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HappySqurriel on 11 February 2008
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Retrasado said:
HappySqurriel said:

With how the PS3 has performed so far, it will be a miracle if the PS3 is not considered a failure (or a stumble if you'd prefer). Realistically, Sony has a pretty tough battle ahead in order to become profitable on the generation, to not lose a ton of third party support, to sell to 1/3 of PS2 owners, and to not come in third place.

Certainly, the PS3 will have performed better than most when it comes to raw sales numbers (and to a lesser extent marketshare) but on its own this is a pretty hollow measure; the only company which has fallen as far as Sony will (probably) fall in this generation is Nintendo, and it took Nintendo 3 successive generation of constantly increasing competition to fall that far.

I don't want people to misunderstand what I am saying to mean that the PS3 is selling at an awful rate. I do think it is important to look at a consoles performance in context with the previous systems to determine whether it was successful or not; as an example, even though the XBox 360 and PS3 may end up selling at a similar level (roughly 40 Million) I would consider the XBox 360 successful whereas the PS3 would be a failure because the XBox 360 would represent growth in userbase size as well as marketshare.


Wow man, where have you been for the last 5 months? In the first paragraph, you made two absolutely ridiculous statements. first of all, Sony has announced that they are pretty much breaking even with the 40 GB PS3 and I think I am safe in saying that they will be able to drop the cost of production further in the next few years. (especially after they dropped production costs by more than $400 in just one year). Second, the PS3 has sold more than a million consoles more than the 360 had sold at this amount of time after launch and no one EVER said devs were going to abandon the 360 last year; so why the heck would they abandon a console that even in its worst year managed to sell a million units more than a console that was $100-$150 cheaper? 

As to your statements in the second paragraph, you must remember that it is very unlikely considering how the PS3 performed last year in spite of the plethora of bad press and near total lack of good games that it will finish in last place in this gen. Also, the reason it took Nintendo "three generations" (actually, it was two unless you mean to imply that the SNES was a failure) to "fall that low" was because there was, for all practicle purposes, two consoles on the market: the PS and the N64, so how could Nintendo fall to third place in a gen that had two major consoles?

While I mostly agree with the last paragraph of your comment, the first two sound like they came from someone who either lives in last July, lives in a 360 fanboy fantasy world, or comes from another planet.


First off, in order for Sony to "Break Even" on the generation they have to recover the Billions of dollars they spent on R&D, as well as the billions of dollars they lost by selling the PS3 below what it cost to manufacture; this means that they will have to make huge profits for the rest of the generation while at the same time agressively reducing the price of the PS3 and spending huge ammounts of money marketing. As Kasz pointed out, there is not official word that Sony is close to breaking even on the PS3, and it is likely that they will be forced into further price reductions in the near future (as Microsoft drops the price of the XBox 360); how profitable can a company really be when they're losing $50 to $100 on each piece of hardware, are spending $500 Million to $1 Billion a year in marketing, first party software doesn't sell particularly well, and they don't have the massive userbase to supply massive licencing revenue from third party publishers.

As for how well the PS3 will perform, currently the PS3 is selling at an anualized rate of around 10 Million units per year while the XBox 360 is selling at close to 9 Million units per yer; even if you assume that the PS3 will outsell the XBox 360 by 2 Million units a year it will take more than 3 years for the PS3 to catch up. In an environment where Microsoft can cut their price faster than the PS3 (due to it being less expensive to manufacture at the moment), Microsoft can market more heavily (due to higher software sales), and Microsofts' willingness to buy exclusivity, it will be very difficult for Sony to maintain a pace where they outsell the XBox 360 by 2 Million units per year.

As for your lack of understanding of the argument surrounding Nintendo. The Gamecube represents a fall to 1/3 of the userbase of the NES, a similar loss of third party support from the NES, and a move into third place; it took the SNES, N64 and Gamecube for Nintendo to fall from a similar dominant position as the PS2 to a position similar to where the PS3 will have a hard time passing.

Can the PS3 outsell the XBox 360? Yes, will it be easy? No ...
Can the PS3 sell more than 40 Million units? Yes, will it be easy? No ...
Can the PS3 regain the third party support it is losing? Yes, will it be easy? No ...
Can Sony become profitable on the generation? Yes, will it be easy? No ...

Basically, if Sony targets one or two of these problems they will have a good chance of accomplishing them (potentially at the expense of another target); it will take a lot better performance from Sony in order to solve all of these problems though.