warrants the price tag to them, they will buy it no matter what the it is. MSoft has to play their cards flawlessly to make any headway over what they did last generation let alone best Sony.

My thinking is anyone not an XBOX owner this generation or fan of MSoft/hater of all things branded Sony, casual gamer or not, but especially the casual gamer -- if they buy an XBOX 360 at launch or after price cuts will be doing so with the PLAYSTATION 3 in the back of their mind for a later purchase. To dismiss the appeal of the Playstation brand to the casual gamer and the skill of Sony’s marketing ninjas is foolish to say the least.

Sony has done nothing to make me think they can't take this generation, too. Not yet, anyway.

[jvd]

You paint a picture of casual gamers being monkeys that just take to whatever is pretty, cheap (if that held any truth Gamecube would be doing gangbusters, not dying a pathetic death), the hype tells them to (if that was true XBOX would have sold better), and have no sense of brand-loyalty whatsoever. I'm sorry, but no. With casual gamers looks and price may play a role, but when the brand they have had before still has most of what they were interested in going for it (looks to their liking, hip-factor, etc.) and the only thing standing in their way is price, they will wait for it to fall before they completely jump ship. And even then, if it warrants the price tag to them, they will buy it no matter what the it is. MSoft has to play their cards flawlessly to make any headway over what they did last generation let alone best Sony.


ANd for the most point its true . You give no reasons why gamecube would have sold well . There is no hype for it , the hype was on the ps2 .

Brand doesn't matter as much as hype. There are many better mp3 players on the market however ipods still outsell them .

Brand loyalty doesn't exist . People will jump ship for any number of reasons in regards to any products.

As a matter of fact in some markets there is no brand buying at all. People will just buy what is on sale or normaly cheaper .

[sirplue]

ANd for the most point its true . You give no reasons why gamecube would have sold well . There is no hype for it , the hype was on the ps2 . .

the gamecube reffrence was on the cheap tip.


Brand doesn't matter as much as hype. There are many better mp3 players on the market however ipods still outsell them .

maybe, maybe not. the "better" mp3's on the market came too little too late, imo. but for the most part, its the bragging rights that sell something through the roof. the ipod's sucess lies not in its quality but in its sleek look and ease of use. ask me, what ipod and sony and motarola are doing with tech right now is broadening it's horizons as far as potential appeal is. what would only sell to the hardcore tech savvy is now selling to their hipster friends.

Brand loyalty doesn't exist . People will jump ship for any number of reasons in regards to any products.

As a matter of fact in some markets there is no brand buying at all. People will just buy what is on sale or normaly cheaper .


buyers in general are, in fact, quite loyal. a shopper will most likely buy coke or pepsi before they grab the stroe's brand. look at nentendo's fans, they seem pretty loyal to me.

[Mmmkay]

heh

Thanks for that thorough rebuke jvd. Here (http://www.ga-forum.com/showpost.php?p=2129746&postcount=672) is his working out. We're talking discrepancies in the low thousands range. The general consensus is that the DS is ~200k ahead. Just out of curiousity, what where the numbers posted on IGN?

This is rather beside the point though isnt it. It was your assertation that high UMD sales were substituting low games sales which brought this up. The numbers provided prove that theory to be quite wrong.

[Phil]

I'm interested in what makes you think they're "exclusive". It's possible to own one machine without buying the next iteration. Otherwise the PS1 couldn't have beaten both Sega and Nintendo.

I actually have never bought a console's successor... I had a Sega Megadrive (Genesis to those in the US), bought a Sony PS1, then a Sega Dreamcast, and then an Xbox. Do you think I'll be exclusive to Xbox?

Exclusive in that they only own a PS2. If you had continue with reading, you would have read the sentance that follows:

Now, obviously, we don't know how many of the above mentioned 50 million PS2 owners are casuals, hardcore and loyal supporters, but also here, I'd expect a fair part of them to have become at least somewhat supporters as well, if not for the fact that they enjoy the games they're playing and will be looking out for franchises they know next generation.

Obviously, some of those 50 million PS2 owners are loyal supporters, while some are just casuals. The point is, given the shifts in userbase that happens in each consoles lifespan, the people that will buying Xbox360s within the time before the PS3 is released are mainly to a larger extend hardcore gamers and loyal platform supporters (Xbox fans). Once PS3 launches (and that's rougly between 6 to 10 months probably depending the region you're looking at), it will start to pick up with casuals as well - but with a PS3 that close around the corner or possibly already selling like hotcakes by again hardcore & and its loyal supporters, one has got to wonder what will make those casuals buy a xbox360 instead of a PS3. Maybe you can tell me?

