The new PS3 sales pitch: Better gaming, better technology, better value

[Powderkeg]

I was talking first year. In which this kind of demand will push their production facilities probably beyond capacity. After all, you are talking about the current level of HDtv adoption rates, and you haven't mentioned a timespan or future developments and trends in HDtv penetration over a long period.

What are you talking about?

Let's see, I've talked about DVD taking 6+ years to gain widespread adoption, and compared that to Bluray/HD-DVD, I've talked about how TV owners normally go 10+ years before they replace their sets, and I've talked about the delay of the digital standard into 2010.

How do you figure all I talked about was current adoption rates?

In the meantime, Sony is happy to have 6 million PS3s produced by March 2007. If they can then step it up to 2 million PS2s per month, they can do 18 million more during that year, adding up to 24 million. By your estimates, that's barely enough to satisfy those who *currently* think BluRay is a selling point on the PS3. There's likely to be a few more out there who just think that BluRay means more room for game content on the disc, or lower compression rates = lower CPU usage, or who just really really want to play a certain exclusive game badly, or just think the PS3 will be the best next-gen gaming platform and so on, or because they liked the PS1 and/or PS2 and want more of that. Regardless of if any of them are right, it doesn't matter - they'd be well on schedule to hit 100.000.000 in just four years this time round.

BWAHAHAHAHAHAHAHAHAHAHAA

Sorry, but that is just way too funny.

Yeah, I'm certain that there are what, 80+ million people who will buy a PS3 because the lower data compression means lower CPU usage. NOT. I doubt that is a factor for anyone but super-geeks who don't bother asking themselves how the gameplay is actually improved because of that.

You've got to be near insane to think that 100+ million people are going to buy a PS3 at it's price.

Despite the talk in here, the fact remains that over 80% of all consoles sold are sold after the system drops to below $200 in price, and that isn't going to happen anytime soon with a $500 base price PS3.

And the fact that most console owners don't buy systems until they are below $200 in price should be a big fat indicator for anyone who wants to think about it logically on just how well they should expect a $500+ PS3 to sell.

 

[Titanio]

You've got to be near insane to think that 100+ million people are going to buy a PS3 at it's price.

Maybe I'm not reading things right, but I don't think anyone suggested that.

This seems to be lost on some people - PS3 is not going to be $500 for its lifetime anymore than PS2 was $300. It'll be $500 as long as it sells at that price.

 

[Powderkeg]

No, I don't. Look it up, it's expected most TV sales this year in NA will be HD.

edit - and no, I'm not looking at figures for percentages of sales, that 15%+ figure is addressing penetration. The figure is probably higher than that now, I've seen 25% claimed.

I looked it up...

This increase would boost HDTV sales by 30% and HD video services by 38% by the end of 2006.

http://www.physorg.com/news7662.html

I see an increase in HDTV sales of 30% over current HDTV sales. Just like I said.

I've seen much lower estimates than that from 02/03. But we're already over 15%.

Are we?

that's compared to nearly 20% of households that have a digital TV (some of which display video of less quality than full HD).

http://www.usatoday.com/tech/gaming/2006-01-04-xbox360-hd-dvd_x.htm

If we are, it's only by 1-2%.

If he's going out looking for a videogames console and knows it's already going to cost him a few hundred dollars..$100 more for that functionality won't seem unattractive IMO. That'd take the edge off your gamble..and TBH, I think Blu-ray will look pretty damn standard, a lot more standard than the alternative (but I'm not going to get into HD-DVD vs Blu-ray debates here!).

Yes, let's not start the Bluray vs. HD-DVD here since it is my opinion that neither format is ready for prime time.

But, if you do want to compare them then try comparing brand recognition. Go into a Best Buy, Walmart or any other retailer and ask random people what Bluray is. Don't tell them what it is, ask them, and see if they know or at least can guess.

Then ask them what they think HD-DVD is.

Then keep in mind that most people buy what they know and are familiar with.

