PS3 Strategy/Confidence Retrospective

[Gubbi]

Sony took a risk with several new technologies for the PS3: HDMI, blue laser storage and CELL. That's not a sign of arrogance, that's a sign of confidence and ambition. In retrospect, over-confident and over-ambitious (my 20/20 hindsight).

I'm sure they'll learn for the next generation (by having more contingencies) they way Microsoft learned from last generation.

Cheers

 

[patsu]

Like others have been saying before: the jury is still out on that. And the way things are looking at this moment, we could have the same argument a year from now.

MS needed an early launch and it didn't cost 'm any sales so far. As long as they keep their software quality up, they'll be fine.

Yap. Including Blu-ray has the benefit of ensuring (and perhaps accelerating) the relevance of HD.

It will also be a driving force (help PS3 sell even without buzz) as price falls and HD becomes the norm. By then, hopefully Sony is not losing money on unit sales anymore. Many people quoted numbers, but the largest number is the rest of the world who is non/casual-gamers yet. The pool that Nintendo has tapped on to whoop Sony and MS's *sses.

The problem is they have this chicken and egg scenario to get over first. I am pretty sure (especially after the GT + Top Gear announcement) that something big is in the works. I am just complaining that Sony has allocated too little (marketing) resources and attention to "now" (the present time) -- given that they have slipped in some key content unveiling.

 

[Gubbi]

Another big hole is just looking at the time at which software development started. Each year of development costs considerable amounts of money, and I'm very sure that each year of software development before a console's launch is progressively more expensive, while many third parties would have either killed you, or if they had known, simply started their development a year later also, a disadvantage which would have been the exact same advantage that the 360 has capitalised on in todays reality.

That's the reason most software is 1. party on release (or at the very least bankrolled by the console maker's publishing division).

I think Shifty's point is that Microsoft forced Sony's hand wrt. launch date.

Cheers

 

[Arwin]

That's the reason most software is 1. party on release (or at the very least bankrolled by the console maker's publishing division).

I think Shifty's point is that Microsoft forced Sony's hand wrt. launch date.

Cheers

Obviously that is his point, but I then disagreed with it.
My point in brief is that setting your target launch date is something that Sony and Microsoft did long before the actual dates came into play, and that there is lots of evidence (RSX being another that I forgot to mention, and I'm sure there's even more out there) that Sony aimed for 2006 from day one.

 

[pipo]

Yap. Including Blu-ray has the benefit of ensuring (and perhaps accelerating) the relevance of HD.

Sure.

It will also be a driving force (help PS3 sell even without buzz) as price falls and HD becomes the norm.

The 'driving force' bit is exactly why I said: the jury's still out on that.

*points at Nintendo - again*

 

[[maven]]

May I just interject that my gamertag has nothing to do with this thread?

 

[Shifty Geezer]

I'm sure they'll learn for the next generation (by having more contingencies) they way Microsoft learned from last generation.

Is there anything to learn though? From where I'm sitting, PS3 was as much a set-up for next-gen as anything, with a game-plan that meant a long-term solution that reaches beyond one generation. Is HDMI and BRD (200GB) likely to be superseded next-gen? And Cell will be progressive to whatever scale they want to pitch it at.

Also, now I think about it, previous consoles have often shown what some are attributing to Sony's arrogance in their last-minute 'goof-ups' regards hardware. Last-minute hardware spec changes aren't uncommon. MS and Nintendo have before set their targets with their expert expectations, only to have last minute down-clocks. So really, with MS having cut-back XB hardware and weak devkits prior to XB360's (beta kits released 5 months before release) and incomplete API's a good year or so into their platform, and Nintendo had to downclock their GC GPU, are those events also attributed to their arrogance clouding their long-term vision? Were they all arrogantly reaching too high? Or are Sony uniquely positioned as a totally infallible company who only get things wrong when they get too full of themselves?

 

[dobwal]

So a couple of presumptuously arrogant quotes from a few PR execs who are, in effect, "paid" to be "proud" of the platform/company they are affined to means that, somehow, Sony's entire strategic division share the same inability to acknowledge the possible risks associated with their own strategy & the accuracy of their assumed strengths of consumer sensitivities over brand loyalty?

Do you really believe that..?

Seriously...?

