Fortune Magazine: How Nintendo is beating Sony and Microsoft

[drothgery]

And yeah, I'm a big Nintendo guy, but I love my PS2. I think that's what frustrates me so much about Sony. They can make a great system and get great games, but they aren't.

Here's the thing. The PS2 was not a great system; it was the same kind of difficult to program technological mush doomed to underperform its theoretical specs that the PS3 is. The only time Sony really had superior hardware was with the original PlayStation. Heck, I've maintained for a while that attempting to emulate the PS2 strategy (only with an exlamation point) has been the source of most of Sony's problems with the PS3.

The PS2 had a weird, massiveley parallel CPU design. So does the PS3.

The PS2 was in part an attempt to popularize a new media format. So was the PS3. Except that DVD had been around in the videophile market for a few years already, and had no serious competing format.

The PS2 was preceded by an absurd amount of hype claiming the console was a 'supercomputer' even though its actual capabilities (as opposed to its theoretical maximum capabilities) were no better than its year-old competitor. So was the PS3.

The difference is that today Sony's competion is a Nintendo that was riding high on the DS even before the Wii launched, and a Microsoft that has been in the console business for 5 years, not a Nintendo that seemed to be on the verge of abandoning nonportables, a bankrupt Sega, and an a Microsoft that was new to the console business (and both Nintendo and MS spotted Sony a 1 year head start in the US).

 

[John Crichton]

See, that's one of those things shooting themselves in the foot, though. Yeah, the PS2 is selling well...but THAT is hurting the PS3 sales. They're trying to support two generations of products here, and only one is really selling...the old one.

The PS2 doing well is not hurting PS3 sales. The people buying a $130 system with that selection of games are not the same people who would be willing to dump 4 times that to play the same games. It's about the selection available on the PS3 right now. Sony didn't need to do what MS did and dump the Xbox. The PS2 was still bringing in money and selling well based of it's incredible game selection.

Though I'd dispute the fact that the Wii is in direct competition with the PS2 anymore than its in direct competition with the PS3 and 360. Say what you want about graphics or any of that...they are competing. All of them. And the Wii is winning against all of them.

They are all in the same market and while they aren't all in the same category or console cycle they are all competing for the public's gaming dollar. So I agree. And the Wii is doing very well for itself, which is a very nice change of pace. We'll see if they can sustain it when the PS3 and 360 break out the big guns.

And yeah, I'm a big Nintendo guy, but I love my PS2. I think that's what frustrates me so much about Sony. They can make a great system and get great games, but they aren't. They just keep screwing things up and constantly changing their minds on what they want to do or how to do it. My annoyances at Sony are less because I'm loving what Nintendo is doing and more that I'm just baffled by the decisions Sony's making despite the reality of the world around them.

How are Sony changing their minds? Any more or less than any company does? And if you really love your PS2, just remember how long it took for that system to build up a respectable games lineup. I'll bet it was longer than 9 months.

 

[Ankh-Morpork Guard]

The PS2 doing well is not hurting PS3 sales. The people buying a $130 system with that selection of games are not the same people who would be willing to dump 4 times that to play the same games. It's about the selection available on the PS3 right now. Sony didn't need to do what MS did and dump the Xbox. The PS2 was still bringing in money and selling well based of it's incredible game selection.

But someone buying a PS2 now is not buying a PS3. Yes, the price difference between the two is huge, but they're both from the same company. By supporting both, Sony is possibly shipping less PS3s due to the PS2s still out there selling.

Of course, with the way Sony has been losing money over the past months, the PS2 is probably the only way they're making much at all.

They are all in the same market and while they aren't all in the same category or console cycle they are all competing for the public's gaming dollar. So I agree. And the Wii is doing very well for itself, which is a very nice change of pace. We'll see if they can sustain it when the PS3 and 360 break out the big guns.

See, I don't agree they aren't in the same console cycle. I think the idea that huge jumps in graphics and all that are necessary for that kind of thing isn't true at all. The Wii IS the same cycle as the 360 and PS3. In fact, calling it a cycle behind or 'last generation' actually is a bigger boost to Nintendo and a harder hit for the other two...since that would mean they're losing to something 'outdated'.