You have got to be kidding me. I'll say this very slowly - I think most of the market for PS3 and 360 this year, and probably longer than that, will be HDTV owners. If you look at the demographics for 360 owners to date, that is not unreasonable. I did not say that most of the total videogames market was currently made up of HDTV owners, but the segment of the market adopting these systems early is.

1 year won't make any difference either way. To get either format to succeed you are going to need to sell hundreds of millions of players.

A number of people I know use PS2s to play DVDs, and certainly when they bought them. Less may use them now than when the systems were purchased, but that's somewhat irrelevant if its movie playback functionality was part of the reasoning for their purchase in the first place - as it was in many cases.

Your "number of people" is pretty much irrelevent.

I know over 30 console owners, and not one cared about the DVD playback. In fact, by the time most of them bought a console they already had a DVD player, and stand alone players could be found for under $100.

Heck, I bought the original Xbox on launch day, and even I already had a cheaper stand alone player by that time.


The movie playback capabilities might have sold a few systems to the early adopters, but after the first year or so superior standalone units could be found cheaper, and once we reach that point with the next-gen video formats we are back to having the PS3 and 360 playing the same games but the PS3 being priced significantly higher.

 

[mckmas8808]

In the end it's a $500+ game console that doesn't have any advantage over their $300 competition for 85% of the population. How is that "pure genius."

It's pure genius if Blu-ray wins the format war.

 

[Platon]

Maybe I'm not reading things right, but I don't think anyone suggested that.

This seems to be lost on some people - PS3 is not going to be $500 for its lifetime anymore than PS2 was $300. It'll be $500 as long as it sells at that price.

The question though is how long will it take PS3 to drop to those previously considered mainstream pricepoints, if ever. And the PS3 will be selling at $500 as long as Sony is loosing money on each console. I doubt they can go through a whole generation by selling a console at loss ala MS. With Sony it seems that consoles should be profitable on the hardware after 1 year, maximum 2...

 

[Titanio]

I looked it up...



http://www.physorg.com/news7662.html

I see an increase in HDTV sales of 30% over current HDTV sales. Just like I said.

And coincidentally, 30% penetration is forecast by the end of the year.

And yes, we're at least over 15%, very possibly at 20% or more.

Then keep in mind that most people buy what they know and are familiar with.

If name is the best thing HD-DVD has going for it..good luck. Name is irrelevant, in 12 months everyone will have heard of and know of Blu-ray. When people go into stores they'll see more (variety of) Blu-ray hardware and more Blu-ray content on the shelves. It'll benefit from the combined marketing of most CE companies, and that marketing will be massive. Anyway, this is Blu-ray v. HD-DVD stuff.

1 year won't make any difference either way. To get either format to succeed you are going to need to sell hundreds of millions of players.

Err..so they have to sell hundreds of millions this year, or else? Come on.

Your "number of people" is pretty much irrelevent.

As are yours. But you're lacking in hindsight if you believe DVD playback was not a pretty major factor, particularly earlier on, with the PS2 generation. I worked in retail at the time, and without fail every single person coming in to buy a games console asked about DVD playback - Gamecube suffered heavily because of this.

 

[Arwin]

Maybe I'm not reading things right, but I don't think anyone suggested that.

This seems to be lost on some people - PS3 is not going to be $500 for its lifetime anymore than PS2 was $300. It'll be $500 as long as it sells at that price.

Not to mention that today's $500 was yesterday's $300. Also something that people forget. The dollar devaluated both nationally and internationally.

As for the rest, I'm sorry if I understood you, powderkeg, when you posted the 1.8% figure I assumed you had translated all your calculations to the current state of HD - in that particular post you didn't specify and I didn't make a connection with your previous posts.

If you think that 1.8% is going to be for all buyers of PS3 at any given time in its lifespan, well, then I think as much of your post as you do of mine, probably, but without the childish laughter. And on that note, you do realise I just listed a number of random reasons, and qualified them as not necessarily true, right?

