Author Topic: Sony's PS3 strategy (Read 8963 times)

Avinash_Tyagi · « **on:** November 04, 2005, 07:49:09 AM »

The PS3 is a Blu-ray trojan horse. According to an anonymous ”high-level studio executive,” the PS3 will be a “subsidized Blu-ray play that will sell 20 million units. The first HD player will be on the market for $1,000. PS3 could be at $300 or $400. Sony will be selling them at a loss the first six months to a year just to get Blu-ray players out in the market. So studios realize they need to have their content on it.”

Another duh award. But the amount posted by merril lynch on the PS3's price to manufacture ($465+) indicates a price point closer to $400 and is in line with the comment that they plan to lose money for 6 to 12 months at least. (A $65+ loss per system will add up huge in the first year, heh, if blu-ray fails to make much of an impact this could really screw sony over)

edit: forgot the link

joystiq

couchmonkey · « **Reply #1 on:** November 04, 2005, 12:51:33 PM »

$465, eh? That's actually not soooo expensive. The way Kutarugi was talking about PS3, I would have expected manufacturing costs to be over $500. I imagine Sony will launch for at least $400, I wouldn't be surprised if it launches a little higher, even.

Edit: Yeah, this does serve a "duh" award, but to Merril Lynch's credit, the people reading these things may not think about the games industry constantly day in and day out like some of us do.

King of Twitch · « **Reply #2 on:** November 04, 2005, 01:02:32 PM »

Wow, in another 2 generations, we might be paying $800 for a new system if Sony keeps doubling the price every 2nd launch.

Stimutacs Addict · « **Reply #3 on:** November 07, 2005, 07:48:36 AM »

...yea, but my uncle ken told me that we'll be playing systems that look more realistic than real life! you wont need to go outside because the PS4 will have 7 CELL processors emulating the real world in your game room. Every thread of carpet will have it's own physics engine!

odifiend · « **Reply #4 on:** November 07, 2005, 09:38:00 AM »

BLU-Ray sucks... This is moving away from the olfactory orbs of the PS7.

Seriously though 65 bucks to lose per system is huge. If the PS3 performs even half the amount Sony is expecting that will be several hundred thousands lost in the first couple of months. Add to that R&D and Sony's just overall falling in electronics and they aren't looking so hot. Even if Blu-Ray becomes the media of choice, wouldn't you figure the move from standard DVDs to Blu-Ray would be pretty slow? I can't imagine the pay off would EVER pay itself off.
Oh well- at times like this, I'm glad I don't own stock...

Kairon · « **Reply #5 on:** November 07, 2005, 02:06:34 PM »

If the first HD-DVD players will sell for $1000 and HD-DVD technology is supposed to be cheaper than Blu-Ray technology... I'm having a really hard time reconciling that figure with the idea that the PS3 costs ONLY 465 bucks to manufacture...

Doesn't the non-Blue-Ray-non-HD-DVD X360 already cost maybe 300 or 400 dollars to manufacture as it stands?

~Carmine M. Red
Kairon@aol.com

BigJim · « **Reply #6 on:** November 07, 2005, 02:35:11 PM »

Sony sold PSOne and 2 at a loss for their first few years, so this is old hat. They eventually make it back and profit. It'll be subsidized by a number of things. BRD movies, memory sticks, etc.

Avinash_Tyagi · « **Reply #7 on:** November 07, 2005, 02:43:13 PM »

But that assumes that the system sells as a gaming machine, if it flops it will drag them under, also:

portable video devices to fill the time gap before PlayStation 3 launches in Japan in March and in the U.S. a year from now.

A year from now puts it in Early November 2006 in NA, meaning the Xbox will have a year's advantage, heck even the REV will have been out for a while.

Sir_Stabbalot · « **Reply #8 on:** November 07, 2005, 03:29:12 PM »

Hmm... Losing money per console sold while you're company is in 61 million dollars debt? Geez, not even Sega would make that mistake!

Kairon · « **Reply #9 on:** November 07, 2005, 03:52:18 PM »

I don't doubt that they'll be losing money on each system they sell. I doubt the AMOUNT of money they'll be losing.

~Carmine M. Red
Kairon@aol.com

Djunknown · « **Reply #10 on:** November 07, 2005, 04:16:09 PM »

Looks like they want the proverbial lightning to strike twice. It worked with DVD with the PS2 because DVD was 4 years old, and the price was starting to come down. I doubt this will happen with Blu-Ray.

I hate to sound like a broken record, but the common folk don't need Blu-Ray of HD-DVD right now. These new formats need killer hardware to show off what makes them special, which is still out of reach for most people.

I'd like to see a comparison of Blu-Ray Vs HD-DVD Vs DVD on a regular CRT television, then on a flat panel LCD and plasma. I'm guessing on a plain old TV, it won't make that much difference.

Sony better have some good games in case this doesn't pan out...

Nephilim · « **Reply #11 on:** November 07, 2005, 09:32:17 PM »

I doubt sony will take large risks with the ammount of money they lost this year
Them loosing just 20dollars of 100,000 (talking world wide launch, 1-2 after period) machines is a big blow to there ammount of money

Spak-Spang · « **Reply #12 on:** November 09, 2005, 06:58:49 AM »

Sony could be looking to lose that much money if the company views it as an investment.

Here is what I mean.

