Business Approach Comparison Sony PS4 and Microsoft Xbox
- Thread starter BRiT
- Start date
I made the point earlier that many of 360 3rd party exclusives eventually made there way to PS3 and I expect the same thing happens with XB1 and PS4. To that point:
http://www.eurogamer.net/articles/2...r-come-to-playstation-respawn-and-ea-weigh-in
http://www.eurogamer.net/articles/2...r-come-to-playstation-respawn-and-ea-weigh-in
5M is probably way on the low side. The number could be closer to 15 million - half from new owners and half stolen from potential PS4 buyers.
D
Deleted member 7537
Guest
Can you tell me PS4 BOM? Why sony shares rise after the press conference?
Stock prices are news driven. The AI algorithms controlling trading, interpreted a $100 price differential as a competitive advantage, which it is. However, that advantage come at a huge cost in lost profit. By the time the consoles are no longer supply constrained, I expect MS to beat Sony on entry price with a subscription version. Hence, lots of profit downside and little if any market share growth to compensate.
BOM is irrelevant. Once MS announced at $499, they threw away several hundred million dollars in launch window margin for basically no long term benefit. That said, if Sony can move an extra 10 million units than MS in the first year, then $399 looks like a good payoff.
At $399, it would mean that Sony is confident at supplying as many PS4 as possible. There may be a launch shortage initially, but their intention would be to deploy as many units as possible with as little friction as possible.
It may also imply that Sony intend to focus mostly on gaming and innovate from there, most likely without PSEye ?
With PSEye, they will be tied down to the living room. We can't RemotePlay the game on Vita and other devices. Their real goal nextgen is cloud gaming. This is why PSEye is completely optional.
Once Sony has a critical mass of PS4/PS+ user base, they will extend select games to other devices/PC/Mac via Gaikai, most likely the indie games first because they are smaller and less intensive. Progressive download before game streaming.
EDIT:
The innovations Sony focus on will likely be bigdata, social gaming, marketplace, remote assistance, multiplayer ideas, multiple and cross device interaction, etc. those sort of things.
It may also imply that Sony intend to focus mostly on gaming and innovate from there, most likely without PSEye ?
With PSEye, they will be tied down to the living room. We can't RemotePlay the game on Vita and other devices. Their real goal nextgen is cloud gaming. This is why PSEye is completely optional.
Once Sony has a critical mass of PS4/PS+ user base, they will extend select games to other devices/PC/Mac via Gaikai, most likely the indie games first because they are smaller and less intensive. Progressive download before game streaming.
EDIT:
The innovations Sony focus on will likely be bigdata, social gaming, marketplace, remote assistance, multiplayer ideas, multiple and cross device interaction, etc. those sort of things.
And you would want to work on them on an XB1 over a PC why? :|
RancidLunchmeat
Veteran
Yes, and I've made the point earlier that it didn't matter that those 360 3rd party exclusives eventually made their way to the PS3 because the 360 had already been established as the console to play those games. They sold better, their DLC sold better and their sequels sold better.
Sony lost their standard as both the "Madden" and "GTA" console this generation due to timed exclusivity on the 360. They also couldn't match the 360's sales of no-longer exclusive sequels such as Bioshock or Mass Effect.
Which means those games sold systems for MS and didn't for Sony, only people who currently had the Sony platform and not the MS platform purchased the Sony version.
There's no real reason to have never-ending exclusivity. 6 months, certainly a year, and the damage has already been done.
RancidLunchmeat
Veteran
You mean all the things that are currently incorporated into and the focus of the One?
I agree completely. I mean, look! Now, if you buy a PS4 and pay for PSN you get to have cross game party chat!
I firmly believe that if Sony does produce a PS5, that it will contain all last generation's features and functions that were available in the One. Just like the PS4.
Sigh, can no one parse a simple sentence? your statement is nonsensical.
For the comprehension impaired, I was using that as reason I am rather more bullish on the cloud than most. I use a form of it everyday.
