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PS3 spurns recovery for Sony (much like cocaine spurns recovery in narcoleptics) photo

Sony is a company that was once the talk of the tech sector. With their gargantuan successes - including the ubiquitous Walkman and their line of chic televisions - Sony has traditionally been the Icarus of technology, soaring above their competition on wings made of dreams and solidified wax. Sadly (for them, not this analogy) Sony flew too high, and has recently seen a string of failures including the MiniDisc, every DRM scheme they have ever concocted, and last year's storied $1.93 billion splatter of red ink from their PlayStation 3 console.

Sony CEO Howard Stringer, however, believes the PS3 to be the key to Sony's future, and he said as much to shareholders at a meeting in Tokyo earlier today. To quote the man behind the tie:

We always lose money in the hardware initially, and we recover that money gradually...We believe that the PS3 going forward will be vital to our future, and succeed

It's still too early to report Mr. Stringer's pants as being en flambé, but considering a high point of the company's financial forecast for the current year includes a loss of only $404 million dollars, I wouldn't consider them out of the woods just yet. In fact, since I only know three people who own a PlayStation 3 and I exist in a world almost completely made up of spare Crash Bandicoot jewel cases and Super Nintendo peripherals, I think it would be more appropriate to say that Sony is still stuck ten miles from the nearest ranger station, the sun is setting, and they smell strongly of red meat.

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67 comments | showing # 51 to 67

some_dude's Avatar - Comment posted on 06/22/2007 11:42
some_dude
Just to be fair to the poor PS3, this makes it look descent. Of course Japan thinks the 360 dropped the bomb on Hiroshima, so....
bhive01's Avatar - Comment posted on 06/22/2007 11:57
bhive01
@some_dude, it's all about perspective. I think comparing anything to the DS is unfair at this point, with perhaps the exception of the PS2. There's just too many DSs around. What's there not to love about a DS?

TheStripe's Avatar - Comment posted on 06/22/2007 12:05
TheStripe
"Look the obvious is right here, sony will do well when the price drops, I doubt they will be king again but when the price drops the PS3 will be fine."

Well, Sony will be selling more consoles, yes, but losing even more money on each one out the door. With the current timid sales, money blown on exclusivity contracts, and massive dollar losses on each console sold have added up to 2 billion dollars in losses in the gaming division.

The one thing a console needs to see the upper end of it's potential is lots and lots of games, good or bad. The more developers making different games for any particular console helps the development community to better learn how to take advantage of the hardware. If only the big-budget devs are using Sony's tools to make PS3 games, instead of optimizing their own toolchains and libraries, the PS3 isn't going to improve as a platform within it's life. If it's not economical to spend R&D budget on making these new development tools because they will work better for your games than the ones sony distributes because you had to spend $20k plus per development kit for each of you 30 coders, it's hard to make money. And games, from a business standpoint, exist to make money. While I have no doubt Sony's console will have new games clear to the end of it's life cycle, those games aren't going to push the sony hardware to it's potential because it's not going to be economically feasible to do so. Remember before the console launches, when Sony's suits were talking about game prices? They were talking like $80-$100 was going to be norm, in order to fit into their business model. The problem with the PS3 is that the only discernible effect of their new high powered console is new, high powered overhead. Microsoft is doing comperable graphics (currently) for less money, and still losing less money per box sold. Sony's future-proof tactic is a lark, because the MS gaming division is going to release a new box in five years, absolutely, positively. And it will probably support both blu-ray and HDDVD, if no format comes out on top before then, and have a feature set that puts the PS3 to shame, as well as capitalizing on everything that the game industry learned from the PS3 about multithreading and simultaneous processing in the Cell unit. So Sony's PS3 is only futureproof in a vacuum.

