Fortune Magazine: How Nintendo is beating Sony and Microsoft

[Vigilance]

Its not settled yet. Part of it might be the price, but if they lower the price and it STILL doesn't sell, well...its more than just the price. Or maybe the price wasn't the real problem before.

Still too early to really make a call until we see what happens because of this.

It just means Sony is trying something...but note that they're ONLY doing this price drop in North America, not everywhere.

But remember that they lowered the price in Japan immediately, pre-release.

They realized Japanese folks were just too tight with their money and the price wouldn't fly.

 

[Ankh-Morpork Guard]

But remember that they lowered the price in Japan immediately, pre-release.

They realized Japanese folks were just too tight with their money and the price wouldn't fly.

Look at the effect on sales its had in Japan, though...slim to none. PS3s just aren't selling well at all, and obviously a price drop in Japan hasn't helped that.

 

[Vigilance]

Look at the effect on sales its had in Japan, though...slim to none. PS3s just aren't selling well at all, and obviously a price drop in Japan hasn't helped that.

Well- I think Sony painted itself into a corner. The problem with the price is that it's more than double that of the console's most serious competition in Japan, the Wii.

So that's why this is only in America. They can cut the price here and be competitive with the 360. In Japan, I dunno, I think they're never going to get more than 50% market share there.

 

[John Crichton]

Price drops are great and all but it really doesn't mean much at all. I wouldn't expect many folks to buy the system to play games just because it's now $100 cheaper. I'm sure there will be some that will get it now that it's a more affordable BR player and yeah this may sway a few people sitting on the fence. To me, there isn't a ton of difference between $500 and $600 dollars when we are talking about a piece of non-essential hardware. Now, if there were a few games coming out along side it that you could only get on the PS3 and they were pretty good, this would be a bigger deal.

If the masses weren't buying it to play the available games @ $600, I don't see why they would get it for the bad games lineup now when it is a bit cheaper. And the newer version @ 80GB + Motorstorm is attractive but not a big deal. It is, however, consistent with Sony's past systems where they'll release a game-bundle version of a system.

The PS3 didn't need a price drop. It needs to release least one must-have high profile title and then drop the price for the holiday season. Of course accompanied by at least one other quality exclusive.

To me, the PS3 hasn't had its Onimusha yet. That was really the first game for the PS2 after launch that made some people go out and get the system just to play it. It didn't sell like crazy, but it did very well and got people talking more about the system.

 

[drothgery]

The PS3 didn't need a price drop. It needs to release least one must-have high profile title and then drop the price for the holiday season. Of course accompanied by at least one other quality exclusive.

I think it needs a price drop, but a $100 drop (to $499) probably isn't sufficient. Sony -- and Microsoft -- need to get under $300* if they want to sell beyond harcore console gamers and their respective fanboys. Because of a much better and more extensive library and substantially lower price, the 360 is currently more compelling to hardcore console gamers, but the Wii's sucking up everyone else (except those who are just sticking with their PS2 for now). Even FFXIII and MGS4 aren't going to change this much.

* The 360 Core is $299, but it's (correctly) percieved as crippled and a poor value. It's my opinion that MS should cut the Elite's price to $399 and either cut the Core to $249 and bundle in a memory unit and a game and drop the 'Premium', or drop the Core and cut the price of the 'Premium' to $299.

 

[Vigilance]

Price drops are great and all but it really doesn't mean much at all. I wouldn't expect many folks to buy the system to play games just because it's now $100 cheaper.

Well, part of why I think this is good is from a cost comparison standpoint.

$100 might not be a big difference, but if there's a comparable product that's significantly cheaper, most folks will buy that.

But you also need to come to grips with the fact that the product it's trying to move closer to in price, the 360, is ALSO overpriced.

MS themselves have admitted that the "sweet spot" in the console market is $200.

There's one console near that price, the Wii, and it's selling like gangbusters, at twice the rate of the 360 and 4 times the rate of the PS3.

And of course the other major console that's still the dominant player in the market is even cheaper than the Wii: the PS2.

 

[John Crichton]

I think it needs a price drop, but a $100 drop (to $499) probably isn't sufficient. Sony -- and Microsoft -- need to get under $300* if they want to sell beyond harcore console gamers and their respective fanboys. Because of a much better and more extensive library and substantially lower price, the 360 is currently more compelling to hardcore console gamers, but the Wii's sucking up everyone else (except those who are just sticking with their PS2 for now). Even FFXIII and MGS4 aren't going to change this much.

I can agree with this. Final Fantasy is a sure system seller. But if you are saying that those two games aren't enough, I agree and have been saying that all along. It would serve as a nice shot in the arm to say that "The PS3 has arrived."

