PS3 To Slow Game Industry Growth?

simoniker writes "DFC Intelligence's game analyst David Cole has released a new report on the next-gen video game market, and he's especially harsh on PS3 plans: 'The high price of the PlayStation 3 is going to slow overall industry growth, especially for software,' and '...if Sony does not change its current strategy for the PS3 the system will probably end up in third place in installed base.' He also suggests that 'the PS3 would be more than 35% of the monthly household income' of average families in some world territories. When will the backlash end?" The bottom line is that, even if they ramp up to 200,000 units a month starting this month, they're still not going to hit their 2 million unit goal in time for a November launch. Shortages and the high price tag will mean this is going to be a very weird Christmas console season.

Right, right

[Anonymous Coward]

The bottom line is that, even if they ramp up to 200,000 units a month starting this month, they're still not going to hit their 2 million unit goal in time for a November launch. Shortages and the high price tag will mean this is going to be a very weird Christmas console season.

Yes, Zonk, we know, sony is teh doomed and someday soon you will stand victorious upon the rubble of the bulldozed Sony headquarters, clutching your XBox 360 and laughing maniacally. We get it already, you don't have to keep ramming it into our heads.

Anyway, the article seems a bit dumb to me. It may be that the PS3 will slow sales when it's first out because consumers can't buy/can't afford one, and so will just opt to buy nothing at all since they can't have the biggest and most expensive thing-- but I don't think that many will have this response. After all, this winter will not be 2005's, when releases were mostly scanty. This winter it seems to me slightly more likely than consumers looking at this situation and realizing they can't afford or can't find a PS3 will just shrug it off and buy some of the great games coming out for the PS2 or Wii, both of which are cheap and will have actual games (i.e. not untold legends) coming out this winter.

Shortages...

[hackwrench]

If there are shortages then that fellow really was right and the PS3 isn't selling at high enough a price.

I'm not going to buy a PS3

[maynard]

I have a PS2 and a PSP, and I was expecting to buy a PS3 as soon as I could get ahold of one - primarily for a cheap blu-ray drive, but also for backward compatibility. I have plenty of other Sony products, and like the company's engineering and manufacturing quality control. But the company's arrogance over PSP homebrew and the poor game availability, combined with this ridiculous $600 price tag for a PS3 w/hdmi has convinced me that Sony is in a tailspin. I simply don't want to give them my money any longer.

I \*can\* afford it. I don't want it. Until Sony refocuses on the consumer again, I'm not giving them a dime.

Re:Why would that be weird?

[Wind_Walker]

Hi, have you ever heard of "Demo units"? You know, those things in Best Buy or EB Games where they have the consoles set up with an LCD screen where you can try out the games on the system? I can hear the discussions now

Parent: Ooh, what's that they're playing over there?
Child: Oh, that's the new Nintendo console
Parent: Wow, that looks like fun. Do you want that?
Child: No, I want a PS3, and you said I could only have one console.
Parent: Hmmm, that looks like a lot of fun for my little one and for me too... but I probably can't afford it
Parent checks price of Wii
Parent: WOOHOO!
Parent: Let's get you your PS3, and see what else Santa brings you this year. That Wii sure looks like fun, doesn't it?
Child: Yeah!

Re:Why would that be weird?

[gstoddart]

I wouldnt' consider that weird at all, in fact, I anticipate just that. The Revolution/Wii looks like a truely innovative console, with some amazing games, and great gameplay. Nintendo is really doing the right thing here.

Exactly correct. I grew up in the days of two buttons and a joystick. I can't operate most video games very effectively any more, they're just way too complex.

A Wii could breathe new life into my gaming, as it is going to focus on fun and gameplay, with a really simple interface in the form of their new controller. Sony definitely will NOT be getting my gaming money, and having owned both a PS and a PS2, I am not the target audience for a PS3. And the presence of Blu Ray is irrelevant for me since I don't own anything HD.

I predict Nintendo will clean up on the people wanting casual/family games rather than FPS or other things which are very difficult to control.

Cheers

Next up: Sony eats live babies! Use "zonked" tag.

[SuperKendall]

Wow, Sony single handedly builds a console so expensive that the gravity of the error sucks the whole gaming industry into a black hole of doom.

Just possibly, people will buy or not buy the console and buy, or not buy, other things as well or instead of. You can either say "The PS3 is going to be really successful and thus people are going to have less money to spend on games", or "Not that many PS3s will sell and therefore there will be no market slowdown as people buy other systems". Yet this article seems to try to say both of those things at once, that the PS3 price is too high yet it will slow down the whole market.

