Report: Developers are steering away from PS3

May I ask why? You're bound to pee some off, which is what always happens when there's a price drop. Will there be any repercussions though? You'll have a bunch of angry people posting on forums 'Damned Sony fleeced me for an extra $100!' but would there be any repercusions? Would sales of PS3 drop because some people paid more a few weeks earlier and are now angry?

It's not a good PR move by any stretch, and when XB got it's 6 week drop, they refunded the difference through games and an extra controller. But if that hadn't happened, what's the worst that can happen from upsetting early adopters?

I'm glad you raised that. Sony's ability to sell PS3's isn't just based on price relative to the competition. It's based on perceived value and desirability of the system. Some people suggest for the same price you can have an equivalent next-gen console, but I don't think you'll have an equivalent system. For one, I feel the motion controls could add a great deal. It's unproven yet, but if that adds considerably to the gameplay in PS3 games, in that alone you have XB360 not a comparable system. Then there's the extras like HiDef movie playback (which hopefully does a better job than has been exhibited so far on Samsung's machine, or BluRay is in trouble!) and, if they get their act together, a strong online content platform. Then there's a fantastic diversity in early software. As well as the shooters and racers, you've got a flying game, Karaoke (very popular), Pokemon style card game, and concept not shown on any other machine yet. An XB360 as it stands now doesn't offer a lot of that, so I don't see it as a comparable system at $200 cheaper. They are different systems with different pricepoints.

They're bound to compete for the markets of gamers who want to play the next UE3 game who see XB360 as a bargain, but in other ways PS3 hasn't much competition and isn't price comparable with other products. Whether it can sell on those strengths is anyone's guess - that market hasn't ever developed clearly in years of expectation for it, but it's bound to break eventually, and maybe PS3 is the machine to do it?

 

What's the worst thing that could happen?

http://www.business-opportunities.biz/2005/11/08/one-unhappy-customer-can-multiply/

One unhappy customer = 3,503 people who have been warned not to become customers of the company.

One unhappy customer can cost a company dozens of future sales as the unahppy customer tells all his friends, family, and aquaintances how he was ripped off and persuades them not to buy from the same company.

 

Look, if you're believing that Wii gets more support than PS3 you're in for a harsh reality check. It's pretty simple: EA got several engines of their sports titles up and running for X360 last fall, they'll just have to polish them some more. Plus, their installed base is bigger than either of their competitors. That explains the amount of X360 titles. Wii, as far as we know, seems to be very similiar to the GCN. Thus, for developing software on Wii you can build on the foundations of previous titles. PS3 has neither advantage, so it's going to take more time for new software to arrive.
As EA history shows us, they take very smart business decisions. So there's not even a shred of doubt that their main effort will go to PS3 and X360. Later on their main focus will shift to the leader in units sold, if there's a clear leader.

 

Great post Serenity.

 

I don't know. It all depends on how the price drops and how the converged market develops. In two year's time, a $300 PS3 console and BluRay player with excellent content delivery may be far more appealing to people than a $150 XB360 or a $99 Wii.

Well for starters I don't agree with your predictions. Lots of things could happen to adjust sales figures on either side. It's as likely at this point Wii will sell 100 million, XB360 30 million and PS3 20 million, as it is XB360 sells 100 million, PS3 sells 50 million and Wii sells 20 million, as it is PS3 sells 80 million, Wii sells 70 million, and XB360 sells 30 million. At the moment XB360 is selling in an open market without competition, and we've no idea how things will change once the other two arrive on the scene.

Secondly it seems to me most of the variety on PS3 is coming from Sony-lead developments which guarentees exclusivity. The multiplatform titles tend to be conventional in nature (shooters, racers, etc.). PS2 enjoyed a number of oddities as 3rd party exclusives which might not be so numerous if PS3 doesn't have such a strong lead, but again it's no certainty by any stretch there won't be enough variety to snowball the PS3 into the de facto platform, if it's variety that people want over affordability.

I take my usual stance - 'anything can happen in the next half hour' - Bum-badabada-bum-digga-bum. I neither expect software things to remain as they are, nor expect things to change. It'll be at least a year before I start trying to guess how things will work out long term.

