The smell of desperation is in the air...PS3

[Groundbeef]

Some interesting notes on the PS3 sales (or lack thereof)

Back when the MS 360 came out, sales were very strong and stock kept selling out well past Feb/March until adequate supply could ensure stock. Why then is the PS3 inventory piling up at local retailers?

Target, Wal-Mart, Gamestores, and BB and CC all have units just taking up space. Has the gas run out for Sony?

Here are some interesting articles:

http://www.kotaku.com/gaming/ps3/ple...ers-225271.php

http://www.kotaku.com/gaming/ps3-gre...ket-224984.php

I think that Sony is in trouble, but what do you all think?

[emorphien]

I agree, Sony is potentially in big trouble.

[blackraven]

Sony made a big mistake by not having enough units for sale for christmas. I know many people that bought XB360 instead because of no availability and the $600 price tag of PS3.
I dont think that most people who bought the PS3 gives a crap about the blu-ray player as well.

[emorphien]

I think it's multiple issues.

The price tag is high, and deters people.
Nobody really cares that much about Blu-Ray at this point (although it is the cheapest Blu-Ray player)
Relatively few games, and even fewer good ones.
Poor prospects on future games, in particular exclusives. Development costs for programming games for the PS3 is much higher than the XB360 and any performance improvements in the hardware are unproven and likely not really real.

It's going to be rough IMO.

[jrhymeammo]

Who wants to pay $60 per game, when they are used to downloading everything for free. I think alot of kids would rather get a new computer for $1400.

jra

[westcott]

I forgot where I read it but the PS3 is under 1 million in sales, Wii is 2.2M, and XBox is around 10M units!!!

It will be an uphill battle, and as mentioned before, price, poor launch, lack of software, and no appareant video improvement over the competition will make it worse.

[emorphien]

PS3 couldn't even ship .5million by years end I thought.

[Woochifer]

Uh, isn't it a bit early to be writing the PS3's epitaph?

I mean, as recently as two weeks ago, I was reading a Reuters article about how the PS3 would remain in short supply until about June. To this day, I still haven't seen a PS3 in a retail store, then again I haven't set foot in an electronics store in over a week. If PS3s are actually getting to the floor, not too many people are expecting to see them. Once word gets out, I doubt the PS3s will stay in stock too long.

There are also reports that Best Buy was hoarding their PS3 inventory for New Year's sales. How else could they guarantee a minimum of 25 units in stock per store, with some stores reportedly having 60 units in stock?

http://www.s-times.net/12302006/00/p...ck_at_best_buy

Plus, in mid-December Sony stuck to their projection of having 2 million PS3s shipped by the end of the year worldwide. If they actually succeeded in getting that many units into the distribution channels (doubtful, but still possible), that would at least temporarily satisfy some of the pent up demand, especially considering that less than 500k units were available at launch worldwide. Microsoft purportedly sold around 2 million Xbox 360s in November and December, yet I never saw a shortage of units piled up in stores.

I wouldn't read too much into this until the market settles into more of a normal balance between the supply and demand. One store in my area had a pile of Xbox 360s sitting in the middle of the store the week after Christmas last year, but I certainly didn't see that as any kind of indicator that the platform was in trouble. The question of whether Sony's in trouble won't be answered until much later. If June rolls around, and Sony has already started scaling back PS3 production because of inventory piling up in their warehouses, then I would say they're in trouble.

An underreported angle in the gaming console story is that the six-year old PS2 remained the best selling gaming console in 2006, and had a resurgence in game sales. One market analyst I read is questioning whether the next generation has really begun yet with the PS2 continuing to fare well. Another analyst is talking about how sales for the Xbox 360 have continued to lag behind expectations, and speculates that continued developer support for the PS2 have hampered growth for the Xbox 360. And yet another analyst projects that the PS2 will outsell the PS3 all the way through the end of 2008. That seems more an issue with the rate of adoption for next gen consoles in general, rather than anything specific to the PS3, especially with the PS2 projected to sell 11 million units in 2007 (more than the Xbox 360 sold in 2006).

http://www.gamasutra.com/features/20061219/wen_01.shtml
http://www.gamasutra.com/features/20061219/wen_02.shtml
http://www.playfuls.com/news_05678_P..._and_2008.html

[Groundbeef]

There are also reports that Best Buy was hoarding their PS3 inventory for New Year's sales. How else could they guarantee a minimum of 25 units in stock per store, with some stores reportedly having 60 units in stock?


http://www.gamasutra.com/features/20061219/wen_01.shtml
http://www.gamasutra.com/features/20061219/wen_02.shtml
http://www.playfuls.com/news_05678_P..._and_2008.html

First I would like to say "Welcome" Wooch, it never takes you long to show up on these threads!

1st. Yes, BB was having a "Massive" sale on the PS3 across the country. Here in Springfield IL, they had 25 for the big sale. As of Tuesday they still had 17 on the sales floor. Even the electronics Mgr said they couldn't move them. Was in Target getting stuff and they had 3 in the case. Meijer also had 2 on display. Had them for over a week and no ones biting.

