Full Q/a With Tommy Tallarico Ps3 And 360

[Laa-Yosh]

350k*12+150k*12+200k

4.2 million in NA
1.8 million in Europe
0.2 in Japan

I´d say 6.2 million units would be a very fair estimate for total 2006 X360´s sales

I'll ask the same question - what exactly do you base that estimate on??
Assuming that there are 20 million Xbox owners, and that only half of them wants to buy an X360, that'd already mean 10 million returning customers...
I completely disagree with your predictions, and I expect that for the first year of its life, Microsoft will be able to sell every X360 that they make. Their capacity is a lot higher than your calculated average - MS is going to be able to manufacture and sell at least 8 million consoles in the first year. But I'd rather think that they'll hit 10 million in the first year.

2 million in Japan
1.5 million in US
1.5 million in Europe

So, around 5 million units would be my very quick estimation of PS3´s 2006 sales.

Once again, why do you assume that Sony is going to be able to manufacture 5 million consoles in 2006? We haven't even seen a working final version yet!

And if anything is a sure bet, than this is one: in the 2006 christmas season, Sony will not be able to keep up with the demand for the PS3. MS on the other hand will have plenty of consoles on store shelves, thus the predictable shortage will help them a lot...

 

[Sethamin]

You all are looking at the Core/Premium SKU thing all wrong. Start with the assumption that you cannot make a HDD standard in the console in the long term. Now, do you start off selling it with a HDD, and then introduce a model later without it? That's a bad idea, since games will be coded to assume it's there and then you take it away later and segment the user base. What if you start off selling it without a HDD? Well, that's not ideal either, since everyone is used to it being there from the original Xbox, and you get a lot of angry consumers. On top of that, it destroys most of their Marketplace scenarios, ripped user soundtracks, etc., since MUs don't have anywhere near enough room for those. And you're losing revenues from HDDs that you could have sold for more money.

So what do you do? I think what they did what was the only viable option, and it will make sense in the long run. In fact, raise your hand if you think Sony will do the same thing, because they have the exact same problem. What would you do, since everyone seems so critical?

Also, just to chime in on the other thread of this discussion, I don't think it's very unreasonable to assume that Sony will have supply problems through the end of 2006. Brand new CPU + brand new GPU + brand new optical drive + high demand = likely scenario. Past experience bears this out, too. Custom hardware is hard, and it takes awhile to get the process right. I think most people will be suprised if Sony is able to come close to meeting worldwide demand this year.

 

[Ben-Nice]

You all are looking at the Core/Premium SKU thing all wrong. Start with the assumption that you cannot make a HDD standard in the console in the long term. Now, do you start off selling it with a HDD, and then introduce a model later without it? That's a bad idea, since games will be coded to assume it's there and then you take it away later and segment the user base. What if you start off selling it without a HDD? Well, that's not ideal either, since everyone is used to it being there from the original Xbox, and you get a lot of angry consumers. On top of that, it destroys most of their Marketplace scenarios, ripped user soundtracks, etc., since MUs don't have anywhere near enough room for those. And you're losing revenues from HDDs that you could have sold for more money.

So what do you do? I think what they did what was the only viable option, and it will make sense in the long run. In fact, raise your hand if you think Sony will do the same thing, because they have the exact same problem. What would you do, since everyone seems so critical?

Also, just to chime in on the other thread of this discussion, I don't think it's very unreasonable to assume that Sony will have supply problems through the end of 2006. Brand new CPU + brand new GPU + brand new optical drive + high demand = likely scenario. Past experience bears this out, too. Custom hardware is hard, and it takes awhile to get the process right. I think most people will be suprised if Sony is able to come close to meeting worldwide demand this year.

The PS3 won't launch with a Hard drive nor does it need to. As far as affecting development Blu-Ray disk hold 6 times the amount that a DVD can so space will never be an issue for a developer. I do believe there will be a shortage of PS3 as well because they won't be able to make them as fast as they will sell. Obviously they will not meet the worldwide demand this year are you nuts? That's why they will stagger the launch unlike what Microsoft did which in turn left at least half of the ones they shipped to Japan collecting dust on the shelves. Those should have go to the Europe and US. To be perfectly honest Sony has launched the 2 most succeful gaming consoles in history. My guess is that probably know what they are doing.

 

[scooby_dooby]

you would think so but like TT said why are people buying the premium 360 over the core system then?
Your talking about $100 difference between the core 360 and the PS3 right?

