Microsoft Responds To PS3 Announcement

[function]

I meant by the US launch, it was around 6.5mil to 7 mil by the Japanese launch.

Those figures don't seem right. By January 2001, when Sega announced they were leaving hardware, they were on about 8 million units iirc having underperformed at Xmas. Condifence in Sega and the DC was pretty much gone and there was no end in sight to Sega's losses.

They were, at that point, still ahead of the PS2 in sales (again iirc) but clearly that wasn't going to last.

All done the DC is said to have sold 13 or 14 million systems and by the end there was a new revision of the hardware that didn't work with copied games (no more software hacks). It was a hell of a comeback after the Saturn, but given Sega's financial woes the DC was in deep, deep trouble before day one.

 

[Titanio]

Those figures don't seem right. By January 2001, when Sega announced they were leaving hardware, they were on about 8 million units iirc having underperformed at Xmas.

I've read ~10m by that time. Which if true would have made DC the first to 10m last gen, whatever about accumulating 10m in sales before PS2's launch

That little "law" Ballmer cites is incredibly silly, though, it's certainly not something he should hold on to or bank on. You might aswell say it's a trend that any time Sony has entered a home console into the market it has gone on to dominate, thus Sony will dominate again. For example, if you hit 10m first but your competitor is consistently outselling you 2:1 or more, does he really think domination for the generation would be tenable? Being first to a certain number of units means absolutely nothing - consistently outselling the competition is what matters. I've seen him reiterate this "rule" a number of times..it sounds like something Xbox managers told him to placate him about their position and their rush to the market, and he just keeps bringing it back out in interviews like a comfort blanket.

 

[Tap In]

I have no doubt that Sony will win the marketshare again this Gen. I suspect MS in the privacy of their homes knows that too.

The plan is to erode marketshare which I'm SURE will continue to happen this gen and eventually catch or overcome Sony in subsequent generations.

 

[Fox5]

The Saturn was never well on its way towards 10 million. It got battered by the Playstation in the west and rolled in huge losses for Sega. Its early Japanese lead disappeared when Sony's stronger support delivered killer apps for the Japanese market.

According to this, by March of 1997, the N64 had sold 6.1 million units, Playstation 13 million units, and Saturn 7.6 million units, I'd say that's fairly well on its way to hit 10 million though it does show that saturn wasn't even beating PSX out of the gate. (n64 looks like it was though)

Those figures don't seem right. By January 2001, when Sega announced they were leaving hardware, they were on about 8 million units iirc having underperformed at Xmas. Condifence in Sega and the DC was pretty much gone and there was no end in sight to Sega's losses.

Maybe sales slowed to a crawl upon the PS2's immenient release? That would explain why sega was basically forced to withdraw.

All done the DC is said to have sold 13 or 14 million systems and by the end there was a new revision of the hardware that didn't work with copied games (no more software hacks).

I'd imagine a substantial amount of those final systems sold were from sega began dumping the system on the market, remember the stacks of $50 dreamcasts for sale in every store?

The plan is to erode marketshare which I'm SURE will continue to happen this gen and eventually catch or overcome Sony in subsequent generations.

Considering what they did to Nintendo's reputation last gen, it pretty much guarantees they'll at least pick up Nintendo's market share along with some of Sony's. (last gen, I think they picked up a substantial amount of the dreamcast's market share too)

 

[Nesh]

AFAIK in Japan, Saturn did outsell PS1 for a sustained period of time before it was steam-rollered.

Actually that was almost a myth.
Sega had more numbers shipped than Sony initially, but Sony had more consoles sold.

Sega was annnouncing these numbers instead of units sold and were pretty confident that they were doing better than Sony in Japan.

Many believe that until today.

Saturn did better in Japan than it did in other territories but certaintly they didnt do better than Sony in Japan

 

[function]

According to the SegaBase articles, by July 2000 (or later?) Sega had "sold almost 6 million Dreamcast consoles worldwide". And that almost certainly means shipped, with Sony catching them up from Japanese sales alone.

I may have been off on 8 million sales by Jan 2001 (can't find any reliable sell-through-to-customer estimates), but the important point is that Sega of Japan decided to leave hardware back in 2000.