2nd. Are those Fanboy sites youve been reading on the down low? I thought you wouldn't lower yourself to that

As for writing the death notice for Sony? No, not at all. Its just funny that the market for PS3 doesn't seem as strong as it should be. At this point there should be NO units out for display. The WII is being practically purchased off the back of the truck before being unloaded. The PS3 sits, and sits, and sits......

It could be a death notice if they dont catch on though....

[blackraven]

It all boils down to price. Most parents are unwilling to spend $600 for a video gaming console. I'm 48 and have discussed this with many of my friends and they all say that they would never pay that much for a gaming system for their kids. ( Thats why computer gaming has stalled because most people do not want to have to continually upgrade their computers for hundreds of dollars to keep up with the requirements of ever more demanding games. Every 2 years I have to custom build or upgrade a new computer for my son so he can play his video games on optimal settings).

That is why you see continuing sales of PS2 and great sales of the Wii.

[Woochifer]

1st. Yes, BB was having a "Massive" sale on the PS3 across the country. Here in Springfield IL, they had 25 for the big sale. As of Tuesday they still had 17 on the sales floor. Even the electronics Mgr said they couldn't move them. Was in Target getting stuff and they had 3 in the case. Meijer also had 2 on display. Had them for over a week and no ones biting.

Springfield's also a much smaller market. Hard to judge how things are going nationally and globally based on anecdotal observations. If supply catches up with demand, that's not necessarily a sign of a floundering format. Stores have been awash in Xbox 360s for months now. Does that mean that the Xbox 360 has bombed out in the market, or that their production has reached equilibrium with demand? A lot of the early supply shortfalls with the Xbox 360 occurred because stores were playing catch up filling preorders that Microsoft could not deliver by the launch date. Did not occur with the PS3 because stores did not take preorders this time around, and Sony made no promises on how many units stores would get.

2nd. Are those Fanboy sites youve been reading on the down low? I thought you wouldn't lower yourself to that

Doesn't matter to me if they're gamer sites if the articles are posting actual data or analyses by professionals who actually study the market rather than equate rumors with facts.

As for writing the death notice for Sony? No, not at all. Its just funny that the market for PS3 doesn't seem as strong as it should be. At this point there should be NO units out for display. The WII is being practically purchased off the back of the truck before being unloaded. The PS3 sits, and sits, and sits......

It could be a death notice if they dont catch on though....

I've read that Nintendo underestimated the demand for the Wii, and have been playing catch up ever since, even though they had far more units available at launch than the PS3 and supposedly held back thousands of units so they could phase in the distribution and ensure a supply of units right before Christmas.

Sony supposedly "solved" their production woes before December and the units produced after ramping up to full production are only now starting to get into retail channels. Like I said, if people read the same newspaper articles that I did, then they fully don't expect to see PS3s until June. Hard to gauge how the market will react if the PS3s become readily available this much sooner than expected.

If the market reacts the same way as it did to the DeLorean automobile in the early-80s, then Sony will have a disaster on its hands. In the case of the DeLorean, ther publicists put the word out that the entire first year production was sold out before the cars even arrived in showrooms, hoping it would stoke demand. Instead, prospective car buyers wound up ignoring the DeLorean and staying away from the showrooms, figuring that they'd have to wait a year to get their hands on one. On the other hand, if there's enough pent up demand, the PS3 will move once word gets out that stores have them in stock. If anything, Sony has been trying to put the word out that they're now in full production on the PS3 and will supposedly have 6 million units shipped by the end of March.

The Wii looks like an early hit, and it's already outselling the Xbox 360 worldwide, and came close to the Xbox 360's U.S. sales figures for the Christmas season despite supply shortages. People I know who've played it love it, but those analysts I linked to earlier seem more skeptical about whether Nintendo can maintain momentum over the long haul.

[kexodusc]

Seriously, Beefy, are you sure you're not on the MS payroll? :P

It's way too early to write off PS3 just now. I can't see any negative in any of this to tell you the truth. Sony may have miscalculated the markets willingness to fork over $500 + for a console in 2006, but that can be easily remedied at any time.
From Sony's point of view, there's no point rushing the production schedule and entering a price war now. As Wooch pointed out, PS2 consoles are still selling well. The market is quite content for the moment. Sony is making money off their PS2's. Lowering the PS3's price will just canibalize some of those sales and likely result in less revenue/profit overall. Besides, it's not like XBox 360 is all the rage either. I'm guessing when there's a good library of big hit PS3 games, we'll see the price drop and a war begin.

I seem to recall most PS owners waiting a good year, maybe 2 years before finally jumping on the PS2 bandwagon (or in my case getting an XBox).

Sony and Microsoft got blindsided by Nintendo this time around - instead of the goofy Game Cube and it's cute games, the Wii actually offered something totally unique, fun, and extremely cheap (relatively speaking). When you consider that a good chunk of popular games are available on all consoles, Wii is actually a pretty good choice for a lot of casual gamers. And that's the key here - the casual gamers are the largest chunk of the market, and their not going to pay $400 for an XBox 360or $500 for a PS 3. We're quite happy waiting for another year because we were also late to the PS2/XBbox party and want to get our money's worth there. Wii might not be stealing all the sales, but it's definitely causing people to stop, rething their decision, and play the wait-and-see game before buying a new console.

