Your economics is problematic.

1. Theres no Supply curve, theres only one supplier and in this case its Sony. The market can be described as a competitive monopoly so supply and demand would intersect along the average total cost curve for Sony.

2. Demand curves are bowed inward because the demand for most consumer goods becomes more elastic as the price approaches the optimum for maximising revenue and it becomes less elastic thereafter. Your demand curves are bowed the wrong way for the PS3/360, your justification?

FF13 will not be a launch title either, so the comparison is perfect.

By "launch" FF, he doesn't mean that the game launched when the system launched when the system launched, but rather is the first outing of the series on the console. For example, MGS4 is a launch MGS on the PS3.

And if history serves correctly, the "launch" game sells better than the rest, generally. Ex. FFX>FFXII, GT3>GT4, MGS2>MGS3, etc.

Your economics is problematic.

1. Theres no Supply curve, theres only one supplier and in this case its Sony. The market can be described as a competitive monopoly so supply and demand would intersect along the average total cost curve for Sony.

2. Demand curves are bowed inward because the demand for most consumer goods becomes more elastic as the price approaches the optimum for maximising revenue and it becomes less elastic thereafter. Your demand curves are bowed the wrong way for the PS3/360, your justification?

Before I begin, I want to mention this thread will recive a lot of backlash, and that is to be expected. I am saying to buyers that your product will become useless, essentually. However, I have heard many people say the exact opposite of what I'm saying (that the PS3 will last a long time). I can argue or disagree with them, but it doesn't bring the same effect. All I ask is from those who post to please not flame and to try and think logically about what your saying. I don't mind criticism. Just please don't say "OMG, you lose ALL crediability for X." That's just stupid.

I was talking to a friend, and I said the PS3 wouldn't last much longer. He said "Nu uh. Sony said it will have a 10 year life span." So will it last for 10 years? NO.

When Sony claimed the system would last for 10 years, they meant that the system was future proof. Until the Wii came out, the trend in the industry was to make system bigger and better. Sony took it one step further and made a system with such good technology that it would never be obsolete, well, at least for 10 years. Well, there was one flaw with their theory. Video games are in the content business, not the technolgogy business. This means content, not technology, sells systems.  (Need an example? Look at the Wii. It is the best selling system an it is not up to snuff with the HD twins. The only system that was the strongest and did better then the current competators was the SNES). So what does this mean reader? It means, software, not hardware, sells systems. The Wii is successful becuase Nintendo had Wii Sports. The PS3 is a big flop becuase it doesn't have a game like Wii Sports that customers want to buy. Systems are sold when people have a game they want to play. Packing Wii Sports with the Wii was genius in that it cuts the middle man and put the must have game with the system, already packed. The Wii, in this respect, gets a lot more value right from the box then the other two systems as the consumers gets a game along with the price.

The Wii does not sell because of Wii Sports, Wii Sports sells because of the Wii. People bought it because it was revolutionary, it was appealing, and it was different from anything they had experienced before. With or without Wii Sports, the Wii would be in first.

So what does this have to do with longevity? Game consoles are based on momentum. When a system has a lot of content people want, it sells for a long time. The best part is that if a system has some content that is must have, then resources will all be shift to that system, increasing the amount of content on that system. It works in reverse too. If a system has no content that is in high demand (or has too little content in general), then resources will move away from the system. Here's an example. The PS2 had lots and lots of software. There was a lot of crap too, but becuase it had a large library, the system appealed to more people. Since it had so much content, developers put most of their resources into the PS2. Take the Gamecube. Third parties developed for it when it first came out, but after a while, development slowed. By 2005/2006, Nintendo was the only one making games for the system save for a bone here and there. Some may try to say a small library with better games is better. Take the N64. Nintendo tried to make a dream team of developers, so they only let certain developers develop for the system. In the end, most of the moved to Sony's system. The N64 had lot of good software, yet the PS1 had more. In the industry now, what is happening is that content is moving towards the Wii as it is shifting away from the PS3 and XBox 360, meaning that, over time, people will get bored with the two systems. Sales will slow for both hardware and software. If this happens (and it will), then the manufacture must make a new system if they wish to stay competative in the industry. "Can't they just try to make content for the system people want" No. Once this happens, it's hard to recouperate. Third parties will move enough resources away that the new game that people might want is either ignored or is drowned out by the content on the system will all the conent (which is right now the Wii). The same was never said for the Gamecube, and it didn't happen. Nintendo had lots of good Gamecube software, but it never recovered. It was cheaper then the PS2, and people still bought the PS2 overe the Gamecube.

