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Forums - Sales - Why the PS3 will not last long, let alone 10 years.

Smashchu2 on 23 May 2009
Squilliam said:
Smashchu2 said:
Squilliam said:
Smashchu2 said:
greenmedic88 said:
Smashchu2 said:
@greenmedic88: uhhh, where to start
1)The PS3 will not match the PS1 or 2 in any way. Those systems turned a profit and sold over 100million units. The PS3 is struggling to beat the N64. This claim is just plain silly.
2)"Replacement by 2010? No. Announced in 2010? No." How? This isn't an answer.
3)
"But SCE can't afford to lose money on a price drop." Production cost drops are specifically to address this issue, not to simply repackage a previous product in an attempt to extend longevity. Lower production costs, fewer components, overall reduction in size and weight equates to smaller, lighter packaging, reduction in shelf/storage space for inventory, etc. All have the same effect of reducing overall cost to deliver product to the hands of the end consumer.

Good point, but you didn't address the systems stand in the market (no one is). The system is behind and isn't growing. Your claim would only work is the system has more units sold then it actually does.

@txrattlesnake: How you came to that conclusion I will never know. You claim the 360 will be the one to get the boot when it sells less then the PS3, has more million sellers, and is in demand more for consumers. The PS3 is also costing the company an arm and a leg (the 360 was never meant to make money). Look here

http://vgchartz.com/hwcomps.php?cons1=Wii®1=All&cons2=PS3®2=All&cons3=X360®3=All&start=39453&end=39950&weekly=1

Your claims are crazy. The Wii is growing faster then the other two. The PS3 and 360 are growing at the same rate despite the fact the 360 has been out longer. The Wii, from January to May, is doing worse then last year, but coupled with that fact that in 08 it has Brawl, Mario Kart and Wii Fit, and this year, Punch Out, it's doing really well.

Your claims just don't match up with the facts.

Nobody has been claiming the PS3 will move the same number of units as the PS2 or even the PS1 life time sales. That wasn't even the OP which was more along the lines of the PS3 will be out of production within what, a year or two?

As for the claims of seeing a PS4 in 2010 or even an announcement in 2010? Highly improbable. That was the answer. Support for the PS3 hasn't changed for the worse; if anything it's been growing.

Your wrong. I just posted numbers in the OP that said it was incoorect. I posted another chart that shows the same thing. If you beleive this, then prepair to be sorely disapointed.

I thought the production cost reduction and price reduction was self explanatory, but for clarification, dropping the price to $299 opens up a larger tier of consumers who won't pay more than $300 for a game console. $399 just isn't a broad market friendly price for consoles as the last 15-20 years have demonstrated. Drop the price and the sales won't stay the same any more than they did when the price dropped from $499 to $399. The demographics are very different from $499 to $399, and even more so from $399 to $299.

I would hope nobody will be dumbfounded when sales rates take off similarly following a major price reduction, following major production price reductions on the manufacturing and logistics end of distribution.

As IO have mentioned, price drops do not result in long term effects and do not produce long term consoles. The cube was cheaper than the PS2 and it didn't get the boost some people claim. The 360 is cheap then the Wii, and the Wii dominates. The fact that you beleive this despite the evidence points in the other dirrection is mind blowing. Lowering price does not mean you are doing well; it means you are doing crappy and need some way to get out of the hole. It is a sign of desperation. People play price drops off as good things. They are bad things. Let's look at the economics of this.

http://i82.photobucket.com/albums/j263/Smashchu/Demand_curve.gif

http://i82.photobucket.com/albums/j263/Smashchu/Demand_curve2.png

As they show, price drop will have little effect. The demand is the same. This is why cutting a products price is not significant since demand is not shifted but the equlibrium changes.

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?

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.

 

1. Because they are they only supplier of PS3s. The assertion that theres always a supply curve is a simplification for entry level grade school economics. In this case the Supply curve is the Average cost curve or Marginal Cost vs Marginal Revenue curves. There is no specific supply curve. Which one you choose depends on whether you consider the console market to be a competive/monopolistic or an oligarchy. (my memories of these concepts are a little fuzzy)

2. Elasticity of Demand is this: Its the percentage change in quantity demanded divided by the percentage change in price. A good for which overall revenue rises as the price drops (approaches mass market price for the concept most used here) is elastic. A good for which overall revenue falls as the price drops is inelastic.