The adoption of BluRay has nothing to do with VHS, because BluRay is just about the first standard that supports the previous one in this medium. When that happens, adoption rates are typically a lot faster and just depend on the content offered. HDtv is looking to pick up really fast, as was mentioned above, and certainly for those who want the PS3 (or 360) in the first years, HD tends to be a factor - either because they want to have their Next-gen look best and so they want the best tvs, or they already have HDtvs and they want Next-Gen games to make the most of them.

But more importantly, the TV makers just won't make any 'nice' TVs anymore which don't have HD. Some people will have bought new TVs not even really knowing that the TV can do HD, but they may start wondering about it once they look into BluRay or PS3. In the meantime, whether or not HDtv becomes popular, it will spread regardless, and it will spread fast. According to this survey:

http://www.leichtmanresearch.com/press/110805release.pdf

... adoption was already in 12% of U.S. households in Q3 2005, by the end of 2006, it will be a lot more. No, not all TVs will be replaced, not even ever, but I'm certain most households will have a HDtv as their main set fairly soon, just as Widescreen TVs have become mainstream quite fast. (One underestimated aspect of it is that TVs will now for the first time become suitable for stuff like browsing.)

 

[expletive]

Not to mention that today's $500 was yesterday's $300. Also something that people forget. The dollar devaluated both nationally and internationally.

Dont forget, however, that the competition is selling at today's $300 and possible $200 for Wii...

 

[scooby_dooby]

Not to mention that today's $500 was yesterday's $300. Also something that people forget. The dollar devaluated both nationally and internationally.

This is nonsense as far as i'm concerned. To most people a games consoles is still meant for playing games. It's a frivolous, unnecessary device, that sits and collects dust the majority of the time.

While it's true that the price of consumer electronics generally seems to be rising, that doesn't change the fact that a games console is not an object many people can rationalize spending $500 on.

The reason DVD was such a great selling point for PS3 was that people were having a very hard time rationlizing even $300 spent on a machine that plays video games. It doesn't seem to me that BR has that same sort of mainstream appeal, certainly not enough to overcome a $500 pricetag to the casual gamer.

 

[mckmas8808]

This is nonsense as far as i'm concerned. To most people a games consoles is still meant for playing games. It's a frivolous, unnecessary device, that sits and collects dust the majority of the time.

While it's true that the price of consumer electronics generally seems to be rising, that doesn't change the fact that a games console is not an object many people can rationalize spending $500 on.

In your quote change

game console -> handheld

and you would see the arguement that many people were making against the PSP before it released.

 

[scooby_dooby]

In your quote change

game console -> handheld

and you would see the arguement that many people were making against the PSP before it released.

PSP has done well, but it's all relative to your competition isn't it?

It's a valid argument for sure, I would have a PSP right now if it weren't for the price. I simple can't rationlize $300 for a handheld.

 

[mckmas8808]

PSP has done well, but it's all relative to your competition isn't it?
.

Yep your right. And what harder competition is there than going up against Nintendo in the handheld sector? I think they had like 15 years straight of pure dominance.

 

[Tap In]

small sample evidence:

A poll of 99 gamers on the Operation Sports board revealed that 64.65% of them own HDTVs.

I'd guess the gamer population of HDTV adoption is higher than the general public.

I'd be curious as to the percentage on this board.

 

[Titanio]

It doesn't seem to me that BR has that same sort of mainstream appeal, certainly not enough to overcome a $500 pricetag to the casual gamer.

Let's come back in a couple of years when that might actually be relevant.

But something tells me both the PS3 price and the mainstream appeal of Blu-ray will have changed by then!

 

[RobertR1]

You have to have the product future proof. Sony is betting on Blu-ray. If Blu-ray wins, they (sony) made a smart move. The number of HDTV owners are going up quick.

