PlayStation 3 to Sell For $399, Going Underground 491
Merrill Lynch Japan has conducted research that indicates that the PlayStation 3 will retail for $399. According to Gamespot's coverage of the paper, the unit will cost $494 to manufacture. Sony will thus be taking an almost $1 Billion loss in the first year of the PS3's lifespan. From the article: "It is normal for game companies to take a loss on hardware whenever a new console launches, since they typically focus on acquiring market share rather than generating a profit during the first year. During the second year and afterward, they can recover the losses with the savings that come from mass production and with licensing fees from publishers." Meanwhile, Press the Buttons is reporting on a Pro-G article in which SCEE Chief David Reeves states that "I feel proud that E3 went well from the presentations that they did...I feel very happy about that, but I told the troops: OK now we go underground. The PS3 goes underground until it comes out next year."
No surprise here (Score:5, Interesting)
Don't get me wrong, I'm not saying that video games only take a nickle/disc to make, there are so many games out there that fail, even to the point of being fully developed but never shipped, that these companies need to balance the costs.
Ouch! (Score:5, Interesting)
Will It Make A Difference? (Score:4, Interesting)
Meh.. (Score:2, Interesting)
I'd love to see what would happen if all 3 companies had 33% market share.. Besides the obvious multi-platform title increase, specific and exclusive games could really swing the buying public.
Re:PS3 for $399 (Score:5, Interesting)
It helps to subsidize electronics for the masses without a convoluted gov't based needs program.
How is this not considered "Dumping" (Score:3, Interesting)
How come this is ok?
Is it because this is a direct consumer product?
Re:No surprise here (Score:2, Interesting)
Going underground a mistake (Score:3, Interesting)
Pricing (Score:3, Interesting)
Also, anyone else think that Nintendo may be a bit more successful at undercutting MS and Sony with MS and Sony both ramping up prices? I would assume that Nintendo will make the Revolution's price point a large issue.
Dumping (Score:2, Interesting)
"Dumping [answers.com]: selling goods at less than the normal price, usually as exports in international trade. It may be done by a producer, a group of producers, or a nation. Dumping is usually done to drive competitors off the market and secure a monopoly, or to hinder foreign competition."
Drive off competitors? Secure a monopoly? Sony? Never!
More from the Corporation of Arrogance: (Score:2, Interesting)
The press was saying that it was expensive, but it was a huge hit. It's the same thing with the PlayStation Portable from last year. The Game Boy Advance is a same handheld gaming machine, and it costs less than 10 thousand yen ($91). On the other hand, our PSP had cost 25,000 yen ($229). But people lined up overnight to buy it, and it sold out on the day of its launch. It all depends on whether people want it. Of course, I'm confident that the PS3 is a product that people will definitely want.
Funny, I remember Slashdot covered this and the PSP didn't sell out on opening night.
Have to hand it to Sony. (Score:5, Interesting)
They really know how to do this "business" thing.
Microsoft comes to E3 with a console that is looking amazingly polished, down to the extensive new XBox Live features, and with tons and tons of in-engine first looks.
Sony comes to E3 with a gigantic press event held at their cinema, with 2 simple real-time tech demos, prerendered (although using PS3 hardware) gameplay footage that blows away any other *footage* to date, and a bunch of video clips featuring their spider-man franchise.
There is no doubt about it -- MS is shipping earlier, MS has a better online infrastructure, and many of MS' games are already playable
But Sony won E3. All anyone wanted to talk about was the KillZone trailer.
Now, to keep anyone from pointing out that the Emperor has no clothes, they're disappearing. So all anyone will talk about, until they're ready, will be
It's absolutely a great idea. For the record, I have nothing against MS, but I'm WARY of them. Anything, even something unfair, that keeps them on their toes is probably a good thing for the rest of the world.
I won't buy either until they're both out next summer, though, so it's sort of moot.
Re:No surprise here (Score:2, Interesting)
Ahem!!! (Score:5, Interesting)
It is normal for game companies to take a loss on hardware whenever a new console launches, since they typically focus on acquiring market share rather than generating a profit during the first year. During the second year and afterward, they can recover the losses with the savings that come from mass production and with licensing fees from publishers.
Nintendo will probably launch the Revolution somewhere between $200 and $300 and still manage to make a profit on every console they sell. A while back there was an excellent article on /. that explained how Nintendo's business model was different from Sony and Microsft, and that even though they came in third place against the Xbox and PS3, they were still the most profitable.
For Sony to release a console after Microsoft and for a higher price could cause problems for them like the article stated. Microsoft has deep enough pockets to launch the console at around $350 when it comes out and cut it down to $300 when the PS3 launches. They'd be taking some huge hits in the pocketbook, but it would probably get more people to buy Xbox 360's.