I kind of suspect that both Sony and MS are re-tooling their new consoles to answer Wii anyway. Consumers aren't going to fall for the next generation console so easily, diminishing returns and all - these guys are going to have to think outside the box to get sales early on. Nintendo did that. It's not even revolutionary, (power glove anyone?) but it's certainly welcome.

Funny thing is, I can see us having this same discussion at this time next year.

[Groundbeef]

Seriously, Beefy, are you sure you're not on the MS payroll? :P

It's way too early to write off PS3 just now. I can't see any negative in any of this to tell you the truth. Sony may have miscalculated the markets willingness to fork over $500 + for a console in 2006, but that can be easily remedied at any time.

Besides, it's not like XBox 360 is all the rage either. I'm guessing when there's a good library of big hit PS3 games, we'll see the price drop and a war begin.

I seem to recall most PS owners waiting a good year, maybe 2 years before finally jumping on the PS2 bandwagon (or in my case getting an XBox).

Yes I'm sure.

Pray tell all knowing sage...just how can Sony remedy the GUSHING red ink flowing from their bottom line? They have invested Billions (thats with a 36 font B) on the PS3. They lose more money per sale than they recoup in 2 PS2 console sales. Think about that. Sony has to sell 3 PS2 units to make up for the profit LOST in one PS3 sale. They can not entertain a price cut at this time to make up the difference. Besides, currently MS is making about $75. per Xbox 360 sold. So any price cut Sony makes, MS can simply go lower. Its a lose-lose for Sony.

Now, they certainly have a winner in the PS2. Dont confuse that point. 100+ million units sold is great. I think though that the PS3 is quite an albatross around the necks of the Corp. The corporation must recoup the investment in the technology that makes the PS3. It would be foolish to think that Sony can rely on the PS2 to cover the loss. It cant.

[Groundbeef]

Springfield's also a much smaller market. Hard to judge how things are going nationally and globally based on anecdotal observations. If supply catches up with demand, that's not necessarily a sign of a floundering format. Stores have been awash in Xbox 360s for months now. Does that mean that the Xbox 360 has bombed out in the market, or that their production has reached equilibrium with demand? A lot of the early supply shortfalls with the Xbox 360 occurred because stores were playing catch up filling preorders that Microsoft could not deliver by the launch date. Did not occur with the PS3 because stores did not take preorders this time around, and Sony made no promises on how many units stores would get.

Although Springfield Il, may not be a Chicago, we do have over 100,000 people. I would not consider it "small". As for when the PS3 came out there were well over 100+ knuckleheads lined up around the BB store. Now, 1 month later, they cant even sell a resereved alotment. Doesn't take a rocket scientist to infer that perhaps demand has cooled a bit. And although my report may be anecdotal, it is by no means isolated.

As far as the 360 supply issue, vs the PS3 issue, you are trying to cloud the arguement. I would not expect the 360 to be sold out. If MS doesn't have enough stock to meet demand then there would be a problem. The PS3 is still very early into the launch phase. If demand were white hot it would be selling out as the Wii is. But its not. Do a couple calls today and report if any retailers have any units. I would be interested to know if you can get a PS3 in your area.

As far as preorders go, the major retailers NEVER take preorders. BB, CC and the like don't do pre-orders. Never have, never will. However, EB games, Game Crazy, and others DID take preorders for the PS3 and they got screwed when Sony short shipped orders up to 40%. And yet those same retailers are now sitting on inventory that is not moving.

Doesn't matter to me if they're gamer sites if the articles are posting actual data or analyses by professionals who actually study the market rather than equate rumors with facts. .

Depends upon whose doing the reporting I suppose.

I've read that Nintendo underestimated the demand for the Wii, and have been playing catch up ever since, even though they had far more units available at launch than the PS3 and supposedly held back thousands of units so they could phase in the distribution and ensure a supply of units right before Christmas. .

Everyone was caught by suprise by this one. If anything the Wii has hurt the PS3 worse than the 360. It is double the price of the Wii, and doesn't demonstrate capabilties over that of the 360. In my opinion, people either get the Wii, or buy a 360 for next gen gaming because Sony has not demonstrated the need to pay a $200 premium.

Sony supposedly "solved" their production woes before December and the units produced after ramping up to full production are only now starting to get into retail channels. Like I said, if people read the same newspaper articles that I did, then they fully don't expect to see PS3s until June. Hard to gauge how the market will react if the PS3s become readily available this much sooner than expected. .

Or, demand is simply not going to ramp up to expectations. The reality of the console is that it plays games that either don't look better than the 360, or are not fun to play. All that for $200 extra.

Read this for some insight. Not sure if is up to your standards of objectivity, but a good read anyway:
http://geekidiot.com/9/5-reasons-why...-isnt-selling/

The Wii looks like an early hit, and it's already outselling the Xbox 360 worldwide, and came close to the Xbox 360's U.S. sales figures for the Christmas season despite supply shortages. People I know who've played it love it, but those analysts I linked to earlier seem more skeptical about whether Nintendo can maintain momentum over the long haul.

