Playstation 3: Hardware Info and Price

[Bobbler]

But does the average gamer actually want or care about HD movie playback?

Do they want it so bad that they will spend $100 extra so their game console can do it?




Last time I checked, the AVERAGE gamer still uses an SDTV, so I suspect that the AVERAGE gamer would rather have a $100 cheaper system than a movie playback option that they can't take advantage of.

Your arguement fell apart the moment you assumed the AVERAGE gamer is an uber-technogeek willing to spend $500-$600 on a console. The average gamer is a casual gamer, and they tend to wait until systems fall below $200 in price before they buy one, and they really don't care if it can do HD movie playback or not.

The average gamer isn't in the market for a console at release either...

Of course they aren't going to buy one at launch... the average gamer didn't buy a PS1 at launch or a PS2 or an Xbox or a X360 either. What's your point?

The average gamer is not the target yet... as long as the hardcore audience is saturated by the time the price drops then they have done good (as far as business goes).

I'll be one of those "stupid idiots" there at launch hoping to get one, because frankly the price is the least of my concerns; I want BR (big reason) and I want the new playstation games. When MGS series, FF series, DQ series, and the assortment of high quality first party Sony studios start making games for another platform, I'll likely cease to be a "stupid idiot."

I consider the $100-200 price increase as paying for the price of admission to get the games I can't get anywhere else... I'm really not paying for the hardware (you rarely are -- as the fact that these companies sell them at losses sort of points to this). So, I'd say I do get more going with a PS3, at least from my perspective, based on the games I like most. (I have a 360 and getting a Rev too -- I'm not missing any games this gen!)

With all that said, I think the 500-600 price tags are rather disappointing, but I am, in fact, a "stupid idiot," so I'll pay.

 

[Shifty Geezer]

Why do you keep saying this? Do you know something we don't?

AFAWK online gaming is free to PS3 same as PS2, with optional fees for games at the devs discretion. eg. CON can be played for on PS2 for no monthly costs. So in that case PS3 with wireless controllers and online gaming would be a lot nearer XB360 of the same spec than the clear $500 vs $300 or whatever the price is (XB360 would be console+memory card+wireless controller+Live! Gold).

Of course this free gaming isn't confirmed, but to date Sony have said they want to keep their current format and I don't see them charging a flat fee like Live! Gold.

 

[Powderkeg]

If gamer really are that poor, how can they play games when one game costs about 65€? (atleast here).

They wait until the price drops to below $200 before buying a system, they buy many discounted games, and frequently rent new games instead of buying them.

 

[DemoCoder]

I think consumers have proven themselves more intelligent than people think. When I was standing in line for my XB360, I was talking to a mom who saw the sunday advertisement for Target and was going to buy one for her son. Not being too tech savvy herself, she still bought the Premium because she didn't want to risk buying something that she would be more expensive to upgrade later and might not do all the things her son wanted.

Most consumers have no clue what the HDD is used for, but they still seem to prefer the Premium.

 

[tcrews]

The average gamer seems to want a Premium, and with $100 more, they can get a PS3 that does everything the XB360 does, plus HD movie playback over composite. If MS introduces the HD-DVD add on, the price difference for equivalent functionality will be extremely narrow.

Just a quick correction....HD playback over component, not composite. Composite can not carry HD.

Tom Crews

 

[patsu]

What Sony has totally failed to demonstrate in this press conference is enough *gaming values* to justify for the perceived huge price difference. So the only message that people are getting is "It's expensive" whether it's true or not doesn't matter. Sony will have to find another opportunity to demonstrate the value difference before November if they continue to stick to the price.

It seems that Sony is making its last ditch effort to prevent price errosion in the gaming industry. It actually makes a lot of sense from their point of view (i.e., Nintendo, MS and Sony all are better off with relatively high price, instead of pushing it down too soon. Very often companies try to kill each other and forget about making profits). We will see how the market react over time. I think they still have some buffer to fall further if sales is slow.

