Console Wars Renewed?

Matt · Post by **Matt** » Thu Mar 22, 2007 5:43 pm

Sony (SNE) will lose $241.35 on every PlayStation 3 game console it sells at $599, and $306.85 on every console it sells with a smaller hard drive at $499, according to an analysis of the component costs conducted by iSuppli, a research firm.

That's a staggering figure that is sure to influence how this round of the console war plays out. (In perspective, Sony will take a loss equal to the retail price of a Nintendo Wii every time it sells a PS3.)

It's not unusual for console makers to lose money on the game console itself, expecting to make up for that by selling multiple games later. Sony and Microsoft (MSFT) both have employed that strategy in the past to get more powerful consoles into the hands of gamers.

But this time around, Microsoft will make $75.70 on every Xbox 360 it sells, not counting marketing and distribution costs. So while Microsoft won't need to sell a set number of games to cover its build costs, Sony will have to sell five to seven. That is a high hurdle. This is corrected from an earlier version that said Microsoft will lose $75.70 on each Xbox 360. Thanks, Mike, for the catch.

http://blogs.business2.com/utilitybelt/200..._loss_is_a.html

Sony loses money on every console sold.

Icefire · Post by **Icefire** » Thu Mar 22, 2007 6:20 pm

i'm not denying that, however as i already said they're losing money by KEEPING it at 600 dollars +

the longer they keep it at that, the fewer people that will have the system when decent games start getting made in mass. the games are where they make up for their lost revenue. if a minority of gamers have the console when that happens, they stand to lose more than what they are right now. hell, that's already gonna happen with as long as they've already kept the price on the consoles so high. by the time they lower it, 4 years will have passed, there will be dozens of good games just sitting on the shelves. people will be so busy trying to pay for the ps3 once the price does come down, it'll take a good majority another year+ before they even begin to get the majority of games they want to play on it. by that point there'll already be other game consoles in development and nearing completion which means sony has effectively screwed themselves already.

Matt · Post by **Matt** » Thu Mar 22, 2007 6:55 pm

Same for me, really. I plan on getting one when they're about £300. Like my 360. I'm not forking out £400 for a PS3 when I'm planning on building a PC

I don't see how they can lower the price just yet, though. You've seen those figures, they lose the cost of a Wii on some consoles. When the shit inside gets a bit cheaper, we should expect a drop, if not, then we're right to demand one!

Icefire · Post by **Icefire** » Thu Mar 22, 2007 7:24 pm

i'm saying from a business sense alone that they've killed their revenue when it comes to profits. they wanted to push the envelope to beat out all the other systems. it costed them but if they were smart, they'd lower the cost now that way a majority of people can afford it. that way when the good games finally get released (mind you most of them run at like 60 dollars a pop) people will have the money to buy the games rather than having to cough up 200 or 300 dollars for the console once the price drops. at that point most people will be like "fuck, i already got a wii or a 360 and plenty of games" (again mind you, most of those games they have will just be ported games from the 360 or wii). hell, by that point the price on some of the games for the 360 and wii will have already dropped while the ps3 games will be getting released brand spanking new.

also...there is a high possibility that the low sales on the ps3 at this point may very well cause some developers to cancel their games in the making for the system if they think they stand to lose profits themselves. in short...if sony can't make a higher profit off their games within the next 2 years more so than the 360 or wii, they're shit out of luck. at this point with what few games there are for the system i don't look to the ps3 doing as well as they claimed it would since it seems some of those very games could have been made for the ps2 (which they already proved with that call of duty 3).

kaos · Post by **kaos** » Thu Mar 22, 2007 7:26 pm

theyre keeping it at 600 bucks becuase theykeep entertaining the idea that the ps3 is some kinda luxury console the same as a luxury car.

theyve said before that the ps3 is like a fancy resturant where the other consoles are not.
and recently they said the ps3 was a merecedes...

I'm not making this up.

I think what they dont realize...even if if they try want to make the console out to be some ellitest thing, I think theyre forgetting somthing very important.

their market should be the middle class common man....
not the upper class

while the upper class man has more individual buying power, he is nothing compared to the shear numbers of the middle class cintizen.
they should also realize that the common man doesnt eat at fancy resturants on a a normal basis and doesnt drive a mercedes benz.

the common man eats whatever cures hunger and drives whatever gets him to work.
and right now...that aint a ps3.

