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Why Sony Can't Sell the Most Hardware this Generation

Forums - Sales Discussion - Why Sony Can't Sell the Most Hardware this Generation

This not meant to be inflammatory. I am going to go about this logically, region by region. I enjoy games on all three systems, my favorites right now are Sonic, Resistance and Lost Planet. With that said: Japanese Issues: - The Nintendo DS is currently the best place to be for third party developers. Square Enix now has multiple games to sell over a million units on the platform. Bandai and even Sega have made a million seller in Japan on the DS. Smaller games like Layton also benefit from the rapidly expanding he audience the DS appeals to. When developers want to make more powerful games, they have essentially 4 options if they want the game to sell well. PS2, Wii, PSP, PS3. Through early 2007, PS2 was easily the safest bet. Right now, PSP and Wii have userbases in the millions in Japan, but software by 3rd parties have generally (with exceptions like Capcom) not sold well yet on either platform. With the PS2 slowly dying in Japan, and the PS3 userbase under 1 million, the overwhelming support will be on the DS (see DQIX). However, because Wii is more powerful than PS2, cheaper than PS3, and works under the same business model as the Nintendo DS, I think developers will eventually switch to it. Once Wii reaches 4 or 5 million units sold in Japan, I suspect alot of big 3rd party games to be announced/released. When PS3 price drops further in Japan, it will have huge spikes as big games come out. But I think by this point, Nintendo will be too far ahead, because DS stole traditional Sony support early, and Wii stole it later. I can see PS3 selling 5-8 million units in Japan, but even at just 200,000 a month Wii will be near 4 million in Japan by Dec 31. American Issues: - Although the PS3 is very expensive, I do not think that is what is holding it back. I also don't think it is the games that will proppel it or retard it to new levels of slow/fast sales. PS2 was essentially perfect in the US market. It had one or two games hardcore games wanted in 2000, and it had DVD capacity. Sega was easily squashed by the hype, and Microsoft was nowhere near entering the market. This essentially left PS1 and the Nintendo 64 as competition. Because PS1 games could be played on PS2, many saw no problem in upgrading quickly - especially since it meant getting access to a DVD player and next-gen games. Really then, PS2 only competed against a dying console for its first 13 months. By the time Xbox and GC were released, Sony had assembled MGS, GTA, FF, and others for the holidays. In 2006, that position went to Microsoft. However, since they just had Gears of War to drive sales, they didn't quite dismantle the possibility of someone catching up to them, eventually. With PS3, Sony is seen as having fewer/inferior games for casuals (to Wii and PS2), and as having less online capability and fewer hardcore games than the 360. That is a problem. Normally, as the former market leader, they would be given the benefit of the doubt by many. But that is where price comes in. At $600 and doubt, the PS2 market will largely split in three, to those who want sports/racing, those who want sandbox style games, those who want the most hardcore games. With Nintendo keeping it's loyalists, with Microsoft keeping its online/shooting market, I see the sandbox guys going between Sony/Microsoft, the casuals going to Wii, and the hardcore going to Microsoft. Because HD penetration is low in the market Nintendo is expanding to, and since Microsoft's games are comparable graphically to PS3 offerings, I can see the market growing, even as it shifts away from Sony. Still, with the American market so huge, I do see all three consoles selling over 20 million, I see this mainly because a generation of hardcore games have now grown up playing PS1 games instead of Nintendo games, Microsoft will likely be in this position in 5 years. Europe/Pal/Others Issues: According to this website, 360 had sold 2.3 million through Dec 31, 2006. Sony will be launching in March. Nintendo launched in December and sold .8 million through Dec 31, 2006 (three weeks). By the time Sony launches Microsoft will be at or very near 3 million, while Ninendo will be in the 1.25-1.75 million range (I'm using their claims of meeting the March 31 target of 6 million for the estimation). Sony will sell out at launch week,probably around 750,000 units sold. I suspect they will have great weekly sales through the second week of April at least as the hardcore get their systems. But, with Europe being poorer than the USA and Canada on average, and the fact that fewer hardcore gamers exist, I expect Wii to be outselling PS3 by May. I also think 360 can meet PS3 sales for most of the year. With greater casual appeal, I can see Sony passing the 360 eventually. But on April 1, I expect it to look like this: PS3 .75 million - 14.3% Wii 1.5 million - 28.6% 360 3 million - 57.1% 100 = 4x (360) + 2x (Wii) + X (PS3) With Wii eating up casuals, and PS3 competing for the hardcore, I do think PS3 can inch up to 20% by the end of the year. But I can't see 360 ever dropping below like 35% because of the lead time, the price point, and sales in the U.K. Eventually I think 360 will find support from European developers because of its success in the Western market. Wii will have locked in most Japanese support by 2008. With (my guess) around 55 million consoles to be sold in Europe this generation, I think Wii and 360 can reach 20-25 million each. With the price, late launch, and established competition in all markets, I don't see PS3 getting above 10-15 million units. On a worldwide basis I see it like: Japan Wii-PS3-360 Americas 360-Wii-PS3 Europe/others Wii-360-PS3 Wii: Americas (24 million), Japan (20 million), Europe (23 million) 67 million 1.16 mill/60 months 360: Americas (26 million), Japan (1 million), Europe (21 million) 48 million 666,666/72 months PS3: Americas (20 million), Japan (7 million), Europe (13 million) 40 million 666,666/60 months I believe Sony will also kill PS3 early to make sure they can fight back Microsoft.



