Buy a PlayStation 3 and Sink Sony 441
sonnyweathers writes "There has never been a more perilous time for Sony than 2006. But if you think you can save the company by buying PlayStation 3 consoles, you're wrong. Analyst Evermore believes that selling 6 million PS3 consoles will make Sony a ripe target for takeover — perhaps even by Microsoft."
What would Microsoft do with all that content? (Score:5, Interesting)
"Save Sony?" (Score:5, Interesting)
What do I have to do if I happen to like watching the company most actively pushing DRM on us flounder and collapse? How can I personally help to hasten that demise? Work a little harder? Be a little less greedy?
Actually, that's a strategy that could possibly save Sony -- abandon DRM loudly and publicly, and tout themselves as the Kings of Unrestricted Media. A big campaign of "We trust you to not steal our stuff, but Microsoft and Apple think you're thieves."
Hey, if they're going down the toilet anyway, try a little innovation! Work a little smarter, not harder.
The Console Makers Hate Me (Score:3, Interesting)
My last console of purchase was a Gamecube. The number of retail games I purchased for it totals two: Super Smash Brothers and Windwaker. I hope Nintendo made money on that console because I doubt they made much on the games I purchased for it -- though I could be wrong.
So how many games would I have to buy to make a PS3 profitable? Well if they lose $300 per console and let's be generous and assume they make $50 profit on each game, then I'd have to buy six games -- which there is no way in hell I'm going to do because each game is going to be $60. If I'm to drop $500-$600 on the console (which I'm probably not going to), I'm not dropping another $300+ on games.
Now, if Sony makes big royalties on their Blu-Ray DVDs and the sales of the PS3 increase sales of that, they may be OK. It's hard to say but I think that the adoption of their Blu-Ray standard is crucial to their survival -- the PS3 being expensive because of it is just making the stakes all that much higher. And they've put themselves in that position so they have no one to blame but themselves. Quite the gamble. 'Will it pay off?' relies on too many factors for me to even ponder
Re:What would Microsoft do with all that content? (Score:2, Interesting)
Meh (Score:4, Interesting)
First, TFA suggests that MS could take over Sony's video game arm, not the whole company. Second, it pretty much assumes that MS would want it. Why exactly would MS need/want it? If Sony goes that in the hole over the PS3, meaning not only did they lose a ton of cash on the loss per sale, but also didn't make hardly anything in third-party licensing deals (something TFA seems to forget is the largest revenue driver for consoles these days), that would mean that the Wii60 combination dominated the market - all this after the PS3 sold 6 million units (see the faulty logic yet?). Both Sony and MS lost tons on sales of consoles with the Xbox and PS2, but more than made it up with first-party games, third-party licensing, and the like.
Stranger things have happened, but I don't see it. Microsoft itself is a prime takeover target with almost zero debt and huge cash reserves, but it's too big for an LBO (at least we think it is).
Well (Score:2, Interesting)
In Japan, the PS3 will be the main console over there and sales this christmas will be huge for them. There is no way Sony would take such a hit on the launch machine, and I'd put money on the cost of components having dropped a good deal in the last few months.
Camps aside, wake up and smell the Capitalism (Score:2, Interesting)
Re:Strange (Score:4, Interesting)
Then, they're just a charity for people who need computer parts. What would stop this?
Re:What would Microsoft do with all that content? (Score:5, Interesting)
To say that I am
Imagine how awful things would be if MS owned a bunch of "traditional" content (besides software.. which has grown up with "piracy" and the market understands how to deal with it..and the providers have grown up figuring out how to stay alive inspite of it)
When one umbrella organization owns content and technology, the interests of one are going to suffer due to the other. Sony makes this plainly evident. I suspect that the content people at Sony are furious that the technology people haven't invented a remote "extort-money" button for the latest Sony-Style line of kitchen radios.. and the consumer electronics people are livid that they keep getting memos suggesting that they invent a TV that plays ONLY Sony Pictures movies from the content arm.
When I talk about stuff like the broadcast flag, etc at work, I can still posture the argument that it's not clear that we make money by playing well with that thing vs ignoring it or taking a more consumer friendly approach. If suddenly "we" benefited from crap like the broadcast flag, those arguments would be DOA.
(Just like slashdot - there is not a singular hive-mind mentality inside Microsoft, and it should be clear that not everyone is 100% thrilled with everything that gets MS's name attributed to it. I can only imagine that there are good engineers at Sony as well that are upset with what has happened to their company.. )
Not MS But... (Score:4, Interesting)
Horrible article (Score:3, Interesting)
First, lets take the blue-ray drive. Lets assume for a moment, that the article correctly reports the price at between 200 and 300 dollars. So you're telling me the that between half or more of the cost is in the drive itself, to say nothing of the components that make up the system. I think Sony is run by baboons most of the time as well, but come on. Maybe at a full costs level, being sold to OEMs the blue-ray drive costs that much, but lets be real here for a second, they're not paying that much to have them.
Going further into the article, it suggest that Sony will force you to buy a bundle, big surprise there. Every console during launch has basically forced you to buy some bundle. And lets be honest for a second. What good is a console without atleast 1 game. Show me one early adopter that bought anything, just to have it sit on the shelf and collect dust. Of course you're going to buy a game, possibly two. As long as I can pick the game, I don't really think thats a problem. Now, on that same note, don't force me to buy an extra controller or any other 'accessories' especially since now the low-end model will offer HDMI port. Personally, I think thats a plus. Yes it will drive up the core costs just a touch, but lets be honest again, chances are that if I bought one today, I'd still end up buying the propietary component cables. This way I can buy the HDMI cable from a vendor of choice, and probably at a non-inflated price. I'll be standing just outside of BestBuy offering HDMI cables at half the cost of Monster on release day. Digital is digital.