What am I saying, Sony already has a console that lasts ten years: The PS2.
RICHARD BLOCKER's Avatar - Comment posted on 06/22/2007 12:16
RICHARD BLOCKER
It looks bad for Sony right now. I can only wish that the PS3 recovers. There's no reason for people to want it to fail. It's success will obviously give us more options in our gaming. But as my Momma always used to say to me when I was a youngin', " Shit in one hand and wish in the other, see which one fills up first."
bhive01's Avatar - Comment posted on 06/22/2007 12:16
bhive01
Well said Stripe. Well done.
RICHARD BLOCKER's Avatar - Comment posted on 06/22/2007 12:23
RICHARD BLOCKER
TheStripe wins 3 internets.
TheStripe's Avatar - Comment posted on 06/22/2007 12:29
TheStripe
Three? What am I going to do with three? Enough people hate me because of what I do with the first one.
RICHARD BLOCKER's Avatar - Comment posted on 06/22/2007 12:39
RICHARD BLOCKER
I only award over 3 internets for pictures of bewbs or horrifying car accidents.
uptonogood's Avatar - Comment posted on 06/22/2007 13:50
uptonogood
sony of course knows the ps3 is priced in such a range that it will turn off a lot of people, but that wasn't really their game, now was it? there's way more to be made off of the blu-ray royalties. their push to place the blu-ray drive into ps3's came with a steep cost -- loss of market place, but if blu-ray takes off and it can be attributed to the ps3, sony wins no matter what. sucks for the ps3 fans if the console fails, but sony will have made considerably more from blu-ray royalties. if both succeed, then it will have been a fantastic strategic move.
Crunshii's Avatar - Comment posted on 06/22/2007 15:38
Crunshii
well check this out.

if sony didnt include blue ray on the ps3, yes it could have costed about $400, and only offer the same potential of what the 360 is capable, no real difference and since the cell is a different harder architecture, PS3 would have lost in the long-run since it doesnt offer anything more potential than a 360 that has launched a year b4 the competition and is established. u can bet blockbuster and probably many industries would have gone hd-dvd since MS supports it and Sony would have lost the whole BRD investment.(not to mention Sony could not make a BRD add-on player like the 360 did, the cheapest player comes more expensive than the PS3)

So far blue ray is winning, thanks to the ps3, but for a price, that sony would have lost allot more billions than just the ps3 losses. and it shouldn't even be called losses, its called investment, investment in the next hd movie player/format, console, and that home thingy is coming in September. Sony is pushing boundaries over everyone else, and for a price, I am glad they are because if they didnt then who would? (Same as M$ pushes that new touch screen platform for restaurants and platforms, I clap for them for doing that)

So in other words, sony set the difference by making the PS3 BRD standard, if it didnt, it wouldnt be any difference than the 360. don't you agree?
Joe Burling's Avatar - Comment posted on 06/22/2007 15:58
Joe Burling
In the past, Sony used the Playstation to help the rest of the company be profitable. Right now, Sony is using profits from the rest of the company to help the Playstation. Nothing stays the same forever. GM is a perfect example of that. Am I saying that Sony is doomed? Hell no. Am I saying that Sony will win? Not necessarily.

Sony has an uphill battle on nearly all fronts. The biggest things they have going for them right now are 1st party titles and their name brand. I've actually been really impressed with their ability to consistently improve the PS3 with firmware updates and I encourage them to keep it up. The games are coming; we know that.

Sony's biggest problem right now is that price. It's put them in a very tough position. On one hand, they could lower the price which would increase the install base, but this would (temporarily) put them in a bigger financial hole. On the other hand, they could keep the price the same, but the install base wouldn't be as high and it would be harder to sell those ever-important exclusives to developers and publishers.

I've seen some great possibilities with games as well, such as GTHD (which is really just a demo). The problem is, it costs so much to make a quality full retail game like that on the PS3. There is a balance that must eventually be reached if the PS3 is to ultimately succeed. Price of game * games sold must be <= cost of development. I don't think the price of games will go up. The number of games sold depends on the install base. Over time, cost of development will decrease while the install base increases. This is that balance I was referring to earlier. I think the biggest question here is: when will that happen? 2008? 2009? Will it finally get there around the same time as the next Xbox is getting ready to release?