I don't think first to 10 million does guarantee a winner as it happens (Sega may have got there first with the DC), but a strong first 10 million sales with developer support not evaporatoring like water in a desert, and a system not terribly flawed (a stock DC running bootlegs straight off) puts you in a great place to be a big player that generation.

MS have to talk like they think they'll be the daddy this time round, but all they're really banking on is being a much bigger player and making, if not a profit, at least not a huge loss. They're looking well on track to do that.

 

[avaya]

Actually that was almost a myth.
Sega had more numbers shipped than Sony initially, but Sony had more consoles sold.

Sega was annnouncing these numbers instead of units sold and were pretty confident that they were doing better than Sony in Japan.

Many believe that until today.

Saturn did better in Japan than it did in other territories but certaintly they didnt do better than Sony in Japan

OK shipped vs. sold. Thanks for the clarification.

 

[Qroach]

Imo, I think MS knows sony is promising a lot more than they can deliver in the timeframe for this year through march 07. has anyone worked out the math?

Say they want to make 1 million PS3 units per month. If you break it down by:

7 days per week
30 days per month
12 hour work days (you can't run the manufacturing 24 hours without maintenance).

...that equals 47 PS3's per minute by my rough calculations

Are they nuts? There's no way you can manufacture something as complicated as these game consoles with all the parts required, in one minute let alone 47 of them. look how close that is to one per second! I wouldn't be suprised if it took 5-10 minutes to manufacture one of these machines. So to answer my own question, no they aren't nuts, they are saying this to get the media and public excited.

I'm sure they know this already or perhaps kutagari just says whatever he wants without anyone in the media questioning him. Anyway I think MS already has a good grasp on what it would take to hit with that many consoles and thus they aren't as worried.

 

[Edge]

Imo, I think MS knows sony is promising alot more than they can deliver in teh timeframe for this year. has anyone worked out the math?

Say they want to make 1 million PS3 units per moonth. If you break it down by:

7 days per week
30 days per month
12 hour work days (you can't run the manufacturing 24hours without maitenance).

...that equals 43 PS3's per minute.

Are they nuts? There's no way you can manufacture something as complicated as these game consoles with all the parts required in one minute let alone 43 of them. I wouldn't be suprised if it took 5-10 minutes to manufacture one of these machines. So to answer my own question, no they aren't nuts, they are saying this to get the media and public excited.

I'm sure they know this already or perhaps kutagari just says whatever he wants without anyone in the media questioning him. Anyway I think MS already has a good grasp on what it would take to hit with that many consoles and thus they aren't as worried.

They manufacture something like 2 million PS2's a month.

It's called multiple factories. Smart eh!

 

[Titanio]

Imo, I think MS knows sony is promising alot more than they can deliver in teh timeframe for this year. has anyone worked out the math?

Say they want to make 1 million PS3 units per moonth. If you break it down by:

7 days per week
30 days per month
12 hour work days (you can't run the manufacturing 24hours without maitenance).

...that equals 43 PS3's per minute.

Are they nuts? There's no way you can manufacture something as complicated as these game consoles with all the parts required in one minute let alone 43 of them. I wouldn't be suprised if it took 5-10 minutes to manufacture one of these machines. So to answer my own question, no they aren't nuts, they are saying this to get the media and public excited.

Umm..It may take x number of minutes for one person to assemble a system, but that doesn't mean you couldn't have one on average rolling off the production line every minute (or 43, for that matter).

Sony has shipped an average of 1.75m PS2 units per month since its launch (101.37m shipped total, divided by 58 months). Using your calcs, that'd be 81 PS2s per minute.

Like most hardware supply projections in this industry, they'll probably fall short, but not because it's impossible to have 43 consoles roll off a line on average per minute, or whatever.

 

[Qroach]

They manufacture something like 2 million PS2's a month.

It's called multiple factories. Smart eh!

That argument doesn't hold. 5 - 6 years after they frist begun manufacturing and have reduced the size of the hardware drastically. if they could have always made them at that pace from the start, they would have been able to sell so many more at and right after launch.

you missed it when I said this...

"...something as complicated as these game consoles with all the parts required..."

 

[Titanio]

Qroach, if you want to go back to PS2's beginnings, they were shipping an average of 500k per month from the Japanese launch on (and they obviously ramped that supply without a decrease in assembly complexity, subsequently..). That'd be 23 consoles per minute using your figures Yet you doubt they could assemble 1 per minute? Come now. It's not like they have one lonely person sitting there manufacturing PS2s or PS3s. Assembly time absolutely won't be the bottleneck here, supply of one or more components probably will.