* The 360 Core is $299, but it's (correctly) percieved as crippled and a poor value. It's my opinion that MS should cut the Elite's price to $399 and either cut the Core to $249 and bundle in a memory unit and a game and drop the 'Premium', or drop the Core and cut the price of the 'Premium' to $299.

I agree wth all of this.

 

[John Crichton]

Well, part of why I think this is good is from a cost comparison standpoint.

$100 might not be a big difference, but if there's a comparable product that's significantly cheaper, most folks will buy that.

But you also need to come to grips with the fact that the product it's trying to move closer to in price, the 360, is ALSO overpriced.

I'm well aware of this, but the thing is that it's not terribly overpriced. The Core unit is, for certain. The Elite is too much. $400 is about right for a system that powerful. That will need a price drop before another year passes but for now, it's just fine.

There are tons of people just waiting for Mass Effect to come out and snatch up their 360 at its current price. Again, it's all about the games and not so much the price.

And your mention of the PS2 later in the post brings an interesting quandary to this generation of consoles. It's the most successful of all time and still going strong due to an awesome selection of games and a low price point. That is what the Wii is contending with, not the PS3 or 360: Two last generation consoles going head to head.

 

[Vigilance]

I'm well aware of this, but the thing is that it's not terribly overpriced. The Core unit is, for certain. The Elite is too much. $400 is about right for a system that powerful. That will need a price drop before another year passes but for now, it's just fine.

There are tons of people just waiting for Mass Effect to come out and snatch up their 360 at its current price. Again, it's all about the games and not so much the price.

I think it's all about the games for the hardcore AV consumer. These are the people console launches are catering to by design.

The big event, the waiting for days in line, the hype, the high price, for a certain type of hardcore AV consumer, these are all features not bugs. They are one of the elite few.

But eventually, consoles have to appeal to a mass market beyond these people. This is why the prices fall. The 360 will not stay $400 forever. That's a sign that it needs a lower price point for a broader market presence.

Also, it's about time. The PS2 had its first price drop at 20 months. The 360 has been out for 19. So Christmas this year would be about when a price drop would be expected.

The PS3 is clearly realizing they were too high, thus the correction after only 8 months. They thought their brand and their hype machine (which is truly stellar if you think back to the PS-Dreamcast days, the Sony hype machine killed Sega more than the relative merits of the two consoles imo) would be enough for them to say "this is a Rolls-Royce, you know you want it, it's the elite".

But the 360 was stronger than they expected, and the Wii caught Sony completely by surprise and the market they thought they would be releasing into just wasn't there.

Also, the Japanese gaming market has fundamentally shifted toward casual games. This is why both the 360 and PS3 are and will continue to struggle there.

And your mention of the PS2 later in the post brings an interesting quandary to this generation of consoles. It's the most successful of all time and still going strong due to an awesome selection of games and a low price point. That is what the Wii is contending with, not the PS3 or 360: Two last generation consoles going head to head.

Yeah, I almost wonder if Sony will at some point just stop licensing PS2 games in an attempt to force an upgrade. Right now the Wii is serving to keep the PS2 in even better shape, since a lot of Wii games are being ported to the PS2.

To me, this is another sign that Sony made a huge blunder. When the PS2 was released, it seemed like time for an upgrade. But I don't think desire for a technology bump, HD, Blue Ray etc had reached anywhere near the critical mass they thought it had.

Does this mean I think the 360 was a mistake too? No. MS needed to do something radical to try and further erode Sony's market share and a technology bump is a good way to do that. But the number of consumers looking to drop $400-600 dollars on a console is very, very small, certainly not enough for TWO companies to be successful there.

The Wii showed that people were quite content with the PS2. Wii games look a *little* better than PS2 games and have an added sense of novelty.

 

[drothgery]

I can agree with this. Final Fantasy is a sure system seller. But if you are saying that those two games aren't enough, I agree and have been saying that all along. It would serve as a nice shot in the arm to say that "The PS3 has arrived."

Well, basically I think the known big PS3 system sellers (most notably FFXIII and MGS4) aren't going to drive any more console purchases than the known big Xbox 360 system sellers (most notably Halo 3, Mass Effect, and Bioshock), and that a $500 price point is still too high for most people who already have a 360 (or even a Wii) to think about picking up a PS3.

Now, unless Square Enix shocks the world and announces a 360 port of FFXIII (unlikely mostly because the game's probably too far along), I'll end up with a PS3 eventually. But it'll be a while, because I'm not spending more on two consoles in this generation than I spent on three (one of which I hardly ever used) in the last one (which was $300 for a PS2, $200 for an Xbox, and $150 for a GameCube).