If you want to show higher demand you would simply have the Wii demand curve shifted upwards and to the right of the PS3/360 demand curve, meaning more people would demand the Wii at every price point.

Forgive me, as I've only taken Macro. Thus, i infered everything from what I know if you want a back story.....

  1. No, there will be a supply curve. As the definition goes "The willingness and ability of sellers to produce and offer to sell different quanities of goods  at different prices during a specific time period." Sony is willing (or not) and able (or not able) to produce PS3s. Becuase of this, their output of PS3s is the supply curve. So, yes, there is one. It would work since Wiis have changed in supply. So, like I pointed out, the curve would shift. If you show me a site with some of this info, I might be able to see your line of thinking.
  2. Revenue is a by product of elasticity, not the cause or the main players. Here is how it reads "If demand is inelastic, the precent change in quanity demanded falls but by a smaller percentage but by a smaller percentage than the precent present rise in price. As a result, total revenue increases." Note the phrase in bold. The revenue is a result. Your still right, but the graphs need to be constructed based on how the consumers demands the product, not on the revenue. From what I've read, these graphs work, but are simplistic (they always were). The Wii is not that inelastic on the way down. The PS3 and 360 would also hold true as, appose to what you said, they do not sell any better at a mass market price. Becuase of that, they will not greatly increase quanity demanded when the price falls. of course, with the PS3, it is true that it got a strong push from the first price drop. Combining these two peices of information, I constructed the graph, and it coiencides with what I have read.
  3. Upward sloping demand would imply that as Wiis increase in price, they also increase in demand. This would not work as no price sells more when it's more expensive (tell one item that sold more when price went up. Even when gas went up, people found ways to waste less gas).


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Smashchu2 on 23 May 2009
txrattlesnake said:
Smashchu2 said:
@HanzoTheRazor: Stop being stupid. Your the biggest fanboy here. You came into the thread and back to bck said how it's stupid and that Sony is No. 1. Really, would someone who wasn't drinking the Sony juice say this: "Most know in their hearts that this E3 and 2009 is going to be massive for SONY, (they can smell it) and more than likely quiet for MS."

Here is what is upsetting: this entire thread has become a fanboy idiocy conference. It seems I can post a topic without the Sony Defense Force to come in and act like a huge ass. I was hoping the arguments would have look both ways and that criticism was well thought out and directed at fallacies in my argument. Some replies were good, but almost all of them were incredibly biased and piss poor at best. A lot of you even messed up numbers that are here on this site.

I made the first comment for a reason. The idea was to get people to understand: hey, I know I'm bashing Sony, but let's keep this civil and intellectual, but all of you failed to do so. Wanna know why there are so many doom and gloom threads? Because the evidence points that way. However, none of you have thought to try and challenge those beliefs. Instead, you give rhetoric about the greatness of the PS3. About how FF13 will come save it like MGS4 would have and KZ2. The idea was to right a well thought out post challenging the belief of the "The PS3 will last a long time." As such, your arguments come out terrible and the "doom and gloom" guys continue to be have the upper hand. Why don't some of you try to challenge the belief that the PS3 is doomed? Why don't you do some analysis and try to challenge the idea?

I could sit here all day and try to argue this, but it is clear all of you will just stick to your belief and rather then to try and act intelligent, will just call me stupid. Now, some did try to make analysis, but many of you assumed the truth and called me an idiot because I don't know the truth.

As it stands, no one has brought a good argument, even though some of you did try and stay civil, and I thank you for that.

 

Seems to me you're always calling the kettle black.  As soon as Sony fans start saying why the PS3 will last longer you immediately jump on them and try to start lambasting them for making "crazy claims".  Truth is nobody knows how this gen will turn out until it's over.