 

[Qroach]

Umm..It may take x number of minutes for one person to assemble a system, but that doesn't mean you couldn't have one on average rolling off the production line every minute (or 43, for that matter).

Sony has shipped an average of 1.75m PS2 units per month since its launch (101.37m shipped total, divided by 58 months). Using your calcs, that'd be 81 PS2s per minute.

Like most hardware supply projections in this industry, they'll probably fall short, but not because it's impossible to have 43 consoles roll off a line on average per minute, or whatever.

Well for one I don't believe they were able to manufacture that many PS2's from launch per month, and second, i've always taken that 100 million number with a grain of salt, and third, this console is arguably more complicated and contains more parts then the previous consoles. Moer part dependencies means more manufacturing hassles.

 

[Titanio]

See above, the shipment rate at launch was still well above what you previously considered possible. There's no reason to doubt the total shipment number given, either. And PS3 probably may be a little more complicated to assemble today than PS2 was in 2000, but not significantly so IMO. They'll scale their assembly capacity to match their component supply - assembly won't be the bottleneck at all.

 

[Edge]

"...something as complicated as these game consoles with all the parts required..."

10's of millions of cars are produced each year, and over 100 million PC's are sold each year.

Sony is a 60 billion dollar revenue giant with lots of factories.

 

[Tahir2]

Hi Qroach


For a start:

Why only 12 hours for production (inc maintenance).

A more accurate figure would be 23 hours a day (1 hour lost in maintenance per day).

 

[Qroach]

See above, the shipment rate at launch was still well above what you previously considered possible. There's no reason to doubt the total shipment number given, either. And PS3 probably may be a little more complicated to assemble today than PS2 was in 2000, but not significantly so IMO. They'll scale their assembly capacity to match their component supply - assembly won't be the bottleneck at all.

A little more complicated? it's a lot more complicated. I'd be willing to wager assembly and parts sourcing will be the bottleneck. You can hold me to that.

what I previously considered possible "is" pure conjecture. If and i do mean "IF" what you say is true, then you also proved to yourself that the 1 million per month is not possible. Not early in the manufacturing life that much is for certain.

Also what's with you flipping between 1.7 million per month back to 500k?

 

[Qroach]

Hi Qroach


For a start:

Why only 12 hours for production (inc maintenance).

A more accurate figure would be 23 hours a day (1 hour lost in maintenance per day).

I don't think 23 hours per day is a realistic estimate. I was purposly being conservative.

 

[Qroach]

10's of millions of cars are produced each year, and over 100 million PC's are sold each year.

10's of millions of cars? all produced by one company? wow. that was sarcasim btw.

Sony is a 60 billion dollar revenue giant with lots of factories.

so what? alot of factories producing different things.

 

[Titanio]

A little more complicated? it's a lot more complicated.

PS2 has a case, a CPU, a mainboard, a GPU, memory, now has an ethernet port, power socket, memory card ports, fans, optical drive etc. Most of the components PS3 will have.

I'd be willing to wager assembly and parts sourcing will be the bottleneck. You can hold me to that.

Well, umm, I sure will, because it quite obviously would have to be one of those things I just think it'd be component sourcing rather than assembly.

If and i do mean "IF" what you say is true, then you also proved to yourself that the 1 million per month is not possible. Not early in the manufacturing life that much is for certain.

I don't think it will happen, 1m a month from launch, but how on earth did I prove that?

Also what's with you flipping between 1.7 million per month back to 500k?

1.7m was the average to date since launch, 500k was the apparent average around the time of launch. Oh, and why do you think supply improved? It wasn't because of increasing assembly capacity, but improved chip supply.

I'm sorry, but your original argument seemed to hinge on the notion that one person was manufacturing all these systems, and that it wouldn't be possible for them to manufacture 1 per minute, let alone 43. That's just nonsensical. They could assemble 100 per minute given enough components.

Another example - look at PSP. Probably more difficult to assemble than PS2, I'd guess. For 2005 they shipped an average of 1.21m per month - or, again, using your calcs, 56 PSPs per minute.