However, as illustrated with the PSP, some people will buy something no matter how much it costs just because they want it. Sony is really going to need to count on its fan base to help out a lot.
They want YOU to get addicted (Score:4, Interesting)
The printer corps do it with printers.
1. Sell some product which addicts you to something cheap.
2. People must buy more of your razor-blades, printer-ink, games/controllers,
3. ???
4. Piles of profit.
Anyone know a Playstation owner will spend at least ten times what the console cost on other things.
Worth It For HD (Score:4, Interesting)
My first DVD player was $300, I can only imagine what the first HD-DVD players will cost.
Maybe they will even bundle a 1080p version of Spider-Man 2 to with it.
Nintendo focused on limited monopolies (Score:5, Interesting)
Nintendo took their limited Monopolies (Mario, Metroid, Zelda, Pokemon, etc.) and pushed them into that market. They made money along the way, kept their costs down, and sold most of their own titles. Sony/MS make something like $8/game on third-party games. Nintendo makes considerably more per game.
Even if customers bought fewer games/console, Nintendo probably made more per customer, and wasn't trying to recover a $100/customer acquisition cost.
Sony ONLY makes money on its fan base. A recreational player that buys a few sports games each year will never pay Sony enough in its fees to cover the $100 Sony spent subsidizing their hardware.
HOWEVER, in this case, Sony has another advantage. Getting the PS3 out means getting Blu-Ray DVD players into millions of homes. When the HD-DVD crew comes out with their $1000 HD-DVD players, and Apple and Sony have moved their Blu-Ray DVD machines (including Apple machines that will no doubt let you burn HD Blu-Ray DVDs of your kid's little league game), this might be the first time that the superior technology wins DESPITE being backed by BOTH Apple and Sony...
Alex
Anyone else getting deja vu? (Score:5, Interesting)
This time round, looks like it's Sony coming out second with the advanced yet fridge-sized beast & freakshow controllers, and it's going to really cost them a bundle, while the Xbox 360 seems to taking it more carefully...
I'm guessing that Nintendo will stay right where they were before though.
Predatory Pricing (Score:1, Interesting)
Re:PS3 for $399 (Score:5, Interesting)
Let's pretend we have a game console, and it's planned competitive lifetime is 4 years. It introduces at $400, and a year later it's available for $300. But really, $400 for a 4 year lifetime means you're "writing down" $100/year. In that case, the early-adopter and the wait-for-the-price-to-drop users have gotten equal value out of the consoles. In fact, the early-adopter may have gotten better value, because his first game is being written down over 4 years instead of 3, so it costs less per year.
I know it's overly simplified, but there is one point that lasts... The early adopter does fork out the big bux, but he also gets that early usage out of the console, and perhaps more usage than the price waiter. The latter argument has holes too, in that the early adopter probably adopts the next generation early as well, so both get about the same amount of usage. Still, you buy it to use it, and if you buy early, you get to use early. The idea model, from a cost basis, would be to be an early adopter for every other generation, either skipping the in-between generations or getting them really cheap on eBay.
But if you're strictly on a cost basis, skip the game consoles entirely, and take up real-world activities that also improve your fitness.
PS3 is smaller than Xbox 360... (Score:2, Interesting)
It's not fridge-sized.
I have an original US PS2 (SCPH-15000), and I've taken it apart before. I'd be shocked if it didn't cost more to make than sell at that time. The DVD drive alone must have hurt a lot. Have you forgotten when the PS2 came out, standlone DVD players were about $400-$500? The PS2 was $300 and contained a lot more stuff inside than a DVD player did. Plus that crazy complex (expensive) cooling solution.
Re:Microsoft seeks to ensure Sony win (Score:3, Interesting)
Remember when they were talking about selling 3 different versions of the Xbox 360 at launch? They backed away from that fracturing of the market too.
Also, if they DID sell an HD-DVD version down the line, it wouldn't mean that games would make use of it. Game developers are not so quick to turn their back on millions of installed base users. Notice how nobody made use of the PS2 hard drive peripheral? Game developers are not so stupid about their bottom lines.
And I don't know what you're talking about when it comes to developers shifting from PS2->PS3 compared to Xbox->X360. I'm guessing you're not a computer programmer. What are you talking about by "familiar world"? Familiar API abstractions? X360 developers will continue to be in a DirectX-derived world, something that's been around far longer than Sony's kits. Familiar hardware? The PS3 is far more radically different from the PS2 than the Xbox 360 is from the Xbox - the PS2 didn't have a GPU, programmable shaders, etc. So I'm not seeing what you could possibly be talking about.
