Building negative press for PS3 after E3

While early on I thought it was a great idea, after thinking about it more, the inclusion of the blue ray drive, from my point of view, is the mistake. The majority of people don't have a capable television to take advantage of it and won't see a difference compared to dvd or hd dvd, and those that do probably want a better, standalone player. So in essence, is anyone really benefitting from it aside from the very few who have a capable set and want a dirt cheap blue ray player, which, if we are going to be totally honest here, will probably be considered pretty poor after a couple years?


Eliminate the blue ray drive and you are eliminating a whole hell of a lot of the R&D costs and delays that went into the PS3. At the same price as the 360, based on the PS2 alone, the PS3 would likely dominate.


Also, I've heard the PS3 is more difficult to program for than the 360, and that adds cost for developers. The risk of losing a ton of money on a game that may not sell well may very well stifle creativity.


Finally, the gameplay shown at E3 does NOT match up with what they were claiming capable at last year's E3. If the PS3 games aren't clearly better looking then those from the 360, there may very well be a backlash that send customers to the less expensive 360. With their Live system already in place and well established, and a year's worth of titles already available at the time of the PS3 launch, MS actually has a very good chance of taking over the #1 spot this generation, and I'm definitely NOT a big Xbox guy, so that isn't any fan bias.

#1 in Marketshare is about pure demand. Pure demand is about mass consumers not niche HT or the die-hard gamer factions. It's kids, families, and all the casuals out there. Last time I opened an economics book quantity demanded and price point were directly paired. That's not to say that all products/game systems are homogenous in this case (i.e. value proposition) but merely that price is not a minor factor and will always be the 2000 gorilla in the demand equation.


With a price of 499 vs. MSFT's 299 (entry level prices to just play games), that's more than 60%. That' huge even though a case can certainly be made to justify it on 'value' and that Xbox 360 is not a substitute product. That said, the masses won't care about HD-DVD or BlueRay for a while, there has to be something else to justify the price and differentiate the PS3. Sure the Atari 2600 was almost $300 at launch in the late 1970s but for 20 years computers and games have been coming down in price and scaling up in quality (so hold price constant and you have a next gen unit every 5 years) and there is also a mental bogey to hurdle that most consumers have about the absolute price they are willing to pay for a game console.


In addition the library at launch will be much smaller than the 360 (reversal of roles from prev gen) and the online system not proven and developed. MSFT is now a known gaming entity (unlike pre Xbox) and the 360 is on the market being played. SNE is faced with an uphill battle of fighting a pure product differentiation war to justify a higher price (and that tends to generate low marketshare in many cases).


To be honest this generation was Sony's to lose and they've put themselves in the position. I think MSFT realized that they could hang in there longer than SNE. I don't think Blue-Ray or HD-DVD is going to be enough of a differentiator in year 1 of the PS3 life cycle (certainly this impact will grow 2-3 years out though roughly in sync with DVD players I'd imagine). That leaves games and I haven't heard a single 'wow' report from E3. No one is 'Oh my God'ing and that's just not a good omen. How do you differentiate your game system as far supperior to rationalize a supperior (higher) price point if not with the games?


I'm not saying the PS3 will fail or be horrible or even that it won't be significantly better than the 360, what I am saying is that the whole marketshare war is Sony's to lose and the odds of the happening are much higher than we would have predicted before the price release or the rumors about the price earlier this year. Some of those launch titles are going to need to be astounding graphically and garner instant worship from gaming cirlces - given the multicell learning curve that developers will have and what has already been seen....my money is MSFT having a significantly higher than expected marketshare and Nintendo also increasing. Both at the expense of Sony.

Blu-Ray is going to be the downfall of Sony's reign in gaming. Yet another proprietary product Sony is trying to force upon people. Eventually Microsoft will take a hard stance against BR and join HP to support HD-DVD exclusively as a media storage format for the computer industry. Putting BR in their gaming consoles has given Microsoft a pretty good reason to see BR fail now and as storage capacity limits continue to increase Microsoft will obviously take the side of HD-DVD instead of remaining nuetral.


Sony could have kept a normal DVD drive in the lower priced model and offered Blu-Ray in the deluxe model and kept games producing to DVD format. They would have sold far more consoles this way. The cost of making BR discs is also more expensive so for gaming companies to keep the same margins with increased production costs the PS3 games will likely also be more expensive than their 360 counterparts. I see this becoming a disaster down the road for Sony but I understand that is just one Joe's opinion. If anything this BR vs HD-DVD could turn into a similar situation as PAL vs NTSC.

Quote:
I seriously thought about this as well but there's only one flaw with this idea: The PS3 games themselves will be BR discs and are supposed to take advantage of that technology as time goes by.


In theory...there would come a point x number of years down the road where BR based PS3 games would exceed anything on the Xbox360 or any other console platform.


Whether that actually ever happens? *shrugs* We'll find out in a few years or so.

Quote:
Another great point... HD-DVD players have a bunch of issues already that Toshiba is in need of patching through firmware updates. BR may suffer many of these same issues. Obviously you cannot catch all these things until you start to mass produce and find areas where defects are likely. Does Sony want to release the PS3 with a flurry of glitches. Especially when today's media jumps all over these storys? I am sure we all agree that Microsoft's biggest mistake... (OK other than releasing in Japan in November) was the reliability of the 360's and the heat and disc issues. Luckily Microsoft was very resiliant in their customer support, even going so far sending free hard drives back with units sent in for service to keep their customers happy. My experience with Sony customer service over the last few years has been very poor. Poor customer service along with mechanical, electrical, and reliability issues could really hurt.


Picture this.... Sony PS3 next holiday season has problems. There will also be hardly any available for sale. And they cost $600.


For 90% of America still happy with their DVD collection and a faulty $600 PS3 that isn't available anywhere, do they just make the move to get a $249 Xbox 360 or a $199 Nintendo instead?

Quote:
Could not have said this better myself. That being said, I think you are painting a worst case scenario. If Sony does live up to their promise of delivering 2 million PS3's at launch, and 4 million by the end of the year, the supply issues will be much better than the 360's was. They will still sell out in a nanosecond mind you, but there will be less people who are unhappy that they weren't able to get their hands on one than there were with the 360. Again, this is going on their projections, and we all know what can happen with projections, especially launch projections.


What I find most interesting about your point is the technical problems that can and most likely will arise with the PS3. Think about it, they are using a brand new chip design never used before, a brand new optical drive and optical disk never used before, and everything else inside that beast. The upside of such a great technical piece of equipment is everything it can do, the downside with such a great technical piece of equipment is that there is way more that can wrong with it.


This November will be VERY interesting indeed.

Quote:
I agree.


I'm just shocked at how out of touch Sony seems this time around. Then again, it kinda reminds me of the 26" LCD TVs I was looking at when I was shopping around. Almost all were under CAD$1800, and a few were as low as $800. Then there was the Sony at $2499. WTF? It was good, yeah, but it wasn't that good. Price matters.


Looking back through the retrospectoscope, it's clear now that this situation is precisely what Microsoft feared. They realized adding the HD DVD drive would drive up price far too much, and would delay their rollout by at least six months, and possibly by as long as a year. Thus they chose what seems now to be the most logical route. Forget the featuritis, and release a solid game machine for a lot less money, and potentially add an add-on hi-def drive later if the market warrants.


Sounds like MS will win this round in North America... And Wiintendo will take lots of market share from Sony in Japan too.