Value-wise, I still think something changed last minute which threw off the rythm of the press conference (Or they didn't have enough time to prepare). The possible angles are:
+ Consolidated home media (DLNA + PVR + Remote access)
+ Exclusive games that properly show the "fun-ness", and *consistency/uniqueness* of a PS3 game (e.g., Support for the new controller should be more prevalent). Heavenly Sword is great though.
+ More complete PS Online walkthrough.

Perhaps they don't want to give away the entire game plan ? Nevertheless if Sony is fumbling this early, I think the key components are not ready yet. They should exercise tight project management and phase the features. It's better to have something simple and consistent at first, with continuous update by multiple Sony units. All in all, I still have good faith in them to execute well for the rest of the year. I'm very thankful for their attention to details like the heat and noise issues.

I hope MS takes the time to further fine tune their presentation today. A public presentation like this goes a long way in gaining a large following (See Steve Jobs).

 

[DemoCoder]

Just a quick correction....HD playback over component, not composite. Composite can not carry HD.

Tom Crews

of course, typo on my part.

 

[expletive]

Oh yeah, a crappy core with no hard disk and no wireless controllers. What a fair comparison. And consumers just LOVE the Core don't they.

Apples to Oranges. Cheapest PS3 gets you HD, free online, wireless, BluRay. Cheapest XB360 gets you none of that, a severely crippled system.

Isnt that a narrow view when the bottom line is about actually playing games? The core is there so that the kid who absolutely wants to play Halo 3 can afford to so. There will be a lot of cases when the $100 difference (and that may not be 400 vs 300, maybe its down the line when its 149 vs 249) makes the core affordable wheras it otherwise wouldnt be. I know we think every consumer goes down a feature by feature checklist to see what the value is but for the AAA titles a lot of times it just comes down to "how much to get this damn game in my house", thats what the core is for.

 

[Hifi_Mies]

Powderkeg:

But we are talking about launch prices here. Even if ps3 would cost 800€, all consoles would find their buyers. There are allways enough "grazy" tech people who are willing to pay more than casual gamers. Price doesn't really matter because all units gets sold anyway. After couple of moths or so, price will drop and sony starts to sell ps3 to masses.

 

[Powderkeg]

The average gamer isn't in the market for a console at release either...

Totally agreed, which is why my points don't end with the end of the holiday season.

Of course they aren't going to buy one at launch... the average gamer didn't buy a PS1 at launch or a PS2 or an Xbox or a X360 either. What's your point?

The point is the average gamer rules the market, and the first one to appeal to them wins the market. Announcing a $500-$600 price tag isn't very appealing to them, but MS being able to advertise the same games with the same graphics for $200 cheaper certainly will be.

The average gamer is not the target yet... as long as the hardcore audience is saturated by the time the price drops then they have done good (as far as business goes).

The average gamer is ALWAYS the target. The moment they aren't you've lost any chance at being #1. The average gamer is ruled by emotion and impressions. A few CGI videos will make them believe you have the ulitmate gaming system, and an initial price that's way out of their budget causes them to dismiss you, even if they aren't planning on buying a new system for several years.

It's a term called "mindset."

Once you get people in the mindset that your system costs too much and offers too little, it's extremely hard to reverse that idea.

If you need a real-world example, just look at how many years Nintendo has worked to shed the "kiddie" image, and haven't even made a dent in the public mindset on that issue.

 

[Farid]

Let's keep the agressivity to a minimum, folks.

 

[Powderkeg]

Powderkeg:

But we are talking about launch prices here. Even if ps3 would cost 800€, all consoles would find their buyers. There are allways enough "grazy" tech people who are willing to pay more than casual gamers. Price doesn't really matter because all units gets sold anyway. After couple of moths or so, price will drop and sony starts to sell ps3 to masses.

Launch lasts 2 months. The price reprocussions will last to the end of the generation.


