New Ken Kutaragi interview (2) @ PC Watch

[Arwin]

The Mac mini is similarly spec'ed at roughly $600. KK must be suggesting that the Cell chip and inclusion of a Blu-ray drive is worth an extra $1,400. I will resist the temptation to use an eye-rolly here, but it is a strong temptation...

Surely he meant that the logo alone, the name, would be enough to be able to sell a $600 dollar machine for $2000. You know, like Nike shoes.

The synergy that Sony and Apple may experience is from the concept that you don't necessarily need a Wintel PC for your computing needs. If the days return where you get more diversity and specialisation combined with cross platform standards allowing most important software to run on a great diversity of hardware and OS combinations (think web-browsers, email clients, java stuff, etc.), then they might be able to both profit at the cost of PCs or maybe even just from further market expansion (I myself have seven devices capable of browsing the internet and doing various other stuff - multiple PCs at work, multiple at home, 2 PSPs, a Blackberry, you get the idea. I suspect many of you won't be much different).

@geo: Sony has traditionally almost never subsidised the hardware. Hardware typically isn't expensive and gets cheaper fast, if you sell it in quantity. So even if they may make a loss on the first few, it sounds realistic that prices will have dropped considerably after one year.

 

[TheChefO]

I don't think it's anything revolutionary to tell you the truth; even though Goto hints towards thin margins on hardware, there is that tacit acknowledgement that for the most part Sony sells their hardware for a gain for the majority of any given gen.

I think it will be the same this gen with PS3, but I also think that at launch, PS3 will be partially subsidized.

agreed but does seem to hint at a direction change from previous console business model. Perhaps the inclusion of an ever improving spec sheet will ensure the high price(profit).

 

[Carl B]

agreed but does seem to hint at a direction change from previous console business model. Perhaps the inclusion of an ever improving spec sheet will ensure the high price(profit).

It's all speculation right now. We need to be sure to distinguish between Kutaragi's vision and actual business operations. And I don't think it's because he's kept in check by Stringer per se either; even though all his speech echos the grandiose, at the heart of things he really is a rather astute businessperson who's not going to sink the ship for the sake of whimsy.

Who knows how this will play out, but I'm interested to see how the PS3 will be marketed in TV commercials and such come November.

 

[typoEDR]

His intentions are clear and I think well considered. He's looking at hardcore tech-fans to develop killer software that'll attract attention, user base and more oftware, snowballing into a full platform. What's really missing at this point in time is the intial software that Sony are supposed to provide to lead the way. You can't just create a hardware platform, release it, and hope the software appears. PS3 will be supported as a base for the first n million by the names and games, but what we really need now is some of these software applications that Sony is supposed to be producing. Or someone's producing. Sony haven't yet demo'd the PS3 in anything other than games and movie playback, or and web browsing. Show at least a photo editor or something to show some real applications and maybe people will start to believe!

Wholeheartedly agree with you here. It's part of the reason why Sony was very disappointing in this year's E3--they were trying to pimp a so-called 'home entertainment computer' as a console, which just doesn't work (the price doesn't justify a console; it justifies a HTPC and more). If I can get the equivalent of the functionality of my Ubuntu system onto a PC, I would seriously consider picking up an 'upscale' PS3 just for that functionality on top of the standard PlayStation 3 gaming capabilities.

I'm anxiously waiting for Sony to come out to the public with more information on this 'computer platform', because it has some people really interested in it (other than the strict game console-only folks). This silence often makes me think they are still working on the whole thing...

 

[TheChefO]

It's all speculation right now. We need to be sure to distinguish between Kutaragi's vision and actual business operations. And I don't think it's because he's kept in check by Stringer per se either; even though all his speech echos the grandiose, at the heart of things he really is a rather astute businessperson who's not going to sink the ship for the sake of whimsy.

Who knows how this will play out, but I'm interested to see how the PS3 will be marketed in TV commercials and such come November.

agreed with the new direction they seem to be headed I'm extremely curious to see how they will market the ps3 and what the consumer reaction will be.

 

[Shifty Geezer]

Did KK basically say that they aren't going to subsidize the hardware? That the current announced prices would not be selling below cost? It sounded that way to me.

It sounded that way, but I think PS3 is between two approaches. Computers are sold as a business to make money. Consoles are sold to drive software revenues. PS3 straddles the two. As a computer Sony can charge full price for the hardware as Kutaragi explains, but I think overall the actual pricing, not this business model KK's talking about, will try to cut the price to subsidize and promote the install base. I think the other info here is that Sony aren't looking to make money from other people selling softwre for their machine. If the software makes the PS platform popular (PhotoShop Cell edition, Toshiba's Virtual Makeover software) Sony's PS business will be all about making money on the hardware like Apple. They will also have a games business making money on game sales, and their music and film divisions making money on those aspects. I think there's a conceptual division between selling the hardware and making money on content that KK's trying to describe, which is different to typical consoles (at least as we all seem to assume!) whichc primarily concern themselves with software money, though of course profits on the hardware are always a good thing.

