PS3 Strategy/Confidence Retrospective

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This argument about whether "arrogance" applies to Sony and their decision with regards to design, development and execution of the PS3 is becoming cyclic.

Some will append the term to Sony and some will not.

I think we can all agree that Sony pushed to provide us a great console that ultimately has been so far hampered by poor decisions that left Sony no choice but to initially put a console on the market that was costly for its consumers as well as Sony itself.

I for one have not been disappointed in this generation so far. We have had great games with a slew of highly anticipated ones still on the horizon despite Sony's high price, MS's high failure rate and Nintendo's shunning of competitve visuals.

I mean who can get mad at games that have come since late 2005 or is coming out 2008 and 2009.

2006-2007-2008-2009 might go down as the golden age of gaming.
 
@Chef: the HDD was also essential for building up to what Live is now. Without the HDD, Live would never have become as good a service (downloadable demos, online content, expansion packs, etc). Also very popular then but because of this even better known now, is custom in-game music, for which the HDD has been essential too.

Also, your examples of in-house are actually flawed (possibly on both sides though). They were games paid for by Sony perhaps, but Insomniac is still an independent company, and Motorstorm's guys have only recently been acquired by Sony.

HDD in xb1 had potential, but never proved valuable enough to include it in every box. Leaving this component out of the required list will let MS hit lower pricepoints as ps2 did while still turning profits later in it's life.

Regarding launch software, with that being the case, it is further emphasized that Sony did not shift enough resources to meet the needs of their young platform when it needed all the help it could get.
 
HDD in xb1 had potential, but never proved valuable enough to include it in every box. Leaving this component out of the required list will let MS hit lower pricepoints as ps2 did while still turning profits later in it's life.

This is an assumption and unless the Core to Premium/Elite ratio improves immensely, the 360 could have gotten away with tying a harddrive to every unit. 10% is the difference between 22.5 and 25 million units, 45 and 50 million units and 90 and 100 million units. In my opinion anything less 20% of the 360 userbase would place the Core near insignificant in terms of playing a major role in the 360's success.

Regarding launch software, with that being the case, it is further emphasized that Sony did not shift enough resources to meet the needs of their young platform when it needed all the help it could get.

Well I suppose Sony thought their 14 month line up would look like this:

Resistance
MotorStorm
Heavenly Sword (near or at launch)
Lair (near or at launch)
Metal Gear Solid 4
R&C
GTA
KillZone2 (maybe)
 
Where I think the difference of opinion lies is that Chef and others who have similar beliefs already see the current events (slow sales etc) as proof of the failure, and therefore arrogance, of Sony's choices. Others see the situation in a far longer term way, and feel it can't be arrogance, because the condition for arrogance, failure, has not yet been met.

While this is true, I'd still be of the opinion that Sony was arrogant regardless of the sales outcome. They'd just be successful, arrogant businessmen.

Consoles are about games. Yes, many new features are being added which blur the line, but the main draw is games ... still.

When I examine many of Sony's HW decisions for ps3, I see a very bold outlook for a games machine.

Cell is new and exciting.
Their GPU choice is solid.
Wireless controllers, standard = nice.
BT, standard = nice.
Wifi connectivity with psp = nice.



Then things get a bit iffy:

BRD, standard = nice ... ehh ... how much is that again? And when can we get this to market?
HDD, standard ... hmm ... I've seen this somewhere ... didn't work out too well last time.

While Cell is a great component for the future of gaming, obviously Sony had grand plans for it outside gaming. No harm done as it could be key to great gaming experiences and souldn't cost much more to produce than rival silicon ... good bang for the buck and bonus if they can profit elsewhere.

GPU ... no other uses outside ps3, but who cares as it does it's job nicely and for reasonable cost.



BRD and HDD on the other hand I think start to sway outside the realm of what's best for a gaming machine and gamers and dips into, "what's best for Sony and possible future revenue streams".

If both these features were "free" and were merely replacing other components which simply add potential revenue for Sony, great. As is, they add cost to every console while providing limited benefit. Further, BRD added time or rather, took away time.



Sony director(s) essentially saw ps3 as a trojan horse into a mass of future profits from hd movies and thought gamers would have no problem footing the bill. "even if it didn't have any games"

I call that arrogant and called it such when they announced the price. Maybe it's just me though.
 
I don't want to get too involved with all the details, i think you guys are doing a perfectly good job covering both sides of the argument on your own, however I did want to just cover this one point. In a similar way to the phrase 'history is written by the winners' surely many actions later perceived of as arrogant were simply the 'best idea at the time of making them.' What differentiates an arrogant action and an inspired one is the relative success of that action. Where I think the difference of opinion lies is that Chef and others who have similar beliefs already see the current events (slow sales etc) as proof of the failure, and therefore arrogance, of Sony's choices. Others see the situation in a far longer term way, and feel it can't be arrogance, because the condition for arrogance, failure, has not yet been met.