I see the Wii as a complement to EITHER the PS3 or the 360. There are some shortcomings, such as lack of DVD playback, no HD etc. The price is perfect for complimentry gaming.

[GMichael]

Doesn't this link show a pic of even more Xboxes on display than PS3's?
http://www.kotaku.com/gaming/ps3/ple...ers-225271.php

To me that says that neither is doing all that well at this point.

[emorphien]

Doesn't this link show a pic of even more Xboxes on display than PS3's?
http://www.kotaku.com/gaming/ps3/ple...ers-225271.php

To me that says that neither is doing all that well at this point.

They're not comparable situations. The XBox 360 has been out for a year and early adopters and fans have been taken care of. The PS3 just came out and hasn't sold as many as the XB360 in the same amount of time because at first enough weren't available (or so it seemed) but now they just aren't selling all of them. For consoles, you should expect to see a bunch on the shelves after a year, but not after a month and a half.

[kexodusc]

Pray tell all knowing sage...just how can Sony remedy the GUSHING red ink flowing from their bottom line? They have invested Billions (thats with a 36 font B) on the PS3. They lose more money per sale than they recoup in 2 PS2 console sales. Think about that. Sony has to sell 3 PS2 units to make up for the profit LOST in one PS3 sale.

So what? If you think Sony doesn't have the balls to take a loss you're mistaken. That company has a history of failing products and technologies that it keeps on the market until the absolute bitter end - Beta, MiniDisc, SACD arguably,etc. They'll won't blink first. They never do. And if they didn't make $1 off this venture, the company will still exist in all it's big evil glory.

They'll sell PS3's at a rate and price that maximizes long-term profit (or minimizes loss). We're in the early adopter phase of the product life cycle here - way too early to get excited.

They can not entertain a price cut at this time to make up the difference. Besides, currently MS is making about $75. per Xbox 360 sold. So any price cut Sony makes, MS can simply go lower. Its a lose-lose for Sony..

They're not eager to enter a price war now, that's for sure, but neither is Microsoft. Over time the cost of production for both will drop, and the gap between them will reduce.
It's a matter of production cost, timing, and sales volume. Microsoft knew this very well when they made the original XBox. They lost a ton on it for a long time. But the successful market penetration was worth it to them. Nobody views the gaming console wars as a 1, 2 or even 5 year investment. Cost are recovered over time. Not just through consoles, but all the games and bells and whistles that work with them.

Consoles are epensive to build now. As the technology becomes older with each passing month and production means streamlined they'll get cheaper to build. Every batch gets cheaper. Such has been the model for every console dating back to the Coleco Vision. These guys stand to make more money off the games and licensing than the ever do for the consoles anyway. That's how this business works. Generally, initial pricing is set to maximize revenue. That's how initial prices are determined for most new technologies - and that's a bit different than maximizing sales or maximizing profits. If Sony wanted to guarantee sales strong, they'd have been the price leader. They just want to create enough of splash in the market to generate publicity, and maximize the revenue for the first batch of early buyers. They may have missed the mark by some degree, but its way to early to be preaching their demise.

Second, I dont' think anyone really cares about Sony's financial success on the PS3 - consumers will buy it or they won't based on how good the gaming experiences are relative to another console, not on how good a prospectus on Sony's gaming business looks.

They'll probably lose market share this generation that's normal in any industry as more competitors enter and competition gets heated. Today's leader is tomorrow's goat - ask Sega or even Nintendo. Maybe the'll fall to #2 or #3 this generation. Then bounce back to #1. Maybe yet another corp like ATI/AMD or someone will enter the market. Things are always changing.

Now, they certainly have a winner in the PS2. Dont confuse that point. 100+ million units sold is great. I think though that the PS3 is quite an albatross around the necks of the Corp.
The corporation must recoup the investment in the technology that makes the PS3. It would be foolish to think that Sony can rely on the PS2 to cover the loss. It cant.

Nobody suggested PS2 will cover the losses of each individual console. But they're probably offsetting a portion of losses in the initial stages. Sony will soak the most money out of the combined basket of goods before lowering the price of PS3 substantially, if a price drop meant less money in their pockets. When the price drop decision maximizes profit at some point in the future, they'll do it. Is anyone doubting that the PS3 will come down in price at some point in the future? I don't think so. In fact, I think most of the market is just waiting for it. Waiting for Xbox 360 to drop, too. We've seen it happen too many times before.

Personally, I'm sorta rooting for XBox, I like what I've seen better and I hope it helps make HD-DVD the video standard sooner. But I'm sure PS3 hasn't "run out of gas" and that this isnt' the final chapter.

Anyone wanna guess what % of XBox/PS2 owners actually upgrade to a new console? I'm wondering if these guys moved to fast.

[GMichael]

They're not comparable situations. The XBox 360 has been out for a year and early adopters and fans have been taken care of. The PS3 just came out and hasn't sold as many as the XB360 in the same amount of time because at first enough weren't available (or so it seemed) but now they just aren't selling all of them. For consoles, you should expect to see a bunch on the shelves after a year, but not after a month and a half.

Maybe bad timing. Having them available after Christmas instead of in October or November didn't help them much. The market is not the same now.

[L.J.]