Except its not just from no name PR people it goes all the way to the CEOs within Sony's gaming division. Plus, its the top people that were making the more outlandish statements.

"Its probably too cheap", "its not a gaming machine", "its like comparing a cafeteria dinner to dining in a fine restaurant" and other statements like "One famous reporter let slip, Xbox is 1.5, the PS is more than what I was expecting, so it's 3.5. That's the difference." doesn't come from a nobody within Sony.

 

[Mintmaster]

Jury is still out on BR. I personally think originally announced launch date with UT3 or Killzone 2 would be better than anything in terms of initial reception. Unfortunately not everything goes according to plan.

That's a tangential argument. If PS3 can theoretically launch with KZ2, then XB360 can theoretically launch with Gears and Bioshock. The quality titles always need a decent userbase to take advantage of. I was just saying that with option A (one year headstart, no BR) you'd have to adapt your software strategy accordingly. Maybe PD would have to develop a PS3 version of GT4 alongside the PS2 version.

Very true, but did Xbox's bigger memory, faster GPU help marketability in the end?

If MS was Sony I think it could have. If the original XBox didn't have technical superiority it probably wouldn't get off the ground.

When two products don't have much in the way of differentiation, the market leader wins. If XBox was too similar to PS2, what's the point in buying it? The reasoning is similar in my option A). If PS3 was similar to XB360 and launched at a similar time, what would be the point in buying 360?

Avarage Joe can barely tell the difference between PS2 and PS3, I don't think a year of CPU, GPU or memory difference would effect anything, certainly not worthy of a delay.

By that reasoning there's no use in aiming for any technical superiority. I think a lot of 360 buyers would have chosen the PS3 instead or would at least switch over to the PS3 as their primary platform if it was visibly superior. As it is, that just isn't the case at all. The few times we do see something clearly better/unique on the PS3 (GT5, LBP) are almost entirely due to developer talent and nothing to do with hardware.

 

[archangelmorph]

Except its not just from no name PR people it goes all the way to the CEOs within Sony's gaming division. Plus, its the top people that were making the more outlandish statements.

"Its probably too cheap", "its not a gaming machine", "its like comparing a cafeteria dinner to dining in a fine restaurant" and other statements like "One famous reporter let slip, Xbox is 1.5, the PS is more than what I was expecting, so it's 3.5. That's the difference." doesn't come from a nobody within Sony.

So tell me something.. If you were the CEO of a company like Sony who made as large a strategic faux pas as they did & wanted to save face in the eyes of the general public so as to not cast doubt over the future of your market success in the eyes of your stakeholders, consumers, the press etc.. What kind of remarks (when asked pretty specific questions rather candidly) would you give?

& I ask again...

Do you believe even they represent Sony's entire strategic division's ability to acknowledge the possible risks associated with their own strategy & the accuracy of their assumed strengths of consumer sensitivities over brand loyalty?

 

[valioso]

Do you believe even they represent Sony's entire strategic division's ability to acknowledge the possible risks associated with their own strategy & the accuracy of their assumed strengths of consumer sensitivities over brand loyalty?

I don't think it matters. The comments got out there, not just to the internet people but on Time magazine and newspapers and now is coming back to bite them. Whether they represent the strategy going in or not, they are now being judged by them. By saying xbox 1.5 the ps3 should blow anything in xbox out of the water, but it doesn't.

 

[TheChefO]

Do you really believe that..?

Seriously...?

Words are words, but when actions reflect them, they stop being words and start being policy.

 

[dobwal]

So tell me something.. If you were the CEO of a company like Sony who made as large a strategic faux pas as they did & wanted to save face in the eyes of the general public so as to not cast doubt over the future of your market success in the eyes of your stakeholders, consumers, the press etc.. What kind of remarks (when asked pretty specific questions rather candidly) would you give?

& I ask again...

Do you believe even they represent Sony's entire strategic division's ability to acknowledge the possible risks associated with their own strategy & the accuracy of their assumed strengths of consumer sensitivities over brand loyalty?

I wouldn't make comments like the ones mention above. There are numerous alternatives to confidently promote the PS3 with its high price without making comments that dismiss the concerns of the media and the general public. Hind sight being 20/20, if Sony could step back to 2005 with the $600 PS3 still being a reality, those statements would have been worded a lot differently.