And what percentage of those sets are true 1080p? Still the HDTV sets being sold are only 720p/1080i as 1080P sets are quite expensive and out of the price range of most consumers. It'll be a few years before true 1080P sets drop in price to where they're desired over 720p/1080i. Also, since broadcast won't be happening in 1080P any time soon, a 720p/1080i set will be suffice for the masses.

Here's some basic blu ray vs. HD DVD facts that you need to consider:

Initially:
HD DVD players will be half the price, use a better video codec and have more space than their Blu Ray coutnerpart. They'll also use a better Audio format (irrelevant to most.) The PQ of a HD DVD is just as good, if not better in motion, than the first released Blu Ray movies due to the codecs being used for each.

In one year:
Blu Ray will have a capacity advantage, some studios will use the VC1 codec while others (Sony) might try to drag on with Mpeg 2 for as long as they can. The capacity advantage is irrelevant since consumers dont' care if they have to put Disc #2 in for extra's. It's only relevant if you cannot properly fit a movies onto one disc, which a single layered BD disc using MPEG2 has currently has issues with thus they have to cut back severly on the audio side of things.

HD DVD 1st gen vs. 2nd gen:
All HD DVD media is 1080p. Second gen players will support 1080P. This is also around the time that 1080p sets will come down in price and be in a dominant market position. Until then the 720p/1080i sets are what sell and a HD DVD player is perfect for those people and will be for a long time since consumers do not cycle out their TV sets often (7-10years).

BluRay:
If you have a 1080P TV, the studios start using the better video codecs and dual layered media and you don't care about the cost, then this is a better option for you.

The Chineses Connection:
The Chinese have announced that they're already working on entry level HD DVD players that will be available this holiday season. With majority of the sets being only 720p/1080i and cheap entry level players, HD DVD will have quite the advantage until 1080P sets start flooding the market at a cheaper rate by which time 2nd gen HD DVD players will be out that can do 1080p also. From a timing and economical standpoint, HD DVD has a clear advantage due to a well thought out roadmap and ofcourse "HD DVD" is a much more marketable name than "Blu Ray."

The PS3 will simply not take over the stand alone player market and that is what will determine the format war.

 

[scooby_dooby]

Let's come back in a couple of years when that might actually be relevant.

It will become relevant the instant PS3 stops being supply limited and you're asking regular joes to slap down $500 for a gaming console.

 

[Titanio]

It will become relevant the instant PS3 stops being supply limited.

Not really if the demand you're balancing with supply is high enough to be satisfactory.

It becomes relevant when demand isn't there. But what do you think will happen then? Sony sits idly by?

And you mentioned the "casual" consumer. Typically they enter into the market later, that's what I'm referring to.

And what percentage of those sets are true 1080p?

You think HD movie adoption is dependent on this? It's not.

 

[RobertR1]

Not really if the demand you're balancing with supply is high enough to be satisfactory.

It becomes relevant when demand isn't there. But what do you think will happen then? Sony sits idly by?

And you mentioned the "casual" consumer. Typically they enter into the market later, that's what I'm referring to.



You think HD movie adoption is dependent on this? It's not.

Are you kidding me?
If you only have a 720p/1080i you'd still purchase a $1000 player vs a $500 knowing full well that it has 0 benefits?

 

[rabidrabbit]

It's not necessarily the HDTV adoption that drives PS3 sales, it might be vice versa, PS3 sales drive HDTV sales as people are eager to see their movies in HD, for which they already ´have a HD capable player and likely movies too.

 

[scooby_dooby]

It becomes relevant when demand isn't there.

Isn't that what I just said??

Whether Sony decides to drop the price when they're console is no longer supply limted is completely beside the point because they won't be dropping it to $200 now will they?

I'm talking about the ability of the mainstream consumer to justify a $400+ purchase of a game machine, and stating that the desireability of BR is nowhere near what it was for DVD which, when combined with a higher price, will make this justification even harder for this mainstream consumer.