I must say, these PS3 vs 360 threads are very interesting (in a strange sort of way). As Kex mentioned, these same conversations are gonna be going on a year from now.

[Groundbeef]

So what? If you think Sony doesn't have the balls to take a loss you're mistaken. That company has a history of failing products and technologies that it keeps on the market until the absolute bitter end - Beta, MiniDisc, SACD arguably,etc. They'll won't blink first. They never do. And if they didn't make $1 off this venture, the company will still exist in all it's big evil glory.

They'll sell PS3's at a rate and price that maximizes long-term profit (or minimizes loss). We're in the early adopter phase of the product life cycle here - way too early to get excited..

Heres a bit of a breakdown of the cost structure of the PS3 and the Xbox 360
http://arstechnica.com/news.ars/post/20061116-8239.html

Currently there is no profit to maximize. And the lack of consoles sold directly translates into a lack of incoming licensing fees paid to Sony. No consoles, no games, no income.

They just want to create enough of splash in the market to generate publicity, and maximize the revenue for the first batch of early buyers. They may have missed the mark by some degree, but its way to early to be preaching their demise.

Second, I dont' think anyone really cares about Sony's financial success on the PS3 - consumers will buy it or they won't based on how good the gaming experiences are relative to another console, not on how good a prospectus on Sony's gaming business looks..

No one cares about the finanical success of Sony on the PS3? What are you thinking? The future of Sony is the PS3. Their movies are in the crapper, Blu-Ray is barely a blip on the radar, and the PS3 WAS to be the knight in shining armour. Investors are VERY concerned about the finacial hit Sony is taking right now. Check out these 2 clips. The first isnt quite as #'s oriented. Lest anyone think that perhaps its not as credible check out the article published on "the street.com". Its the second article.

http://arstechnica.com/news.ars/post/20061019-8033.html

http://www.thestreet.com/_tscrss/mar.../10330004.html

Perhaps that will color your perspective a bit on "no-one cares"

Nobody suggested PS2 will cover the losses of each individual console. But they're probably offsetting a portion of losses in the initial stages. Sony will soak the most money out of the combined basket of goods before lowering the price of PS3 substantially, if a price drop meant less money in their pockets. When the price drop decision maximizes profit at some point in the future, they'll do it. Is anyone doubting that the PS3 will come down in price at some point in the future? I don't think so. In fact, I think most of the market is just waiting for it. Waiting for Xbox 360 to drop, too. We've seen it happen too many times before..

The point was raised by Wooch. The PS2 is a solid seller, but it will not keep the company afloat. Thats the only point I was making.

Personally, I'm sorta rooting for XBox, I like what I've seen better and I hope it helps make HD-DVD the video standard sooner. But I'm sure PS3 hasn't "run out of gas" and that this isnt' the final chapter.

Anyone wanna guess what % of XBox/PS2 owners actually upgrade to a new console? I'm wondering if these guys moved to fast.

It took the original Xbox 5 years to sell 24 million consoles. The 360 has sold 10 million in one year. I would hazard a guess to say that PLENTY of original PS2/XBOX console owners have traded up.

[Woochifer]

Although Springfield Il, may not be a Chicago, we do have over 100,000 people. I would not consider it "small". As for when the PS3 came out there were well over 100+ knuckleheads lined up around the BB store. Now, 1 month later, they cant even sell a resereved alotment. Doesn't take a rocket scientist to infer that perhaps demand has cooled a bit. And although my report may be anecdotal, it is by no means isolated.

I'm no rocket scientist, but I have done plenty of retail market studies. 100k is a VERY small market -- barely enough to support a big box electronics retailer like Best Buy, and probably not enough to generate the sales per square foot that they average across the rest of the country.

Might not take a rocket scientist, but an economist will tell you that you also need to look at the supply component before making any assessment about a market condition. And if Sony was truthful about their shipment projections, a lot of supply got into the distribution channel in a relatively short time considering how few units they actually got out by the end of November. And anyone who tracks the seasonality of retail sales will tell you that the period between New Year's and the beginning of March is typically when consumers tighten up the most on discretionary spending. Call it bad timing for the supply to start catching up with demand, but it won't make much of a difference in the long run considering that the PS3 was designed to have a shelf life considerably longer than the 2006 holiday shopping season.

As far as the 360 supply issue, vs the PS3 issue, you are trying to cloud the arguement. I would not expect the 360 to be sold out. If MS doesn't have enough stock to meet demand then there would be a problem. The PS3 is still very early into the launch phase. If demand were white hot it would be selling out as the Wii is. But its not. Do a couple calls today and report if any retailers have any units. I would be interested to know if you can get a PS3 in your area.

As far as preorders go, the major retailers NEVER take preorders. BB, CC and the like don't do pre-orders. Never have, never will. However, EB games, Game Crazy, and others DID take preorders for the PS3 and they got screwed when Sony short shipped orders up to 40%. And yet those same retailers are now sitting on inventory that is not moving.

You need to consider the supply component with the Wii. By accounts I've read, Nintendo had a far bigger supply available at launch, but they also started with a lower production capacity by which to restock stores, which is their problem right now.