I dont think price will be that big of a factor at least not right away. If people want a PS3 they're going to buy a PS3. Like me I dont care if the 360 costs $50, I still want a PS3.

people who buy at launch don't care about price, that's why I say it's a dumb idea at launch, especially when they already had such low quantities to begin with, they should have shipped 100% premiums.

But, it's the after launch crowd that really makes or breaks a console, the people why only buy at $200 or $300 pricepoints are the majority of the market, and with these people price is a huge factor.

 

[Sethamin]

The PS3 won't launch with a Hard drive nor does it need to. As far as affecting development Blu-Ray disk hold 6 times the amount that a DVD can so space will never be an issue for a developer.

Are you sure they don't need to? Where is all the downloadable media (via CONNECT) going to go? Are they going to force everyone to buy Memory Sticks? Are they going to support USB HDDs? I can see a LOT of scenarios where storage would be extremely desirable. They have some options, but having a HDD is an extra revenue stream for them. Plus I thought I recall KK making some comments to the effect that there will be a PS3 branded NAS device.

And your comment about DVDs and BR is neither here not there. It has absolutely nothing to do with anything in this discussion.

 

[Nesh]

So what does that have to do with CGI?

he's saying that the presence of nice CGI is somehow proof of more dev support. It's such a stretch in logic it's not even funny...how do you make the jump from CGI demos > more dev support. It's stupid.

About the argument of publisher support, I think that logic is totally flawed, as by any expectations x360 will have more sales in 2006, and will have the installed lead for 2007. There's no way PS3 will be able to close an 8million console gap in one year, especially being very supply limited.

So any publisher releasing a game in 2006 or 2007, will see that the console that will sell the most is the xbox 360.

I could understand publishers, aiming for 2008 or 2009 to bet on the PS3, it's te safe bet, but if you want to maximise sales in 2006 or 2007, then xbox 360 is the platform of choice.

I think his point isnt obvious but its there.Being CG or not has nothing o do with what he was trying to point out.Its the content they demonstrated in those videos that he was refering to.Devs are simply ambitious, they raise their targets and objectives to the highest level. and only the best devs are raising their expected achievements that high.I believe that was his point.
Now if he is right or not I dont know.

Also about the premium and core thing.He is very valid on this one.MS splitted their consumers that way but the bad thing about it is the fact that most own a HDD.This though puts devs into a dilemma.Making games that need the HD will mean that they will lose for sure the consumers that own just the core.On the other hand if they decide not to make games that need the HD they include in that market all XBOX360 owners but at the end the HD doesnt get the support it would have had if every XBOX360 owner had the premium package.
So at the end the benefits from the HD are less than its value.The consumer pays for a piece of extra hardware device that unfortunately will have reduced benefits because devs are in that dilemma.

 

[scooby_dooby]

Well we all know that the HDD will not get used as much as it could have if it had been bundled, that's a given. But my main point is, the benefits of being able to drop your price quickly outweigh this disadvantage.

Are consumers paying more for less? Not at all, because with 360 you can now download demo's, game trailers, movie trailer, free trial arcade games, and in the future you will probably be able to download entire tv episodes, and purchase music for download.

So while it may be getting used less in games, it's getting much MUCH more use for content downloads then ever before.

 

[Serenity Painted Death]

Are you really trying to suggest that the vast majority of the game buying public DOESN'T see the playstation brand as having the the most killer apps? Game sales, Console sales, AAA reviews -- the evidence is insurmountable. Playstation, consistently, has a wider variety of games with higher scores than either other system combined. MS is improving developer support, but it isn't there yet, and most people will fall back on what they know, anyway.

If so, please explain the success of both prior playstations?

There is no way 360 will escape 2007 with a lead. It probably won't even be close well before the year is over. Keep in mind that pretty much every unit Sony sells in Japan (which will be millions) is basically a free system over MS, who is on track to sell NOWHERE NEAR as many 360s as Xboxs (~500k).

Of course, 360 taking a leading into 08 /is/ a possibility. It just isn't a very likely one. So unlikely given what we know that it isn't worth considering or seriously pushing. For other events that are quite possible, yet exceedingly unlikely, do some research into Quantum Mechanics!!

 

[Powderkeg]

It's very likely that MS loses more off a core system than they do the normal system. So outside of PR purposes it _was_ an extremely stupid idea (considering it probably didn't do much overall positive for their PR).

That's a joke, right?