People are difficult to govern because they have too much knowledge.

When there are more laws, there are more criminals.

- Lao Tzu

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I think that would be reasonable, i still think Blu Ray will be the wild card....as stand alone gaming consoles, i think the PS3 has no chance to catch the 360 with GTA being cross console and many others moving that way.....unless the PS3 finds its gears of war in Lair or Heavenly Sword or something else it will be tough, for every exclusive blockbuster Sony has now, the 360 has its match at this point....so as it stands i think it will be tough. But as much as it is frowned upon here, i think its important to consider the blu ray variable.....that variable alone will be enough for that cross demographic increase in sales, basically, imo if someone is on the fence about a PS3 based solely off of gaming, the Blu Ray factor is something that, if it becomes the industry standard for high def cinema, could easily tip the scale to that person on the fence buying a PS3. While i dont really buy the argument about PS2 pushing the success of DVD (lack of competition, accepted format inand of itself) I really think Blu Ray is going to be what the PS3 is going to need to move more consoles this generation. So, since we are simply discussing hardware movement, i think the PS3 can overcome just about anyhing this generation if Blu Ray prevails quickly and prevails excessively.....regardless of whether its based on games or exclusives, as long as teh hardware moves, it moves, and Blu Ray could have a huge role in that for the PS3



I disagree with you for a few reasons - I do not feel Sony will scrap/discontinue the PS3's support in 60 months as you think they will. They already stated the PS3 is a long term solution for their gaming console, and you have them existing the same amount of time as the Wii which I believe is wrong. Sony, like Nintendo, has the ability to do well worldwide. However, Sony has the stronger track record in the US and Europe/other territories, and I think that this won't change this generation. The Wii HASN'T done the amazing things in Europe and other territories that other's have felt that it has. The PS3 should, even with "poor" sales, will surpass the Wii in Europe, and approach the 360 in a few months, and should be a strong area for Sony in the future. You say the 360 will chart well and do around 48m units (which it should), but Sony will do the same, despite most likely doing slightly better in Europe and still having a market in Japan - this doesn't make a bit of sence. I am going to put forth my own predictions and insights soon. Remember, if you count revenue, the PS3 beats the Wii out - showing that consumers WANT the PS3 vs. Wii, but can't afford it.



Back from the dead, I'm afraid.

Looking forward to it stickball. I generally agree with most of what you say. I'm honestly surprised no one has said I'm completely full of shit yet. I do think some trends are going unnoticed. 360 is doing better in Japan than Xbox. Wii is doing better than Gamecube and Nintendo 64 in both the Americas and Japan. PS3 is selling very well for the price I think. But it is just so expensive, that even after round one of price dropping I don't see it reaching mass-market pricing. I think Wii could be $120 in 18 months. With that kind of pricing verse the PS3 selling at $400 or $500 in 2008, it really would be impressive if Sony sold 20 million PS3's in the Americas. The other thing is, since there are only three pools of developers, I think many Japanese developers will focus on Wii because it seems like that will be the region it locks up first. I mean the Wii lead over PS3 in Japan is larger than the Wii lead over PS3 in the USA, even though Japan has something like 40% the US population (this accounts too for Japanese sales data including sales upto March 11, not March 3 like NPD data)



People are difficult to govern because they have too much knowledge.

When there are more laws, there are more criminals.

- Lao Tzu

I think alot of the j-games companies, are going to go next gen. And becuase of the PS3's power over the 360 in japan, I think alot of those will go with the PS3 over the 360. And becuase of that trend right there, is why I think the PS3 will continue to get great support.



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1. Price 2. Japan. Japanese culture likes cutesy stuff, so nintendo is going to win hands down. I think that after sony captures more of the american/european markets, they will come back to home and encourage more games that will actually appeal to japanese tastes.