Microsoft and the Xbox. Microsoft lost alot of money on the Xbox and Xbox live setup. However, that 4 year investment looks like its about to payoff with Xbox 360. Microsoft now has name recognition in the industry, and are launch a new system perhaps 6 months to a year before the competition. This can be a big head start for them, and could help them capture huge marketshare.

With that comes new means of making a profit:

More expensive memory cards, Controllers, Games, selling special online content, ect. ect.

Now Microsoft would not be in the position right now to make the money they are without the intial investment with Xbox.

Sony is looking at the big picture too. Sony is trying to launch and win a new format war with Blue-Ray Video. But as of right now a straight out battle would be hard for them to win on just releasing the player.

However, package it as a part of the hottest video game system around the world, and perhaps you can make back you investment.

So Sony:
Buys another movie studio company to give them larger collection of movies
Releases the PS3 at an acceptable loss to bring in consumers

Sony will make its money off of:

More expensive games, more expensive Blu-Ray DVDs, probably more expensive controllers and memory cards.

It's not a bad strategy if it works. Sony's strategy is like Microsofts, but with an added profit maker in the movies.

Sony is using the same strategy for the PSP, and you know those PSP movies are going ot make them money if they catch on.

Kairon · « **Reply #13 on:** November 11, 2005, 01:50:01 PM »

Looks like Sony's playing for all the marbles. They'll need all the luck they can get to keep MS from trashing them this time around.

~Carmine M. Red
Kairon@aol.com

Spak-Spang · « **Reply #14 on:** November 13, 2005, 12:11:31 PM »

Kairon: That's true. Sony actually was the giant company invading the market a few years ago. They had capital muscle like no other, and they were able to buy there way to the top with the Playstation and Playstation 2. Really both Sega and Nintendo could outspend Sony, so they really didn't try.

Now Microsoft is even bigger and stronger than Sony, and this next generation is going to be a giant war for public support and dollars that Sony has never had to face in the video game market.

I am curious where this leaves Nintendo though. Their product should be able to standout against the crowd, but what about the public opinion war...will Nintendo be able to make a name for itself within the next generation public?

BigJim · « **Reply #15 on:** December 09, 2005, 06:49:28 PM »

Sony Still Claims Spring Launch -- EA Says Differently

Sony still claims PS3 is a Spring product, but EA doesn't think it'll launch until the fall.

I mentioned before in another thread that a friend of mine at EALA said they still didn't have anything but very preliminary test hardware to tool around with (this was a few months ago). He doubted Spring at the time too. If this is anything like the norm, that leaves basically little chance of games being available by spring.

This news shakes things up some.

stevey · « **Reply #16 on:** December 10, 2005, 02:30:43 AM »

I don't believe they can make it, they have been show nothing but vids of games up intill now and the only way the p$3 will be launch in spring if it in 07.

odifiend · « **Reply #17 on:** December 10, 2005, 02:54:02 AM »

Wait, are they still making HD DVDs? I thought Toshiba decided to settle and compromise with the BluRay?

Avinash_Tyagi · « **Reply #18 on:** December 10, 2005, 03:30:15 AM »

What made you think that?!? HD-DVD drives and players are set to arrive next year.

As for Sony and the PS3, maybe they think that they can launch with a weak lineup like they did with the PS2, which is why companies like EA say they haven't gotten all the hardware they need yet, but Sony still says they'll launch in Spring.

They'll just launch with a weak to non-existant lineup and then wait for the games to show up later, the only downside is that the 360 is out this time and has games in its lineup.

odifiend · « **Reply #19 on:** December 10, 2005, 03:56:02 AM »

Quote
Originally posted by: Avinash_Tyagi
What made you think that?!? HD-DVD drives and players are set to arrive next year.

As for Sony and the PS3, maybe they think that they can launch with a weak lineup like they did with the PS2, which is why companies like EA say they haven't gotten all the hardware they need yet, but Sony still says they'll launch in Spring.

They'll just launch with a weak to non-existant lineup and then wait for the games to show up later, the only downside is that the 360 is out this time and has games in its lineup.

Because Toshiba did do something to settle. If you look at the linked article, you'll notice that Toshiba is working on both sides- both HD DVDs and BluRay. I know that in the past though that they were exclusively on the side of HD DVDs.
Sony is stupid if they think they can launch with a weak lineup. If EA, the biggest 3rd party publisher, can't get ready for a spring launch, Sony would be relying on inhouse (ha ha) titles. That strategy wouldn't make sense because it would be in line with renewed shipments of the much hyped 360.

BigJim · « **Reply #20 on:** December 10, 2005, 03:58:29 AM »

They were going to try to settle the format dispute, but it didn't result in anything. So both formats are full steam ahead with Blu-Ray now apparently in the lead as far as studio support goes.

Sir_Stabbalot · « **Reply #21 on:** December 10, 2005, 04:01:15 AM »

Bah. I refuse to buy a product that misspells its own name.

KDR_11k · « **Reply #22 on:** December 10, 2005, 04:40:23 AM »

You mean like Pokemon Colloseum?

King of Twitch · « **Reply #23 on:** December 10, 2005, 04:06:13 PM »

What in the world are they going to do if Madden isn't ready at launch?

Artimus · « **Reply #24 on:** December 10, 2005, 04:42:14 PM »

Quote
Originally posted by: KDR_11k
You mean like Pokemon Colloseum?

That's a correct spelling. There are two ways to spell it.

News:

Author Topic: Sony's PS3 strategy (Read 8963 times)