Blog Post

Forecast of PS3’s Impending Doom

Not to get overly political, but Sony Computer Entertainment’s management is starting to remind me of the Bush administration. Despite constant dire warnings from so many experts (including an editor with the official Playstation magazine) that the PS3 is careening toward a disastrous launch, the company seems doggedly hellbent on staying the course, dismissing the resourcefulness of the competition, and in the face of mounting criticism, even going so far as to hire writers to post sunny good news about the PS3 on a “semi official” blog.

You keep hoping that Kaz Hirai will suddenly show up on a podium and announce a drastic rethinking of PS3’s pricing, or release schedule, or its online/download services, or its exclusive game line-up, something, anything, but the moment never comes. If the chart above linked to below doesn’t break through their cocoon of optimism, nothing will.

Created by jvm of Curmudgeon Gamer, it’s a comprehensive listing of videogame consoles released over the last 30 years, arranged by date and graphed according to their absolute price (cost on date of release), and relative price (current cost adjusted for inflation).

See the chart posted here. Even at a quick glance, it’s easy to draw some conclusions: the consoles that tend to succeed most in recent years are priced within the $225-350 range, in today’s numbers, while some of the biggest disasters (3DO, CD-i) are priced two or three times that.

At between $500 or $600, the Playstation 3 skews toward the danger zone, and has a price point comparable to the fairly disastrous Sega Saturn of 1995. (And by today’s dollars, it’s $150-250 more than the Playstation 2, released back in the day when it seemed Sony could do no wrong.) Priced at about $250, the Nintendo Wii seems best situated in the chart’s retail sweet spot.

Kudos to Curmudgeon Gamer for crunching the numbers. Maybe they’re too late in coming for Sony’s good, but they’re something. Then again, maybe Playstation has such powerful brand loyalty, millions of gamers will miraculously rise up next week to acclaim the PS3, despite the high cost. But from where I’m sitting, that’s about as likely as 150,000 troops being enough to secure the peace in a Middle Eastern country which… well, in a post-election spirit of national reconciliation, I’ll leave it at that.

Hat tip: Anthony J. Siino III.

26 Responses to “Forecast of PS3’s Impending Doom”

  1. As far as consumer electronics go, Sony have turned themselves from an innovative market leader (1980’s) in the field of must-have quality products, into a politically correct, overpriced, outsourcing also-ran (2000’s)

    Despite the success of the (in its’ day) fantastic, durable PS2, as far as games consoles are concerned, the XBOX36O (Which, itself is certainly not without issues) has its’ feet far to firmly in the door to even look over it’s shoulder at the ever diminishing over-hyped, over priced PS3.

  2. LOL The machine has the 2010 hardware vs the 360 2004 hardware. The average coast of a palm sized still camera wil be almost as much as a PS3 in 2008. HD is mandated. The 360 does not do 1080p It filters a analog “the oposit of Digital” version of 1080p. Which than of course is not 1080p. The 360 is so far behind their having to make a Black new version to try and weight what they kniw will come up. Microsoft had he systems counter taking down. Becuase it was 10 million them, o and o for the other 2. Now its 10 million them still. 2 mill PS3 and 4 mill Wii. At this rate Sony will catch Microsoft by late 2008 early 2009. MGS4, and Final Fantasy 13, and SOCOM, and your Getaways and many others, will hit and boost the Best hardware of this Gen up. And the dead old 360 hardware will be all the older and deader. Lets not forget the motion “”””rumble””” controller we just know Sony working on as of now. It might take them a while thow. With a added Home network in full swing, a full system, and the real games of the next gen. It really is only a matter of time. Not just the few months Sony y has been out, and in that time frame done better than the 360 did, in that same time frame “despite less countries to sell to!” The only real doom when you really think about it with a unbiased un paid off Microhead mind is. Will be a huge fall off for the 360 in 09. By 2010 the 360 may be dead.

  3. Ha! PS3’s dominance is not a foregone conclusion? This things launch was a massive failure. They can’t even put a real PS3 in glass demo kiosk, they have to hide it away behind fans and cooling strips.

    All the systems that are supposed to be “good enough for the money” (Saturn, CDi) are NEVER good enough for ANY money (point made in article). Enter the PS3. The Wii60 has more 3rd party support (with 3rd parties enjoying themselves in the process). The PS3 is just too expensive for a lot of Sony’s fanbase, and they’ll probably turn to 360. And the casual gamer will no longer turn to Sony, but probably to the Wii. Sony has nothing left. With one system launch, they ruined everything.