Failure isn't a requirement for "arrogance", it is infact success that often drives such a trait.
 
Sony director(s) essentially saw ps3 as a trojan horse into a mass of future profits from hd movies and thought gamers would have no problem footing the bill. "even if it didn't have any games"

I call that arrogant and called it such when they announced the price. Maybe it's just me though.

I agree with you 100%, and I've stated at least once already that this is the reason why I call them arrogant. They thought they can just do this and the customers will take it. And it doesn't matter if they were right or wrong.
 
This is an assumption and unless the Core to Premium/Elite ratio improves immensely, the 360 could have gotten away with tying a harddrive to every unit. 10% is the difference between 22.5 and 25 million units, 45 and 50 million units and 90 and 100 million units. In my opinion anything less 20% of the 360 userbase would place the Core near insignificant in terms of playing a major role in the 360's success.

In my mind this is already a foregone conclusion.

By 2011-2012, when the box is selling at $99, there will be at least 20% of them without HDD's, though I would guess more like 30-35% at the end of the day.

As the pricepoint gets lower, and appeals to more casual gamers, the desire for a HDD will also drop.

It defies logic to believe that the current ratio of core/premium sales will continue. We know for a fact right now that 40% of 360 users are not connecting to the internet, and not utilizing the HDD. That percentage of people not utlizing the HDD will surely rise, as the install base currently consists mainly of hardcore gamers and early adopters.

As that percentage of people not utliuzing their hDD rises, to 55-60% as I believe it will, the ratio of non-HDD 360's will go up significantly. I find it hard to envision 9/10 users will continue to purchase a HDD, when only 4/10 intend to use it.
 
This is an assumption and unless the Core to Premium/Elite ratio improves immensely, the 360 could have gotten away with tying a harddrive to every unit. 10% is the difference between 22.5 and 25 million units, 45 and 50 million units and 90 and 100 million units. In my opinion anything less 20% of the 360 userbase would place the Core near insignificant in terms of playing a major role in the 360's success.

It enables them to hit rock bottom prices down the road. It's role isn't for today, though it should help capture some overflow from disappointed Wii shoppers this Christmas.


Well I suppose Sony thought their 14 month line up would look like this:

Resistance
MotorStorm
Heavenly Sword (near or at launch)
Lair (near or at launch)
Metal Gear Solid 4
R&C
GTA
KillZone2 (maybe)

Launch window is 6 months post launch.

A console maker coming in late to the game needs to make an early impact to lure buyers and at $600 a pop, that better be one heck of a lure. Out of that list:
MGS4
KZ2
GTA4
are the only ones I see making an impact significant enough to move units and with GTA4 being available down the road for much cheaper, it gets removed from the list. Also, with MGS4 being a 3rd party title, it's out of Sony's control, removed from the list.

KZ2 at launch, could have been significant enough to uphold desire for ps3. Even if most people couldn't afford to spend $600 on a console, it could have at least upheld the idea that Sony = elite and ps3 = elite. It could have also convinced many others that yes, it is worth $600 and many more to say, "I'll wait for ps3 because THAT (KZ2) is something I want and I don't see that experience anywhere else".

Heck even KZ2 for this Christmas could have been enough to do the trick. Too late though.
 
I agree with you 100%, and I've stated at least once already that this is the reason why I call them arrogant. They thought they can just do this and the customers will take it. And it doesn't matter if they were right or wrong.

Well, there's two of us. :smile:


I remember like it was yesterday arguing with Acert on this subject almost a year ago.


@Scooby - good point on the future and current demographic trends for xb360 and core.
 
Failure isn't a requirement for "arrogance", it is infact success that often drives such a trait.

But why would you judge it as arrogance if they succeeded. i.e. had PS3 been a run away success despite the price and the dearth of games, would we be having this conversation now? Past success definitely gave them the (perhaps misplaced) confidence to make the choices they have though, no doubt about it
 
In my mind this is already a foregone conclusion.

By 2011-2012, when the box is selling at $99, there will be at least 20% of them without HDD's, though I would guess more like 30-35% at the end of the day.

As the pricepoint gets lower, and appeals to more casual gamers, the desire for a HDD will also drop.

It defies logic to believe that the current ratio of core/premium sales will continue. We know for a fact right now that 40% of 360 users are not connecting to the internet, and not utilizing the HDD. That percentage of people not utlizing the HDD will surely rise, as the install base currently consists mainly of hardcore gamers and early adopters.

