05-22-2006, 08:59 PM
A couple points, not responding to anyone in particular.
1. Regarding people purchasing systems for the games; I suppose you could make a case that this has remained true for nintendo systems being that nintendo is the only company that makes a true gaming system. Sony and Microsoft, however, make hybrid systems. starting with the PS2 one of the main draws of that system was that it could also play DVDs. a large portion of the support base of the PS2 purchased the system not necisarily based on the merits of the games or just based on the fact that it could play dvds but because they got both in one. Both Sony and Microsoft have built their business plan around this idea that people will lean more towards their products as long as they have greater functionality.
2. This is where the problem arises for Sony. When the PS2 came out dvds were already a couple years into their cycle. The progressive early adopters had already purchased dvd players. The base that the PS2 was appealing to were the people that weren't willing to spend the money to get a dvd player but when they could get it and the gaming system they were willing to buy in.
Sony is trying to cash in on the same concept with the PS3. The devil is in the details however. When PS3 releases they are not going to be appealing to people on the fence over the new technology (blu-ray) they are going to be appealing to early adopters that not only are willing to throw down 600 on a HD media player they probably would do that even if PS3 wasn't coming out. The people that the PS2 appealed to still won't be willing to throw down the $600 bucks required for the purchase.
This is a problem for Sony because they are pretty much betting the farm that PS3 will dominate the next gen market like it did throughout the last era. The PS3 is priced at 600 bucks AND they are going to be selling it at a loss. If sony doesn't sell out practically all of their initial shipment of 2 million right off the bat and if they can't sell out the subsequent 2 million they are planing for the holidays they won't be able to acheive a proper saturation to sustain the system throughout the full cycle.
Getting back to those details. The market environment right now is completely different than when PS2 came out. Xbox 360 will have been out for over half a year, they have 6.5 million units shipped right now and will probably have closer to 9-10 million by the time that PS3 releases their initial 2 million. Nintendo Wii will release their system and it's price point alone will probably draw a large userbase (not to mention the alternative play style they are promoting.) I wouldn't be surpised if Microsoft responds to the release of the PS3 by lowering the price of their system. All of this can cause serious problems for, not only the PS3, but sony as a company given that they have pretty much everything riding on the fact that PS3 will carry them.
3. Then we have the issue of the lower price point PS3. This is sony's attempt to reel in that demographic that responded to the PS2. The problem is that those people that do buy into it on the basis that it will be a decent gaming system as well as a HD media player are getting purely raked over the coals. If things remain as they are now, the lower price point PS3 will not be an HD media player. Nvidia and ATI are already in class action lawsuits regarding the promotion of their hardware as HD compatible when they won't be. If Sony promotes the lower price point PS3 as a HD media player they run the very real risk of having similar cases against them. Then again, if they publicly state that the LPP PS3 isn't a HD media player they will lose the demographic they are trying to appeal to. which leads to the question of why have a cheaper PS3 in the first place?
4. I bring up the Rumble lawsuit not specifically because it relates, in any way, to Sony and the PS3's future success or failure but because it is a pristine example of the company reacting in an utterly obtuse and stubborn way. add that to the HDMI issues that are now arising and the path that Sony is taking is at best questionable and at worst entirely maladaptive.
Conclusion: Come this fall when PS3 is released early adopters will, no doubt, rush out to purchase a PS3. Sony's success is totally reliant on whether anyone else bothers to buy one. If you happen to be one of those early adopters and plan to purchase a PS3 at or around release, do yourself a favor and spend the extra 100$ to get the real system.
1. Regarding people purchasing systems for the games; I suppose you could make a case that this has remained true for nintendo systems being that nintendo is the only company that makes a true gaming system. Sony and Microsoft, however, make hybrid systems. starting with the PS2 one of the main draws of that system was that it could also play DVDs. a large portion of the support base of the PS2 purchased the system not necisarily based on the merits of the games or just based on the fact that it could play dvds but because they got both in one. Both Sony and Microsoft have built their business plan around this idea that people will lean more towards their products as long as they have greater functionality.
2. This is where the problem arises for Sony. When the PS2 came out dvds were already a couple years into their cycle. The progressive early adopters had already purchased dvd players. The base that the PS2 was appealing to were the people that weren't willing to spend the money to get a dvd player but when they could get it and the gaming system they were willing to buy in.
Sony is trying to cash in on the same concept with the PS3. The devil is in the details however. When PS3 releases they are not going to be appealing to people on the fence over the new technology (blu-ray) they are going to be appealing to early adopters that not only are willing to throw down 600 on a HD media player they probably would do that even if PS3 wasn't coming out. The people that the PS2 appealed to still won't be willing to throw down the $600 bucks required for the purchase.
This is a problem for Sony because they are pretty much betting the farm that PS3 will dominate the next gen market like it did throughout the last era. The PS3 is priced at 600 bucks AND they are going to be selling it at a loss. If sony doesn't sell out practically all of their initial shipment of 2 million right off the bat and if they can't sell out the subsequent 2 million they are planing for the holidays they won't be able to acheive a proper saturation to sustain the system throughout the full cycle.
Getting back to those details. The market environment right now is completely different than when PS2 came out. Xbox 360 will have been out for over half a year, they have 6.5 million units shipped right now and will probably have closer to 9-10 million by the time that PS3 releases their initial 2 million. Nintendo Wii will release their system and it's price point alone will probably draw a large userbase (not to mention the alternative play style they are promoting.) I wouldn't be surpised if Microsoft responds to the release of the PS3 by lowering the price of their system. All of this can cause serious problems for, not only the PS3, but sony as a company given that they have pretty much everything riding on the fact that PS3 will carry them.
3. Then we have the issue of the lower price point PS3. This is sony's attempt to reel in that demographic that responded to the PS2. The problem is that those people that do buy into it on the basis that it will be a decent gaming system as well as a HD media player are getting purely raked over the coals. If things remain as they are now, the lower price point PS3 will not be an HD media player. Nvidia and ATI are already in class action lawsuits regarding the promotion of their hardware as HD compatible when they won't be. If Sony promotes the lower price point PS3 as a HD media player they run the very real risk of having similar cases against them. Then again, if they publicly state that the LPP PS3 isn't a HD media player they will lose the demographic they are trying to appeal to. which leads to the question of why have a cheaper PS3 in the first place?
4. I bring up the Rumble lawsuit not specifically because it relates, in any way, to Sony and the PS3's future success or failure but because it is a pristine example of the company reacting in an utterly obtuse and stubborn way. add that to the HDMI issues that are now arising and the path that Sony is taking is at best questionable and at worst entirely maladaptive.
Conclusion: Come this fall when PS3 is released early adopters will, no doubt, rush out to purchase a PS3. Sony's success is totally reliant on whether anyone else bothers to buy one. If you happen to be one of those early adopters and plan to purchase a PS3 at or around release, do yourself a favor and spend the extra 100$ to get the real system.