Is the price of the PS3 high, yes it is. Do I still want one, yes I do. Will I buy it, probably not - but maybe. Does it cost more than the xbox 360, not necessarily. I can buy the 'base' console for the same price as the 'premium' 360. Plus I get BlueRay without any additional costs. The only advantage I can immediately see the 360 currently having is the modability. Give the PS3 1 year and I'm sure we'll see the same results.
I could go on, but to be honest I don't have the time or the energy to further crap on this article. I think someone had a word quota to fill, and this was there attempt at getting it done with.
Bad guess (Score:3, Interesting)
As will all other things PS3, we have to wait till the console arrives to see what are negatives and what are positives.
You're forgetting something... (Score:2, Interesting)
UMD is alive and well in Japan. Minidiscs are alive and well in Japan. New video games [for the ps2] normally cost around $70. It seems Sony is treating the US market as if it were Japan.
However, even if this strategy bombs in the US, there is still a huge market that will eat it up. People wonder why the XBox 360 does poorly in Japan. It's because there are no games for it - most of the games that Japanese like are for PS2. The trend will continue with the PS3. Even if sales in the US are poor, Sony will recoup some of the losses from overseas markets.
I'm just guessing, but the PS3 won't bomb nearly as badly, and it will make up ground. It may not end up being more successful than the PS2, or even the XBox 360, but I think it will end up being successful.
Re:"Save Sony?" (Score:5, Interesting)
It's not an issue of cold facts, it's one of perception. Keep in mind that at this time Sony was widely loved for having produced the Walkman, which was 1979's version of the iPod. I'm not saying Sony went out to deliberately screw the people who adopted Betamax. Far from it, it's obvious that they wanted Betamax to dominate the market. But it didn't, and people felt like they had wasted a huge amount of money trusting their beloved Sony (feel free to adjust a $1000 price tag for a VCR for 25 years of inflation.) When they spent that money, they didn't know it was a gamble or that there was a chance they'd "lose" -- this was Sony!
Now, compound that disappointment with the rest of the restrictions and proprietary media that Sony's shoveled out the doors or supported ever since they entered the production side of the entertainment industry. ATRAC, the copy bit in DAT tapes, Macrovision, Memory Sticks, CSS, HDCP, (and the rootkit fiasco) and you can't help but notice a pattern of general contempt for their customers evolving over the years.
So if a pissed-off grumpy old guy wants to whine about getting burned by Betamax, let him. He's got tons of evidence on his side, even if the facts are slim.
(A lot of people who paid thousands of dollars for non-HDCP HDMI televisions a few years ago are about to enter that same ripped-off state, so look for a fresh crop of bitter young technophiles to adopt a similar attitude towards the makers of their plasma TVs.)
Re:Strange (Score:4, Interesting)
1) Sony doesn't make the consoles as the order comes in. Sure, they won't make 6 million right away if nobody is buying them, but they still have to have enough on hand for the initial launch to fill demand. So if they make two million consoles and manage to get half of those onto store shelves before stores realize that nobody wants them, then Sony is out $600*1M + $100*1M = 700M. If they make 6 million and they sell out, they are out $100*6M = 600M, and even that is assuming that there are really 6 million people out there who are willing to spend $600 on a console and nothing else just to spite Sony. Sorry, don't think so.
2) Does anybody actually know that Sony is selling these consoles at a loss, or is this all just wild speculation? So far as I know, the only company that has ever sold a console at a loss was Microsoft, and they explicitly were not interested in making money on the console, but rather spending a boatload of money to make their way into a new market. The razor blades analogy is so bad for this market for a variety of reasons, but the most obvious one is that razor blades are consumed. You can't buy a razor and just one blade, because the blade will wear out and you have to either buy a new one or you're left with a worthless plastic stump. Console games are not consumed- you can buy just one, and it will last you the lifetime of the console. I know a couple of people who bought a PS2 just for the GTA games. If Sony had been selling that console at a loss, they would have never made their money back from three games, when one or two of them were purchased as "Greatest Hits" for $20. All of the estimates that I remember seeing for the "per console" cost to Sony of the PS3 included sunk costs such as the cost to develop the BluRay drives, which is misleading because Sony has already spent that money, whether they sell 1 PS3 or 100 million.
Anyway, I think Sony really blew it on this generation. They are too expensive to compete with Nintendo, and they are a year later on the market than the XBOX. Unless they have some really good exclusive games, (which it's been a long time since they have had) they are in for a world of hurt pretty soon.
Re:PS3 isn't expensive - Xbox 360 is overpriced (Score:1, Interesting)
Besides, this is Microsoft. $500-ish for their complete package is no shocker.. And anyway, there was plenty of discussion about their decision to make two packages back when it was new.. you know, almost a year ago? Regardless anyway, Sony's "basic version" costs as much (if not a tad more) than Microsoft's "complete" version.. there is obviously some concern there to those that don't examine the facts carefully. I mean, who wouldn't double take on that bit of knowledge and go "Hmm"?
Re:What would Microsoft do with all that content? (Score:3, Interesting)
We can see what indiscretion in choosing "targets" and/or having a binary opinion of who is or is not "guiltly", "part of the problem", or whatever leads to.
let's try another one:
I'd be happy to explain at length if you're truly curious about my employment decisions. There are many avenues for trying to change the world for the better, with varying degrees of personal comfort and ultimate effectiveness along a gradient that is at least 2 dimensional. There are those that think Microsoft is absolute evil and must be destroyed, and there are those that think that Microsoft has generally done more good than harm, and can be improved from within. I lean more towards the latter, but as I alluded to in my original post, sometimes I have doubtful days.
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