As that percentage of people not utliuzing their hDD rises, to 55-60% as I believe it will, the ratio of non-HDD 360's will go up significantly. I find it hard to envision 9/10 users will continue to purchase a HDD, when only 4/10 intend to use it.

Its all dependent on the performance of the 360 and on how MS maintains the perceivable value gap between the two skus. If the price gap between the two skus grows smaller as the overall prices goes down it makes the % percentage of people who can actually afford and choose the Premium to go up. There is a point that price gap can't get any smaller due to price constraints of the HDD cost. However, there is nothing to stop MS from stalling the price reduction of the Core and allowing the components cost reduction rate to outpace the price reduction rate of the Core.

If 360's sales take off with the Premium as the primary driver of 360 sales, its doubtful MS will ever make the Core more attractive to consumers. Its a chance MS might dropped the Core altogether. Noones going to push their least expensive product if consumers are buying up the more expensive model with higher profit margins.
 
I think we can all agree that Sony pushed to provide us a great console that ultimately has been so far hampered by poor decisions that left Sony no choice but to initially put a console on the market that was costly for its consumers as well as Sony itself.

That's not what I fault Sony though. A company is free to charge their product at any price they deem reasonable (especially considering their losses). There is nothing arrogant about it because for a large company, it is usually based on careful calculations and they *will* suffer/enjoy the consequences should they get it wrong. Execs don't wake up one morning and insists on a pricepoint blindly. This is a well known marketing problem (though not well studied). That's why many execs make good/bad mistakes here (e.g., recent examples I know of are Sony, Apple, Logitech). Because of what they said in the press, one can infer that both Howard Stringer and Kutaragi were aware of this fact (It's very basic marketing. Even first year marketing students will know). That said, as long as the user base is large enough and Sony has unique offerings, there is no reason why PS3 can't succeed (even now).



Where Sony falls flat big time (so far, until they show their hand) is their inability to string together all their software effort to deliver something impactful. e.g., For PS Eye, they have 1 full game, EyeCreate (like Apple's Photo Booth), 4-5 interactive screen savers only in European PSN, and even some hidden ones that are not available on any PSN yet. All these are very disjoint experiences and together they amount to almost nothing. Few people leave their PS3 on, and those who do are running Folding@Home or hosting RemotePlay. The screen savers are essentially useless.

What they could have done is to save all the resources and develop 1 full game (EOJ is good), plus a PS-Eye extension to the core XMB and the built-in player user experience so that everyone can enjoy the convenience right away. By doing that, they layer the benefits on top of existing ones, and there is a sense of progress (rather than radiating bunch of off-shoot mini-programs and still remain status quo). I hope it's not because the XMB is done in Japan and the PS Eye team can only make small non-improvements like screen savers separately. That sort of organizational boundary should have been torned down a year or two ago.


Looking at the network, a small company like Insomniac can deliver a best of breed online gaming experiences with clan support _at launch_, while a fumbling Sony delivered a bunch of APIs that no one has used and deployed fully yet. Sure they are working on Playstation Home, which is amazing (!!!). But they need to break things down into deliverables and deal the cards out.

There are quite a few examples on how an unfocused Sony has led to PS3's stagnant image in the public's eye even though the hardware and available software is great (in my view of course).


Granted, I heard bits and pieces of goods news hinting at an amazing future, but (i) The public doesn't care, and (ii) Sony... in case you haven't heard, studies have shown that initial estimates can be off by as much as 2 times + 20% (so if you think it will take you 10 years to complete the PS3 vision, it may only be realized in 22 years). You can't wait for everything to be spit shine, all the content deals to be dotted and crossed, all the Sony devices to be developed and connected before you start to roll out.

Sony lately talked about waiting for their other devices to be ready for the video initiative. I held the exact opposite view. Do not be distracted, and do not delay the PS3 version because the Bravia and Sony-Ericsson ones are still in the works. The whole damn thing is too big. I respect Howard Stringer for what he has done, but if he is behind this school of thought, I think he should let someone else drive the project(s).


The outcome is that Sony only gets like 20-30% of the mileage for the amount of work they put in. Once (if ?) they start to repackage and regroup, they should be able to find their groove again.

I for one have not been disappointed in this generation so far. We have had great games with a slew of highly anticipated ones still on the horizon despite Sony's high price, MS's high failure rate and Nintendo's shunning of competitve visuals.

I mean who can get mad at games that have come since late 2005 or is coming out 2008 and 2009.

2006-2007-2008-2009 might go down as the golden age of gaming.

Yap ! I use PS3 every weekday.... from gaming to playing music, watching movies, browsing and now tinkering with Playstation Eye. It's a great little machine. The funny thing is I sometimes have to turn off my PS3 because I thought it has finally become more noisy. Turns out it's usually my MacBook Pro, or the spinning hard disks on my storage server (I have 720Gb now :) ).