 

[TheChefO]

It sounded that way, but I think PS3 is between two approaches. Computers are sold as a business to make money. Consoles are sold to drive software revenues. PS3 straddles the two. As a computer Sony can charge full price for the hardware as Kutaragi explains, but I think overall the actual pricing, not this business model KK's talking about, will try to cut the price to subsidize and promote the install base. I think the other info here is that Sony aren't looking to make money from other people selling softwre for their machine. If the software makes the PS platform popular (PhotoShop Cell edition, Toshiba's Virtual Makeover software) Sony's PS business will be all about making money on the hardware like Apple. They will also have a games business making money on game sales, and their music and film divisions making money on those aspects. I think there's a conceptual division between selling the hardware and making money on content that KK's trying to describe, which is different to typical consoles (at least as we all seem to assume!) whichc primarily concern themselves with software money, though of course profits on the hardware are always a good thing.

This is a difficult business model to follow though if their competitors can undercut their customers initial cost by significant amounts by subsidizing.

Isn't this what the 3do business model was?

 

[hey69]

why nobody cried when the ps2 launched at close to current 540euro in europe is beyond me...
i guess the internet=american prices

 

[London Geezer]

why nobody cried when the ps2 launched at close to current 540euro in europe is beyond me...
i guess the internet=american prices

Oh we cried, trust me... especially my pockets...

 

[Sis]

This one?

Hardly similarly specced at all. It'll be interesting to see how much Blu-ray Apples cost when they're made available.

I said similar, not identical. I also suggested that KK thinks the differences are worth an extra $1,400, but for some reason you cut that out of my quote. Regardless, other than the dubious added value of Blu-ray, if I wanted a computer to do the same functions that the PS3 will be potentially capable of, then I definitely think the Mac mini is equivalent, if not better suited for that purpose, primarily for reasons of the existing Mac OS ecosystem, including iPod/iTunes integration.

 

[mckmas8808]

So the PS3 and PSP are using the same business model now?

 

[Sis]

Surely he meant that the logo alone, the name, would be enough to be able to sell a $600 dollar machine for $2000. You know, like Nike shoes.

Interesting thought, but I don't agree. I think he is comparing the PS3 directly to a $2,000 Apple computer.

 

[Titanio]

then I definitely think the Mac mini is equivalent, if not better suited for that purpose, primarily for reasons of the existing Mac OS ecosystem, including iPod/iTunes integration.

Certainly, something like a Mac has a big advantage in terms of software. But I think Kutaragi was referring to the hardware. Apple would certainly charge a lot more for an equivalently specced machine than Sony does for PS3.

 

[mckmas8808]

Interesting thought, but I don't agree. I think he is comparing the PS3 directly to a $2,000 Apple computer.

No he is not. The man actually (as in litterly, you know like as in reality) said LOGO!!

 

[Urian]

I undestand this:

"We want the money from PS3 games library and BluRay Royalties and this is why we are going to make every BluRay player made by us a PS3"

"MediaCenter PC are invasors to Sony classic space, this is why we are going to transform PS3 into a computer, if we don´t enter to the MediaCenter space we are fucked"

Am I the only person?

 

[Sis]

Certainly, something like a Mac has a big advantage in terms of software. But I think Kutaragi was referring to the hardware. Apple would certainly charge a lot more for an equivalently specced machine than Sony does for PS3.

Come on, now, he's obviously trying to suggest that the PS3 is a steal at $600 but putting forth a false comparison with a fictional $2,000 computer. Perhaps I'm splitting hairs and I do know this is just PR talk, but to me, the comparison is just invalid.

 

[Titanio]

Come on, now, he's obviously trying to suggest that the PS3 is a steal at $600 but putting forth a false comparison with a fictional $2,000 computer. Perhaps I'm splitting hairs and I do know this is just PR talk, but to me, the comparison is just invalid.

He said if Apple were to make such a system, they could charge $2000 for it. How much do you think Apple would charge if you disagree? $2000 doesn't seem like a terrible guess to me looking at what they charge $2000 for right now. Certainly I'd agree with him that it would be much higher than $600.

 

[Carl B]

I don't think there's any need to overthink it; $2000 was used arbitrarily.

He's saying Apple has the brand cache to push products at a price people wouldn't normally pay for 'inferior' products. He doesn't think Sony has that sort of cache in the computer market, but he's hoping over time 'Playstation' will become associated with computing in it's own right.

 

[Sis]

He said if Apple were to make such a system, they could charge $2000 for it. How much do you think Apple would charge if you disagree? $2000 doesn't seem like a terrible guess to me looking at what they charge $2000 for right now. Certainly I'd agree with him that it would be much higher than $600.

Then back to my original point: Apple has made a system to do what Sony wants to do in the living room. It's the Mac mini. HD media is the only thing it lacks.

(Ok, besides the ability to play the entire Playstation library )

 

[TheChefO]

$2000 doesn't seem like a terrible guess to me looking at what they charge $2000 for right now.

how much ram do you think would come stock?