Icefire · Post by **Icefire** » Thu Mar 22, 2007 7:36 pm

kaos for president

Matt · Post by **Matt** » Thu Mar 22, 2007 7:50 pm

Well, perhaps they've said all that kind stuff in the states. All I've heard over here is that chip thing, the fact that they dropped the 20GB consoles for the 60GB ones and that it's released on Monday.

As for the pricing strategy. I'm still going to stick with the fact that they lose $250 on most consoles. You want them to lose more? When developers aren't too sure just yet? They're banking on games sales. They need to get some kind of return on these consoles. When they're losing $250 per console it's unreasonable to expect any drop in price. Especially when developers aren't too sure yet.
Imagine you have two jobs. On one job, you're working for less than you should be getting, in fact with the time, money and effort you put in, you're losing money. But it's ok, because your second job is a high payer, and it's just getting going and things are rolling in nicely, should get into full swing soon enough and totally cover your arse. Would you lower your charge for the first job, if the boss from the second says "hey, look, errr, we're not too sure about you, anymore. Can you, errm, get better please?" ?

Which links back to what Xanien said: Once the consoles drop to a reasonable price and developers are chunking out some great games then we can all stop worrying about which console is better than which and more about what game is better than which

EDIT:

Eitherway, the PS3 costs more because it's most expensive to make. Don't want something that expensive? Then get some lower spec technology. I don't understand the quibble over the price of it at all. Only that it's just too much for some people to afford. It's just business lunacy to do what Mike suggests. Why not stand on the street corner and give them away?

Icefire · Post by **Icefire** » Thu Mar 22, 2007 8:05 pm

simply put, you wouldn't take out a loan on a vehicle if you could get one better at a more affordable price somewhere else. the comparison there is that nobody in their right mind would fork out 2 to 3 hundred dollars for a console and then another 50 to 60 per game at roughly the same time if they could already get those games for one of the more affordable consoles and yes, comparitively, the 360 and wii are and will be much more affordable than the ps3 ever will be.

EDIT: it's not bussiness lunacy what i'm suggesting either matt. it's quite simple. they lower the price, more people will be able to afford the console which means game developers will say "hey, there's a good majority out there with this console, lets get our games out there we stand to make a hell of a profit now" that in turn will mean revenue for sony much quicker than what they're making now which means they stand to gain back all that lost money within a short few years if not sooner and then they'll have quite a bit of profit in the end. as is, all they stand is to lose period with how they're doing things. if i were working for or running a video game development team i'd look at that console and ask myself "when's it gonna get sold in mass? if it's not, what's the fucking point to developing games for it and losing profit when i could concentrate on making more games for the systems that already out there in mass."

kaos · Post by **kaos** » Thu Mar 22, 2007 8:15 pm

AHEM

Final Fantasy XIII heading to Xbox 360?

The PS3 exclusivity rumor train is unstoppable these days. Just days ago it was revealed that both Devil May Cry 4 and Ace Combat 6 were going multiplatform, and now we hear, courtesy of GameSpot, that the one of the biggest exclusives of all may be spreading the console love as well. Yes, it appears that Final Fantasy XIII -- you know, "that RPG" -- could be jumping the fence in search of greener pastures. In an interview with Les Dernières Nouvelles d'Alsace, Georges Fornay, president of Sony Computer Entertainment France, hinted at the possibility. Fornay noted that development costs for games have skyrocketed, making it difficult for 3rd party developers to produce exclusive titles. Said Fornay, "As far as Final Fantasy XIII goes, I can tell you that the exclusivity is in discussion." Square-Enix has yet to comment on Fornay's statement.

Final Fantasy creator, Hironobu Sakaguchi, recently added fuel to this rumor, stating that the FFXIII's White Engine is capable of multiplatform development, and that he believed making FFXIII a multiplatform game would be a "wise" decision. Is the Xbox 360 about to pick up another of the PS3's heavy hitters? Only time will tell. If Final Fantasy XIII were to come out on Xbox, would it sway your decision to get a PS3?