CEOs are ultimately responsible for the performance of their companies, they are the primary dictator of the goals set forth by their company. They are basically the head of the strategic division. It common to appear poised and confident regardless of the state of your product, but there is a fine line between trying to postively spin with finesse a negative aspect of your product and PR spinning to the point where it seems you've lost perspective.

 

[TheChefO]

Were they all arrogantly reaching too high? Or are Sony uniquely positioned as a totally infallible company who only get things wrong when they get too full of themselves?

Ambition != Arrogant

I like "Sony the innovator" and "Sony the ambitious", but "Sony the Arrogant" sucks.

As I've said, it wasn't just the arrogant statements that got them in trouble, it's when this arrogance started infringing on their planning in all phases that I take issue with.

I know some here feel Sony did all they could to see ps3 through to success, they just "reached too far", I completely disagree.

As the saying goes, they wanted to have their cake and eat it too.

They wanted success without giving ps3 the proper software, tools, price, timing, marketing/pr, or HW for that matter.

They could have sacrificed late profits on ps2 to establish a strong early library for ps3.
They could have secured more key exclusive games to help establish and maintain interest.
They could have invested more in dev tools to get them up to par and help keep their platform as the lead devkit for the generation.
They could have sacrificed BD (and consequently HDD) as standard features to help reduce BOM and consequently, they could have launched earlier to keep MS at bay.

At the very least, they could have mandated all initial games be produced on dvd to leave themselves a backdoor if the high price was rejected.

 

[TheChefO]

What kind of remarks (when asked pretty specific questions rather candidly) would you give?

I would play directly on the line of the strengths of the platform.

Yes it is pricey, but it has a built-in HD movie player with the industries top studios supporting it. We also are home to the most popular franchises in this industry and have lead it with innvation over the past decade. We will continue to be in this leadership role going forward and we will continue to revolutionize the games market.

All the while, I'd have a "dvd games only" mandate which let's me backdoor my way into a value ps3 which is dvd based if sales fall below expectation. If sales are brisk and meeting expectation, the gameplan can continue and future games produced on BD.

 

[-tkf-]

Well, I can tell you that there is evidence that when some studios announced for B-r they specifically cited PS3 as a factor in that decision. In fact, I believe Paramount was one of them in Oct 2005, when spring 2006 was still what was being expected for PS3 launch. Paramount that's now jumped ship. Maybe they'd have jumped ship earlier, or not joined in the first place, if they were expecting a mid-2007 launch instead of a year earlier. It's hard to say for sure, of course, but I think it's clear that pressure from their allied studios in the HD wars was there on Sony as well.

If you look at the bigger picture, neither Samsung (which launched the first player) nor the actual BD production lines were really in place when Blu-Ray launched. BR faced lots of problems when they launched, if Paramount had any doubt in the power of the PS3 Blu-Ray support they should have been convinced by the numbers when they jumped ship. Blu-Ray turned a massive HD-DVD lead into a 2:1+ lead within a very short time. And the reduced price can only help widen this gap.

So i seriously doubt that the PS3 had anything to do with them going HD-DVD exclusive. The only real reason i can see is the Payback Rumour but i don´t think we will know the truth.

 

[TheChefO]

I think a lot of 360 buyers would have chosen the PS3 instead or would at least switch over to the PS3 as their primary platform if it was visibly superior...

Good point and I agree, I just think the actual number is very small and reflected in xb1 sales v ps2.

Yes there are many out there that appreciate a technically superior system with better graphics, but that number is very small in the grand scheme of things. Certainly not enough to capture market leadership.

 

[Shifty Geezer]

As I've said, it wasn't just the arrogance that got them in trouble, it's when this arrogance started infringing on their planning in all phases that I take issue with.

All phases? Again with the ;this is the only explanation for Sony's results, whereas for the other companies it's all different reasons.

I know some here feel Sony did all they could to see ps3 through to success, they just "reached too far", I completely disagree.

