Look ioi :D

[Steve 3.2]

ioi said:

Is the PlayStation3 dead? I have resisted answering this question until now. But this figure - almost half of the entire PS3 inventory remaining unsold until March - is nothing short of disastrous. Sony excluding sales figures from their earnings release is proof of how embarrassing those figures are.

Meanwhile, the Wii is off to the best possible start and the Xbox360 has used its headstart reasonably well, building an impressive games portfolio with more to come this year.

Videogame Charts offers detailed graphs, illustrating sales figures for each console. The trend is clear: while the Wii is on a high level and gaining, the PS3´s sales have been poor and are in decline.

Consider the following graph showing weekly sales. Evidently, the PS3 failed to cash in on the sales spike in the run up to Christmas. And since, the sales have been on a steady decline.

The sales figures paint a clear picture: the PS3 is a distant third and is set to stay in last place.

System sellers like ´Metal Gear Solid 4´ and ´Final Fantasy XIII´ are likely delayed until 2008, while both competitors are sporting a fantastic line-up (the Wii certainly is) which will become available by the end of the year.

The downward spiral - dwindling hardware sales causing developers to allocate resources away from the PS3 causing even worse hardware sales - is in full effect and there seems to be no way out. With Sony losing hundreds of dollars with each unit sold and the company posting record losses, I rule out a price drop as a viable option for this year.

Blu-ray, Sony´s trojan horse, has not emerged as the clear winner in the format war. It seems likely that the war will continue to rage well into the next year. If it does win, Blu-ray will undoubtedly push PS3 sales. But by that time, the console may already have died as a gaming platform (much like the PSP has died as a platform for movies but continues to sell as a gaming device).

Still sceptical? Remember that a PlayStation3 game costs around ten million dollars to develop and, as a consequence, must sell at least 500.000 units in order to break even, as Namco president Takeo Takasu told Bloomberg in late November. Developers will be glad to drop the PS3 from their portfolio if there is a reason to do so. And, currently, there is not a single reason that might persuade them otherwise.

In conclusion, I am going to go out on a limb here and am now daring to say what I have previously been too cautious to admit: the PlayStation3 is dead. It would take a miracle for Sony to turn this disaster around - and there are no miracles. There, I said it.

 

Great commentary, but I'm going to argue that the PS3 ain’t dead… yet.

First and foremost, I think we should ask 'Why is everyone so critical of Sony?'  And the reason is simple -- arrogance.  Sony has been top dog for a long time and grew way too confident for its own good.  This behavior turned many people against the company and those people are now reveling in Sony's misfortunes.  It's easier and a heck of a lot more fun to cheer for the underdog when they beat the ‘jerks’ in first place.  Most believed the Wii would come in third place in a tightly contested console war.  So six months into the current console war, it appears that the ‘little console that could’ has a good chance of becoming the number one seller this generation.  The PlayStation 3, on the other hand, has disappointed most by not having the same success as its predecessor -- the PS2.

The PS3s has sold about 3M consoles in six months.  How many Xbox 360s were sold by this same time last year?  About three million.  Don't believe me?  Check out the chart:

http://vgchartz.com/hwcomps.php?cons1=Wii&reg1=All&cons2=PS3&reg2=All&cons3=X360&reg3=All&align=1 

(FYI - It's missing European numbers but should be updated by the weekend.  I'll remove this comment once that has happened.)

Comparing the launches side by side, the first six months don't appear so bad for Sony.  Yes, the 360 was still a bit supply constrained at this time last year, but it was getting much easier to find one.  And I remember the complaints about the lack of game releases back then too.  So all in all, it looks like Sony is experiencing some similar problems Microsoft had a year ago.  Unlike the 360, however, PS3 doesn’t have the luxury of time on its side.  And the trend towards drastically lower sales is a growing concern.  But does this mean the console has no hope?  Not at all. 

There are good games coming this year.  They may not be as big as MGS4 of FFXIII, but many of them are bound to sell systems.  And Home may actually trump Live if Sony can deliver everything they’ve promised.  Of course we’re still talking about ‘later’ and ‘promises’.  Sony is doing as much as it can to make the PS3 the best it can be.  But for a company who proudly proclaimed that the next generation of home consoles starts when they say it does, it’s frustrating that we’re still waiting six months after they launched for them to get their act together.

While a PS3 game may cost $10M to make, I bet a PS3/Xbox 360 game probably only costs a million or two more.  Console exclusives don’t make sense for most third parties -- not even 360 exclusives (unless they’re getting paid by Microsoft).  So even if the PS3 version of a game only sells about 50K to 100K copies, the cost of porting it over has been covered and then some.  The PS3 may lose a few exclusives, but I doubt that they’ll lose too many good titles to the 360 exclusively.

The biggest thing that is getting lost in today’s equation is the PS2.  It’s still a very dominant platform and will continue to affect game sales throughout 2007 and into early 2008.  Given the success of the Wii, I think that there will be a long list of games that come out for both consoles since they’re more closely aligned than the other two.  And every time a PS2 is sold, it’s unlikely that that same household is purchasing any other systems that year.  And that’s a win for Sony.  The PS2 is profitable, helps cement brand loyalty, and keeps you from owning a 360 or a Wii.  The longer consumers wait, they better things may get for Sony (cheaper production costs, more games, finalized online services, etc.).

The PS3 will remain in third place this year and into next.  Sony admitted that when they announced they would be making approximately 11M PS3s over the next twelve months.  Assuming all of those were sold, that would give the system an installed base of about 16.5M.  It looks fairly safe to assume that Nintendo will sell all 14M Wiis that they’ll make this year (though I bet the company will continue to increase supplies and up sales guidance after each quarterly report).  But with that conservative estimate, that would give the Wii almost 20M users.  And with 11M Xbox 360s already made and a slew more to be ready for a strong holiday lineup of games, I’m sure we’ll see Microsoft easily top Sony’s total shipment numbers by a couple of million.

In the end, this console generation is going to be one of the closest yet.  Each system is marching to the beat of very different drummers and there are a lot of unknowns out there.  It’s going to be fun to watch how this all unfolds in the months and years to come.  And, yes, all three companies are going to be in this for the long haul.