Is Sony as desperate as it looks?

vurbano

On Double Secret Probation
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Is Sony as desperate as it looks?
Don Reisinger


With a rumored $399 40GB Playstation 3 on the way, a cheaper device hitting shelves in Japan and UK, and announcements of an all-out price blitz this holiday season, is Sony really as desperate as it looks?

By just looking at news from the last week, it's quite easy to see that Sony is grasping at anything that will make the PS3 stick. Whether it's a new color, a cheaper price, or a rumbling controller, the company is hoping we will like something that make us spend our hard-earned money. I can't blame Sony for trying--the PS3 is hands-down, the most important device Sony is selling right now. Not only is it the harbinger of Blu-ray, it represents one of the most economically stable divisions of the company over the past decade.

But once again, Sony has it all wrong. The company is a victim of its own self-image and there is no stopping it with the current management in place. Simply put, Sony sees itself as a hardware company and in this business, that's the last thing you want to do.

Is Sony just a hardware company? Well, yes and no. Almost every product it releases is hardware and it seems to know this business best. There is no denying the fact that Sony threw all of the cutting edge components into the PS3 and it's simply the most powerful game machine we have ever seen. But for some odd reason, Sony genuflects at the sight of high-powered hardware while thumbing its nose at software--the true sellers of gaming consoles. Isn't this ironic considering the company develops software for its platform on a regular basis?

I can appreciate Sony's position--it needs to drop the price on the Playstation 3 to appeal to consumers first, but at what point does the company plan on selling consoles? A dropped price is fine and $399 is a good place to start, but if it gets rid of backward compatibility as it did with the UK device, how will it stop people from buying the Playstation 2 and opt for a PS3?

In fact, look no further than the PS2 to see how the video game industry really works. The Playstation 2 is underpowered when compared to this generation of consoles and yet, it's selling better than the PS3. Some may say it's price, but I disagree. Sure, it's easy to afford, but think of how many games you can play with a Playstation 2. And once you do that, compare it to the Playstation 3 library of games and then tell me which console you would prefer to play.

For the first time, Sony is off the mark entirely. To make matters worse, this couldn't come at a worse time. With a floundering PS3 that Sony hopes will catch on, what will happen to Blu-ray? What will happen to its game development division if the PS3 continues to fail? Worse, what will happen to Sony as a whole?

Sony is under the impression that a lower price on its console will stimulate sales and help it attain the lead it used to enjoy. But with no exclusive blockbuster titles in sight, what's the impetus for us to run to the store and buy the Playstation 3?

The Xbox 360 currently has the best software library and that console has been selling for $399 since its release. The Nintendo Wii is riding a wave like nothing we have seen in this industry and that console costs just $250. Simply put, if I want to play video games, why would I choose the Playstation 3?

Now, I'm sure Sony zealots will stand up and tell the world why there is a need to buy a Playstation 3 immediately, but I think any and all of those arguments are pure rubbish. I've owned the console since December and I can say that I've tried to play it as much as I can, but there is nothing out there that has made it imperative that I do so.

The Playstation 3 is on life support and unless Sony starts grasping at something it can hold on to, it should stop worrying about how the public perceives its hardware and start doing what it can to bring exclusive blockbuster titles to the console. So far, the Playstation 3 is the biggest gaming blunder we have seen in years.

Can you say "another Sega Saturn?"
 
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Ouch! The sega saturn comparison AGAIN! That is the 3rd time in print I have seen someone compare the PS3 fiasco to the Saturn. I even saw one writer a few weeks ago liken the PS3 price cuts and hardware changes to the Atari Jaguar.

*this being said, I own a PS3 and a HD-A2 for both HD formats.
 
If they get the PS3 down to that price; I'll probably buy one :)

I need to be neutral on my HD screens and this would be an inexpensive path to do so.

Cheers,
 
If they get the PS3 down to that price; I'll probably buy one :)

I need to be neutral on my HD screens and this would be an inexpensive path to do so.

Cheers,
If they sell it for 399 how much money do you think they are losing on each unit? 300?
 
This article was posted in this Format War forum presumably because it implies Blu-Ray viability issues due to Sony's PS3 problems.

But considering all the studios that make Blu-Ray titles, and the strong sales of Blu-Ray titles, and the existence of *other* manufacturers of Blu-Ray players besides Sony, how dependent is the Blu-Ray format really on Sony's PS3 problem???

Are we getting a bit desperate for arguments? !sadroll
 
...how dependent is the Blu-Ray format really on Sony's PS3 problem?
Good question.
It has probably as many answers as the number of people posting on this forum. :)

To re-phrase it: if (theoretically speaking) the PS3 lost the BD drive tomorrow (i.e. stopped being a BD player),
would that affect BD as a format? I think it would. Hence, PS3 problems are of importance to BD.

I believe PS3 was the main "currency" used to buy other companies' support for BD. PS3 was supposed to fast-track the volume manufacturing advantages, i.e. cut the prices of BD-specific components deep and fast. And the projections seems to have been based on the number of PS3's sold.

