PS3 Strategy/Confidence Retrospective

The difference between MS and Sony is that when they make mistakes or things don't go according to plan Sony expects the consumer to bear the costs (BR - $600 PS3) whereas MS expects to pay it themselves (extending the warranty - $1 billion loss). That's the arrogance I'm talking about. Besides how can you argue that Sony isn't arrogant when execs were talking about selling 10 million units without needing any software? Seriously. It's not really a matter of opinion: Sony was arrogrant at the beginning of this generation and MS and Nintendo have taught them a lesson.

 

Care to get deeper into this?

 

Is there really much to discuss here, isn't the past history proof enough of attitudes, trashtalking and false promises?

 

Sony sold a $600 console because they knew people would buy all they could make at that price, and they kept selling out for many months at that price. Since they started sitting on the shelves, Sony dropped their prices to attract a larger market. That isn't arrogance, it is just smart business.

 

a) Sony isn't expecting anyone to pay $600 for a PS3 these days. They priced themselves too high for the larger gaming market with too much expensive technology in the box at launch, for sure, but there are plenty of us who actually get a lot of use out of the Blu-Ray player support now, and there's lots more use to come.

b) XBox customers have paid plenty for the hardware failure rates on the 360, in time, hassle, and even additional 360's that a number of people have bought to replace their broken ones without having to wait 6 weeks for a refurb.

c) Sony never talked about selling 10 million units without software.

 

Umm, what? By that reasoning a $50,000 console that they can only make 1 per month of is a success so long as that one per month sells?

Surely Sony stopped being supply constrained many months ago vs current demand.

 

Eh? I never said anything about success, but your example certainly makes for less of a failure than selling that one console they can manage to produce a month for cheaper.

 

True.

They expected to sell 5 million without software. Either way, it's quite arrogant.

 

Where was Sony supply constrained beyond the launch month anywhere?

 

The discussion should not be the amount of arrogance as in the thread title, but how that arrogance affected their decision making (PS3 setup, pricing, marketing) and current situation.

I personally don't think the arrogance effected public reception much compared other factors, and regarding Blu-ray and price I guess I'm the only one who cannot imagine how that decision can be a result of arrogance. Those kind of financial decisions aren't typically made without significant market research, very expensive analysis, projection, etc.

 

I think a simple question here could put this to rest:

What would Sony have done ANYTHING differently if they had no competition at all?












IMO, it would have been very similar to what we saw with ps3:

high price
poor dev tools
proprietary media
very few games

In fact, I think the only thing that may have been different is an even further delayed launch.

 

They definitely were arrogant last year with comments like "360 is selling worse than PS2 lol, they're no compatition for us and ps3", but now with PS3 lagging behind competition they are trying harder than they did last year.

 

Arrogance doesn't mean anything in business. This is no children play court. Overconfidence, yes. PS1 was a success, and so was the PS2...They thought they had a chance of selling consoles at that price and that the brand would justify such a premium and they were proven quite wrong...
I see no arrogance here. It's not about PR sentences , companies are not human beings...They took decisions based on assumptions they thought wre solid. I can't imagine them overlloking facts for the sake of looking ARROGANT. !!!

 

Good point, or close anyway. Looking back it seems January was when they started to saturate demand for the 60gb model anyway, though I still had trouble finding my 20gb model then.

Still, while selling the hardware at a loss it only makes sense to keep those losses as small as possible with high prices rather than going with a lower price and loosing even more money with every console you make.

 

As Shifty mentioned, MS already has decade of experiences deploying and integrating OS, applications, game APIs and SDKs. The IPs was ported to Xbox 360. Even the HD-DVD layer has its roots on Windows.

... or they could be optimistic. Kutaragi is an engineer at heart. It seems that he simply wants to realize his distributed entertainment platform vision (The same way he wanted to realize the original Playstation vision).

Doesn't have to be incompetent or arrogant to be slow and passive (Why only 2 discrete variables). As I mentioned, complexity could be another reason. Even the best OS players, MS and Apple, have their own fair share of slippage (think "Longhorn" and "Pink").

Sure, if they truly believe in the value they can bring, perhaps they genuinely think that it's worth US$599 ? Apple priced its iPhone at $599 too. Are they arrogant too ? Pricing a new product is a multi-million dollar business. It's not that simple.

The BOM cost and price could be estimated early, but the software delay may be the one that pull the rug under their feet.

Sony also went through a management shakeout. It is unclear how much of the original plan stayed intact (e.g., PSP launched at a very reasonable price).

Not according to the original vision that was demoed.

Historic examples are indicative but may not be always accurate. The rules have changed somewhat this gen. As I said, we shall see.

They simply bite off more than they can chew. Everyone can make that mistake. You don't have to be arrogant about it.

I also think that you have misunderstood my post. Johnny Awesome mentioned that arrogance disrupted Sony's plans ("Their arrogance was their undoing"). I simply stated that complexity may be the main culprit (In a multi-headed conglomerate amidst management shuffle, there are plenty of room for complexity to creep in, who say it must be arrogance). This is a very different argument from whether Sony is arrogant or not.

People want to label Sony as "arrogant" because they attach their emotion to the high price, and most importantly, some of the Sony execs mishandled PR when the ex-PR head left).

EDIT:

Perhaps ! But people can be overconfident because of wrong intellgence/information from vendors or subordinates, unexpected events, and changing climate. Or the final outcome may be a compromise between multiple strong heads. There could be tons of reasons, I will only settle down when that PS3 book arrive... hopefully I can live to see it.

 

That's because Sony is selling a hi-end product (That's why the consumers pay), whereas Microsoft is plugging their serious mistake (That's why MS pay).

The other difference is MS has a monopoly but Sony does not.

Sony is arrogant in press at the beginning. That's all we can be sure.
There are many reasons for the price to be high. They can be telling the truth (10 year business plan), but they forgot that gamers are an abrasive bunch.