Fortune Magazine: How Nintendo is beating Sony and Microsoft

[John Crichton]

http://www.gamespot.com/news/show_b...vert&om_clk=latestnews&tag=latestnews;title;1

And now a twist on the PS3 Price drop.

Sure, the 60GB is going to be cheaper and the 80GB is coming out at the 'old' price of $599, but it looks like the 60GB is being phased out completely in North America, meaning its not really a price drop at all.

There have been two updates and it appears that there should be plenty of the $499 units to go around for the time being. This paves the way for another price drop near the holidays that will have this bundle and possibly another. Sony loves those bundles...

 

[Vigilance]

Here's a funny bit I came across. I actually wonder if this will impact how many PS3 ports we see.

In other words, if it's such a pain, will designers shy away from the console unless the install base gets really big?

Of course, this begs the question how much power designers have. Probably about as much as RPG authors (in other words, almost none lol).

It's hard to believe, but every so often the developers at E3 forget that they're talking to a room full of journalists and they say something that they probably shouldn't.

A developer was demonstrating her team's multiplatform game for myself and two other journalists, both of whom happened to have been from Xbox-specific outlets. She jokingly asked if it was ok that we were going to see the Wii version, and the two guys chucklingly assured her that yeah, that was fine.

Picking up the controls, she began sorting through the debug menu to get to the bit of the game that she actually wanted to show us, making idle chitchat as she did so.

"Of course this will be on the 360, too. We love the 360. Hoo, we love it." Pause as she waited for the demo to load. "We love the Wii, too, it's a lot of fun. Playstation, pfffffffft. Gah." One of the Xbox guys laughs at that and she goes on to say how hard it is to "get anything to run on that box."

At that point, the demo was ready to go, and she began to put the game through its paces for us. Another moment of unguarded E3 honesty.

http://blog.wired.com/games/2007/07/heard-at-e3-we-.html

 

[Ankh-Morpork Guard]

There have been two updates and it appears that there should be plenty of the $499 units to go around for the time being. This paves the way for another price drop near the holidays that will have this bundle and possibly another. Sony loves those bundles...

Even though the 60GB will be around for a while(since they...haven't sold), it still smacks of a lie from Sony. Once the 60GB are gone, do you really expect them to lower the 80GB price? At this rate, it just seems hard to trust what they say, as they're jumping back and forth on issues, saying different things, then finally saying one thing...after someone seems to have screwed up and told the truth(like how this stuff turned out today).

Though, to defend the PS3 on the development side, I remember comments like that about the PS2 when it was first released.

 

[John Crichton]

Even though the 60GB will be around for a while(since they...haven't sold), it still smacks of a lie from Sony. Once the 60GB are gone, do you really expect them to lower the 80GB price?

It doesn't look good at all on their end but this really seems like 3 different branches not having their stories straight and confusing everyone in the process. And yes, I do believe another price drop will happen around Holiday 2007. That would put things right in line with having the console be closer to the 360's price (pending a price drop by MS - their move, now) at that time.

 

[Vigilance]

It doesn't look good at all on their end but this really seems like 3 different branches not having their stories straight and confusing everyone in the process. And yes, I do believe another price drop will happen around Holiday 2007. That would put things right in line with having the console be closer to the 360's price (pending a price drop by MS - their move, now) at that time.

I disagree. Has Sony ever been particularly honest when it comes to their PR?

Remember when they said the Playstation would have "Pixar-style graphics"?*

That the PS3 would have a "digital storage locker" to turn regular video content into HD content?

That they would have a worldwide launch for the PS3?

That they would ship 5 million PS3's by the end of 2006?

And of course, though this one hasn't been PROVED false yet, what about the recent claim that there would be 380 new PS3 titles by March of 2008? (Yes I'm jumping the gun on this, but it's clearly bananas and is typical of the kinds of lies Sony tends to tell)

I mean c'mon John. Sony has a proven pattern of making claims that will get them some good press. In this case, they both got good press about the price cut, they also got a stock bump because they announced the price cut at a shareholders meeting.

Heck, analysts were even threatening to DING MS stock if *they* didn't match the price cut!

This is typical Sony business practice.

Chuck

*This is an example of when their rhetoric actually worked, since they basically killed the Dreamcast in the opinion of one Gamespot editor by making wild claims about the PS graphics capabilities that caused many consumers to just wait and see what the playstation would look like.

Since Sega was teetering on the brink of financial ruin, the delay in purchasing the Dreamcast actually contributed to their downfall, and all the claims Sony made about the PS were things not achieved until late-stage PS2 titles like FF XII and God of War.

 

[TwistedBishop]

Every time I hear the PS3 prices referred to as a "drop" it frustrates me.

The basic fact is this: by Christmas, even in the best case scenario of a second "drop", the absolute minimum price of entry to play any Playstation 3 game is a $500 unit.

That's EXACTLY where we were at last year.

After TWO "price cuts".

Unacceptable.

 

[John Crichton]

Every time I hear the PS3 prices referred to as a "drop" it frustrates me.