And do you mind showing me some proof that Sony will be dropping the price so much so soon, or is this pure wishful thinking on your part?

I am inclined to believe that Sony is losing too much money on production costs to be able to afford any major price drops, and even if they could, the negative PR they would receive would be devistating.

How do you explain to your most hardcore fans who early-adopted that you planned all along to rip them off of hundreds of dollars by dropping the price by massive amounts within just a couple of months after launch? How do you convince the general public that your system is really worth everything you say it is when you are cutting the price by 30% or more within it's first year? How do you assure them that you simply didn't intentionally overprice the system specifically to rip off the early buyers?


You want the public's trust in your product. How do you sell it for $500 today and then drop the price to $400 in 3 months, and not break that trust people had in you? The people who bought one for $500 will feel ripped off, and the ones who ahven't bought one yet will probably wait longer expecting another price drop just a few months later.

 

[RobertR1]

HD over composite? Composite is the worst quality video signal next to coaxial.

I hoping you mean component because you can't do HD over composite. Unless there is a very loose term for "HD" that I'm not familiar with.

 

[patsu]

Powderkeg:

But we are talking about launch prices here. Even if ps3 would cost 800€, all consoles would find their buyers. There are allways enough "grazy" tech people who are willing to pay more than casual gamers. Price doesn't really matter because all units gets sold anyway. After couple of moths or so, price will drop and sony starts to sell ps3 to masses.

In general true, but Sony also cannot cut the price too fast or it will p*ss off the early buyers. It may be 1 to 2 years before the anticipated price drops.

It is not uncommon for companies to signal to their competitors "Not to play with pricing" to maintain a more lucrative market for all players. In some cases, like airlines and banking, the competitors are more "shortsighted" and went ahead to cut each other's throat anyway. In others, the industry continues to hold their price. Sony may be hinting to MS not to drop thir Xbox prices too fast since there are money to be made by everyone. This is different from price fixing.

What all 3 console vendors need to do is to continue to innovate and surprise us for real if they want to keep that kind of pricing structure (launch or no launch).

 

[ERP]

Ignoring the launch price for a moment, since it's largely irrelevant. They will be limited by supply rather than demand initially, I'm wondering how they project the price to drop over the next 3 or 4 years.

Even at $100 a year, it leaves it as a pretty expensive item 3 years from now.
At some point do they drop the cheaper or more expensive SKU?
Given the majority of a consoiles sales are at <$200 I wonder if Sony intends to try and extend the cycle?

 

[DemoCoder]

The point is the average gamer rules the market, and the first one to appeal to them wins the market. Announcing a $500-$600 price tag isn't very appealing to them, but MS being able to advertise the same games with the same graphics for $200 cheaper certainly will be.

According to your reasoning, the average gamer should buy a Wii then on launch, and not bother with MS or SNE until 3 years later.

The average gamer is ALWAYS the target. The moment they aren't you've lost any chance at being #1. The average gamer is ruled by emotion and impressions. A few CGI videos will make them believe you have the ulitmate gaming system, and an initial price that's way out of their budget causes them to dismiss you, even if they aren't planning on buying a new system for several years.

Right, according to this reasoning. During the november launch, when you could practically only buy an XB360 bunch at launch for $600 or stand in line all night, you lost the average gamer. I mean, clearly it was "average gamers" who stood in cold whether all night to get a chance to buy a bundled system.

If you need a real-world example, just look at how many years Nintendo has worked to shed the "kiddie" image, and haven't even made a dent in the public mindset on that issue.

It can work the opposite. People often perceive items with higher prices to be "better" even if they aren't. Honestly, why do you argue so much or even care Powderkeg? You obviously aren't going to buy a PS3, and for some reason, want to argue that it will fail. Ok, then be happy with the console you have bought.

Why is it necessary not just for you to be happy with your own console or for it to win, but for others to LOSE?

It is way way too early to say anything about how the console market is going to unfold. No one has that kind of clairvoyance no matter how smart you think you are.

