Japans PS3 Nightmare

[johnlucas]

fooflexible said:
What hasn't been addressed enough here, is not the console ps3 sales, it's their software sales. Granted everyones first reaction is that, "Wait till the good stuff get here!" but no one who's buying the system is a gamer, gamers aren't buying the ps3. Heck only one game per 3 consoles is being sold. And thats the ratio if you don't count the existing 900,000+ userbase, if you add them only 1 game is being bought with a system per every 4 or 5 systems sold. Even if you think the ps3 is a trojan horse that will later convert its userbase to sales, I don't see how that'll happen, if you don't want to buy a single game when you first get the most state of the art video game system, you most likely won't want to get a game at all. That means most of the ps3 sales are blu-ray movie player sales. Their attach rate is falling through the floor. Now publishers have to say to themselves, it's not selling well, and most of what's selling isn't for games. And what's going to kill Sony is they lose money on the system sales, and make it on software, what good is a system that sells, when no one is buying the games? And don't tell it's good enough to just push blu-ray movies, if that were true why bother investing billions in the gaming industry, and just give out cheap blu-ray players from the start. The attach ratio right now is a huge siren going off. Even the X360 is selling more games, and thats more important to publishers then a userbase, if they don't believe the userbase is here to buy games.

I touched upon that very point in my last "essay"

Sony's business plan is designed to have game software make up for the losslead strategy that causes *SOLD* PS3's to lose money. It's easy to get caught up solely on hardware which does matter in building a wide enough base for potential software sales but software sales is the whole crux of how Sony planned out this system. When that doesn't pan out it's exponentially worse for their outlook. They may get console sales but all this does is put them further in the hole since they played the ill-advised losslead game.

Lossleading is a pisspoor strategy. I can't see for the life of me why Sony continues to try this after being revenue champ the last 2 gens. That is only good to use when trying to penetrate a new field like with Microsoft and the XBox. And it takes hellafunds to pull that off in the first place.

Sony was trying to set up a two-fer that funds both its gaming division and its general consumer media division with blu-ray. Profit from hit games; profit from hit blu-ray movies. I talked with RolStoppable about this in a conversation. I think Sony put it together like this because of the poor kept profits from the PS1 & 2. In comparison to the record revenue Sony didn't profit dominantly. And I think they wanted to get an edge to impress investors. To show up Microsoft in hopes of running them off. And to have bragging rights and fulfill their legacy in the gaming world by extending dominance over 3 gaming generations. Something not done in the console world before. A videogaming version of "4 more years!"

They made it too top-heavy and got caught on the fence. I think they missed the boat on both halves of that planned equation to be honest. I don't see the viability in either side of that HD-DVD/Blu-Ray dealie. They are niche formats it looks to me. I got a feeling obsolescence is on the horizon for both of these formats due to some unforeseen left-fielder coming up with something better. Read Malstrom at TheWiikly.com he points out several examples of this very thing in one of those articles of his.

3rd party needs games to sell. And always have. Period. And they need profits from said games to be viable. So even if sales between systems are lower on one than the other if it took less money to make then it's still all good. Userbase counts as for potential growth in buyership of games. They're gonna get tired soon and I think they already are. When they finally get fed up one of these 2 systems is gonna drop out and I don't see it being XBox 360. There's a reason why that system's green & off-white like the colors of a dollar bill.

John Lucas