Like I said before, hard to tell what people will do if they've been expecting the PS3 to be short-supplied through June. I've yet to see a PS3 in stores, but again, I've not been looking for them nor expecting to see them. I'm not clouding the argument by comparing the Xbox 360 supply with the PS3, since you were the one that was comparing the short supplies on the Xbox 360 to the PS3 to begin with.

As far as preorders go, Best Buy DID take preorders on the Xbox 360 (as a Reward Zone member, I was offered an Xbox 360 preorder), and they DO take preorders on a whole bunch of items like DVDs, video games, and software. Is Best Buy not a major retailer?

Everyone was caught by suprise by this one. If anything the Wii has hurt the PS3 worse than the 360. It is double the price of the Wii, and doesn't demonstrate capabilties over that of the 360. In my opinion, people either get the Wii, or buy a 360 for next gen gaming because Sony has not demonstrated the need to pay a $200 premium.

Well, not everyone. In earlier threads, Lensman pointed out Nintendo as a potential dark horse winner in the next gen console war, as did others, myself included.

Or, demand is simply not going to ramp up to expectations. The reality of the console is that it plays games that either don't look better than the 360, or are not fun to play. All that for $200 extra.

Read this for some insight. Not sure if is up to your standards of objectivity, but a good read anyway:
http://geekidiot.com/9/5-reasons-why...-isnt-selling/

Well, also consider that the base PS3 has the same basic feature set as the $400 Xbox 360 plus Blu-ray capability for $100 more. But, until more Blu-ray titles and PS3 games come out, the actual value of the extra processing power under the hood won't be known.

The article raises some good points, particularly about the PS2 and Blu-ray. If the main selling point on both the Xbox 360 and the PS3 is HD resolution, consider that less than 1/4 of households currently have HDTVs. Hardly enough to entice the casual gamers with regular TVs into upgrading their consoles.

As of now, neither of these consoles can be considered the heir apparent to the PS2 if the PS2 console continues to outsell both of them, game developers continue to support the platform, and exclusives for that platform like the Guitar Hero series continue to create a buzz. It's still way too early in the game to project where the PS3 is headed.

I see the Wii as a complement to EITHER the PS3 or the 360. There are some shortcomings, such as lack of DVD playback, no HD etc. The price is perfect for complimentry gaming.

Actually, I think the Wii will likely be complementary to the PS2 in the short-term. The Wii seems to have a broad appeal to the casual gamers that make up the majority of the market, and the $250 price point is a market segment that both Sony and Microsoft abandoned with their next gen consoles (IMO, Microsoft made a mistake in discontinuing the original Xbox and completely ceding that end of the market over to Sony and Nintendo). But, I think the market analysts are right in questioning the long-term potential for the Wii, which will be at a disadvantage as the market continues to move towards HD and the console prices for both the Xbox 360 and PS3 inevitably go down.

[kexodusc]

Currently there is no profit to maximize. And the lack of consoles sold directly translates into a lack of incoming licensing fees paid to Sony. No consoles, no games, no income.

Profit maximization( or loss minimization - they're the same thing) - My point here is Sony will from this point forward do what is economically most beneficial, even in a losing cause. This is certain. They'll continue with the product line doing whatever it takes to make the most money or lose the least if being in the black is impossible. That's all I'm saying. The deed is done, PS3 is gonna be made. Millions will buy. Sony might have to remarket and accept they'll take a hit, but I'm not willing to write of PS3's chances of being a viable competitor just yet.
Look at the computer processor market. AMD was a dog for years, then took the market by storm while Intel lost billions. Intel didn't quit, and now fortunes are reversing again.

No one cares about the finanical success of Sony on the PS3? What are you thinking?

Read the context of my message again - When a consumer chooses a console, the financial health of Sony has nothing to do with the decision making process. Especially the average consumer. Nobody cares - they only care about the product itself, not the viability of the parent company. Sony's stockholders might care, but I doubt they make up the majority of consumers.

The future of Sony is the PS3. Their movies are in the crapper, Blu-Ray is barely a blip on the radar, and the PS3 WAS to be the knight in shining armour. Investors are VERY concerned about the finacial hit Sony is taking right now. Check out these 2 clips. The first isnt quite as #'s oriented. Lest anyone think that perhaps its not as credible check out the article published on "the street.com". Its the second article.

Sony isn't going belly up regardless of which direction PS3 goes. I might not buy Sony stock in the near future, but it will continue on. The future is PS3? Didn't realize Sony filed Chapter 11. And when did it completely leverage itself all on PS3.

Perhaps that will color your perspective a bit on "no-one cares"

Please, let's try and keep this civil, no need for condescending tone here.

Surely you're not telling me a 10 year old kid tells their mom and dad to buy a gaming console based on the recent stock performance of the company? Truth is undeniable, "no-one cares" about the profitability of the company when they make their gaming console selection. I cannot make this point any clearer.

Nintendo's financial statements were terrible for years, they seem to be enjoying some success. They didn't give up and get out of the gaming business. You underestimate these corporations ability to absorb billions in losses and carry on...That's all I'm trying to say here.
Calling Sony out of gas at this stage of the game is premature. Maybe it'll end up that. They're not off to the start they wanted. Neither was Xbox 360.