The basic fact is this: by Christmas, even in the best case scenario of a second "drop", the absolute minimum price of entry to play any Playstation 3 game is a $500 unit.

That's EXACTLY where we were at last year.

After TWO "price cuts".

Unacceptable.

I call BS. Again. The problem with the PS3 isn't the price of the console, it's the lack of games. This whole "price cut" issue is largely irrelevant right now. The games are the true issue.

The fact that this is still a big deal simply means that Sony is still on everyone's radar and is waiting for them to really enter the next generation scene. If Sony really wasn't a player at this point all this would mean nothing and it wouldn't annoy anyone. The point is that people WANT the PS3. They want it to be affordable and they want it to do well. And they are frustrated with all the perceived screwing around, which realistically is no more or less than another of the other companies.

By and large, the public doesn't care about any of this because there isn't much of a game selection for the machine. It will matter when the games get good and people have to have it.

 

[John Crichton]

I disagree. Has Sony ever been particularly honest when it comes to their PR?

Remember when they said the Playstation would have "Pixar-style graphics"?*

That the PS3 would have a "digital storage locker" to turn regular video content into HD content?

That they would have a worldwide launch for the PS3?

That they would ship 5 million PS3's by the end of 2006?

And of course, though this one hasn't been PROVED false yet, what about the recent claim that there would be 380 new PS3 titles by March of 2008? (Yes I'm jumping the gun on this, but it's clearly bananas and is typical of the kinds of lies Sony tends to tell)

I don't care about any of this. All companies constantly spew nonsense and propaganda to keep the stockholders happy. I pay much more attention to the end numbers like what people are buying, real release dates for games and what is currently available to buy and play.

I mean c'mon John. Sony has a proven pattern of making claims that will get them some good press. In this case, they both got good press about the price cut, they also got a stock bump because they announced the price cut at a shareholders meeting.

This means right next to nothing to me. People get all wrapped up in all these articles, what the press is saying and what companies are trying to market. Any company can talk until they are blue in the face and it means zero to me. I'll talk about things like projections but I never assume what any company rep says is fact until I see it happen. Wanna say your machine will produce Pixar quality graphics? Show me and then maybe I'll take notice. I'm not one for faulting any company for their hype machine and get all bent out of shape about it. It's all about the games. Make 'em good and fun and that is all the matters.

Heck, analysts were even threatening to DING MS stock if *they* didn't match the price cut!

This is typical Sony business practice.

Again, I couldn't care less about Sony's business practices. They are a business and will do everything they can to try and make money. They are no better or worse than anyone else in the videogaming industry.

 

[TwistedBishop]

I call BS. Again. The problem with the PS3 isn't the price of the console, it's the lack of games. This whole "price cut" issue is largely irrelevant right now. The games are the true issue.

I've never said that games aren't important. I'm not interested in arguing that a game console would sell even without games (unlike certain Sony executives). However dismissing price is taking a myopic view on the situation.

There's a reason why most console sales happen below a certain price point (and why a lot of people picked up the Wii on almost a whim). Because price, despite how great something may be, determines what people will and will not even consider buying. Right now, at the sort of prices Sony is charging, they're in the ultra hardcore demographic of video game players. More games will encourage more of those people, sure, but the pool of possible consumers is still limited to those willing and able to drop $600 on a video game system.

Microsoft has a software library which, apparently, even at $400 (a price point that never worked before in video game history) is able to sell twice as many consoles to consumers as the PS3. Meanwhile, Microsoft is long overdue to drop the Premium's price down to $300, while Sony will struggle to even make $500 this Christmas season.

What are the people who only play Madden each year supposed to buy? The console that can play BluRay movies for the HDTV they don't have?

What about the people who only play GTA? (That series which sold 14 million copies last time around.)

Those are a huge number of sales to lose.

Heavenly Sword, Ratchet, Drake's Fortune, Lair, and Warhawk will move consoles. But not as many at $600 as $400. Meanwhile Microsoft is coming out with some, it's fair to say, much more hotly anticipated titles this holiday, while already at that lower price point (and with the potential to dip even further). Lower prices equal more possible consumers; more possible consumers equal more sales; which equals a bigger install base; which generates more exclusive deals; which leads to even greater sales; which lead to even more exclusives.

This is a race Sony is going to lose, and if they do it's because they handed the victory to Microsoft.

 

[Vigilance]

I call BS. Again. The problem with the PS3 isn't the price of the console, it's the lack of games. This whole "price cut" issue is largely irrelevant right now. The games are the true issue.

Price affects how many units you sell.

Porsche sells fewer units than mid-line Toyota Corollas.

Do you think that's because people think the Corolla is the more attractive car?

The thing is though, unlike Porsche, Sony can't *afford* to sell to only hardcore AV consumers willing to drop 600 on a console and 1000 on a tv.

Why? Because they are losing money on the hardware (unlike Porsche). They need a large install base so they can make that money back on licensing software.

This is a game for the mass market.

Something Sony, and you, don't seem to grok.