The race to 45nm... PS3 vs. 360

[Ail]

rocketpig said:

I was just thinking... With MS working on a new chip set out to launch this year and Sony having announced a 45nm Cell awhile back with intent of launching this year, the next few months should be interesting.

A few points:

1. Obviously, the PS3 is outselling the 360. Not by a large amount, but enough to make MS sit up and take notice.

2. MS is aggressively attacking Europe with mixed results. Price drops helped a bit and it will be interesting to see how the 199 Arcade Halo/PGR bundle will effect Euro sales.

3. MS is sitting on one $50 price cut in 30 months in America. Obviously, sales are starting to suffer a little because of this.

4. Sony aggressively cut PS3 prices to great success in 2007. Now, after the recent earnings release, their statement that they're looking for profitability in the games division leads one to believe that a PS3 price cut is coming late this year at the earliest.

5. MS posted a modest $90m profit last quarter while Sony posted a slightly less modest $180m loss. Both seem to be geared on pure profitability from this point forward (with MS, it seems that they've been in this mode since Halo 3 launch).

So, how is the rest of this year going to play out? Personally, I see MS attacking NA later this year with a significant price cut to stop the bleeding. They can't let their biggest market fade away to Sony. Sony, on the other hand, is slightly reeling after another loss and I don't think we'll see a price cut until later in the year when 45nm PS3s are on shelves in abundance. I think they're realizing that they've fallen into the same trap MS did and are losing too much early in the generation to ever recoup the money back out of the PS3 and turn an overall profit on the console.

Overall, I don't think MS is as far out of this as people make them out to be. A $249 or 279 Pro would really shake up the North American market while I think MS can only hope to hang with Sony in Europe, keeping it close but overall, losing the market in the long run.

Dunno. These last quarter's earning statements turned out to be more interesting than I thought. I was shocked that MS managed to cut the Euro price and still turn a profit while Sony sat still and turned another loss. It unquestionably puts to bed that rumor the Sony was breaking even on the 40GB PS3. It's obvious that they still have a ways to go because both the PS2 and PSP are still offsetting PS3 losses (and at that, still not making it into the black for the games division).

In final, it will be interesting to see which company can get their new chipset out first and get the prices cuts and huge profit this holiday season. 

They cut the price only a few weeks before the end of the quarter, it had very little effect on the overall quarter, at best 200k consoles were affected by it...

It will be more interesting to see the effect it has this quarter, especially with Others sales> NA sales so far.