WereKitten said:
Leaving the subtle nuances of the English language aside, and the love Squilliam keeps showing me that is starting to worry my girlfriend, let me answer a few points.
I'll say it again later, but I was unaware that you are not a native speaker. I hear that a lot from others, and it annoys me. So, I'm sorry.
- you didn't answer me, or you didn't understand what I wrote. I never claimed that PS3 software sales would make the whole division profitable. I claimed that nowadays each PS3 sold brings profit to Sony when hardware and software are accounted for. The same was not true years ago, and yet it's enough to tag the decision to cut its life in 2010 or 2011 as financially idiotic. You could as much say that they should cut the PSP.
I did very much answer your question. Your claim is "each PS3 sold brings profit to Sony when hardware and software are accounted for." In order for this statement to be true, it also means "The games and software make the division profitable." The claim is false since the division is still losing millions when software and accessories are taken into account (to elaborate, you said the system brings profit, meaning the division must be profitable. Since it isn't, the claim is false).
In the same way the PS2 and the PSP bring profit, but the whole game division shows passive. My whole post to MrHappySquirrel was exactly about the fact that the game division net profit is not made simply of PSP profit +PS2 profit +PS3 profit
Remember thst Sony casturates their profits thanks to the "Razors and blades" model. Since the system sell at a lose, they never make a lot of return. I doubt the small profits from the PSP can save the loses of the PS3.
- the gap between 360 and PS3 is immaterial, nor did I ever say that it's going to vanish or even mention it. The marketshare ratio is obviously shifting in favour of the PS3, as the current trend is towards a 6:5 ratio.
Again, Market shares are irrenivet. Profit isn't. The PS3 could be ahead of the Wii, but since it lost all it's money (being it was still unprofitable) the Wii would be the winner as it was making money. The battle for marketshare is a battle not worth winning. The battle for profitability is what counts.
- software sales:
GTA IV: PS3 5.62M, 360 7.06M ->higher tie ratio on PS3, even with the boost the 360 got from the exclusivity of DLC and with the fact that when it came out the install base ratio was even more favourable to the 360.
DLC will probably never increase sales and I have yet to hear of a game that sold more becuase of DLC. It is really for two purposes: to please keep current costumers playing and to keep them paying. To the first, the developement time need is rising faster then developers can put content into a game. So, DLC tries to fix the problem by putting the content back at a latter date. However, game buyers do not buy for the prospect of having more content. They want conent immediatly. So this strategy is harmful, not helpful.
Even though a higher precentage of PS3 owners bought the game, more people bought it on the 360. The 360 also sells more software than the PS3. People always say "proportionatly, the PS3 is doing better." I say, "But doesn't software sell hardware, so isn't the fact that more copies were sold on the 360 a testement to that fact it is doing better?"
Does it look like the gamers are abandoning the franchise on the PS3 because it's no longer exclusive? Not really. Does it look like the developers can shrug off the PS3 market as negligible? Not really.
Developers only develop for the PS3 becuase they can also developer for the 360. Not how there are very few exclusives between both systems, and how the big selling games are usually on both consoles.
The goal of removing exclusives is that it wears out Sony's edge. That is the whole reason Microsoft goes for exclusives. It's entire strategy is to one-up Sony.
Meanwhile, what other recent big multiplatform game can you bring as an example? In 2009 we had RE5 and SFIV. Both sold better on the PS3.
Neither sold that much anyway. The PS3 version of Street Fighter 4 barely broke 1 million. RE5 didn't move as many as the earlier titles, but is still shy of earlier games in the series, and that is between two systems. It also shows that the franchise bag is running thin, meaning two things: Nintendo will take marketshares due to the stagnation of the other two resulting in a race for the next console. The Core industry is sick. There will be a big emphesis to one up the other in hopes of getting the old market users who are still left. If that Wii last too long, it will kill the other two*
And overall software sales per week of ownership show PS3>360 (slightly).
Software sales of the last four weeks had Microsoft up. Not sure what you are trying to say?
- the 360 is more profitable to developers. Maybe so for most of them. But when the sales of multiplatforms are like 5:4 (GTA IV case) who comes first is not important. Porting expenses between the two HD consoles and PC amount to about 10-20% of the total. As such, as long as the sales are not 5:1, developing for the PS3 will almost always be a given. As for third party exclusives, they are a dying breed because they make little financial sense unless explicitely payed for by MS or Sony.
"the 360 is more profitable to developers." Hmmm, when did I say that? I'll just role with it and say I did. Yes, it is more profitable when looking at exlusives. The trend is to now to port them. You see it as a good thing. I see it as a bad thing. This means there is no difference between the two consoles, making a very red ocean. The two will have to find new ways to one up each other and the fight will be more for exclusives. On their own, third party would chose the 360 (although, between all the consoles, they'll chose DS and sometimes Wii). But, it is more profitable to make them for both. This creates even more of an unsustainable environment.
Where does this leave us? Well, with the fact that in the foreseeable future the PS3 is likely to have all big multiplatform games, and more exclusive ones (more first party studios, the Japan market will probably bring more exclusive JRPGs).
You drew a conclusion from nothing. There is no reason for what you said to be true. The PS3 sells less software and most multiplatform games do better on the 360. There is no reason to go exlcusive for the PS3 unless Sony bribes you. There is no weight to support the claim. Precents matter to fanboys, not publishers, where they are trying to sell more units.
- last but not least: Nintendo is disrupting the industry? Maybe so, because it opened a whole new market. But has the industry been disrupted to the detriment of 360 or PS3? Uhm, not really. It looks more like an expansive disruption than a shift one. Maybe it will appear differently if the 360 and PS3 start trying and failing to go after the same expanded/causal market, but for the moment there's no proof really.
I'm not using "disruption" in the dictonary terms. An earthquake is a disruption. A phone call is a disruption. This is disruption of the business kind. It comes from a nam named Clayton Christensen who wrote the book tries to find why well managed firms die. The answer: disruption. This is the abridged version: A company makes new values which is more intune with what more consumers want. It grows a new market, then attacks the old market. Here is the process
- The Old Market overshoots the old one (here, Sony and Microsoft focused on more imersive time sinks, better graphics, and more expensive hardware. Nitendo noticed people were leasing the market which he called "gamer drift")
- A newcomer or outcast makes a new product hoping to capture new users. The mainstream market (in this case, the hardcore) laugh at it can call it a "non-X"
- The consumer's product grows by leaps and bounds. The incombent is startled by this, but brushes it off.
- The disruptor (Nintendo, in this case) moves upstream. They take more and more markets, The incombent (Sony and Microsoft) lets Nintendo have them since they are unfavorable markets (these are gamers who did not want to buy a 360 or PS3, but were still in the market previously).
- The incombent counter attacks. This could be a motion controller from Microsoft.
- The counter attack usually fails, and it makes the incombent gone. They can not win becuase they have different values from the disruptor and can not compete in the same arena (here, it is integrating hardware and software. Nintendo is an intergrated hardware software company and has some of the best developers so they can easily do this. Sony and Microsoft have game sectors as almost side products, so they will not be able to fight a head on battle requiring amazing software develoment and integrating it with the hardware).
- In the end, the disruptor wins and the industry is now moved by their values (interactivity, interface and accesability).
Nintendo is not just expanding. They are moving in for a kill. They hope to make the industry new, in their favor of course.
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