The PS3 is mostly the console I wanted. I would not consider buying it on launch if they didn't have BluRay. I don't care if average gamers don't buy it just like I don't care if average people don't buy HDTVs. What average people do or do not want does not effect my desires. I do not perceive any threat to PS3 failure such as lack of third party support, and I am sure they will sell every unit they produce atleast for the first 10 million or so. If in 3 years, they can't get the costs down and it becomes a DreamCast, no big deal for me. $600 over 3 years is trivial.


So really, why do some people care so god damn friggin much about which console "wins"? and why do they care how much the competitor costs when it is clear they ain't gonna buy it anyway. If you are happy with your XB360, Sony is irrelevent, and there is no need to get religious.

 

[scooby_dooby]

And do you mind showing me some proof that Sony will be dropping the price so much so soon, or is this pure wishful thinking on your part?

Im inclined to believe that this is the only reasonable approach. If Sony does not do this, they really are shooting themselves in the foot. In addition, I have to believe that Sony's cost curve will fall much faster than MS, as BR hits mass production and drops signifigantly in price.

It makes total sense to me that we see aggressive pricedrops from sony around E3 next year. And this consumer backlash you speak of is exagerated, you're talking about 6million early adopters who are hardcore, they'll get over it, meanwhile everyone else will just be happy they can finally pick up a PS3 base unit for $400 or less.

Again, I'm under the belief that this is a calculated move by sony to get some extra money out of the early adopters, rather than something they were forced to do due to high costs. If not, MS is gonna put the hurt on em in 2007.

 

[Hifi_Mies]

Launch lasts 2 months. The price reprocussions will last to the end of the generation.


And do you mind showing me some proof that Sony will be dropping the price so much so soon, or is this pure wishful thinking on your part?

I am inclined to believe that Sony is losing too much money on production costs to be able to afford any major price drops, and even if they could, the negative PR they would receive would be devistating.

How do you explain to your most hardcore fans who early-adopted that you planned all along to rip them off of hundreds of dollars by dropping the price by massive amounts within just a couple of months after launch? How do you convince the general public that your system is really worth everything you say it is when you are cutting the price by 30% or more within it's first year? How do you assure them that you simply didn't intentionally overprice the system specifically to rip off the early buyers?


You want the public's trust in your product. How do you sell it for $500 today and then drop the price to $400 in 3 months, and not break that trust people had in you?

Good points, Im well aware of them. Im not going to argue about the schedule, because the point is that the price will drop eventually. Both ps1 and 2 did cost about 500€ here at the beginning, and they both sold very well. PS3 has every change to get the same results. If it won't happen, it won't be because of price. Good games along the run will make successful console.

 

[DemoCoder]

It is highly likely that yields will go up, and costs will go down for CELL and RSX. And GDDR-3 is bound to drop in price as well. The big questions are how fast XDR can drop (why can't people stay away from Rambus) and how fast the OPU in the BD drive can drop. Most of the other components, core logic/asics for wifi, bluetooth, HDCP, ethernet, etc are also bound to drop.

I think the biggest risk is OPU and XDR as far as price drops. Any component based on high volume semiconductor prices is going to get cheaper over time. But the OPU isn't a semiconductor, and XDR is controlled by a monopoly and only a single vendor is using it right now(is anyone else?)

The analysts claimed that the GPU was $140, the CPU was $200+ and the drive mechanism was $200-300. Clearly, there's alot of leeway. Switching to 65nm and getting yields up might knock off alot from the RSX and CELL. The drive mechanism, we'd need to know more about the internals of that and why it's so high.

 

[L233]

To the majority of the gaming community, game consoles are about the GAMES. The vast majority of the rest of us do not use cheap little game consoles as out primary movie players, and we don't care about 99% of the multimedia BS that Sony and MS are both pushing. The vast majority of the gaming market looks at a gaming console and only cares about one thing.

The GAMES.

They said the same thing when the PS2 shipped with a DVD drive.