Well which is it? Are people buying the PS3 or not? In reality, only time will tell.

As for Slashdot, we know where they stand - any Anti PS3 news you got, no matter now non-sensical - throw it their way!

Re:Why would that be weird?

[Khuffie]

And about 10 years ago, Nintendo was the brand that parents and kids were familiar with. Things change. Sony are showing a similar level of arrogance as Nintendo when they started their downhill spiral in losing market share. I'm not expecting anything, but I wouldn't be surprised if the PS3 doesn't fair well.

Re:Why would that be weird?

[KDR_11k]

The kids can be familiar with anything they want, what kid can afford a 600$ console? And what parent would agree to buy one for the kids?

Simple Question

[sottitron]

Here is a simple question... If you were Sony and you anticipated that - at the quantity of consoles you could provide - they were going to be selling at $800-$1000 on eBay this Christmas season, then what price point would you set the console at? Why not price it higher and line your own pocket instead of someone else's? Sure some demand will drop off because its not priced at $300, but those people weren't going to shell out to get one at the holiday season anyway. Plus the components will come down and then they can (and will) drop the price. If executed properly this is a good strategy - a profit maximizing strategy. If executed poorly, then the 3 in PS3 will be quite apropo.

Re:Sony is about to learn the same lesson as Ninte

[rAiNsT0rm]

er, no. The cartridge model was extremely developer unfriendly. Carts are MANY, MANY times more expensive to manufacture than CDs, could only be manufactured by nintendo itself (this is not the case for CD based media) and had to be paid for up front- if a game failed to sell, the developer would be stuck with a lot of very expensive unsellable bricks. Make no mistake, Devs LOVE the CD model.

Umm, I said the exact same thing as you are saying except mine is adjusted for the real world. Sure CD's are cheaper, and sure carts are more expensive up front... but the number of copied PS1 games far eclipses the knock off carts for the NES/SNES/Genesis. These are lost sales and a bigger cost to a company by far. But in typical console gamer land profitability and media cost are just arbitrary numbers that people think they understand. Take a glance at actual company profitability and earnings before trying to talk about an area that others people may just know a bit more about. But nah, that elementary profitability stuff that everyone seems to think is so profound is easier to spout off.

Successful to some degree? Sony was a first time entrant to the market and the Ps1 ended up doubling the sales of both the SNES and the Genesis, and exceeded the sales of the previous all time seller (the NES) by a good 25 million. It also drew in older gamers in a way that Nintendo, Sega, and Atari never had. It's successor was ALSO a blockbuster success and outsold it, based largely on favorable impressions of the Ps1. make no mistake, Sony's first console was a VERY big deal. As for "trying so hard to manufacture a mascot like mario or sonic..." This is a fallacy. never happened. All of the "mascots" that people associate with the Ps1 (crash, lara croft, klonoa, solid snake...etc) were made by third parties. Sony never made the attempt to market their console this way.

Yes, successful in the sense of dollars and quickly garnering market share. But UNSUCCESSFUL in many key areas, innovation, quality, customer satisfaction, etc. How many defective units and multiple sytem purchases did people need over the PS1/PS2 lifespan? Success in business is not measured by the here and now, it is not a sprint but more of a marathon. Nintendo made this mistake, Sony made this mistake, and MS has made them all. Because Sony did NOT lay a solid groundwork built on customers and innovation, they have stagnated and run out of road to go forward. The "more, better, faster" ideology has worn out, and the "FPS, GTA, RPG" one will too. But again, to only look at short term success as a basis for actual success is more your speed and most other console armchair analysts, it is just totally wrong. Take a look in every field for examples of this, not just consoles.

Blatant fanboysim at its very finest. When nintendo was market leader it's monopolistic tactics in the console market matched or exceeded microsoft's behavior in the desktop market. For instance, if you wanted to make a game for the NES, not only could you not port the game to any other system, third parties couldnt make ANY games for ANY competitor or be blacklisted. Nintendo is a company out to make money any way it can, make no mistake.

This "blatant fanboy" here worked for Sony for over 4 years, covering nothing but Sony. Oops. The fanboy card doesn't apply here, my current enthusiasm for Nintendo is exactly for the reasons I stated. They are the only one catering to the users, being innovative, trying to break out of this funk that gaming is in right now, and NOT trying to be "hardcore." Hardcore gamers are a fallacy, they are a very small (but dedicated) market. Industries can sustain but not grow in that environment, and that is what has been happening. Real growth comes from diverse markets and wide target audiences. But that means "kiddies" and women, and that means your console must be teh suxorz. To tell the truth I actually hate Zelda games, not a fa