I think it is clear that there are more PlayStation supporters outthere than they are of any other kind. I'm still waiting to find out why they will buy a Xbox360 instead of a PS3 in 1.5 years - 6 years down the line based on reasons that we can accurately predict today?

[PARANOiA]

Bugger it, not in the mood for an arguement.

[rabidrabbit]

Brand doesn't matter as much as hype. There are many better mp3 players on the market however ipods still outsell them .
The iPod certainly is a brand, and a strong one too.
I don't understand how you can separate the brand and hype... or bundle them together... I really don't know which one you're doing here.... and why should brand or hype equate/dissociate with quality???

One thing is for sure, short-term hype itself doesn't sell. But hype created by a strong brand and that is built over time does sell.
Brand loyalty doesn't exist . People will jump ship for any number of reasons in regards to any products.
No, it does exist, it just switches target ;)
People won't jump ship overnight for no reason at all.
If a brand does not dissappoint them, they are likely to continue with that brand.
Of course they might try another brands too, but that doesn't mean they'd abandon the other brand or vice versa.
As a matter of fact in some markets there is no brand buying at all. People will just buy what is on sale or normaly cheaper .
You mean like some daily consumer goods? What about some things more closely related to gaming and home electronics than soft toilet paper :)

[london-boy]

Thinking that a "new generation" somewhat resets the Matrix, makes everyone forget what came before, and makes them "start from zero" is very naive.

In the end most people will want the console where they know they can get the games they enjoyed so much in the last generation. If someone really wants to play MGS4, he WILL buy a playstation, whether you want to call him a "loyal Sony fan" or whatever.
If he liked EA games, he will get the first console he can put his hands on and play those games.

There are so many scenarios that limiting everything into "we'll start from zero, there is no brand loyalism" is just not right. They're not TVs or washing machines, which are quickly forgotten (very few people are "loyal" when it comes to TVs or microwaves for example, they just get what they feel like, what looks best among the rest of the furniture at the time of purchase), consoles are instruments through which people play software, some of which is exclusive, and as such there will always be preferences.

[rabidrabbit]

Couldn't have said it better myself, l-bo.

[london-boy]

Couldn't have said it better myself, l-bo.

That sounds too much like J-Lo for my liking...

[mckmas8808]

Thanks l-b you said what I've been trying to say for 3 to 4 months.

[jvd]

No, it does exist, it just switches target :wink:
People won't jump ship overnight for no reason at all.
If a brand does not dissappoint them, they are likely to continue with that brand.
Of course they might try another brands too, but that doesn't mean they'd abandon the other brand or vice versa.


No it really doesn't exist . If someone is willing to jump ship for any reason than that is not loyalty .

Thanks for that thorough rebuke jvd. Here (http://www.ga-forum.com/showpost.php?p=2129746&postcount=672) is his working out. We're talking discrepancies in the low thousands range. The general consensus is that the DS is ~200k ahead. Just out of curiousity, what where the numbers posted on IGN?

This is rather beside the point though isnt it. It was your assertation that high UMD sales were substituting low games sales which brought this up. The numbers provided prove that theory to be quite wrong.


The numbers were on the psp ign board. I don't have the time to go and search for them as my life doesn't exist only on the forums . I really don't trust someone working things out. I trust offical numbers . Apparently he isn't able to supply them as he admits himself and must work it out for himself .

No thanks .

There are so many scenarios that limiting everything into "we'll start from zero, there is no brand loyalism" is just not right. They're not TVs or washing machines, which are quickly forgotten (very few people are "loyal" when it comes to TVs or microwaves for example, they just get what they feel like, what looks best among the rest of the furniture at the time of purchase), consoles are instruments through which people play software, some of which is exclusive, and as such there will always be preferences.


The average consumer will buy what they can afford or feel is the best value for them .

Games factor in much later. Many people don't get hyped up about games coming out in another year or 2 . They look ats whats avalible and whats cheap. You don't know how many times a parent has come into a store and asked me , whats the cheapest and has the most titles and i point them to the ps2 and they just snap it up even with the other parent or the other child saying no i think he wanted a xbox .

[Carl B]

Games factor in much later. Many people don't get hyped up about games coming out in another year or 2 . They look ats whats avalible and whats cheap. You don't know how many times a parent has come into a store and asked me , whats the cheapest and has the most titles and i point them to the ps2 and they just snap it up even with the other parent or the other child saying no i think he wanted a xbox .

Jvd this is totally on the side, but do you guys have any non-used Xbox's left in stock?