And as for the big guns...well, the 360s been out a good while now. Sure, its got more big guns coming(Halo 3 a huge one along with Mass Effect), but really, you can't say that they don't have huge games now. And despite the big guns they already have out, the Wii is still doing insanely well.

As for Sony, you're right that their big success for the PS2 was game selection. Most of those were because they were exclusive. This generation they have...Metal Gear and Final Fantasy. But even then, Nintendo's getting more Final Fantasy for the Wii(Crystal Chronicles), and the 360 is getting most of their old exclusives. The old 'big guns' for Sony just aren't there anymore. In fact, one thing that kind of bothers me about the so called 'big guns' for both the 360 and the PS3 is they're usually FPS games, which are all, essentially, the same game with different window dressing put on it.

And it should also be mentioned that Nintendo still has big guns to put out, too. Super Mario Galaxy looks absolutely amazing, and Metroid Prime 3 is sure to sell a ton along with Super Smash. Not to mention the so-called 'casual' games like Wii Fit and other very unique games that sell insanely well to the disbelief of so many(truthfully, me included).

So its not just big guns for Sony and Microsoft. And Sony really badly needs some heavy hitters to step up and compete with both the 360 and the Wii.

How are Sony changing their minds? Any more or less than any company does? And if you really love your PS2, just remember how long it took for that system to build up a respectable games lineup. I'll bet it was longer than 9 months.

Changing their mind probably wasn't the best choice of words. It just bothers me how much different parts of the company continually say different things that completely contradict one another.

And yeah, the PS2 took a bit to really get going, but it had games coming on the horizon that would really sell systems. And not just a few, it had a ton coming and we knew it. This generation is just a different beast. The 3rd party guys are branching out much, much more, and exclusives just aren't as common as they were. The same games are commonly comming out for all three systems and that really hurts Sony a great deal since they're old big guns just aren't completely their's anymore.

 

[John Crichton]

But someone buying a PS2 now is not buying a PS3. Yes, the price difference between the two is huge, but they're both from the same company. By supporting both, Sony is possibly shipping less PS3s due to the PS2s still out there selling.

There isn't a correlation between the two. It's like with the Nintendo DS & GBA, they both existed just fine in the same market because they offered different things at different prices, not to forget the great game line-up on the GBA.

People who are buying the PS2 aren't doing so because they wanted a PS3. If they wanted a PS3, they would buy it because they have the setup for it.

See, I don't agree they aren't in the same console cycle. I think the idea that huge jumps in graphics and all that are necessary for that kind of thing isn't true at all. The Wii IS the same cycle as the 360 and PS3. In fact, calling it a cycle behind or 'last generation' actually is a bigger boost to Nintendo and a harder hit for the other two...since that would mean they're losing to something 'outdated'.

Don't even try to sell anyone that the Wii compares to the PS3 or 360's visuals. You'll simply be wrong. It's closer to the PS2's than the PS3's.

That's not to say that the games look terrible on the Wii, but that's not what we are talking about. The Wii is a modded Gamecube with slightly enhanced graphics and the motion sensing.

And as for the big guns...well, the 360s been out a good while now. Sure, its got more big guns coming(Halo 3 a huge one along with Mass Effect), but really, you can't say that they don't have huge games now. And despite the big guns they already have out, the Wii is still doing insanely well.

Yes, the 360 already has Gears of War along with Dead Rising and Crackdown plus some quality FPS (I'm not a fan but there are certain ones I like). That's still not enough.

As for Sony, you're right that their big success for the PS2 was game selection. Most of those were because they were exclusive. This generation they have...Metal Gear and Final Fantasy. But even then, Nintendo's getting more Final Fantasy for the Wii(Crystal Chronicles), and the 360 is getting most of their old exclusives. The old 'big guns' for Sony just aren't there anymore. In fact, one thing that kind of bothers me about the so called 'big guns' for both the 360 and the PS3 is they're usually FPS games, which are all, essentially, the same game with different window dressing put on it.