Re:No surprise here (Score:4, Interesting)
Why? Nothing even close to a majority of US homes have televisons capable of displaying high-def content yet - A quick Google search shows figures for HDTV penetration around 4-9%, for example. By the time HDTV support is a majority, it'll be time for the next generation of consoles anyway.
People have been predicting Nintendo's doom for years now, but they're still around and actually quite profitable. I seriously doubt lack of HDTV support is going to be the issue that changes that trend.
Re:Have to hand it to Sony. (Score:1, Interesting)
http://ps3.ign.com/articles/628/628048p1.html [ign.com]
It's not running at full clockrate, it gets REALLY hot (but so does the X360's devkit, which often experiences graphics glitches and lockups when it warms up), and the GPU is a G70, not a fully-fledged RSX.
It's definitely not perfect for development, but it will start devs off with a leg up to at least start the first couple of games, and they'll run (faster) on the final as long as there are no serious sync issues, and they'll get a second revision closer to term with actual PS3 hardware in it which is when they test what it behaves like on the final PS3 Cell, RSX and Blu-ray (but possibly not Dual Shock 3). (I doubt the transition from this hardware to the final PS3 will go smoothly, so the first batch of games might not be as polished as anyone would like, but that's par for the course for launch titles.)
Somewhere in the ballpark of a Christmas 2006 release for US and Japan does sound about right, though, with Europe following sometime 2007.
*shrug* I'm gettin' both. And probably a Revolution too. Why not?
Re:No surprise here (Score:4, Interesting)
I'm not that excited about HDTV. I tend not to watch TV live - if a show's good I catch it on a rented DVD without adverts - and I watch DVDs on a projector. The quality is not perfect, but I have to look closely to see pixelation, and so it falls into the category of `good enough'.
Re:No surprise here (Score:3, Interesting)
Re:No surprise here (Score:5, Interesting)
Re:No surprise here (Score:3, Interesting)
I assumed that the GC would be the worst of the three. Much of that assumption came from aesthetics and design. The GC looks and feels like a toy that should be tucked into a child's cubbyhole. Playing games on it proved me wrong as both the graphics and gameplay exceeded my expectations and the capabilities of the much better looking and marketed PS2.
marketing is so important man. I think Nintendo needs a ramped up marketing strategy. I think being the console with the least penetration works in its favor this time around because the audience is always looking for something new. The revolution can be that new thing.
Re:No surprise here (Score:4, Interesting)
If DTV were that important, the GCN, with its support for progressive scan, would be seriously trouncing the PS2. The only progressive support you see on the PS2 is on DVD playback, and that's only on the newer units. And yet the market seems content in paying (more money!) for the inferior 480i.
It's a revolution. It's supposed to reach to the common man. The common man doesn't have the latest and greatest in their a/v setup, so there's no reason for the Revolution to cater to the elite(ist). If anything, the people who insist on HDTV and such are the people who Nintendo are actually trying to distance themselves from in an effort to reach a broader audience, the very people some of us feel are causing the games industry to stagnate the way it is.
Only the bourgeois elite care about real-time rendered forearm hair and the picture resolution to see it, and the hidebound electronics industry aristocracy are doing nothing for the gaming proletariat by offering it. The masses need better games! It is time for the people to rise up and demand a gaming industry again, television and set-top box manufacturers be damned!
Video games got started not in living rooms with big-screen TVs, stereo systems, comfortable sofas and easy access to the kitchen, but in cold, unfinished basements with hand-me-down televisions that required "warming up," maybe a boom-box to route sound out of for stereo, and no furniture save for a washer and dryer. If the Revolution is to have any shot at reinventing gaming, it will have to be able to return to gaming's roots to start. There is no HDTV down there.
(On a slightly more serious note, what the heck is HDTV supposed to do for gaming?)
Re:Geeze (Score:4, Interesting)
As long as blue-ray discs start being released at about the same time as the PS3, people will justify part of the purchase price as going to their "free" blue-ray player. Sony will not only make money off PS3 games, but also off of an extensive library of hit movies that they'll be able to sell to PS3 owners.
If you want to see the model, it'll play out exactly like the PSP and UMDs. PSP early adopters justified a portion of their purchase price as going to the movie playing capabilities of the PSP. UMDs, despite high prices, have been selling well and making money for Sony. More UMD movies are on their way every week.
When I bought my first CD player I had a couple of friends that commented, "but you don't have any CDs." Eveyone starts out this way with a new format and they don't let it stop them from making that purchase. The only thing that will stop people from factoring the value of blue-ray into their PS3 buying decision is if they think HD-DVD will win. Otherwise they'll be delighted at the possibility of getting a BR disc player so cheap.
TW