My problem, and why the claims are crazy, is they are not backed by an evidence, just retoric. Most of the constructs people made have no number backing. They they do, the numbers will either point the opposite of what they are saying or are completly wrong. This is why I tried to quiz people. Why would it do that?

Otherwise, I will disagree with you in that know one know how this cycle will end (well, not literally. I can't read the future). I think I have a good idea about how this cycle will end, but so far, no one has brought an argument that would make me think "maybe I'm wrong," save for the economics thing.  I was hoping there would be though......

ON FF on the 360: It was a smart move by Square. The 360 does a lot better in the US than the PS3. In order to try and make development cost back (as it's been there for a few years), they make it for the 360. The PS3 version may very well do better worldwide, but the plan is better for Square overall, and that is all that matter. 3rd parties will always look out for number 1.



txrattlesnake on 23 May 2009
Smashchu2 said:
txrattlesnake said:
Smashchu2 said:
@HanzoTheRazor: Stop being stupid. Your the biggest fanboy here. You came into the thread and back to bck said how it's stupid and that Sony is No. 1. Really, would someone who wasn't drinking the Sony juice say this: "Most know in their hearts that this E3 and 2009 is going to be massive for SONY, (they can smell it) and more than likely quiet for MS."

Here is what is upsetting: this entire thread has become a fanboy idiocy conference. It seems I can post a topic without the Sony Defense Force to come in and act like a huge ass. I was hoping the arguments would have look both ways and that criticism was well thought out and directed at fallacies in my argument. Some replies were good, but almost all of them were incredibly biased and piss poor at best. A lot of you even messed up numbers that are here on this site.

I made the first comment for a reason. The idea was to get people to understand: hey, I know I'm bashing Sony, but let's keep this civil and intellectual, but all of you failed to do so. Wanna know why there are so many doom and gloom threads? Because the evidence points that way. However, none of you have thought to try and challenge those beliefs. Instead, you give rhetoric about the greatness of the PS3. About how FF13 will come save it like MGS4 would have and KZ2. The idea was to right a well thought out post challenging the belief of the "The PS3 will last a long time." As such, your arguments come out terrible and the "doom and gloom" guys continue to be have the upper hand. Why don't some of you try to challenge the belief that the PS3 is doomed? Why don't you do some analysis and try to challenge the idea?

I could sit here all day and try to argue this, but it is clear all of you will just stick to your belief and rather then to try and act intelligent, will just call me stupid. Now, some did try to make analysis, but many of you assumed the truth and called me an idiot because I don't know the truth.

As it stands, no one has brought a good argument, even though some of you did try and stay civil, and I thank you for that.

 

Seems to me you're always calling the kettle black.  As soon as Sony fans start saying why the PS3 will last longer you immediately jump on them and try to start lambasting them for making "crazy claims".  Truth is nobody knows how this gen will turn out until it's over.

My problem, and why the claims are crazy, is they are not backed by an evidence, just retoric. Most of the constructs people made have no number backing. They they do, the numbers will either point the opposite of what they are saying or are completly wrong. This is why I tried to quiz people. Why would it do that?

Otherwise, I will disagree with you in that know one know how this cycle will end (well, not literally. I can't read the future). I think I have a good idea about how this cycle will end, but so far, no one has brought an argument that would make me think "maybe I'm wrong," save for the economics thing.  I was hoping there would be though......

ON FF on the 360: It was a smart move by Square. The 360 does a lot better in the US than the PS3. In order to try and make development cost back (as it's been there for a few years), they make it for the 360. The PS3 version may very well do better worldwide, but the plan is better for Square overall, and that is all that matter. 3rd parties will always look out for number 1.

 

      Yeah making exclusives for the 360 has been the smartest thing Square has ever done, not.  Of the three exclusives they've had on 360, Infinte Undiscovery, The Last Remnant, and Star Ocean 4, each one has managed to receive some of the lowest cumulative review scores in Square history combined with some of the worst sales for any games ever published by Square.



