I honestly don't know why the 20GB version did not sell, I don't think that memory card readers and 40GB are worth $100. Maybe it was because people feared that 20GB was not enough?

We're observing short-sighted strategy as well as tradeoff between customers and developers.  Sony wants to convince people who want /desirable feature/ or /desirable price/ that the product with that feature or price will sell out and be gone, implying the other product will be the only one available and they will have missed out on feature or price.  Examples: the 20GB model, the 60GB model, and backward compatibility.

This is short-sighted because it will not affect sales in the long term and will alienate customers a greater extent than simply being honest (although that would not boost sales).  Tricking people to boost sales will make many of those people feel upset unless they're very satisified with the product.

Sony needs sales desperately /right now/.  They need to keep third parties interested, and they need to keep the games flowing.  They're falling behind with third party support compared to the 360 and especially the Wii.  3rd party support is what made the PSX and PS2 awesome systems and a lot of Sony's most important partners have been rumbling about Sony's poor sales -- Square-Enix and Konami in particular.

This is the customer-developer tradeoff -- they might imply things that aren't true to get customers to buy the system now if it means they'll maintain or improve developer support.  The customers get a little more upset since the unit they're buying and being told to rush out and get becomes obsolete at the same price or drops in price a month or two later and the developers get a little happier since the installed base grows at a more promising rate.

This sleight of hand cannot be maintained forever.

And how does that relate to this thread exactly? Did you misunderstand Borkachev's point, or are you replying to someone while forgetting to indicate so?

I think that was their recruiting standard.

Proof in parcel why every decision Sony makes has long-reaching compounding consequences.

This has never happened before in videogaming where models keep getting changed left and right. All it does is make people more cautious before purchasing.

John Lucas 

I agree but I think this doesn't abstract the problem quite enough.

The true crux that their strategy hinges on is the architecture of the PS3 itself.

I mean why would they need to make excuses and find ways to quickly cut cost if not for the original architecture designs. Just to be clear I am not saying that a powerful architecture is always going to produce these sorts of problems but what I am saying is that their decision to develope their own specialized architecture has been the root of most if not all of their problems with the PS3 this generation.

1) Software development cost is increased due to increased development difficulty, which provides incentive for companies to look elsewhere, not exclusively elsewhere but at least to consider their options
2) High cost of developing new architecture from the ground up necessitates higher profit margins to recoup losses in standard opening window.
3) Required High profit margins enforce a required high starting price for consumer
4) High consumer starting price turns potential users off to the product
5) reduced user base further turns off 3rd party developers
6) Situation requires major PR work so PR spin ensues....
7) PR spin results in a less than desirable impact
8) Only option that remains is to cut price to stay competitive and play for the long term.

I am sure I missed some steps in there but I think that illustrates where the problem is truly coming from. And once again I feel I need to stipulate that I am not saying the PS3 is weak or slow or anything of the sort. I believe it is a very capable architecture. But where it fails to be an ideal gaming architecture is it's price, meaning price to purchase and cost to develop for.

They are trying to make the ps3 available at a more reasonable price ($599.99 is crazy!)

zackblue

The current Sony management reminds me of Apple's management when Sculley took over. At the time Apple was struggling with the direction of the company.

So what did they decide to do? Make their computers into a commodity, ala the PC market. But the repercussions of that kind of thing was enormous. It completely shrunk their profit margins. It almost killed Apple because they were forced into the cycle of premature price cutting.

It saddens me that some people will so readily accept such dishonest business practices.