Needless to say, PS3 hasn't sold as good as expected. And Sony realizes this. Multiple SKU's are the best proof of it: cutting the hard drive storage in half (hardly a $10 saving) and dropping the price by $100. Dropping the emulation chip. Eliminating external connectors.

It would be nothing alarming and "business as usual" (it would take 3 years instead of 1, so what?) if not for this pesky competitor HD DVD.
Something went wrong with BDA's math. Only time will tell how bad it actually is...

Diogen.
 
If they sell it for 399 how much money do you think they are losing on each unit? 300?

I don't know. If LG can sell dual format drives for $399/499 MSRP I would think that the ROM only drives for Blu-ray are a good bit cheaper. Figure half that cost.

I don't have any insight into costs of the other components though without doing some research.

Best,
 
Good question.
It has probably as many answers as the number of people posting on this forum. :)

Okay, I follow your point about the PS3.

But let me state it another way... If Blu-Ray is doing this well (roughly double the title sales of HD-DVD, etc.) with all the PS3 problems you cited, imagine how well Blu-Ray would be doing if Sony actually got their act together. :eureka
 
If Blu-Ray is doing this well (roughly double the title sales of HD-DVD, etc.) with all the PS3 problems you cited, imagine how well Blu-Ray would be doing if Sony actually got their act together.
That's an easy one: there would be no war if Sony's plans would've worked out 100%.
And I don't mean they (BD) would have won, I mean the other format (HD) would have never been born...

Everybody knows that in 2003 Sony introduced the v.1 of Blu-ray products (now discontinued, never sold outside Japan)
CNN.com - Sony sells first blue-laser DVD recorder - Mar. 4, 2003
Designed as recordable (the only format with a chance to survive in Japan), MPEG-2 (only!) transport streams, DVD-type DD/DTS (only!), single layer, 23GB.

Not often is mentioned the fact that one year earlier (January 2002!) Toshiba made this announcement
Toshiba : Press Releases 7 January, 2002
What little is mentioned about the technology itself is a carbon copy of BD: file format, cover layer, laser. Higher capacity, maybe due to better optics.

For some reason Toshiba abandoned this line. Was it
- because Sony had too many patents in all this?
- because they hoped to beat Sony one more time with an optical format?
- because they couldn't see how to bring yields to DVD levels (95%+)?
or for any other reason will probably never be known. But having a good understanding what actually BD-like technology requires already in 2001, the fact Toshiba abandoned it means that they believed an alternative can be created, IMHO. And they most probably would've given up before releasing any product (after seeing the roster of companies that have joined BD), if Sony wouldn't lend them a hand and screw Microsoft (I think this happened for two reasons: Everybody hates Microsoft entering their business and BD really believed in its technological superiority). That was Toshiba's lucky day: they got a friend the BD gang grossly underestimated to have as an enemy.

HD is the underdog in this war. But it might have just enough to screw BD's party.
According to Sony, the war must've been over by now. It isn't, far from it. And I don't believe time is on BD's side.

Diogen.
 
Lots of info there, Diogen. I did not know any of that background. I guess I better sit back and watch what happens.

It still seems that the best HD-DVD can do at this point is make dual-format players become the standard. I can't see the Blu-Ray format disappearing entirely and losing out to HD-DVD. But who knows.

Thanks. :up
 
Dual format would be just fine by me.
And in one week $275 will buy you one for your HTPC!
http://www.satelliteguys.us/1072838-post25.html
(I don't play any audio/video on anything but my HTPC for over 3 years now - except for a VHS tape once in a while).

Diogen.

It's still not showing as in stock. Arrgggh.

Nice street once it actually streets though.
 
And now it says the product is not available anymore.

But in Canada, according to this report
Dual Format LG Drive - Digital Forum
it is available in a local computer store for $262.

What is even more interesting, the only one customer review on NCIX
claims it comes with a full version of PowerDVD Ultra ($100)...:)

Diogen.
 
Sony is just not any company it is a Japanese company and one that the Japanese Government will not let go of. The government will float loans to Sony if they need money to keep doing business. There is too much at stake to lose a major player for the Japanese. I also agree that Sony's entire problem is software driven. In the console business if you do not have exclusives you have no reason for gamers to buy one. Only thru exclusives does a gamer start thinking they would want a particular console. I kept hearing about Halo so I purchased an Xbox and played the game. I did not play much else because my PS2 had plenty of titles to play but the story plays out the same for this generation.

Is Sony worried -- they better be. Rachet and Clank and Uncharted are two exclusives that make having the PS3 worthwile. A second generation Motorstorm and RFOM could also help but those titles are too far away. Sony needs a blood transfusion now and lower the price on the consoles is just prepping the process. Good exclusives is how they can climb out of the cellar they put themselves into. I give them till XMAS '08 to get their act together. If it does not happen by then it is not going to happen at all.

As for the BD - HD-DVD war, I do not see Sony's current problem with the PS3 as causing the BD group any pain. Other manufacturers can take up the slack by producing a lower cost BD player to replace the PS3. And the studios supporting BD are not backing down at all. Sony's problem is if they can turn the corner on the PS3 in profit. They are a long way from that.
 

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