Why the PS3 will not last long, let alone 10 years.

[|_emmiwinks]

Smashchu2 said:

Before I begin, I want to mention this thread will recive a lot of backlash, and that is to be expected. I am saying to buyers that your product is garbage essentually. However, I have heard many people say the exact opposite of what I'm saying (that the PS3 will last a long time). I can argue or disagree with them, but it doesn't bring the same effect. All I ask is from those who post to please not flame and to try and think logically about what your saying. I don't mind criticism. Just please don't say "OMG, you lose ALL crediability for X." That's just stupid.

I was talking to a friend, and I said the PS3 wouldn't last much longer. He said "Nu uh. Sony said it will have a 10 year life span." So will it last for 10 years? NO.

When Sony claimed the system would last for 10 years, they meant that the system was future proof. Until the Wii came out, the trend in the industry was to make system bigger and better. Sony took it one step further and made a system with such good technology that it would never be obsolete, well, at least for 10 years. Well, there was one flaw with their theory. Video games are in the content business, not the technolgogy business. This means content, not technology, sells systems.  (Need an example? Look at the Wii. It is the best selling system an it is not up to snuff with the HD twins. The only system that was the strongest and did better then the current competators was the SNES). So what does this mean reader? It means, software, not hardware, sells systems. The Wii is successful becuase Nintendo had Wii Sports. The PS3 is a big flop becuase it doesn't have a game like Wii Sports that customers want to buy. Systems are sold when people have a game they want to play. Packing Wii Sports with the Wii was genius in that it cuts the middle man and put the must have game with the system, already packed. The Wii, in this respect, gets a lot more value right from the box then the other two systems as the consumers gets a game along with the price.

So what does this have to do with longevity? Game consoles are based on momentum. When a system has a lot of content people want, it sells for a long time. The best part is that if a system has some content that is must have, then resources will all be shift to that system, increasing the amount of content on that system. It works in reverse too. If a system has no content that is in high demand (or has too little content in general), then resources will move away from the system. Here's an example. The PS2 had lots and lots of software. There was a lot of crap too, but becuase it had a large library, the system appealed to more people. Since it had so much content, developers put most of their resources into the PS2. Take the Gamecube. Third parties developed for it when it first came out, but after a while, development slowed. By 2005/2006, Nintendo was the only one making games for the system save for a bone here and there. Some may try to say a small library with better games is better. Take the N64. Nintendo tried to make a dream team of developers, so they only let certain developers develop for the system. In the end, most of the moved to Sony's system. The N64 had lot of good software, yet the PS1 had more. In the industry now, what is happening is that content is moving towards the Wii as it is shifting away from the PS3 and XBox 360, meaning that, over time, people will get bored with the two systems. Sales will slow for both hardware and software. If this happens (and it will), then the manufacture must make a new system if they wish to stay competative in the industry. "Can't they just try to make content for the system people want" No. Once this happens, it's hard to recouperate. Third parties will move enough resources away that the new game that people might want is either ignored or is drowned out by the content on the system will all the conent (which is right now the Wii). The same was never said for the Gamecube, and it didn't happen. Nintendo had lots of good Gamecube software, but it never recovered. It was cheaper then the PS2, and people still bought the PS2 overe the Gamecube.

Here is the kicker: turns out Sony loses money on every PS3 sold. As of right now, Sony loses $40 on ever console sold (this comes from another thread here on VGchartz). So, the system is losing the company billions. If you haven't kept track, the system is eating profits from the other two systems before it. Gasp. If you didn't know, the system uses what is dubbed the "razor and blades" modle. Their goal is to sell the system at a cost at first and make the money up as the price of manufacturing goes down and hope to make it back on games sold on the system. Or, you could be like Nintendo, sell the system for profit, and "print money." This strategy worked when they were in first because they would make some money anyway. Now, the brand is having trouble staying afloot and turning a profit. Let's put this all together.

http://s82.photobucket.com/albums/j263/Smashchu/?action=view&current=PS3_sales.gif

