El Duderino said:
Me (and I guess many others) don´t dissagree on the profit part of your commnet, the problem is Sony would only make profit on the consoles they could sell and it wouldn´t be enough to get some good marketshare and 3rd party support, so it would lose money in the long run, thats why big companys like Sony and MS try to lose money to make money and drive out little(er) companys like Nintendo who can´t compete with inflated prices, (only this time around Nintendo knew what to do), point is you can´t make money with a product if its not what consumers whant and it doesn´t have the pricetag consumers whant, first one is a no brainer for Sony, who in his right (fanboy free) mind would not whant a PS3 ??? Who whants to spent 500$-600$ dollars on one... ok now we are getting to to the problem. the PS3 will do much better when the price is down and more games are out, peoblem is the competition has those fields coverd as well, if Sony whanted to to make profit from day one they would have needed a machine weaker than the 360, but for the big companies this doesn´t go well with a 7-10 year plan....until Nintendo pulled a houdini...now everyone is waiting for it to fail (it used to be next month, now its next year, we just have to see) Profit is a great thing but when you whant to sell the most powerfull machine to a broad range of customers over a long range of time you need to cut back on something, Nintendo cut back on power ( seriously who thought that was gonna go well until they saw what the Wii really was) MS and Sony cut back on profit. Still I like your way of thinking shams, the PS3 is a ballsy and very ambitious project and it needs some outside of the box thinking, my problem is that eventhough Sony can wait for the PS3 to build momentum and be a 10 year plan, developers can not whait that long, they need money for new projects fast and on a strong userbase, they don´t care how well it will do in 8 or nine years, they need a userbase, Sony needs games, right now this relationship is a little disfunctional so Sony needs to cut price and make profit later. The two biggest factors hurting the PS3 (not a flame just my opinion) are IMO the mutimedia format wars Sony whanted to pull gamers into (and most of us have no interst in fighting two wars at the same time) and a stronger MS with a now knows XBox brand name, a good price and many good games (of which many where PS3 exclusives) the Wii may also be a problem but its definitly not the biggest. |
To piggyback on your response, the flaw in your thinking Shams is that you are looking at this as a simple system, like selling Coca-Cola. Make product, calculate costs, charge more than cost.
The gaming market is a much more complex and dynamic system. To start, consoles are more expensive than most products the average person buys, so there is extra scrutiny that goes into a purchase. But beyond that, the money made off console sales has always been minimal, and consumers generally aren't interested in the console per se because traditionally they don't do much on their own (though that has changed). The bulk of the money has always been made in games, and that means getting as many consoles into as many hands as possible. Once you go over $200-300 on a console's price, there is a very steep drop off in the number of consumers willing to spend the money. In short, whatever you gain on the console's cost, you lose more from a shrinking customer pool.
Now toss in 3rd party publishers, who don't make a dime on the console, and who often determine the final success or failure of a system. The only way to get their support is with a successful console, which they see not as one that makes a profit (which they don't see a penny from), but one that has a large number of potential customers they can sell their games too. If they don't see that, they don'tmake the games, the customers don't buy the console, and console manufacturer doesn't get money anywhere. Thus it is their best interest to sell the console for the cheapest price possible, even if it means taking a loss in the first year or two (which is usually the case).