    The PS3’s lifespan will be like the PSP. Everyone will want it at first, but then the trade-ins will start rolling in. People will continue asking, “When is the price going down?” Everyone will either give up on gaming, or turn to another company. I’ve seen it firsthand, that’s why the DS Lite is still killing PSP. Sorry Sony, but it looks like I’m finally leaving you, for good.

  4. Re: 2nd and 3rd wave of games or always known to be the stronger titles to look for…

    You are right. Two things to think about are 1) rising development costs; 2) PS3 will not have dominant market share leading up to the 2nd and 3rd wave of games.

    Therefore, if you are a publisher or developer, how do you make the decision to allocate additional resources to PS3 development when they can be spent developing for another platform or a new title?

    You may be right…my point is simply that PS3’s dominance is not a foregone conclusion.

  5. I think online content will be great for everyone as long as they keep they price points low, if not free. As far as playing previous system games, this can only be seen as a expected service and not as a ‘new’ feature. (Play old games, again!) Nostalgia can only go so far before everyone craves new content. But, you know I’ll be playing some excite bike when it’s available.

  6. J.Lake, I’m curious to hear what you think of Nintendo’s online catalog. The downloadable games it will have for its service goes back more than Sony’s 11 years. I’m totally dying to play some of these oldies.

    • R. Pad
      Thanks for mentioning that, let me clarify my point about Nintendo. I think we may be feeling the same thing but expressing it differently. My thoughts of Nintendo’s future was based on becoming ‘obsolete’. Nintendo’s current strength is in portable gaming: Gameboy (89-98), Advance (01), Adv. SP (03), Adv. Micro (05), DS (04), DS Lite (06). Refining its self over 16 years, Nintendo IS the gold standard for portable gaming. The DS lite is a beautifully designed handheld with backwards compatibility, a great price and no true competition. Sony’s PSP is a Gameboy with an identity crisis, part PS2 part iPod, and no where near the back catalogue Nintendo has regarding games. Purchasing a DS provides instant value as compared to its confused counter part. In defense of Sony, the PSP is a 1.0 machine that will probably only get better with age.

    But, the Wii does have competition, really heavy competition. The PS3 has over 11 years of back catalogue games, a new disc standard in Blu-Ray, Online connectivity, a custom built processor, hard drive and the ability to fold proteins (genius!) just to name a few features. The 360 is no slouch either with it’s online game community as a force to be reckoned with. So, outside of the motion technology, can the Wii stay competitive? They are not competing on graphics power, feature set or title variety (mature rated games), but on game play alone. This is honorable ground to stand on and indicative of Nintendo sticking to their gaming roots. But, if gamers decide, after awhile, that swinging a controller is ‘gimmicky’, then what else does Nintendo have to fall back on? Is Mario and Zelda enough? Could Sony or Microsoft introduce competing technology that renders the Wii controller less unique? Maybe. It took the Gameboy 16 years to become the DS Lite, has Nintendo created a console that is just as refined? Probably not.

    They are the closest to becoming obsolete in this hi-stakes game of competing technology. If they consistently manage to offer something ‘different’ from their competition, Nintendo may have a seat at the table. But, if the Wii is a work in progress, then Nintendo will finally be showing it’s age. With that said, my prediction is the Wii will become the defacto 2nd console to own, since the 360 and PS3 have overlapping skill sets. No one said it was a ‘one horse’ town.

    • E-train
      You’re right about Sony not being the brand they used to be, but based on experience and longevity, Sony can learn from it’s mistakes. But, I think they need the PS3 to be a hit as part of their recovery program. Regarding price point, Apple has also proven that quality comes at a premium. The PS3 is aiming for sophisticated users who make money and want something more then what Nintendo can offer. Gaming is not a child’s domain anymore, but a billion dollar business, and the Industry is trying to shake it’s simplistic 8-Bit roots as fast as possible. As first generation gamers reach there 40’s, how can we expect them to accept a console that is designed for a teenagers budget. (Car buying has a similar trend.) Having limited experience with programming myself, things eventually get easier with longer development times (something no one had with the PS3). This was an issue for the PS1/ PS2 / XBOX / 360, not to mention every derivative of OS on the market today. The 2nd and 3rd wave of games or always known to be the stronger titles to look for, right?
  7. Lake –
    If you had made your post 5 years ago, I would have agreed with you. However, Sony is no longer associated with innovation and a clean consumer experience. That is reflected in the company’s performance over the past 5-6 years. While they may be vertically integrated, Apple has proven that that’s not necessary in the digital media world.

    PS2 is a fantastic product. The reason it outsells the 360 (which I will assume is true) is that Sony has dropped the price on it dramatically and it has a fantastic line up of titles. Will either of these be true of the PS3? Given the pricepoint and developers’ frustration with the platform, the answer is not clear to me. I’m not sure how you can dismiss this as a problem that will solve itself with time.