BMaker11 on 23 May 2009

How about I try to end this now. When you've got Squilliam defending the PS3 to a degree against this kind of bashing, you basically failed. If starcraft comes in here and does the same, you should probably never post on VGC again, because you have failed just that hard



Squilliam on 23 May 2009

1. The definition says sellers, not seller. That definition best applies to a competitive market, say for wheat or copper. The link shows how a monopoly in this case which is Sony supplies the PS3. This differs from how say, your local farmer might consider selling wheat.

http://www.pinkmonkey.com/studyguides/subjects/eco/chap11/e1111301.asp

2. I never based my statements on anything but how consumers demanded the Wii or PS3 or Xbox 360. The Wiis overall demand is higher than the PS3 and the PS3s overall demand worldwide is likely higher than the Xbox 360. So therefore if all else remained the same, price/quantity supplied etc the Wii would sell more than the PS3 and the PS3 would likely sell a little more than the Xbox 360.

The whole concept of a mass market price is centred around a console being price elastic as the price approached certain levels. The mass market price is by definition the pricing level where demand is neither elastic or inelastic so the overall quantity demanded is the highest that it can be efficiently raised to.

2008 Holiday sales Xbox 360 America: 2,799,403 PS3 control: 1,322,439
2007 Holiday sales Xbox 360 America: 2,255,898 PS3 control: 1,380,959

The Xbox 360 price cut at its highest was 29% or 15% for the Premium or 11% Elite /~20% average
The Xbox 360 sales were 19% higher. There was some substitution between the different SKUs but on the whole the consoles prices are roughly at the mass market price point for the console as the elasticity is aproximately 1. However this year with the recession the mass market price will be lower, as we have seen demand dip now for all three consoles.


3. I never said anything about Giffin goods, consoles aren't Gucci they are a consumer product and they follow the same general rules.



Tease.

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SOLIDSNAKE08 on 24 May 2009

the ps3 WILL have a 10 year cycle but that doesnt mean their next console wont come out beofre then cause it probably will. anyone who the hell are any of us to tell sony how to run their business?



Lolcislaw on 24 May 2009

The PS3 wont repeat a success of PS2 and PS1, because this console will be without any support in few years, it does not have the monstrous userbase of the previous Sony consoles, and its appeal to customers. The Winning console lasts further into the generation, and Sony will kill of the PS3 the moment that PS4 arrives.



tinybigman108 on 24 May 2009

ill say this for a console that's supposedly not gonna last very long as YOU claim it will they sure got some great games coming next year and after that. just because they had it rough this generation doesnt mean they'll be gone anytime soon. as for this 3rd party leaving if that was the case they wouldnt release any of there big name games. oh even though i love my wii you dont see the main games of a particular series going to the wii do you other then MH3 and DQX. Dead Space is an offshoot, their are rumors of RE5 going to the wii but it hasnt been confirmed yet. in short if we are GAMERS like you all claim to be stop being SHAREHOLDERS and FANBOYSstart being just gamers again. because all three systems having have great games to offer everyone i sure know i own all three plus a DSi and PSP.



SaviorX on 24 May 2009

Smashchu, I'm sorry that these Sony guys (with the exception of the honorable Squilliam) jumped on you like a pack of hyenas.

At least you have the fact that I believed you to give you comfort.

I hear the same excuses coming from you guys all the time. Great games COMING. Where are they now? Stop preaching about how Sony's software will miraculously turn hardware sales around. 70m Lifetime? Please. You act like MS will just be twiddling its thumbs while Sony tries to recuperate from their financial beating.

Then, the price cut. 300 or 200, what makes you think 4 years after the gen starts, a price cut will just boost sales to near Wii levels? A price cut usually does boost HW, but this is 2010 we are taking about where this will take place. Consumer interest may be ninexistent at that point. Did a price drop help the Gamecube?

And it is funny that you guys somehowcooked up a theory that the Wii will somehow lose 3rd party support? In this "economy" that has "put a knife in third years sales" (as Squilliam put it") how in the world would devs just start making games for the most taxing and expensive console on the market?