[jvd]

Jvd this is totally on the side, but do you guys have any non-used Xbox's left in stock?

I dunno , i only work once every other week , tommrow i'm stoping there for comics so i will let u know .

I know last wensday we had 1 halo 2 xbox used 2 ps 2 slims , 4 psps , 2 ds's (we had 6 but people were buying them for nintendogs) and 4 cubes

[Mmmkay]

The numbers were on the psp ign board. I don't have the time to go and search for them as my life doesn't exist only on the forums . I really don't trust someone working things out. I trust offical numbers . Apparently he isn't able to supply them as he admits himself and must work it out for himself .

No thanks .

...but you're quite happy to bring up unverified sales numbers from IGN which you 'cant even be bothered to find'? It is my understanding that if there was ever a reason to visit GAF it's for their accurate sales data sourced from NPD numbers.

[jvd]

...but you're quite happy to bring up unverified sales numbers from IGN which you 'cant even be bothered to find'? It is my understanding that if there was ever a reason to visit GAF it's for their accurate sales data sourced from NPD numbers.

compared to your numbers where the author admits they aren't right and that he "figured " them out .

Anyone hear can go search the ign forums .

[Mmmkay]

compared to your numbers where the author admits they aren't right and that he "figured " them out .

Anyone hear can go search the ign forums .

I'm trying really really hard not to start with an ad-hom right now. Presenting 'numbers' as fact without providing a linked source, any evidence to support the authenticity of the numbers, and an unwillingness to find said numbers when called out on it is all somehow much more of a reputable source than what I presented to you??

Astonishing, absolutely astonishing.

That author sourced all of his data from NPD threads. Two of those figures were in question, where the numbers were provided as a NDS/GBA combined value and he relied upon the %differences which were announced every month or information from posters who were in posession of the actual numbers. This (http://www.gaming-age.com/news/2005/8/15-44) article covers total DS sales up until the end of June 2005(1.89million) and was provided as part of Nintendo's financial review. September figures were given directly (http://www.ga-forum.com/showthread.php?t=67146)*, only July and August are in question.

So lets play the numbers game shall we? Your understanding is that the DS has sold less than the PSP, if that were true then its numbers would have to be less than 2million. Without those two months of sales data for the DS, it stands at 2.054mil(1.89+0.164) which puts it almost exactly at where the PSP is. Are we supposed to believe that the Nintendo DS sold zero units in July and August?

That is as close as you're going to get as an official total without asking Nintendo themseleves. So unless your 'source' happened to be a genuine Nintendo employee I would really like to know why you support your information more.

Oh and anyone here needs to be a paid subscriber to search IGN.

*(approx) here means tens-hundreds out. The source is fully vouched for on GAF.

[mckmas8808]

Look Mmmkay you are right. I've seen those numbers on GAF and have been following them for months now. They are way more trust worthy than IGN boards it seems. It's just that jvd can't prove his point that UMDs are selling due to the lack of good games for the PSP that's all. People have to face it, UMDs are selling great so far.

[jvd]

Look Mmmkay you are right. I've seen those numbers on GAF and have been following them for months now. They are way more trust worthy than IGN boards it seems. It's just that jvd can't prove his point that UMDs are selling due to the lack of good games for the PSP that's all. People have to face it, UMDs are selling great so far.

Once again the author admits they aren't right .


So MMMMkkyyy is using numbers that are known to be false to prove a point that he is right ?

Yea that works out real well there . As for me i don't feel like going to search for numbers in a forum that is most likely 100 or 200 pages further along than when it was posted in a thread that started out with a diffrent topic .

[mckmas8808]

Once again the author admits they aren't right .


So MMMMkkyyy is using numbers that are known to be false to prove a point that he is right ?



I know for DARN sure Mmmkay is not using false numbers. Those numbers are from people that actually see the NPD report. Sorry jvd you are just so wrong on all fronts on this one. Just fess up and admit your intial point was wrong. It's ok, I make wrong statements too sometime, yet I admit it when I notice it.

[jvd]

I know for DARN sure Mmmkay is not using false numbers. Those numbers are from people that actually see the NPD report. Sorry jvd you are just so wrong on all fronts on this one. Just fess up and admit your intial point was wrong. It's ok, I make wrong statements too sometime, yet I admit it when I notice it.