  8. Good post Mr. Lake, but I couldn’t disagree with you more about Nintendo. How does it have the most to lose? Its market share can only improve after the poor performance of the GameCube. As a company, it’s far more profitable than the gaming segments of Sony and Microsoft. If anything, the only direction Nintendo can go is up. How far it can go with the Wii will be fun to watch. Having played the system, I see huge potential for expanding the market, but only if Nintendo markets the machine well to the non-gamer audience.

  9. Unfortunately for Microsoft and Nintendo, consumers have had a long relationship with Sony. Recent quality issues and marketing hits aside, Sony has captured the mind-share of consumers long ago via TVs, Walkmen, stereos and computers. They’re considered a ‘lifestyle’ brand, unlike Microsoft and Nintendo. Only recently has Sony’s grip been challenged by other companies competing for the same business. But, with such a small group of competitors fighting for your console dollar, Sony has a natural lead against the rest. (Manufacturing, distribution channels, movie and music all part of Sony’s massive marketing muscle.)

    Nintendo is the humble game-centric company that realizes a pixel fight isn’t worth fighting. The Wii is their way of changing how the world sees games and gamers. They shy away from violent games (no FPS) and embrace Mario as a marketing tool. But imho, Nintendo has the most to loose in this phase of the console wars. If the Wii controller fails to become the gold standard of gaming, the system will most likely become a novelty only played at parties.

    It’s no secret that Microsoft is known more for their shrewd business tactics and less for their technology. MS is playing catchup to the video game world and shouldn’t be seen as a serious technology leader. (er,yet?) Outside of a few bright moments in their past MS is not know to push many envelopes. But, they’re a competent company with money to burn, so a slow hybridized approach seems most likely for Redmond.

    Available PS3 titles, difficult programming and inventory concerns are variables that will work itself out in time, but what will matter most between the next-gen consoles is value. With so much technology fighting for our attention, consumers expect nothing less then great. There is enough room for all three consoles, but longevity is based on keeping yourself relevant to your audience (not everyone loves FPS games or Mario ‘blank’). According to a recent Arstechnica article, the PS2 still outsells every console, including the Xbox 360. And thats after six years of availability. A first generation PS2 can outlive most computers, ipods and televisions and still deliver brand new content (ie. FF 12, Guitar Hero 2), now thats 300 bucks well spent. Considering longevity and value, spending 500-600 on a PS3 with the promise that it will last at least 6 years is a really good deal.

  10. Everything that I’ve read indicates that the service is free “for now”. Again, given the size of the loss that they’ve taken on each hardware unit, I can’t see them keeping the service free for too long. I’d expect to see a tiered service like Microsoft’s in the near future. Microsoft has had 5+ years to learn how to roll out a solid online console experience…it will be difficult for Sony to match the quality of Microsoft’s service. I’d expect to see an inferior online product for equal price 6-12 months from now.

  11. E-train, do you think the PS3 launch lineup is worse than the PS2’s? While I don’t think either of them were strong–and really, the last great launch lineup was for the Dreamcast–I prefer the PS3 launch games over the ones that accompanied the PS2 launch.

    “you have to remember that the incremental cost of the live service provides additional value that PS3 will not”

    I somewhat disagree with you here. PS3’s online service has many of the same features of Xbox Live. While it’s not as robust or polished as XBL, the service is free.

  12. Wagner, I guess the whole point of a blog is to provide a forum for discussion…even if the people that responded to you don’t make very intelligent arguments.

    While I agree that the Playstation has a very loyal fan base, it will be interesting to see how loyal those fans are when faced with:
    1) constrained supply
    2) a list of titles that is mediocre when compared to past PS launches (and not very differentiated from Microsoft’s today)
    3) being forced to purchase a next-gen DVD player that may/may not win the standards battle.

    I was not very impressed with the quality of gameplay of the titles that I saw at E3 and based on what I’ve heard the cell is very difficult to develop for. You have to wonder whether or not publishers and developers will devote the extra resources to PS3 titles rather than develop for a platform (the 360) that has a 6+ million installed base lead (you have to wonder how far they are from the 10 million mark) and is much easier to develop for.

    With regards to people’s comparison of the PS3’s cost to 360 + Live, you have to remember that the incremental cost of the live service provides additional value that PS3 will not and allows Microsoft to segment the market. Gamers do not need to hit the $600 pricepoint to play the 360. Also, the 360’s multiplayer experience is far superior to that of PS2 and PS3.

    Finally, given Sony’s financial state, competing with Microsoft on price may be a difficult pill for Sony shareholders to swallow.