Everyone reading this right now is the minority of gamers. We all want a PS3, I'm sure. Why wouldn't we want access to all games and gaming features? It's not going to be any of us that decides when this will happen. It's going to be all those other people out there (the ones that are killing for a Wii). Personally, I don't expect those people to contribute much while the console has a $600 price tag.

If Blu-Ray wins, I expect standalone players to be cheaper than the PS3 by the time the masses have figured out that they want one, so I don't expect many of those people to go buy a PS3 when a standalone player is half the price. The PS3 will hit the critical market when people want it as a gaming machine. I wish Sony the best of luck.
dual_handguns's Avatar - Comment posted on 06/22/2007 17:03
dual_handguns
Thank you some_dude for this

But for a more accurate post you should have set the graph values to show the whole story

As much as I don't like the PS3 I don't think it's in any danger. I hear so many people say "Well when the price comes down I'll buy it" That I'm certain it's just a mater of time. And if you'll notice from the handy chart...(Thanks again some_dude) the worldwide trend is quite similar to the 360's. It's just behind by a few quarters.
dual_handguns's Avatar - Comment posted on 06/22/2007 17:09
dual_handguns
Oh and by the way...about the exclusivity contracts

Microsoft being the shifty folk that they are have not had to worry much about being exclusive because for the whole time before the PS3 there was no competition. So what if a few games come out on the PS3 and the 360. The lag between release dates will always give MS an edge...

Where MS lacks in the video game department they make up for in Bill Gates evil empire EXP points
TheStripe's Avatar - Comment posted on 06/22/2007 17:42
TheStripe
"2 billion dollar loss would be some deep shit if gaming were all Sony was doing. Kinda like how the Xbox division hasn't made a profit (I'm sure that has changed or will change soon) but yet, MS is still alive. I wonder why that is?"

An 80% lockdown on the consumer PC OS market, probably. And emergent technologies like photosynth and surface. I agree, that Sony's biggest mistake was thinking the 360 was going to fail, and that gamers would have to buy Sony to get next-gen gaming, with nintendo out of the picture. They figured this lock on the market would be the perfect time to leverage a new media format, even though they knew it was going to push the console price higher than we're used to paying. They thought that everyone who owned a PS2 was going to march out and buy one because of brand loyalty and superior technology. It almost seems like games were an afterthought.
Aequitas's Avatar - Comment posted on 06/22/2007 18:38
Aequitas
@BuckF1tches: Well said. I personally think that once the price comes down to a more competitive level, developer support and games will surge. I'm actually hopeful that this will happen - I love my 360, but it doesn't serve every facet of game genre equally.

@Crunshii: I disagree. The only time technical specs honestly come into play is in press releases and fanboy arguments. Sony has their first-party dev studios, MS has theirs - that alone differentiates a purchase enough for most consumers. Games tend to drive hardware sales more than technical specs.

Besides, I have my doubts about how much of the available capacity of a BD-ROM will actually be used for most games. All of those assets cost money to develop, and if they aren't necessary, developers won't create them just to boast 50 gigabytes of data on the disc. This also leads to some concern that we'll see BD-ROMs stuffed to the brim with 1080p video cutscenes, akin to the FMV nightmare Sega CD experienced when developers could suddenly use decent quality video clips in games.

We'll see. More capacity is better than less, but I for one don't appreciate being leverage for a new storage format. That does tint my opinion of the Playstation 3 and Sony, but if the games roll in and the price comes down, I can forgive. I still don't have to buy Blu-Ray movies, after all.
SniperFodder's Avatar - Comment posted on 06/23/2007 11:31
SniperFodder
@ LordRegulus
"I likes teh vidjamagames. I likes to play them.

The machine and/or manufacturer who facilitates this process is irrelevant to me."

I couldn't have said it better myself...
brainderailment's Avatar - Comment posted on 07/03/2007 20:10
brainderailment
Screw this comment section.
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