You just have

From his source

NDS Software NPD LTD: (through Sept/05)
HW = 2,240,895 (Note - this is best info I have, although a couple months of the data have not been confirmed)
Tie Ratio = 2.08

[Mmmkay]

You just have

From his source

I'm sure this is all just a misunderstanding and you just forgot to read this part of my post:

So lets play the numbers game shall we? Your understanding is that the DS has sold less than the PSP, if that were true then its numbers would have to be less than 2million. Without those two months of sales data for the DS, it stands at 2.054mil(1.89+0.164) which puts it almost exactly at where the PSP is. Are we supposed to believe that the Nintendo DS sold zero units in July and August?

Since you were so adamant that he was wrong in his calculations, I removed him from the equation. 1.89million is from Nintendo and 164,000 is from Sept NPD. None of the NDS/GBA combined numbers were used.

[jvd]

Got links ?

[Mmmkay]

Got links ?

You really didn't read my post did you...

[mckmas8808]

Got links ?

His earlier post had links. What's going on?

[jvd]

His earlier post had links. What's going on? his earlier post pointed to data that was not offical and was figured out to be close to correct by the original poster .

THe original poster said there were months of missing data .

He is now suggesting that there isn't any missing data .

[Mmmkay]

his earlier post pointed to data that was not offical and was figured out to be close to correct by the original poster .

THe original poster said there were months of missing data .

He is now suggesting that there isn't any missing data .

Jeez.. http://www.beyond3d.com/forum/showpost.php?p=611801&postcount=102 <-- This post. Scroll up a bit will ya.

He is right here by the way... My point was that there are two months we have no absolute certainty for so I removed them. Withstanding this, the DS is still ahead of the PSP. Have a rough guess how many units the DS sold in July and August (Nintendogs launched at the end of August). Would you say around oh I don't know.. 200,000?

[jvd]

...but you're quite happy to bring up unverified sales numbers from IGN which you 'cant even be bothered to find'? It is my understanding that if there was ever a reason to visit GAF it's for their accurate sales data sourced from NPD numbers.


So lets play the numbers game shall we? Your understanding is that the DS has sold less than the PSP, if that were true then its numbers would have to be less than 2million. Without those two months of sales data for the DS, it stands at 2.054mil(1.89+0.164) which puts it almost exactly at where the PSP is. Are we supposed to believe that the Nintendo DS sold zero units in July and August?


IF we go by those numbers the two would be almost even . However we don't know what the numbers from the other two months are . Both which were soft months (till the end of august) for the ds . Sept was the first full month nintendogs was out for and it only sold 180k units .

The numbers i read put the psp ahead by 15k units . Depending on what was sold in those two months the two can be very close .

I can be wrong as can those numbers. But then again his software tie in numbers will be wrong .


Also the links you sent me show they have no numbers for the psp for sept

http://www.ga-forum.com/showthread.php?t=67146

So where is he getting sept numbers from in the thread u linked me to ?

also where are the tie in rates figured out .

[Mmmkay]

Also the links you sent me show they have no numbers for the psp for sept

http://www.ga-forum.com/showthread.php?t=67146

So where is he getting sept numbers from in the thread u linked me to ?

Here (http://www.ga-forum.com/showpost.php?p=2124806&postcount=553), later on in the thread he confirmed the more accurate DS number and the PSP number.

Please define a 'soft' month. This (http://www.ga-forum.com/showpost.php?p=1805013&postcount=61) post puts the DS between 62-100k for July. August (http://www.ga-forum.com/showthread.php?t=62522) numbers were given as a percentage increase over July. Which puts July at between 78-126k. The absolute minimum that the DS can be ahead of the PSP is 140k. This (http://www.ga-forum.com/showpost.php?p=1905513&postcount=32) post from another member who is privvy to NPD numbers would indicate that the difference is 180k.

[jvd]

that thread has someone posting with no links .

Sorry how does this confirm anything ? can i sign up at gaf get a few posts under my belt and just post things and its taken as offical ?

err your second link is two people guessing what the numbers will be . How is this acurate or true ?

Third link again up 26% of what ? From numbers that were guessed at ?

Last thread with approx in the ds numbers .


And finaly where do the tie in numbers come from ? anywhere offical or just off unoffical and made up info from gaf ?

[Mmmkay]

that thread has someone posting with no links .

Sorry how does this confirm anything ? can i sign up at gaf get a few posts under my belt and just post things and its taken as offical ?

They are the sources and they've been doing it for years. You may as well start discrediting everyone who claims to be a developer here while you're at it with that attitude.

[mckmas8808]

And finaly where do the tie in numbers come from ? anywhere offical or just off unoffical and made up info from gaf ?

The numbers come from the NPD report. They are not made up from the GAF. It's the closes numbers we have on the internet actually.