Sony: Dead in the water

Discussion in 'General Off-Topic Chat' started by Ace Gunman, Oct 4, 2006.

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Oct 4, 2006

Sony: Dead in the water by Ace Gunman at 6:18 PM (7,198 Views / 0 Likes) 95 replies

  1. Ace Gunman
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    Former Staff Ace Gunman ~••Lucky҉Shot••~

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    Well let me start off by saying that you guys know me, you know I'm usually fair and unbiased when it comes to things, and as such, I ask you not to shrug this topic off as an anti-Sony rant, as it's not. It's merely a compilation of the facts. Now be warned, the topic will be fairly long (due to the articles that have to be read), but it all has a purpose. Oh, and I'll summarize after each article. Also, I don't want a bunch of random comments from people who haven't read the facts presented in these articles. Read them, don't just jump into the discussion without having your facts straight.

    ARTICLE 1: http://www.electricsistahood.com/reviews/2...y-go-broke.html
    SUMMARY 1: If the PS3 fails, Sony loses billions. And if the PS3 sells... Sony still loses billions. Also if they drop the price to get more people to buy, they lose even more money. Their television sales are trailing far behind the competition (Sharp, Samsung, Panasonic, etc), their CD and/or MP3 player sales are failing due to the iPod (and buy/download by-the-song music), and their movie sales are hanging by the Spider-Man franchises webline. Which, by the way, will probably be ending after Spidey 3, which will in turn put an end to that particular cash cow.

    ARTICLE 2: http://today.reuters.com/news/articlenews....C1-ArticlePage3
    SUMMARY 2: Sony's stock shares have already dropped 2.75% already from negative news about the PS3, and it hasn't even been released yet. And the fact that Sony won't see profit from the PS3 for over 5 years will cause the stocks to drop even farther.

    ARTICLE 3: http://pspupdates.qj.net/Developers-say-th...pg/49/aid/67974
    SUMMARY 3: Developers believe that the PSP has either already failed, or is in the process of failing. And when the developers think the product is dead, they stop developing for it. Which will in turn be the killing blow.

    ARTICLE 4: http://www.gamesindustry.biz/content_page.php?aid=20115
    SUMMARY 4: Even Sony's own executives don't believe that Blu-Ray will last, with many of them giving sending mixed messages regarding Blu-ray's future. Bottom line: if Blu-ray fails, Sony dies.

    ARTICLE 5: http://www.1up.com/do/newsStory?cId=3154029
    SUMMARY 5: Many developers (in this case, Square-Enix) don't have faith in the PS3, and are going cross-platform. Kingdom Hearts may be coming to Wii instead of the PS3, Grand Theft Auto is now cross-platform (360 and PS3), Solid Snake is appearing in Super Smash Bros: Brawl, and there are countless more examples. Example: Originally Assassin's Creed was PS3 exclusive, now it's cross-platform. Basically, PS3 is losing brands and exclusives left and right.

    ARTICLE 6: http://psp3d.xhardwarereviews.com/index2.p...s%20Predictions
    SUMMARY 6: Analysts suggest that the PSP sales this winter will be "abysmal", no doubt signaling the end of an already dying handheld, as mentioned above.


    ADDITIONAL FACTS:

    * The price is way too much for the average consumer to spend on a video game console. The average non-hardcore gamer working 9-5 won't be able to afford it, and the average parent certainly won't be it for their child. Atleast not for a few years down the road. Alot of average consumers will put off buying the PS3 for years until the price drops.

    * Sony pissed alot of people off with one negative announcement after another regarding the PS3. They're making no allies and getting constant bad press. So far the only positive announcement has been that the Japanese core PS3 got a price drop, and even that was accompanied by the fact that Japanese PS3 games will now retail for close to $90 USD. Then there's the delays, and various other factors.

    * They plan for the PS3 to have a 10 year lifespan, but Xbox and Wii will most likely have the usual 5 - 6 year lifespan. Meaning by the time Sony even starts making any money on the PS3 (if they do), Nintendo and Microsoft will both have new consoles out that will be more powerful than the PS3, and cheaper to produce due to components costing less by then.