It took the original Xbox 5 years to sell 24 million consoles. The 360 has sold 10 million in one year. I would hazard a guess to say that PLENTY of original PS2/XBOX console owners have traded up.

Sure, but are 100 million plus PS2 owners going to upgrade to Xbox or PS3? All of them? Maybe, but it's gonna take awhile. I kind of wonder if people are just content to skip a generation and hang on to the Xbox/PS2 until the next round comes out.

[Woochifer]

It's way too early to write off PS3 just now. I can't see any negative in any of this to tell you the truth. Sony may have miscalculated the markets willingness to fork over $500 + for a console in 2006, but that can be easily remedied at any time.
From Sony's point of view, there's no point rushing the production schedule and entering a price war now. As Wooch pointed out, PS2 consoles are still selling well. The market is quite content for the moment. Sony is making money off their PS2's. Lowering the PS3's price will just canibalize some of those sales and likely result in less revenue/profit overall. Besides, it's not like XBox 360 is all the rage either. I'm guessing when there's a good library of big hit PS3 games, we'll see the price drop and a war begin.

I seem to recall most PS owners waiting a good year, maybe 2 years before finally jumping on the PS2 bandwagon (or in my case getting an XBox).

I went about a year and a half before getting a PS2, and can easily see myself waiting at least that long on the PS3.

And looking at the sales charts for the PS2, the console sales did not peak until December 2002, which was more than 2 1/2 years after it got introduced in Japan in March 2000, and about six months after the first major price reduction. And if you tally up the PS2's U.S. sales between its introduction in October 2000 and the end of December 2000, it was barely over 1 million units even though the console had already been on sale for 6 months in Japan and Sony presumably had time to work out any production shortages.

http://www.neogaf.com/forum/showthread.php?t=105508

One of the more interesting things that I read from a market analyst pointed out that the Xbox 360 sales as of October were running behind both the PS2 AND the original Xbox at the same point in their respective product cycles. Supports your assertion that the Xbox 360 hasn't been setting the market ablaze.

Deutsche Bank analyst Jeetil Patel looks at the 360 business in a different light, instead focusing on the hardware which seems to be underperforming. "260K hardware units were sold in Sep-06, which is an improvement from Aug-06 (200K). However the Xbox 360's installed base is still smaller than the original Xbox's equivalent after the same number of months of sell-through. Xbox 360 sales are even more lackluster if you consider that the original was an unproven product that was trying to sell-in against the hugely popular PS2," commented Patel. "Finally we highlight that the gap between Xbox 360 and PS2 hardware sales at equivalent time periods in their lives continues to widen. In 2001, the PS2 was consistently selling-through >300K units a month, whereas the Xbox 360 has not broken 300K since its launch in November."

http://biz.gamedaily.com/industry/feature/?id=14095

Sony and Microsoft got blindsided by Nintendo this time around - instead of the goofy Game Cube and it's cute games, the Wii actually offered something totally unique, fun, and extremely cheap (relatively speaking). When you consider that a good chunk of popular games are available on all consoles, Wii is actually a pretty good choice for a lot of casual gamers. And that's the key here - the casual gamers are the largest chunk of the market, and their not going to pay $400 for an XBox 360or $500 for a PS 3. We're quite happy waiting for another year because we were also late to the PS2/XBbox party and want to get our money's worth there. Wii might not be stealing all the sales, but it's definitely causing people to stop, rething their decision, and play the wait-and-see game before buying a new console.

You got that right, although I think the Blu-ray angle might yet play out as the PS3 supplies start to ramp up and home theater enthusiasts (who are less apt to camping out overnight or bidding 5x over list on eBay for components) start to consider the PS3 as a relatively inexpensive $500 Blu-ray player. I know that until I get around to upgrading my video chain to HD, the PS3's not even on my radar screen. But, once that happens, then I'll definitely take a long look at the PS3 as a Blu-ray player. And if I get around to finding some interesting PS3 games to play, all the better.

Funny thing is, I can see us having this same discussion at this time next year.

Yup, just as we were last year before the PS3 even came out!

[Groundbeef]

Might not take a rocket scientist, but an economist will tell you that you also need to look at the supply component before making any assessment about a market condition. And if Sony was truthful about their shipment projections, a lot of supply got into the distribution channel in a relatively short time considering how few units they actually got out by the end of November. And anyone who tracks the seasonality of retail sales will tell you that the period between New Year's and the beginning of March is typically when consumers tighten up the most on discretionary spending. Call it bad timing for the supply to start catching up with demand, but it won't make much of a difference in the long run considering that the PS3 was designed to have a shelf life considerably longer than the 2006 holiday shopping season..

A major reason that the PS3 is in the supply chain so quickly is that they were forced to use air freight to get many units in for the holidays. That is why the supply chain had as many units as it did. As it was it was still 40% less than expected. The problem as you stated is that there is a lul in the market. In my opinion this will reinforce the negative perception that SOME consumers have of the system. As in "Hey this was supposed to be a really hot system. Why is my local BB have 17 of them on the floor for the last week? Must not be that hot." On the flip side, the Wii cant be kept in stock. It simply reinforces the idea that maybe the PS3 isn't such a great system. This doesn't translate into the 360 because it is an established system and the supply chain has been established.