How much third party support do you see for the Wii? Not a lot. The HD twins get a hell of a lot more, because of three main reasons:

1) Developers want to make technically stunning games not possible on the Wii

2) Developers don't want to make a new control scheme

3) Past evidence shows that third party "hardcore" games don't really sell on Wii. By "hardcore" I mean violent. With the occasional exception of games from established franchises, but even then, the HD consoles generally sell them better. MadWorld is a perfect example of what I am saying, and World at War is an example of how the PS3, with half the userbase of the Wii, can outsell it on a game.

Thus, HD third party support isn't going anywhere. As long as the PS360 sell hardcore games (and believe me, they do), then hardcore games will continue to be produced. Not every developer is in it entirely for the money, or we'd see less No More Heroes and more Carnival Games.

Here is the kicker: turns out Sony loses money on every PS3 sold. As of right now, Sony loses $40 on ever console sold (this comes from another thread here on VGchartz). So, the system is losing the company billions. If you haven't kept track, the system is eating profits from the other two systems before it. Gasp. If you didn't know, the system uses what is dubbed the "razor and blades" modle. Their goal is to sell the system at a cost at first and make the money up as the price of manufacturing goes down and hope to make it back on games sold on the system. Or, you could be like Nintendo, sell the system for profit, and "print money." This strategy worked when they were in first because they would make some money anyway. Now, the brand is having trouble staying afloot and turning a profit. Let's put this all together.

And thus, we come to what is, perhaps, Sony's biggest mistake in their time as a company. They put in the Blu-ray drive to win a format war, and in my opinion, it was a great addition. However, it increased manufacturing costs, so the PS3 cost an obscene amount to make in 2006/2007. But manufacturing costs fell, and they continue to fall, so it will be making a profit soon enough. In fact, in 5 months, it's gone from $450 to $420 to make. 

http://s82.photobucket.com/albums/j263/Smashchu/?action=view&current=PS3_sales.gif

If you look at the sales of the PS3 over time, you'll see that the sales are usually lower in 2008 than 2007. Now, while the change isn't great, it does show that the system is stagnant. Now, I did US only for Novermber and December as it was the only place to have the system for those three years at that time. April was the only months where 2009 was higher then 2009. The system is either declining, or will decline soon, meaning consumers are not as insterested in the PS3 as a whole. The consumer isn't gaining more interst in the PS3, but they are losing it. As such, developers are moving resources to other consoles. If you haven't noticed, developers are putting more and more effort in the Wii. They are showing more Wii games off and are trying new things on the system. The reason they do this is because of the larger install base. They hope that by releasing a game on a system more people will own, that more people will purchase the game on that console then the weaker selling console. As time goes on, they will move more and more. When third party games start to do really well (which may happen with Moster Hunter and Dragon Quest), then developers will make a massive push to the Wii. The movement happening now with keep Wii sales going as more and more content becomes available on the system; thus, they never get bored (at least not for a while). With content lessing on the PS3, people will soon put it away or sell it.

Not at all. The PS3 was a failure console in 2007. Let me show you with a nice table:

2007:

2008:

An increase of around 2.5 million units.

Yes, developers are making third party Wii games now. Those could sell well, or they could flop. If they sell enough to make as much profit as an HD game, they'll make Wii AND HD games. If not, say goodbye to third party Wii support. And if anything, the PS3 is getting more third party support than it did at launch. Games like Dead Rising, Lost Planet, Ninja Gaiden, BioShock were once Microsoft exclusives, but are now (or soon will be) on PS3.

Here is why manufacturers release new consoles. New consoles mean new content, or the prospect of new content. It is benifitial to do this as it gets consumers excited and publishers want to make new content on the console in the prospect it will do well. (aside: publishers, at the begining of a console cycle will support the system they expect to do the best, or that will benefit them the most. This is how it has been recently, but it may not have been this way in the days of the SNES). Manufacturers make new consoles to stay competative in the business. However, if they do not release one soon enough, people may forget about the brand, and will probably leave it behind. There is no data to support this, but let me convince you with a senario.  Let's say Sony does not release a new console. The sales of the PS3 it's software are down. More and more developers are moving to the Wii. What do you do? If you sit and wait, nothing will happen. You're essentually in limbo. If you release a new console, you might get consumers excited. One thing is for sure, they are not excited. Now, if a manufacture with similar values as your console release one, they will take all your users. Developers who make games with similar values will flock to the new system. If you do not respond soon, the new console will already have the sales and support that your system can compete. Your console would be a risk to publsihers and will lack the content consumers want. Unless you have a strong first party, you will not be able to creep into the market (aside: I know many will hate that I say this, but Sony simply does not havge the first party to do this and neither does Microaoft. Their developers don't have the talent and most games they make are eclipsed by the offerings from third parties. Sony is still very relient on third parties for content. Remember, Metal Gear Solid 4 was the only game to really move PS3s, and it was a third party game).

