Business Week spoke with Nikko Citigroup analyst Kota Ezawa who believes changes in the PlayStation 3 have dropped production costs from $800 to about $400 per unit. Although Sony may have cut production costs dramatically it's not all sunshine and lollipops, Ezawa expects the Sony games division to lose about $1.4 billion this fiscal year, which is still better than the $2.1 billion loss last year and he doesn't expect prosperity in the division until '09.
With production costs continuing to drop and signs that Sony may see Blu-ray succeed, consumers who held out on the PS3 may see benefits this year. If the cadre of American analysts is correct, there may be another PS3 price drop this year -- although this time it'll appear more a sign of growth than desperation.
[Via PS3 Fanboy]














(Page 1) Reader Comments
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If Sony lowers the hammer and drops it to $299....then all bets are off and Microsoft is really going to need to lay the pedal to the metal.
The 360, even with it's stellar library of titles, is wayyyyy overpriced. It's 2005 DVD technology, and don't get me started on the failure rate, which at Joystiq is at, what, 100%? Microsoft could easily cut the price of that system by $100, and probably will come Holiday08. With Jasper in the wings, hopefully they will deliver on a STABLE, cheaper costing system, that I for one, will finally buy.
I guess I still supported MS by getting Vista Premium.
I also expect that Sony is going to launch a slim version this year. They've been agressively working on the motherboard size so it's only 60% of its original size. It wouldn't surprise me if we see a slim appear before Christmas. I think it would send sales through the roof in Japan, especially if it was timed with MGS4 appearing.
I'm happy with my 60GB right now and I feel sorry for everyone who wants a 40GB.
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USB multi card reader so no loss here...
Sony should have kept the BC if they could, but clearly they felt that people who cared about it have already bought a PS3, and those that don't care much more about price. So BC was chopped to save money. If it bothers you that much, keep your PS2.
For BluRay of course.
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They're not crazy enough to do that.
you forgot the "ba-zing" lol
but yea, somebody doesnt know what they are talking about. all PS3's have HDMI.
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You decide for yourself, if 100+$ is worth it for better PS2 compatibility.
BC was something that Sony wouldn't shut their fucking pie-holes ever since PS3 was announced.
Don't call it an extra as every PS3 should have had one in first place. Sony is trying to learn how to screw people over from the best...aka MS.
I'm just wandering how many PS3's got returned this x-mas when all the parents and kids realised that PS3 hasn't got the promised BC.
PS:At least MS said from the beggining that not all games will work on 360.
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By half it's features, do you mean a $15 PS2 chip, and a £5 USB port/Card reader assembly?
Of course, that would result in a 50% reduction in functionality, if it were a wii, but this a PS3 we are talking about, where every single one has Blu-ray, Cell, HDD, HDMI, RSX and so on..
Gee, I didn't realize I could spend more money to get what I want. What a bunch of retards.
Those precious features were mere luxury items that Sony built into the system to make a multimedia hub that could do it all(as long as you buy proprietary devices), and stand above the rest of the console markets. The luxuries brought the cost up, and everyone BAAWWW'd about the price being so high.
Sales suffered, price was the big complaint. Easy solution, rip out the expensive add-ons.
Don't blame anyone but the consumer for that one.
Also, being an early adopter (HDDVD...sigh), it comes with the territory. They don't call it the bleeding edge for nothing.
Losing true PS2 compatibility is no fun, in that Sony pioneered the feature and now casual consumers have pretty much come to expect the feature from a Playstation console.
It's got to be tough trying to market the console though. People are just about ready to adopt an optical HD format, but complain about not having six year old tech tacked on.
And the magic pricepoint for any console to truly take off is still $299. Either that or just make a bunch of party games slapped together by summer interns working with share ware design tools, and market your system towards your grandparents.
Oh yeah, and if you want to be constantly sold out Sony...just make like...five a month or so.
1)Terrible games...but a WIDE selection, of terrible games.
2)Never have a reasonable flow of inventory...just make up really high NPD data showing that your console is kicking everyones ass...who's going to look that up anyway?
3)Make sure to market towards baby boomers and stay at home mothers.
4)Oh...and f#&% the controller. Just say: "revolutionary", and, "innovative", every other sentence. Having an army of nostalgic fanboys to back up your cause helps too.
There you go Sony. Screw pricedrops. Screw blu rays. The real key to success is to completely alienate and abuse the core customer who supported your previous efforts.
Just make the PS2 case cuter and toss some six axis at it. At this point in the cycle, the terrible game selection should just about take care of itself.
I'm a genius.
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1)Terrible games...but a WIDE selection, of terrible games.
and a good selection of good games
zelda,metroid,galaxy,RE4,Z&W,GHIII,SPM,
2)Never have a reasonable flow of inventory...just make up really high NPD data showing that your console is kicking everyones ass...who's going to look that up anyway?
Nintendo has the highest manufacturing rate ever (consoles, not handhelds)
So your saying that nintendo pays NPD to make up data
3)Make sure to market towards baby boomers and stay at home mothers.
And this is a bad thing why?
4)Oh...and f#&% the controller. Just say: "revolutionary", and, "innovative", every other sentence. Having an army of nostalgic fanboys to back up your cause helps too.
Isn't this the sixaxis and eye of judgement
The real key to success is to completely alienate and abuse the core customer who supported your previous efforts.
Nintendo's core is those who enjoy Nintendo games and they have not been alienated.
6 of the top 10 nintendo games by salees last gen have already had sequels on the wii. (another 2 next year)
Or are you talking about cote gamers who didn't support nintendo last gen anyway?