Edit : I'll just add, it might be worth looking up predictions for last gen. One of the great things about the Internet is it records so much history readily there to investigate. Here we've got one analyst placing XB as a strong second or third, while another places them as vying with Sony for the top spot.
http://news.com.com/Will+Xbox+drain+Microsoft/2100-1040_3-253654.html

I think XB's sales were similar to current XB360 sales (can't find any easy place for figures. Forgotten the website of choice . But looks like 8 million in 14 months) but they failed to climb over the long term.

 

I should say... There are undesirable side effects (more than just impact to early adoptors).

It depends on:
* How fast is fast,
* How low is low,
* How frequent is the drop

The undesirable effects are:

* The people you screwed are most likely the most loyal ones It goes against CRM practices. They will remember when you have PS4.

* It may train consumers to wait rather than to buy now if it's too fast/frequent (Yes, it has happened before in other markets). The issue is it does not give consumers the stability they need to make decision.

* It may also introduce more channel conflicts and overhead to manage the price drop. This is because each price drop needs to be administered to keep distis, retailers and in some cases consumers happy. They are all added cost.


Price drop should be used prudently (less frequent but cut more). So I think the bundling strategy works better. For one, it sets the right price for PS3 (i.e., USD599 is the price of the PS3 launch bundle). Without the extras, it's back to say... USD499 or lower for a quick saver. Then there's the promised free online game (The more the merrier) to tweak the price perception further.

Thirdly, it is also possible to work with the retailers to use rebates and other incentives to promote PS3 on top of the bundling policy. But this tends to cheapen Sony's brand a little.

Finally the real cut can happen later. Something to that effect.

However I think an even better strategy is to shift the comparison from box-vs-box to total-experiences-vs-box. In which case, they are apples and oranges (Kinda like Lexus owners vs car owners).

 

Doom and Gloom industry journalism makes me want to vomit profusely.

It's the same feeling I get when I'm checking out at the supermarket, and I see all those woman-oriented tabloids exclaiming something to the extent of, "J-Lo bump has been spotted! Exclusive photos inside!" What the hell is a bump, and why is there a perverted cirle overlayed on her belly? Why the sensasionalist accusation like everyone's got something juicy to hide?

In the videogame industry, a language has arisen which is just as annoying, subjective, and unprofessional as Hollywood tabloid fodder language in my opinion.

 

That's a customer unhappy with the service, having lost his worldly possessions for three months. If someone told me that a company had lost them that, I woudn't use that company. But if someone told me they bought a TV for $1500, and a week later it was now $1000, would I avoid the company? Or think 'Wayhay, I can get that TV now!'? I don't see how a price drop will deter customers no matter have agrieved early adopters might feel and how many Christmas cards they write saying 'This company lowered the price of their product shortly after I bought it.'

 

Why do they need to compare with PS2 ? Times are different now and it may be dangerous to try to recreate the old glory in the face of new threats. While MS still have the question of whether they can make enough this gen, it can try many things to outdo Sony within a standard 5 year lifecycle.

In exchange for higher cost up front, PS3 should have more revenue opportunities, larger market (with different PS3 configurations), boost sales of other Sony products, plus unify other Sony divisions. This is of course assuming that Sony can execute well (which is far from the truth in the mean time).

Exclusives would flow from Xbox to PS3 also. There is always first party for both platforms. On top of that, PS3's extra functionality should differentiate itself more once the price is comparable. Beyond these hand waving points, how it turns out eventually is anybody's guess.

 

By your logic, every single developer with an exclusive game on Xbox/Gamecube is terminally stupid.

I mean, they're ignoring 70% of the market...

 

I honestly have no opinion. I'm not going to try guessing per year sales for the next 5 years of these systems. I wouldn't know where to start. Certainly without any idea how well PS3 and Wii will start, how can we guess where they'll end up? And how can we guess how opinions will change over the next two years, when the platforms are established? It wouldn't be hard to draw up a few very different outcomes and present reasonable cases for each of them coming true.

 

I think the point is: If you can find all the games you want to play on your platform, then all is well.

 

I figured you had the ability to answer your own question, re: why would XXX ignore XXX% of the market.

So, why ask?

 

Sorry, I should have linked you to the full article...

http://www.bizjournals.com/austin/stories/1999/03/22/smallb3.html

Never underestimate the power of bad publicity and unhappy customers.