The instant a Core system owner buys a hard drive and a wireless controller Microsoft breaks even on the hardware.

 

[one]

Please format the 1st post, the 1st poster or moderator

Did anyone actually think that was a good idea?? c'mon... seriously!! I think Microsoft failed miserably in that department. They thought that people would jump on the CORE system and no one did.

Is this true? The both units are sold out in the US anyway, aren't they?

 

[one]

That's a joke, right?

The instant a Core system owner buys a hard drive and a wireless controller Microsoft breaks even on the hardware.

Those already keen on cost (= core owners) are unlikely to do that in the near future.

 

[Sethamin]

Are you really trying to suggest that the vast majority of the game buying public DOESN'T see the playstation brand as having the the most killer apps?

I think you vastly overestimate the attention span of the game buying public. Most people just don't care. Companies flounder, leads get lost, and the scoreboard resets every console generation. If this were not the case, then we'd all still be using Atari's. I would wait until Sony actually has an actual product to speak of before declaring a winner.

 

[liverkick]

Companies flounder, leads get lost, and the scoreboard resets every console generation. If this were not the case, then we'd all still be using Atari's. I would wait until Sony actually has an actual product to speak of before declaring a winner.

Leads are lost by companies making mistakes, not just facing stronger competition. Momentum isnt a one-way street. Atari and Nintendo both made fatal missteps that resulted in loss. By that token, you may want to wait until Sony has tripped up in any significant fashion before declaring them no longer the obtainers of the strongest brand in the business. The scoreboard may reset numerically but mindshare certainly doesnt. To say Playstation's brand recognition and the popularity of the many games that are associated with that brand (both first and third party) isnt a huge factor as to why they're favored to continue their market leadership is being a bit disingenuous at best.

 

[Kabbage]

Tommy isnt saying what I like, he must be an idiot .... :|

Look Ma' more back and forth with predictions about what console will lead in sales

Amazing.

 

[Mythos]

By that token, you may want to wait until Sony has tripped up in any significant fashion before declaring them no longer the obtainers of the strongest brand in the business. The scoreboard may reset numerically but mindshare certainly doesnt. To say Playstation's brand recognition and the popularity of the many games that are associated with that brand (both first and third party) isnt a huge factor as to why they're favored to continue their market leadership is being a bit disingenuous at best.

And up to this point MS has fumbled quite a bit starting from leaked specs. to its console launch...if any one is to trip up MS needs to get its house inorder if they seriously want to compete....

 

[mckmas8808]

And up to this point MS has fumbled quite a bit starting from leaked specs. to its console launch...if any one is to trip up MS needs to get its house inorder if they seriously want to compete....

Talk about house in order did you hear what Toshiba is saying about the add-on HD-DVD player?

 

[Serenity Painted Death]

I think you vastly overestimate the attention span of the game buying public. Most people just don't care. Companies flounder, leads get lost, and the scoreboard resets every console generation. If this were not the case, then we'd all still be using Atari's. I would wait until Sony actually has an actual product to speak of before declaring a winner.

When you dominate like Sony is dominating, it generally takes an "act of god" (hmm, sticking with cartridges over CDs comes to mind) to take you down on such short notice. We haven't seen this so far, though it could still happen.

 

[Edge]

Never met so many people that can predict the futuring so unerringly.

Never mind how many consoles sold, which stock should I buy?

 

[Nicked]

Never mind how many consoles sold, which stock should I buy?

Dude, seriously as a armchair analyst of the console market, I could totally kickass at being a stockmarket analyst. Lemme try....

Google (GOOG) - so I can laugh when the bubble bursts on you and all the other investors . Sure its had 500% growth in the last year, but its bound to fall because whats to sustain its growth? Google Video...oh please.

Seriously the rest is dynamite 100% guarenteed to be profitable*
Apple (AAPL) - if you want to make a relatively low-risk high-yield investment. Nearly 500% growth in the last 2 years but its product lineup for '06 is great. iTunes Video...oh please!
Sony (SNE) - stock is at a three-year high, but I think it'll continue to climb until the NA PS3 launch (people do realise its a major release for Sony) then spike dramatically. Sell 3months after the PS3 launch and watch it plummet as others do likewise.
Microsoft (MSFT) - hasn't actually varied much for 4years of so, but buy now, wait out Vista spike, sell post-Vista.

Alright, that'll be $10,000 for my investment advice

*not a guarentee

 

[seismologist]

HAL. I made about $1k last month on that stock.