IMO, it's really difficult to see which console ship the devs will goto. You have a few major dev companies - Namco, Capcom, Konami, and Square-Enix for J-companies that are very strong (atleast IMO). Which of these companies is really dumping the PS3/360 for the Wii? Square Enix is for the most part (although FFXIII is PS3), but other than that, most are staying middle-of-the-road, and Capcom is seemingly aligning itself with the 360. Because of this, I don't see devs really doing to the Wii as they are doing to the DS.



Back from the dead, I'm afraid.

--Wii-- The Wii has been eating up the market share in japan... and as it stands from forum posters living there it is still completely supply constrained. Europe is a mixed bag, from what we hear from people living there on the boards, England and France are sold out, doing okay in Spain, and poor in Germany, while still at 1.62 million according to vgcharts. Considering it seems like they're getting the least supplies that's still very good. The question is if Nintendo can start getting Wii's to the countries that still demand it quickly enough to help offset Sony's intro to that market. America also seems to be a mixed bag as well, most places are still selling out very quickly, and some places still aren't getting regular shipments in when they need them. I don't see the overall sales in America slowing down until May at earliest at this point. --PS3-- North America - Of course with Motorstorm and a few other games coming out in NA we expect sales to be higher than Febuary, but exactly how much is anyone's guess. Personally I think the odds of the PS3 breaking 200k this month are about 50/50 at best. Japan - The PS3 has Winning 7 coming out at the end of the month, which the predecessor sold 1.1m (ps2), but in comparison, Virtua Figher 4 (ps2) sold over 750k while 5 hasn't broke 75k to my knowledge, so it's debatable if this will have any effect. If not, the release charts show nothing else of significance 'till June at earliest. And at $410 and $520 respectively for their pricing and abysmal software/hardware attach ratios, it's hardly going to be changing anytime soon without outside intervention. Europe - Online we have reports from all over the place, some saying that preorders are selling like crazy, others saying they're crawling, so we'll have to wait and see. My own opinion says that the PS3 is digging itself into a pretty big hole, and as time goes on the odds of a comback are slowly shrinking. A comeback isn't impossible, but any chances of pulling a majority of the market this generation have all but dissipated at this point. Update - As of GDC this year we know Konami has 3-4 wii projects in development (DDR, Dewey, an RPG, an adventure game), Capcom has 4 Wii projects as well (Resident Evil - Umbrella Chronicles is one of them), Square-Enix has at *least* two that we know of for Wii, both exclusives also. Koei made their announcement, we also have the big name `Project O` started. Bandai-Namco supposedly has some in development as well still, despite the Sony-Namco joint project. Developers have, in the last several months, started numerous projects for the Wii. Oh yeah, Monolith is doing Disaster : Day of Crisis for Nintendo too. I don't know who's making Project Hammer. The Japanese developers most certainly have not abandoned current PS3/360 projects, but those resources now being put towards new Wii games are now not even being considered for those ps3/360 projects, now are they? Should I start looking to see who else has started projects for the Wii?



Nobody is crazy enough to accuse me of being sane.

But Vanguardian look at the timing - most are late this year, 08' releases. That is what I was saying, they will come out as the Wii userbase is bigger in Japan. That is why DS has the 3rd party support right now, the developers reacted in early 2006 when things started changing for the better in terms of DS sales in Japan. So i see the DS essentially being the safe haven for 3rd parties in Japan, until/if they are convinced Wii will win. Then they give it full support. But it won't be evident for months yet.



People are difficult to govern because they have too much knowledge.

When there are more laws, there are more criminals.

- Lao Tzu

steverhcp02 said: I think that would be reasonable, i still think Blu Ray will be the wild card....as stand alone gaming consoles, i think the PS3 has no chance to catch the 360 with GTA being cross console and many others moving that way.....unless the PS3 finds its gears of war in Lair or Heavenly Sword or something else it will be tough, for every exclusive blockbuster Sony has now, the 360 has its match at this point....so as it stands i think it will be tough.
Yes, but I think It will probably stay tough. The Wii and the X-Box 360 have right now a significant price advantage. WIth an expected price cut of the XBox 360 it would even increase. If the PS-3 would follow with significant financial pains it would still not make up the advantage of the Xbox 360 that suddenly gets to the border line for casual gamers. And for the BluRay: if this format will stay the prices for new BluRay players would probably drop much faster than the price of the PS-3. Beyond 300 $ (Euro) it would simply not be real possibility of the normal market. The markets for BLuRay and games are not really the same. The BluRay makes the most sense with a beamer or a big display (bigger than 42''), while for HD games a 32 to 40'' Display is sufficient (and significantly cheaper). In fact for a Xbox 360 you could simply use a normal LCD monitor to get the kids away from the big TV and out of the room). Due to its power consumption the PS-3 would be more expensive to watch BluRays than a STand Alone Player, which can probably even offer a better DVD Upscaling.