But hey, it's good for business. And just color me confused as to why people are demanding a price drop on a 500 dollar PS3, which Sony already loses money on, but will blindly throw 250 on a console, a console which Nintendo makes a very solid profit on.
Again, just another reason for me to consider the Wii as not designed with me in mind.
As for the NPD, I was having fun. I'm just skeptical to the sales numbers, when the Wii is well known to be in low supply when they show up to the retailers. I'm not crazy enough to suggest that game publishers pay off news outlets in order to report a high number.
http://www.gamespot.com/xbox360/action/kanelynchdeadmen/index.html
I have owned a Nintendo console at just about every stage of my life. I clearly remember getting my NES whe I turned 5. I remember wanting a Sega but being given an SNES when I was ten. I had an N64 in middle school and a Cube along with my PS2 in high school.
At no time did a baby boomer or stay at home mother offer to play some Super C or Smash with me. Therefore, to me anyway, Nintendo doesn't correlate to Metamucil and Rachel Ray. I can liken the same jaded reaction to my childhood when my local arcade closed down and in its place went a Lane Bryant.
Again, I suppose it's nothing terrible, but again, I don't like the direction it's headed.
And as for the core not supporting the GameCube, by that time I remember a lot of my friends already owning the DreamCast or the PS2. Hell, even the XBOX came out before the GameCube if I'm not mistaken. It was only about three days apart but still last to the party. And by that point, the Playstation brand had all but taken over.
E3 2000 was the show that MGS2 knocked everyones balls off, veering a lot of core support over to the Playstation side of the fence.
You could say that gamers didn't support Nintendo, or you could argue that Nintendo didn't support gamers. It's no secret that Nintendo had a reputation of being arrogant towards retailers, publishers etc. Nintendo hardware had always been more costly to license and develop, and I think a lot of developers saw a chance to just go with Sony hardware.
The way I see it, Nintendo blew it, lost a big part of the core, and now just cut the losses and find a new demographic who they can market to.
I think the Wii helps the industry in the long run, because it has brought a new type of gamer, and I guess buying two games a year makes them gamers now.
In summation, Sony could easily develop a Wii-esque console if they just modified the PS2, and rebranded it to the same crowd that digs the Wii. And no, I don't seriously suggest that Sony do this.
I need to invent a keyboard the evokes dry humor.
If that's satire, then every Nintendo-hating, Sony-loving person here must be a comedic genius. Because, quite honestly, I can't tell the difference between this post any anything made by the "Sony Defense Force."
Does Wii have a large amount of crap games? Of course. That always happens to the market leader. You can't honestly tell me that NES, PS1, or PS2 had more good than bad games.
But, even so, it would appear as though the scales are even more unbalanced than before. And I think there are several reasons:
1) Serious developers shrugged off the Wii, thinking it wouldn't sell at all.
2) Development costs of 360 and PS3 compared to the Wii keep away the shovelware devs.
3) Several of Wii's shovelware titles are old PS2 shovelware ported over (ALL of those "Popcorn Arcade" games... ugh)
Has Nintendo alienated the core? Perhaps, and perhaps not. While they haven't made all the right decisions (particularly in regards to online), they still make games that would NOT appeal to the "casual" gamer: Metroid, Fire Emblem, Smash Bros., and Zelda for examples.
Sequels? I don't see why everyone gets such a hard-on for "OMG TEH ORIGINALS IP" There are HUNDREDS of new IPs every year. The shovelware "Anubis II" is an original IP (despite the name, there was no prequel), but who cares about that?
And even if the game is original and good, it doesn't guarantee success. Where's YOUR copy of Psychonauts, hmm?
Unfortunately, publishers do have to force their developers to work on established brands BECAUSE THEY SELL. Want more creative, original IPs? Buy more original games.
And, personally, I don't care if the brand is new or old. How good a game is has nothing to do with the characters in it. I'd rather play Mario Galaxy than Kane & Lynch, for example.
tl; dr version: You call that comedy?
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Frankly, The cost being driven down is a product more of running the systems for a year as well as slight revisions. Without the benefit of that year and it's impact on reliant technology (the more you make something, the cheaper it gets to make it), we would still be looking at PS3 launching at a loss. Just MAYBE at $650 instead of $800.
But on the other hand, Sony is, quite frankly, incredibly fast at turning around that loss point. Took PSX less than a year, took PS2 less than a year, took PSP under six months. So seeing PS3 drop into this zone this quickly isn't all that suprising. I mean, sure, Sony is an all in one company but that has definate advantages as even the nVidia chips for PS3 are manufacturered at a Sony factory.
There is no scientific explanation as to why it can't catch up to the Wii sales figures.
And secondly, how the hell does someone land a job as an industry analyst? I could pull educated guesses out of my ass too. Did Pachter just invent a job and somehow trick everyone into taking his word as future law?
But seriously...the PS3 kind of almost secures it's future positioning by default, now that Blu Ray has all but garnered industry wide exclusivity.
Which makes me wonder what format Microsoft will go with for their next console. I don't see enough bandwidth in the next five years that would enable pure digital distribution.
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They still have advantage of an add-on drive. If Blu-Ray failed, Sony would just be plain fucked.MS only has to start developing a Blu-Ray add-on for a 360 :)
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Now, I could see future generations, those who have grown up where there first musical ownership experience is via ipod. Luckily we'll all be dead and won't be around to witness the last amount of soul sucked out of media. The first music purchase that resonates with me is buying the Tool Salival box set. And being forced to go into San Francisco to get it. And almost being hit by a trolley. That's not an experience that you would remember on a digital service.
It's digital music as standard today, and soylent green tomorrow.
Spoiler Alert: It's people!
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