The sharing of GTA & Resident Evil are the big ones that really hurt Sony, as is Assassin's Creed. But that's not to say Sony is losing all it's exclusives, that is far from the truth. There are still plenty of franchises that are still sticking with Sony. These are interesting times for gaming as more and more companies go multi-platform. Something has to give and I'm interested to see where it goes.

And it should also be mentioned that Nintendo still has big guns to put out, too. Super Mario Galaxy looks absolutely amazing, and Metroid Prime 3 is sure to sell a ton along with Super Smash. Not to mention the so-called 'casual' games like Wii Fit and other very unique games that sell insanely well to the disbelief of so many(truthfully, me included).

The Wii's big guns aren't that big a deal if the systems are already flying off shelves. Really, all they have to go is down at this point. It's more likely that these big releases will keep them chugging along and selling well.

So its not just big guns for Sony and Microsoft. And Sony really badly needs some heavy hitters to step up and compete with both the 360 and the Wii.

Yes, the PS3 needs to get out Heavenly Sword, Rachet & Clank: Tools of Destruction, Warhawk and Uncharted: Drake's Fortune out in time for the holiday season. They could afford a delay to 1 maaaaybe 2 of them so I think they'll need at least 3 big games to compliment the multi-platform games and Home for the end of the year.

Changing their mind probably wasn't the best choice of words. It just bothers me how much different parts of the company continually say different things that completely contradict one another.

Yeah, that is annoying. This whole price drop/model availability thing was handled terribly. Bleh! Personally, I'm waiting for this week to hear more clarification.

And yeah, the PS2 took a bit to really get going, but it had games coming on the horizon that would really sell systems. And not just a few, it had a ton coming and we knew it. This generation is just a different beast. The 3rd party guys are branching out much, much more, and exclusives just aren't as common as they were. The same games are commonly comming out for all three systems and that really hurts Sony a great deal since they're old big guns just aren't completely their's anymore.

There are less exclusives coming to the PS3 than the PS2 at this point in their lifecycles, but you are badly underestimating the amount that are still there. Yes, there is another player in town with the 360 but there are many games that Playstation fans are just chomping at the bit, waiting for them to come out. MS is pulling closer and that is a good thing. Doesn't spell the death of the PS3.

 

[Ankh-Morpork Guard]

There isn't a correlation between the two. It's like with the Nintendo DS & GBA, they both existed just fine in the same market because they offered different things at different prices, not to forget the great game line-up on the GBA.

People who are buying the PS2 aren't doing so because they wanted a PS3. If they wanted a PS3, they would buy it because they have the setup for it.

That's possible, but one of the things that could realy help move PS3s is that they can play PS2 games(Well, all of them before and who knows how many after the 80GB is out...hopefully most). So, like the PS2, one of the big advantages of buying the PS3 is you CAN play the older games.

Though, of course, that's true of the GBA/DS, too.

But it doesn't seem like the PS2 and PS3 ARE existing just fine in this market. The PS3 isn't selling. The PS2 is. At least with the DS coming out, that sold more...same with the PS2 when it was released over the PS1. But the PS3 just isn't moving enough units and having the PS2 out can't be helping that.

Don't even try to sell anyone that the Wii compares to the PS3 or 360's visuals. You'll simply be wrong. It's closer to the PS2's than the PS3's.

That's not to say that the games look terrible on the Wii, but that's not what we are talking about. The Wii is a modded Gamecube with slightly enhanced graphics and the motion sensing.

I didn't say a thing about comparing the visuals.

What I DID say was that I don't believe visuals are all that determine what generation a console is.

The very fact that a modded Gamecube is outselling two machines that are built around the fact that 'graphics are great' says a great deal about the current market. MS has taken note of this and they've already made mention of trying to tap this market they never thought about before, a market that doesn't value graphics as high as some hardcore gamers. Sony, though, is still playing the same old game.

And the simple fact is, the same old thing doesn't work right now. It isn't. Say what you want about Nintendo, with both the DS and the Wii having such insane success, they've proved that the market is shifting(and they're helping to move it), and you can't just rely on graphics and power of a game system to actuall sell things.