EDIT: fwiw, I recently also bought a small SA-CD compatible AV/home theater set up in my office to complement my PS3. So I'm enjoying work rather much now. ;-)
 
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Sony director(s) essentially saw ps3 as a trojan horse into a mass of future profits from hd movies and thought gamers would have no problem footing the bill. "even if it didn't have any games"

I think the Blu-ray drive would have had to been unknown to the buyer and directly meant to hurt the consumer to warrant Trojan Horse metaphors. Imo the analogy is very inaccurate.
 
I'm pretty sure the Trojans knew there was a giant horse outside their gates. The story kinda hinged on it.
 
I think the Blu-ray drive would have had to been unknown to the buyer and directly meant to hurt the consumer to warrant Trojan Horse metaphors. Imo the analogy is very inaccurate.

If Sony felt strongly that BRD could hold it's own, it wouldn't have been included in ps3, nor touted at every prelaunch meeting with hollywood studio execs on the benefits of BRD over HD-DVD.

I'm quite sure that had something to do with the early BRD support.


Obviously it wasn't meant to harm anyone (aside from their wallet) but it certainly is debatable whether it was necessary for this gen, games wise.

On the other hand, the potential benefits to Sony (BRD) were obvious and in fact Sony has already benefitted from it on the Movie front. The only reason they are even in that HD-OM fight is due to ps3. Otherwise they would be facing a much cheaper HD-DVD with brand recognition and a huge headstart ... and likely ;) significantly better studio support.
 
But why would you judge it as arrogance if they succeeded. i.e. had PS3 been a run away success despite the price and the dearth of games, would we be having this conversation now? Past success definitely gave them the (perhaps misplaced) confidence to make the choices they have though, no doubt about it

So you wouldn't append the term "arrogant" to a football player that walked around with purple robe and crown 24 hours a day and refused to acknowledged you unless you addressed him as "Your highness, the best of who ever was and ever will be" just because he scored the most goals (soccer fans) or touchdowns (american posters) and his team won the championship every year.
 
Just trying to keep it light. :) I don't particularly like the analogy, but I suppose it could be supported by the fact that BR was known to be in PS3 (and the praises thereof sung) long before it was known what having BR in PS3 was going to do to the overall price compared to historical standards and the competition. That price impact would be the soldiers in the belly of the horse that sprang forth later.

But really, meh, like most short-hand, more heat-worthy than light-worthy.
 
So you wouldn't append the term "arrogant" to a football player that walked around with purple robe and crown 24 hours a day and refused to acknowledged you unless you addressed him as "Your highness, the best of who ever was and ever will be" just because he scored the most goals (soccer fans) or touchdowns (american posters) and his team won the championship every year.

I think there needs to be a certain amount of differentiation between individuals and organisations or companies. Clearly in your example, the football player appears to be arrogant, but companies can't walk around in a purple robe and crown. At a strategic level, which is what we're debating here I think, whether a decision is arrogant or not isn't always clear at the time. In retrospect though, it's a lot clearer, and i do think if Sony had been successful at this price point, we wouldn't be here now discussing if they'd been arrogant. I'm sorry I didn't make that distinction before, but I hope you agree that a person being arrogant is completely different to a company doing so.

Just to make my position clear BTW, I think they were arrogant. Their current problems are a combination of factors including arrogance WRT what they thought the market would bear, and using the brand as a vehicle for blu-ray, but aside from arrogance, i think there is some ignorance in there - ignorance of what the average consumer wants in a gaming device and ignorance of their competitors. Also a certain amount of incompetence in terms of their marketing, which, frankly has been pretty dire the last couple of years.
 
At a strategic level, which is what we're debating here I think, whether a decision is arrogant or not isn't always clear at the time. In retrospect though, it's a lot clearer...

Emotion state or character can't be declared even after the fact unless you experienced them yourself. They can be perceived without first hand experiences though.

FWIW, the decision could be due to wrong attribution (assigning traits to the wrong factors when analyzing their very successful PS2 numbers and demand forecast), intentional (because it's also a common defense/offensive strategy to protect the high end customer first like how Citibank assaulted HSBC in HK), vision-driven (The movie execs, the home appliances guys and SCE all fell in love with the mysterious PS3 final vision just like how Apple fell in love with Newton at one point), manufacturing cost etc.

Some level of ignorance, arrogance, self pressure, peer pressure, external pressure, carelessness, cleverness, ambitious, etc. all sort of positive and negative human emotion probably had a go at it. We will have to see what Sony really wanted to do early next year (Hopefully the betas show more).
 
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