  13. Few things to consider …
    1) PS3 will not face a lack of sales at launch … look at the lines outside best buy already …
    2) Demand will be high through Q1 … because of enough unsatiated demand…
    3) when sales finally slow down … because the huge fanboy base has been satiated … people will have a more difficult time to justify the cost .. But then xbox + xbox live + hd dvd drive IS more expensive …

    its not like the ps3 is bad value … its just that the ps3 is freakin omg expensive .. How that pans out is not really clear now. Prognsoticating success or failure is not only dangerous … it is pure speculation …

  14. More shoddy “journalism” from Wagner…

    If you’re going to base your argument off of numbers, at least use numbers to support your claim, christ.

    The Atari 2600 crushed its competition and created the US console market — and it cost more than its competition.

    The Genesis crushed the SNES, and it cost more.

    The PlayStation 2 RAPED the Xbox, Gamecube, and Dreamcast combined — and cost more than all 4.

    In fact, the CHEAPEST system ever released, the Gamecube, was the WORST SELLING platform in its generation.

    Wagner, before you learn to write, maybe learn basic math and some decent research skills.

  15. I’m glad someone brought the iPod into the discussion. Whenever someone talks about escalating console prices, they rarely bring up the costs of other consumer electronics. Sure they bring up inflation, but that’s only part of the picture. Compare the cost of an 80GB iPod to the PS3–it’s $350 to $600. Now if you compare the cost of one of the “failed” expensive consoles of the past to a walkman of the same era, there’s a much greater disparity in price.

  16. Wagner,

    What are your thoughts on comparing the price of consoles in an age where the console hardware you put in your house isn’t the only thing you might be paying for? To use a specific example, what are your thoughts about the argument that an Xbox + Xbox Live for 2 years (which is a conservative estimate of a console’s lifetime) costs more than the PS3 with its online service over the same time period? Of course, the more liberal you are with the estimate of a console’s lifetime, the more expensive an Xbox is than a PS3, using this line of logic. Thoughts?

  17. Outside of Nintendo, Sony and a few other established console makers, the 3DOs of the time had fringe technology with little back end support. Gaming was considered niche (by appearance, not by dollars) and had never been given the general audience most consoles see today. Sony delivered a ‘mature’ gaming platform which broke the kid friendly stigma Game Industries wore. The PS3, roughly the price of 2 iPods, includes a laundry list of next-gen technology, which today’s consumers think is valuable in comparison to just being an evolved walkman with video.

    If you want a political analogy, Nintendo (The Right) will always play towards its base, the kid-safe family friendly charm we expect. Microsoft (The Center), a reactionary player in the console wars, will stay moderate to appease the gamer who’s needs can be easily met. Sony (The Left) will always develop future pushing consumer technology, weather we need it or not, because thats their business.

    Maybe everyone should just thank Steve Jobs for making consumers understand the concept of ‘Technology done well’. Er, thanks…Steve!?

  18. Wagner,

    Looks like you pushed a lot of buttons with this post.

    I do agree that Sony made a lot of mistakes along the way, but I believe they would still dominate the next gen gaming market. The game lineup for next year is absolutely amazing, their hardware is superior, they have a strong loyal customer base, and they seem to have a well thought out plan for taking over the living room. I do not see them succeeding this holiday season but in the long run, their system is better positioned to win the market.

  19. If you notice, almost all of the consoles that were priced in that upper half were commerically failures, even though they were state of the art and highly desirable at the time.

    The exception being only those first few consoles that came out in the early years of electronic gaming.

  20. You don’t really need that graph or this blog post to see how this generation of consoles will pan out for Sony. Reading about the company’s impending doom is SO tired. It will obviously lose market share to Microsoft and Nintendo. In terms of PS3 and Xbox 360, PS3 will be the sales leader this gen. The more interesting question is if the Wii will outsell them all since it’s at a cheaper price point and goes after a different/broader market.

  21. Everyone skims at launch. The more people want what you have, the more opportunity to skim. The price will come down sharply in a few months where it will stabilize for a long time before edging lower slowly as it ages.

    It’s not like an election (or an invasion) where the monkey in the White House predicted victory and was totally humiliated. (Greetings John C.) :-)

    The launch may or may not be “successful,” but that may not be relevant to the long-term success of the product. Think of opening week numbers for a movie. Great for bragging rights, not necessarily indicative of the ultimate profitability of the venture.

  22. Not sure how this graph really shows much of anything at all.

    And the political stuff is really not wanted. If I wanted little jabs at various politicians I’d go read a political blog.

  23. How exactly does that graph help? It doesn’t even indicate the sales figures that each console accumulated. I’m sure the only use Sony would find for this is that, despite both the Playstation and the Playstation 2 being priced more than its competitors, it still kicked their sorry asses.