I don't think they did all they could to secure PS3's success as top seller. Putting in DVD and selling cheaper and earlier would probably have done them more favours than anything, except they'd have been in an even worse state regards software then. I just don't buy the fact that the wrong decisions are all as a result of pig-headedness. The fact they have post-commented with arrogant stances doesn't mean their decisions were made with such a mentality. The choices are like bets on a horse; you check the form, make your estimates and place your bets. If a person places a bet on a horse because the horse has won three times in a row, and then brags that he's going to win lots and doesn't, it wasn't his arrogance that led to losing money. It was his wrong decision-making process. Now if the person blindly picked a horse at 100:1 and boasted that whatever horse they picked would win and they lost, then that would be arrogance as their choice was made solely on a misplaced self-belief. You attribute all Sony's 'mistakes' to the latter example, denying the former is even a possibility.

They wanted success without giving ps3 the proper software, tools, price, timing, marketing/pr, or HW for that matter.

They could have sacrificed late profits on ps2 to establish a strong early library for ps3.
They could have secured more key exclusive games to help establish and maintain interest.

Limited budgets. They'd already spent billions on PS3. Do you not remember the big fat negative revenues of the gaming division? Sacrificing even more money would have been a hard sell to the board, don't you think, when Sony was in a real drive towards profitability?

They could have invested more in dev tools to get them up to par and help keep their platform as the lead devkit for the generation.

Throwing money at development doesn't magically speed it up. A key limiting factor is the time taken for people to get their heads around designing for Cell. Doesn't matter how much you pay them, you can't speed up human innovation. Presumably it's the same reason why MS were a year late getting predicated tiling into their development systems despite having designed the machine to work on that principal years earlier. Why do you think software tools being late is always a fault of management to plan effectively, rather than a very nasty and common occurrence in the field because large-scale software development is so damned incredibly hard and complicated!

They could have sacrificed BD (and consequently HDD) as standard features to help reduce BOM and consequently, they could have launched earlier to keep MS at bay.

That's not necessarily an arrogant decision though! They knew prices were going to drop fast, but didn't know for sure when. That's like the guy betting on the horse by looking up the odds and form. If they went with DVD only, they could have released a DVD only PS3 in November 2006, and then in introducing a BRD PS3 been left unable to take advantage of it for their software. The choice 'was we go with BluRay Disk at 5:1 when looking up form, we reckon he's got a 50:50 chance of coming in, or do we go with DeeVeeDee at 7:5?' Given the odds and chances of their evaluation of the situation, BRD looked a good bet.

At the very least, give Sony a little while at $400 to see if they did leave it too long or not! And give BRD a while to show if its been worthwhile for Sony or not. After all, if PS3 'bombs' but Sony rake in the dough from BRD sales, it was the correct decision to make, no? It's not like Sony were designing their system to be the top seller one year after launch. They were designing it to make the most possible money for them of any system they could produce over the life of the platform.

 

[TheChefO]

At the very least...

Fair points, but you didn't respond to the easiest and cheapest option of all which would have only required a crumb of humble pie on Sony's part:

DVD-only games for launch window.





continued:
I think there are way too many points for it all to be one big coincidence. In fact, looking at it rationally from a business perspective, it seems Sony was willing to sacrifice ps3 for BD profits and setting up ps4.

 

[Carl B]

DVD-only games for launch window.

....

In fact, looking at it rationally from a business perspective, it seems Sony was willing to sacrifice ps3 for BD profits and setting up ps4.

The thing with DVD-only games for the launch window, is that a year down the line it starts to become a non-factor anyway, and two-years down the line the cost increase is nominal all-around. If you're going to have DVD games at launch, have a DVD-only SKU as well; a year later is not the time to introduce that particular SKU. If you're going to have a BD-only strategy in hardware, there's no point in putting games out on DVD. The greatest savings are right at the beginning afterall.

I certainly don't think that Sony was willing to sacrifice the gaming division for the sake of Blu-ray, but the decision was obviously set in stone that PS3 would be used to jumpstart the BD ecosystem. And it goes beyond movie sales. Diode yields/volumes, drive expertise, and disc replication have all received a massive boost due to PS3's incorporation of the technology. PS3 has taken it on the chin due to the move, to an extent Sony was likely not prepared for - and likely would have rethought if they though it would go down like this - but it is what it is. The rationale for Sony putting a BD drive in the PS3 was obvious on several levels; it's just a shame that the unpreparedness of the tech vs when they needed it to be ready ended up stinging them as hard as it did on the BOM.