Like I said before, hard to tell what people will do if they've been expecting the PS3 to be short-supplied through June. I've yet to see a PS3 in stores, but again, I've not been looking for them nor expecting to see them. I'm not clouding the argument by comparing the Xbox 360 supply with the PS3, since you were the one that was comparing the short supplies on the Xbox 360 to the PS3 to begin with..

? Not following here. You suggested that perhaps the 360 isn't selling well because there are units in the store. I am saying that is not an equal equation because I for one, dont expect to see any PS3's in the store. The 360 is established. You should be able to go in and buy one at will.

As far as preorders go, Best Buy DID take preorders on the Xbox 360 (as a Reward Zone member, I was offered an Xbox 360 preorder), and they DO take preorders on a whole bunch of items like DVDs, video games, and software. Is Best Buy not a major retailer?.

I should have elaborated. Yes, BB DOES take pre-orders on games, movies and software. It has been my experience, and from asking the Manager about pre-ordering systems. He told me that BB does NOT do pre-orders on consoles. Perhaps its a regional thing.

Well, not everyone. In earlier threads, Lensman pointed out Nintendo as a potential dark horse winner in the next gen console war, as did others, myself included. .

I think I agreed on that as well.

Well, also consider that the base PS3 has the same basic feature set as the $400 Xbox 360 plus Blu-ray capability for $100 more. But, until more Blu-ray titles and PS3 games come out, the actual value of the extra processing power under the hood won't be known..

I hope you realize that Sony also made the PS3 without IR support for the remote controller. So if you have a fancy all in one, pitch it, or better yet duct tape the PS3 bluetooth remote under it so you can control the movies.....hahaha (that was catty sorry

As of now, neither of these consoles can be considered the heir apparent to the PS2 if the PS2 console continues to outsell both of them, game developers continue to support the platform, and exclusives for that platform like the Guitar Hero series continue to create a buzz. It's still way too early in the game to project where the PS3 is headed..

You need to read some more fanboy sites. Your a bit behind on your data. Sony has lost MANY exclusives to MS in the last few months. Guitar Hero will be coming out first Q 2007, Rockstar Games is shipping GTA 4 the same day for PS3, 360, a HUGE departure from the past when MS got the game several months after the PS2 got it. Take Two is getting away from Sony Exlusives. Tekken 5 a very popluar series is coming to the 360, and UbiSoft (assisins creed) another prior Sony Exclusive developer is now developing games for the 360. Virtua Fighter 5, another prior Sony Exclusive...gone, now to be developed for the 360/PS3.

While in no way will these losses kill Sony, they can't help either. GTA was a system seller, and now it comes out the same time for example.

Actually, I think the Wii will likely be complementary to the PS2 in the short-term. The Wii seems to have a broad appeal to the casual gamers that make up the majority of the market, and the $250 price point is a market segment that both Sony and Microsoft abandoned with their next gen consoles (IMO, Microsoft made a mistake in discontinuing the original Xbox and completely ceding that end of the market over to Sony and Nintendo). But, I think the market analysts are right in questioning the long-term potential for the Wii, which will be at a disadvantage as the market continues to move towards HD and the console prices for both the Xbox 360 and PS3 inevitably go down.

Actually I disagree. For MS to move forward I think that it was a good move to support the new system 100%. The installed base isn't as large as the PS2, and studios are still free to develop games for the original Xbox.

[Groundbeef]

Read the context of my message again - When a consumer chooses a console, the financial health of Sony has nothing to do with the decision making process. Especially the average consumer. Nobody cares - they only care about the product itself, not the viability of the parent company. Sony's stockholders might care, but I doubt they make up the majority of consumers..

I will conceed that perhaps the average joe doesn't wander into the ol' BB and care about the financial health of the company. However, there are plenty of people that are seriously considering the financial health of Sony.

Sony isn't going belly up regardless of which direction PS3 goes. I might not buy Sony stock in the near future, but it will continue on. The future is PS3? Didn't realize Sony filed Chapter 11. And when did it completely leverage itself all on PS3..

As you say, lets keep this civil. Here is some meat to chew on about the PS3 and Sony's future as an electronics giant: The first one is bit of a read at 4 pages, but if you got the time it is an excellent article! Pretty evenhanded as well. Certainly not a slash and burn piece.

http://www.wired.com/wired/archive/14.09/sony.html

http://news.cnet.co.uk/gamesgear/0,3...9285320,00.htm

Please, let's try and keep this civil, no need for condescending tone here.

Surely you're not telling me a 10 year old kid tells their mom and dad to buy a gaming console based on the recent stock performance of the company? Truth is undeniable, "no-one cares" about the profitability of the company when they make their gaming console selection. I cannot make this point any clearer. .

Sorry if I wasn't being civil. These chats are hard to come across as "dry" vs "smart-ass". I've been slapped by the admin once and prefer not to be again. So, please accept apologies.

And surely you are not going to suggest that 10 year olds run major corporations either. I agree with your point about consumers, but you can't disagree that there is plenty of concern in the financial world about Sony and its finances.