The sharing of GTA & Resident Evil are the big ones that really hurt Sony, as is Assassin's Creed. But that's not to say Sony is losing all it's exclusives, that is far from the truth. There are still plenty of franchises that are still sticking with Sony. These are interesting times for gaming as more and more companies go multi-platform. Something has to give and I'm interested to see where it goes.

Sony isn't losing all of them, no, but they're losing most of the ones that used to be considered system sellers. And while some franchises are staying with Sony, there's been branching out(see Final Fantasy), talk of possibly branching out(in the case of Metal Gear, which amazes me), and downright cancelling of games to move to other systems(the new Katamari).

Interesting is definitely the word for it.

The Wii's big guns aren't that big a deal if the systems are already flying off shelves. Really, all they have to go is down at this point. It's more likely that these big releases will keep them chugging along and selling well.

Makes sense. Though I think its bad to ignore the Wii's big guns while mentioning the others, as they have the potential to still pull sales from the other two. You have to consider it all to get a good picture of things.

Yes, the PS3 needs to get out Heavenly Sword, Rachet & Clank: Tools of Destruction, Warhawk and Uncharted: Drake's Fortune out in time for the holiday season. They could afford a delay to 1 maaaaybe 2 of them so I think they'll need at least 3 big games to compliment the multi-platform games and Home for the end of the year.

Delays of any of those could really hurt them. There's also the chance that any one of them might end up being so overhyped they just don't live up to it...another thing that could hurt the system.

The constant "Over the horizon" feeling for PS3 games may actually hurt it anyway, because when they do come out, even if they're good...will it have been worth the wait?

Yeah, that is annoying. This whole price drop/model availability thing was handled terribly. Bleh! Personally, I'm waiting for this week to hear more clarification.

No! Don't ask for clarification! Next thing you know we'll have them telling us that its not a 80GB, but actually a 65GB for only Europe but not Australia and actually for everywhere except the places they didn't say.

There are less exclusives coming to the PS3 than the PS2 at this point in their lifecycles, but you are badly underestimating the amount that are still there. Yes, there is another player in town with the 360 but there are many games that Playstation fans are just chomping at the bit, waiting for them to come out. MS is pulling closer and that is a good thing. Doesn't spell the death of the PS3.

Its way too early to claim the death of any of the three. However, if Sony doesn't pick up quickly and get some steam going, they're headed for a bad path. The PS2 was slow, but they didn't have the competition then that there is now. Between Nintendo just being a monster out of no where and Microsoft watching both companies and trying to do what they can, Sony has to start making some smart moves soon.

 

[Vigilance]

Bah and bah again. I grok just fine, thanks. If you want to personally attack me for "not getting" the way the industry works that is just fine. But I'll remind you that you were convinced that PS3 games would sell for $100 a pop. So, lets dispense with the personal attacks, no?

I wasn't aware that saying someone didn't understand an issue was a "personal attack". If so, should I have reported your post when you told me I just didn't understand high definition electronics and what people would pay?

You know, when I said the PS3 would be in last place and you told me I was flat wrong? That thing I was 100% right about? That the sales would be Wii, then 360, then PS3?

So don't act like you were right and I was wrong.

On the games being $100 thing, I was quoting a Sony executive. I know, given the rate at which they lie, that's probably the last person I should have quoted, but don't put words in my mouth.

I didn't say the games would be 100 bucks. Sony said they might be, I said that was crazy.

So, are you ready to stop with this petty score-keeping thing? I was right about something. You were right about something. How's that.

Sony's main competitor is losing even more money, especially after the warranty extension/faulty 360 fiasco. Sure, MS has virtually unlimited pockets but if this is a game for the mass market then Sony is certainly playing by the rules. If Microsoft really wanted to try to blow Sony and Nintendo out of the water, they would just take more hits on each 360 and drop the extra SKUs and put the Elite @ $250 or some kind of other price drop. So why don't they just do that? Get that install base up, right? No, that would mean more losses or revenue on top of what they are already loosing.