SOURCE: http://www.xbox360fanboy.com/2007/03/22/ff...-ps3-after-all/

its still a RUMOR

but this was printed just a few hours ago.

Square Will probably come back with a standard "we dont comment on rumors" reply.
but that still leaves things in the air.

and now with this statement, theirs going to be a cloud looming overhead that nobody can shake off

Icefire · Post by **Icefire** » Thu Mar 22, 2007 8:22 pm

the biggest problem behind all this is the fact sony took too long to get their console out on the market. the moment that happened, the development teams that exclusively made games for them decided to make games or are considering to make games for the other consoles since there's more chance to make profit there faster than making games for the ps3.

EchoPark · Post by **EchoPark** » Fri Mar 23, 2007 12:04 am

The other reason developers arnt making games for the PS3 is cause of the hardware, 360 and wii hardware isnt excatly brand new. I mean the 360 is what? 3 core processor? Core processors arnt a new thing so game developers can deal with that, the rest of the hardware falls in place, nothin to new, Tho the PS3 has the Cell Processor, they pretty much finished the final testing of the unit and shipped it out, its brand new, its also works in a total different way than any other processor i think, am not in to the whole workings of processors but am sure i read somewhere its a real fuck to program anything to run on it.

Cell processor is whats fuckin up the PS3 and there game developers, yes the cost of the console with fuck it up too but before the cost was even released game developers where dropping out of Sony and moving to either Nintendo and MS. Sony was asking for to much.

Also as rumours go, supposely Dell was thinkin about the gaming market but maybe to join with another group, no sure who. Also rumours flyin about the return of sega. U hear alot of rumours going about.

And to finish off

http://www.computerandvideogames.com/article.php?id=160496

Matt · Post by **Matt** » Fri Mar 23, 2007 12:52 am

Icefire wrote:simply put, you wouldn't take out a loan on a vehicle if you could get one better at a more affordable price somewhere else. the comparison there is that nobody in their right mind would fork out 2 to 3 hundred dollars for a console and then another 50 to 60 per game at roughly the same time if they could already get those games for one of the more affordable consoles and yes, comparitively, the 360 and wii are and will be much more affordable than the ps3 ever will be.

EDIT: it's not bussiness lunacy what i'm suggesting either matt. it's quite simple. they lower the price, more people will be able to afford the console which means game developers will say "hey, there's a good majority out there with this console, lets get our games out there we stand to make a hell of a profit now" that in turn will mean revenue for sony much quicker than what they're making now which means they stand to gain back all that lost money within a short few years if not sooner and then they'll have quite a bit of profit in the end. as is, all they stand is to lose period with how they're doing things. if i were working for or running a video game development team i'd look at that console and ask myself "when's it gonna get sold in mass? if it's not, what's the fucking point to developing games for it and losing profit when i could concentrate on making more games for the systems that already out there in mass."

You still don't take into account that they loose money on every console. It's bad for business to be losing money. The thing is expensive? To be honest, the 360 was £399. The PS3 is £425. What's the big deal? £26? It's not that expensive.

kaos · Post by **kaos** » Fri Mar 23, 2007 8:15 am

not to down england...

but youd probably better stick to US prices.

considering its most american states are are bigger than the place.

youe special discount dosent amount to much when you look at the bigger picture...and when places like austrailia and new zealand get fucked over.

Post by **Mik** » Fri Mar 23, 2007 9:41 am

They may be bigger in terms of mass but I would think the population of the UK is slighty more than most US states at ~60million (US PoP = 294million).

Also UK is usually released along with the rest of Europe (est pop 807 million).

Although not a big gamer % out ot that.

It's been proven if you can crack China you can make a killing.

I understand the losing 250pounds/dollars/kangaroo's a machine is tough, in fact it borders on retarded but thats the way the market works, if the Wii wasn't two gamecubes duct taped together they'd be losing money as well.

I'd prefer some sort of price balance, it cheaper to buy one in the dependant on where you are which makes little sense if you already loosing money.

Bogey · Post by **Bogey** » Fri Mar 23, 2007 11:30 am

Sony wouldn't be losing money in the long run. The more PS3s they get into homes, the stronger their hold is on the next video format. If Blu-ray becomes the next standard I doubt Sony will cry over losing a bit of money from console sales.