Smashchu said hardware is supported by software, and ho couldn't be any more right in this case. What game does Sony have that all consumers may want to play, not Kojima aficionados or former PS2 owners?
They don't have a game over 5m yet, and until Gran Turismo comes out, they may not ever. Killzone 2 will take several more months to touch 2m, not nearly enough to help Sony at all. People complain about the Wii library, but that thing sells everything.

PS3 will be dead in the water before 10 years are up.



Leatherhat on July 6th, 2012 3pm. Vita sales:"3 mil for COD 2 mil for AC. Maybe more. "  thehusbo on July 6th, 2012 5pm. Vita sales:"5 mil for COD 2.2 mil for AC."

BMaker11 on 24 May 2009
SaviorX said:
Smashchu, I'm sorry that these Sony guys (with the exception of the honorable Squilliam) jumped on you like a pack of hyenas.

At least you have the fact that I believed you to give you comfort.

I hear the same excuses coming from you guys all the time. Great games COMING. Where are they now? Stop preaching about how Sony's software will miraculously turn hardware sales around. 70m Lifetime? Please. You act like MS will just be twiddling its thumbs while Sony tries to recuperate from their financial beating.

Then, the price cut. 300 or 200, what makes you think 4 years after the gen starts, a price cut will just boost sales to near Wii levels? A price cut usually does boost HW, but this is 2010 we are taking about where this will take place. Consumer interest may be ninexistent at that point. Did a price drop help the Gamecube?

And it is funny that you guys somehowcooked up a theory that the Wii will somehow lose 3rd party support? In this "economy" that has "put a knife in third years sales" (as Squilliam put it") how in the world would devs just start making games for the most taxing and expensive console on the market?

Smashchu said hardware is supported by software, and ho couldn't be any more right in this case. What game does Sony have that all consumers may want to play, not Kojima aficionados or former PS2 owners?
They don't have a game over 5m yet, and until Gran Turismo comes out, they may not ever. Killzone 2 will take several more months to touch 2m, not nearly enough to help Sony at all. People complain about the Wii library, but that thing sells everything.

PS3 will be dead in the water before 10 years are up.

Paragraph 1: People say that because the great games are ALWAYS coming! It started in 2006, and consistantly great games have come out. It'll be no different in 2010, when newer games get released after the games we're waiting on now have already came out. And PS while we're waiting for games to "come", we'll still be playing KZ2, MGS4, LBP, etc to hold us over

Paragraph 2: Price cut will defintiely help because the DEMAND IS THERE. If it won't help, then please tell me why a $400 PS3 is only selling 10k less than a $200 360? Especially since you want to talk about "do you think M$ will just be twiddling their tumbs". Also, take into consideration how when the PS3 was cut to $400 the first time, it was outselling a $350 360

Paragraph 3: Nobody here said that the Wii will lose 3rd party support. The OP said that the PS3 will lose 3rd party support and that their will be a "shift of resources to the Wii". First off, if that's true, then why are all the big 3rd party titles still only on the HD consoles? Since resources are supposed to be shifted, why is there no Wii version of FFXIII...I mean Crystal Tools is SUPPOSED to run on the console, right? Why was the Wii not even considered for RE5? Why does EA still make the proper versions of their sports games on the HD consoles, while the Wii either gets the "All-Play" version, or a cartoony pseudo-NFL Blitz looking game? The only 3rd party company that anyones care about that's doing any major investing in the Wii is Sega...and with the abysmal sales of MadWorld and HotD, they have paid for it.

Paragraph 4: This is just moot. You want to talk about "which game is must have on the PS3?" What game is must have on the Wii? Mario? Zelda? Metroid? Mario Kart? Other random staple franchise? They didn't save the GC or N64, so don't use those games as examples. If you want to talk down about the PS3 because of stuff like Wii Fit and Wii Play selling millions, you're out of the loop with games. Software does in fact sell consoles, otherwise why DO you think the PS3 is only 10K below the 360, which like I said, has an entry price of $200 (you know, mass market price). If you honestly don't believe that cutting the price will not boost sales significantly, thus helping software sells also (since you want to rag on KZ2) then you're an even bigger fool than smashchu