If you look at the sales of the PS3 over time, you'll see that the sales are usually lower in 2008 than 2007. Now, while the change isn't great, it does show that the system is stagnant. Now, I did US only for Novermber and December as it was the only place to have the system for those three years at that time. April was the only months where 2009 was higher then 2009. The system is either declining, or will decline soon, meaning consumers are not as insterested in the PS3 as a whole. The consumer isn't gaining more interst in the PS3, but they are losing it. As such, developers are moving resources to other consoles. If you haven't noticed, developers are putting more and more effort in the Wii. They are showing more Wii games off and are trying new things on the system. The reason they do this is because of the larger install base. They hope that by releasing a game on a system more people will own, that more people will purchase the game on that console then the weaker selling console. As time goes on, they will move more and more. When third party games start to do really well (which may happen with Moster Hunter and Dragon Quest), then developers will make a massive push to the Wii. The movement happening now with keep Wii sales going as more and more content becomes available on the system; thus, they never get bored (at least not for a while). With content lessing on the PS3, people will soon put it away or sell it.

Here is why manufacturers release new consoles. New consoles mean new content, or the prospect of new content. It is benifitial to do this as it gets consumers excited and publishers want to make new content on the console in the prospect it will do well. (aside: publishers, at the begining of a console cycle will support the system they expect to do the best, or that will benefit them the most. This is how it has been recently, but it may not have been this way in the days of the SNES). Manufacturers make new consoles to stay competative in the business. However, if they do not release one soon enough, people may forget about the brand, and will probably leave it behind. There is no data to support this, but let me convince you with a senario.  Let's say Sony does not release a new console. The sales of the PS3 it's software are down. More and more developers are moving to the Wii. What do you do? If you sit and wait, nothing will happen. You're essentually in limbo. If you release a new console, you might get consumers excited. One thing is for sure, they are not excited. Now, if a manufacture with similar values as your console release one, they will take all your users. Developers who make games with similar values will flock to the new system. If you do not respond soon, the new console will already have the sales and support that your system can compete. Your console would be a risk to publsihers and will lack the content consumers want. Unless you have a strong first party, you will not be able to creep into the market (aside: I know many will hate that I say this, but Sony simply does not havge the first party to do this and neither does Microaoft. Their developers don't have the talent and most games they make are eclipsed by the offerings from third parties. Sony is still very relient on third parties for content. Remember, Metal Gear Solid 4 was the only game to really move PS3s, and it was a third party game).

So, Sony has to react now. Their system is losing steam and may decline sharply in 2010. Since Sony is relient on third patries for software, they may be in hot water if Nintendo wins the third parties over (this was Microsoft's plan in stealing exclusives). They may have to start planning for a console very soon. Undoubtly, Microsoft is poising problems for Sony. Microsoft is only concerned with destroying Sony. The 360 has tried at every turn to one up Sony. Malstrom also wrote a peice explaining the new motion control from Microsoft was aimed at the Eyetoy, not the Wii Remote. Microsoft is not concerned with profits but with stoping Sony. This means they will lose billions to stop the Playstation brand. What could they do? Why, release a new console of course. If they release a new one, Sony will have to retaliate or lose publishers and consumers with the same values (yes, Microsoft and Sony are competing on similar values in the videogame market). Microsoft has been a thorn in Sony's side since the begining of this console cycle. Microsoft has done a good job of stealing consumers and content from Sony.

Either way you slice it, the PS3 is hurting. Hurting consoles do not stay on the market for long. Hurting consoles do not last 10 years. All the systems that had long life spans were healthy, had a lot of content, and sold well during this cycle. Accordingly, Nintendo will be the one who sticks around while Sony and Microsoft scramble for a new system. If you want my prediction, I expect we will see a new console by E3 2010. Heck, they may very well talk about on at this E3. So, expect the PS3 to not last very long.

 

Alot of text here, I skimmed for the important parts.

 

Things I noticed, one, the PS3 is losing 40 dollars on the 399 unit, but making money on the 499 unit, so its not every one sold.

two, the PS3 Slim looks like its real, or people wouldnt have issued cease and desist orders for it, that will further drop production costs, but it will retain the same price point if the PS2 slim is a guide, meaning profit on every unit sold.

third, the PS3 hasnt lost momentum, it would have had to have had momentum to begin with to lose it, The 360 is losing steam, the Wii is losing steam, the PS3 is still ploding along at the same pace.

forth, as mentioned by someone else, there has been virtually no 3rd party defections from the system, games are still coming out on it along with others.

You need to realize that a PS3 Slim is the same as a new system in most peoples minds, The PS3 will last 10 years, sure the PS4 will be out at about year 6 of those 10, maybe 5, but the PS3 will be supported and used for 10. Like the PS2 and like the PSX.