5 Reasons The PlayStation is Toast

[DanneSandin]

Jereel Hunter said:

DanneSandin said:

I don't think the 360 will be more profitable than PS1 or 2: first off, they were sold at a lose for the first years, and secondly: RROD cost MS half a BILLION dollars or something like that... But that's not the point we're talking about =)

I imagen a console from Apple would almost only get casual gamers, and that's not where the big money is at in gaming. Sure, they'd sell a ton of console, but fewer games (think "Wii"), and definetly not hardcore games. Well, not much of 'em anyways. Sure, that would leave Sony, Microsoft and Nintendo to fight over the core gamers - and one of those could surely go, but the market wouldn't be much different than how this generation has been.

the PS1 and PS2 were sold at losses to begin their lifecycles as well - that's built into the business model for the "hardcore" systems. 

And the "big money" in gaming is whatever sells the most. the big money is in getting casual and hard core - but the Wii showed that if you target just one, casual is probably the way to go. (they made more this generation than Sony and MS did combined - not counting handhelds)

The point is, all 3 consoles are set up differently as regards profit. Nintendo systems will always profit, whether they are #1, or #3. They sell at a profit from the get-go. Microsoft requires a fair number of unit sales for their business model to pay off, but the online revenue allows them to profit without selling 100m units. Sony REQUIRES 100M units to break even. The PS3 as a whole is still a couple billion in the red over it's lifecycle. Point is, Sony's model doesn't function unless they successfully capture both market segments - and there's no way that could happen if suddenly a 4th big contender entered the ring.

The question is, how long will the casuals spend lots and lots of money on gaming? It's only during the current generation that casuals been a force to reckon with - and as of now we don't know if they'll contiunue being one. Many analysts and journalists seem to think that the casuals have shifted their focus to cheap iOS/android games. Will they come back to consoles? Don't know. And that's why I'm not too sure how big an impact Apple would have.

But - I gotta say you've put it all down very nicely =) I've never looked at it that way.