D
Deleted member 7537
Guest
I'll have a look at some business models. But i think you are leaving too many variables outside of the picture, hardware sales (profits) are not the backbone of SCE o IEB profits, loosing money on hardware it's just a way of achieving a critical mass of installed hardware and then grew up from there (licensing,online fee,hw sales,etc...).
I'll try to come back with more info on this matter next week, i'm quite busy right now.
For the technologically impaired, a remote DB isn't a form of compute cloud.
Sony will offer music and movie entertainment on PS4 but they may be less intense there because everyone from Apple, Google, Microsoft, Amazon and Samsung are helping Sony Pictures and Movies make more money. The more successful they are, the more $$$ Sony will make.
What will be interesting to watch is whether Sony split into 2 as proposed by an outside dude (forgot his name). If so, the media business will be a healthy cashflow into their new gaming platform.
What will be interesting to watch is whether Sony split into 2 as proposed by an outside dude (forgot his name). If so, the media business will be a healthy cashflow into their new gaming platform.
I'll have a look at some business models. But i think you are leaving too many variables outside of the picture, hardware sales (profits) are not the backbone of SCE o IEB profits, loosing money on hardware it's just a way of achieving a critical mass of installed hardware and then grew up from there (licensing,online fee,hw sales,etc...).
I'll try to come back with more info on this matter next week, i'm quite busy right now.
You are making my point for me. The base case assumption is that the forgone profits from the launch price won't translate into increased share. By the time the consoles are no longer supply constrained, MS will beat them on entry price with their subscription plan.
Now another interpretation is that is sure to piss on the sony fans is that Sony's management believes that they can't compete with MS at $499 and that they have to be $100 cheaper not to get crush. That argument is reasonable, although I don't believe that is the case. Personally, I put down to typically poor decision making by executives as the most likely reason, followed by their belief in have significant quantities of consoles in the first six month, e.g. 10 million or more.
And you know my business how? more concretely, unless the phrase "forests of forests" has any meaning to you, you are not in any position to comment.
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I don't think its as cut and dry as you lay out here, in fact I think its possible that Sony looks at this and says 6 months of exclusivity will cost 'x' and reasons that they can fund their our own studio and offer more content on their platform.
If we use Patcher's estimate MS paid roughly 50MM for this IP, putting that investment into 1st party games has the potential to attract customers every bit as much as a timed exclusive. Especially if that investment helps the platform holder offer more variety in the type of games offered on their system.
I also think consumers have caught on and realized that the big IPs are going to be on both platforms. Further if PS4 has better graphics and a more diverse library there are plenty of the core who will be happy to wait 6 months to access games like this.
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Mebbe in the "big data world" clouds are different, y'know like they're just a magical buzzword for anything accessed online or something?
I don't believe that argument is reasonable.
Sony has said that they targeted the $399 price point specifically. I believe them. I believe them because of what I know about consumer electronics. From what I have seen, there is a price barrier to mass consumption for even good products. I would bet that both Microsoft and Sony have pretty good ideas of where their consoles started to sell in large quantities. Sony targeted that price point, MS went for a supply constrained launch.
Sony seemed worried coming into E3 that MS would go for a loss leader of ~$299. I would bet they have absolutely no concerns with competing with Microsoft at $399, and are ecstatic that Microsoft ended up at $499. From the business side of things, I would bet they will either start selling hardware at a profit immediately or have it as a target in the first year. I would bet they are aiming for the mass adoption price range of $299 at their first refresh. Remember, that is the price point that they caught up with Microsoft this generation.
As for entry price, the subscription plans for both consoles cost the same (about $50 a year), so even when Microsoft drops to $399 they are playing on an even field - MS won't "beat them on entry price with their subscription plan". As for the lower price translating into a larger market share, it is very likely. It is doubtful that MS would drop their price in the first 6 months, and consoles are rarely supply constrained for much more than the first holiday season.
Microsoft does position itself to generate hype for the second holiday season with a price drop - which may or may not be a good thing.