See this is how I know you're wrong about price not mattering, because MS has repeatedly said that they KNOW their price is too high. That the sweetspot in the market is @ $200, the price the Wii is flying off the shelves at.

So why aren't they dropping the price?

Because right now they don't have to. As long as the PS3 stays at $600, and as long as the Wii's install base isn't obscenely larger (which, with the lead, it's only just now passing the 360's install base, even though it's selling at a 2:1 rate).

So for now, MS has no pressure to change. They're being smart and playing for time.

You notice, as soon as Sony announced it's "price cut", analysts started pressuring MS?

Those are the forces that are driving the situation right now. It's a question of install bases.

As long as MS has the lead in the install race, or at least is competitive enough to keep 3rd party support intact, they know they don't need a price drop, even though they also know where the sweet spot in the market really is.

 

[Vocenoctum]

I'll believe the Premium @ $300 price point when I see it. That happens, expect to see the PS3 follow right behind.

Why do you believe that, when the PS3 hasn't matched the 360's price yet at all?

Sony's answer to "this isn't worth $600" was not to drop the price, but to raise the specs. They obviously missed what most of us wanted. Perhaps the company is moving in a direction you like, but I'm not sure that's a popular place you live in.

The "price reduction" on their old SKU has been labeled "clearance discount". And the fact that there is an "adequate supply" is because...
::drumroll::

No Body Is Buying Them.

Anecdotes are fun, I like anecdotal evidence. Locally, I can find a PS3 anywhere that sells games. I can track down a 360 without too much effort, but it's not everywhere. I can find a Wii easy enough, but it's out of stock at most places.

Say what you will about whether it's lack of games or price point, but the PS3 is more available than the 360 was at this point in it's lifecycle... heck, it's more available than the 360 currently.

Either way, both companies are still losing money and at the very least the PS3 is a very reliable piece of equipment. I cross my fingers every time I turn my 360 on that it will survive a 3-4 hour gaming session.

Interesting. What exactly is the failure rate of the PS3 and 360's?

It's a popular subject, but so was "flying wiimotes kill children!" or whatnot, it doesn't make it an epidemic.


Of particular amusement at this years E3 was the mantra "ten year plan". I'm sure the Wii won't be the core console for 10 years. (And, I can see them dropping in price to the point they are everywhere.) Nintendo makes money on Wii's, so that's good, but I think lots of folks are buying Wii and Wii Sports and nothing else. Thus the Wii's low attach rate.

But, give it ten years, and Sony will be telling you how their console "won" versus the defunct 360 and Wii, simply because it'll be competing against completely different systems.

Heck, Blu Ray probably won't even last that long.

 

[Vocenoctum]

The other funny from E3 at Sony's expense was the Killzone 2 thing.

They swore it was game footage, it wasn't.

Now they are vindicated, because they have eventually managed to make actual game footage that looks close enough to the lie. I guess if you ignore the fact they LIED about it, and the game isn't due until next year...

 

[Ranger REG]

But, give it ten years, and Sony will be telling you how their console "won" versus the defunct 360 and Wii, simply because it'll be competing against completely different systems.

Wii lasted ten years before Sony beat them?

That's even better news.

I mean, how often can you find a 10-year-old console or computer still kicking despite rapid technology turnovers?

 

[Ankh-Morpork Guard]

The other funny from E3 at Sony's expense was the Killzone 2 thing.

They swore it was game footage, it wasn't.

Now they are vindicated, because they have eventually managed to make actual game footage that looks close enough to the lie. I guess if you ignore the fact they LIED about it, and the game isn't due until next year...

Sometimes I wonder if I'm the only one who remembers the first Killzone.

It was terrible.

Okay, so maybe they've improved the many problems it had...but what everyone always talks about is "THE GRAPHICS LOOK GREAT!!!" and that's it. What about oooh...the gameplay? Its yet another FPS and it needs something beyond GRAPHICS!!! to actually make it good.

But eh, maybe I'm just to the point where the whole graphics thing doesn't impress me like it used to.