Yes, Sony are reliant on third parties, but that's okay, because Sony has gotten, and always will get, a ton of third party support. Perhaps not exclusives, but 90% of third party games are on PS3 (and 360 for that matter). And Sony's first party is arguably the strongest of the Big Three, I would say at least on par with Nintendo. And what makes you think they are sitting around and twiddling their thumbs? They are trying to think up a pricing strategy- look at their FY2009 projection. 13 million units, an increase of 30%, is not going to happen at the PS3's current price. And what makes you think Sony won't make a PS4 until 2016? I would expect one in 2012-2013. It'll be like the PS1 and PS2, both of which survived for a few years while their successor was on the market (the PS1 actually lasted almost until the launch of the PS3).

So, Sony has to react now. Their system is losing steam and may decline sharply in 2010. Since Sony is relient on third patries for software, they may be in hot water if Nintendo wins the third parties over (this was Microsoft's plan in stealing exclusives). They may have to start planning for a console very soon. Undoubtly, Microsoft is poising problems for Sony. Microsoft is only concerned with destroying Sony. The 360 has tried at every turn to one up Sony. Malstrom also wrote a peice explaining the new motion control from Microsoft was aimed at the Eyetoy, not the Wii Remote. Microsoft is not concerned with profits but with stoping Sony. This means they will lose billions to stop the Playstation brand. What could they do? Why, release a new console of course. If they release a new one, Sony will have to retaliate or lose publishers and consumers with the same values (yes, Microsoft and Sony are competing on similar values in the videogame market). Microsoft has been a thorn in Sony's side since the begining of this console cycle. Microsoft has done a good job of stealing consumers and content from Sony.

Once again, Sony has an excellent first party lineup: Naughty Dog, Team ICO, Santa Monica, Sony Bend, all of the various regional studios, and effectively Sucker Punch, Media Molecule and Insomniac. Sony and Microsoft will always get third party games, for the reasons I've stated. And Microsoft is stealing nothing. FF13, Tekken 6, and Devil May Cry are all still on Sony consoles, right? How does it matter if they are exclusive?

Either way you slice it, the PS3 is hurting. Hurting consoles do not stay on the market for long. Hurting consoles do not last 10 years. All the systems that had long life spans were healthy, had a lot of content, and sold well during this cycle. Accordingly, Nintendo will be the one who sticks around while Sony and Microsoft scramble for a new system. If you want my prediction, I expect we will see a new console by E3 2010. Heck, they may very well talk about on at this E3. So, expect the PS3 to not last very long.

No. Not at all. It's hurting, yes, but it just needs time to heal. It will, eventually, make a profit on each sale, and then each sale will make Sony money. SCE has sunk too much money into the PS3 to kill it off after four years, then spend billions more on the PS4. No, the PS3 is here to stay for four years at least.

1)How can there not be a supply curve. There always is. The graph, or any graph, would make no sence without it. Since Sony is supplying something, there must be a curve for the quanity supplied. No supply curve means no items are supply, meaning no one will demand the product (if we use Say's law). Since Sony supplies the consoles, there is a curve for their supply. It would work like any normal curve, in that, as they increase the price, they can supply more units. They are suppling something; thus, a supply curve.

2)Here is my explinations

Elasticity woulb be where a change is price has a lower change in quanity demanded. Inelasticity would be a change in price give a large change in quanity demanded. So, for the PS3 and 360, they will increase greatly when their price drops, however, as price drops more and more, the consumers deamnds it less and less. The price drops, in this case, would simply pull in those people who wanted it, but could not afford it. This is evident that the 360 is a lower price than the Wii, but it is demaded less by consumers. The Wii works in reverse. The higher the price, the less change in quanity demanded. This is evident by the fact that people payed premiums to get Wiis during 2006 and 2007. My theory is that when Wiis drop in price, consumers will eat them up.

I constructed these by understanding elasticisty and inelasticisty and combined them into one with my knowledge of how consumers were buying systems based on changes in price. The Wii's is the only one which could be different since the Wii has never been below $250. It may just be inelastic.