    * What many people don't know is that game hardware spec comparisons have been done, and the Xbox 360 is actually equal to the PS3 in most way, and even surpasses it in others. This means the consumer can get (basically) the same level of power for a smaller cost. Now the Xbox 360 is even offering something that was a large draw to the PS3: 1080p.

    * Blu-ray is slower loading/reading than HD-DVD, has a less recognizable brand name (HD-DVD is an obvious combination of High Definition and DVD), it will scratch like crazy due to the data being closer to the surface (and a lesser protective coating), manufacturers don't believe Blu-Ray recorders can succeed in North America, and now that the 360 has an optional HD-DVD drive, it basically has the same advantage as PS3's blu-ray player (except in this case you can choose to shell out money for it rather than having the price of the console jacked up).

    * Sony apparently hasn't delivered the online specs to developers, meaning they won't be able to implement online play any time soon. This one's not confirmed, but if it's true it means they're not taking online play seriously, and they need to because Xbox live has a rather large head start.

    * The Xbox 360 already has a large head start, and rumor has it they'll be lowering their prices and improving internal hardware (nothing major, just some new chips and fixes, etc) in 2007. Which will make competition even more fierce. Not to mention additional non-direct (as stated by Nintendo) competition from the Wii as well.

    * A long time ago it was announced that the PS3 budget version will not be backwards compatible (I believe it was e3), if this still stands it will be a huge drawback for the consumer. I have no idea if that still stands, but feel free to correct me if that has since changed.

    * HD-DVD at the moment has stronger sales than Sony's Blu-ray format, and it too had a head start. Not to mention Blu-ray's one advantage (the fact that it could hold more data) is useless at this point, as apparently Sony can get the larger capacity disks to work on existing Blu-ray players.

    * Sony's PSP UMD movie format was an utter failure. It didn't sell, and if I remember correctly because of that... they stopped produbing movies in this format. This may have been changed if Sony had released UMD recorders, but they were so set on keeping pirates away from their format that they refused to let that happen.

    * Various game stores are speculating (based on recent polls) that the PS3 will sell terribly in Japan this winter, going as far as giving it an equal market share figure to that of the Xbox 360. Which is ironic, as based on earlier polls before all of Sony's bad press, the PS3 was by far the most anticipated next-gen console. Now? Not so much.


    Well, that's all I can think of off the top of my head, but everything there spells out what we're all thinking: Sony is dead in the water, and they don't even know it. I mean what does it say about a company if they're going to lose billions even if they do succeed, and even more if they try and lower the price for the consumer? It says "dead meat". By the by, the first article is the msot important one. Above all else, read it.
     


  2. adgloride

    Member adgloride Its A Wii Wario

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    I'll just comment on some of the points.

    The HDTV LCD screens that sony have for their TVs they get them from samsung. If you buy a sony lcd HDTV all your paying far is the name, the samsung version is a lot cheaper and you get the same screen. Sony should have really stuck with DVD for the PS3 and it probably could have been out and a lot cheaper. Yet they insist on making it more expensive and going with blu-ray. Which no one seems to want.

    I can still see the PS3 selling like hot cakes when they are eventually released in the UK. The way I see it is I'll have to save up for about 6 months to get one. Instead of getting a ps3 I could be very close to buying a new PC. All I'd need is a little more money to add.
     
  3. legendofphil

    Member legendofphil Phil no Densetsu

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    Sony have only shipped online kits to some developers and not just certain publishers, because Sega have an online game and another that has dropped it for the PS3 only.

    The 20GB version *should* be backwards compatible because the device that deals with the older memory cards is USB based.

    Sony have also got alot invested in the Cell processor that powers the PS3, they could loose alot if it doesn't take off in computers/servers either.

    Then of course are Sony batteries, $500 million it has cost them so far with 10 million batteries across many branded laptops being recalled to date.
     
  4. yatzr

    Member yatzr GBAtemp Regular

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    by the ten year lifespan, they meant that games will be made for it for ten years. They said the ps1 had a ten year life span because games were still put out for it even after the ps2 came out. Also, games will still come out on ps2 giving it the "ten year lifespan" as well.

    you can't say the x360 gives the same level of power for less cost because it doesn't already come with the HD-DVD. Throw that in and now they're about equal cost, which makes sense.
     
  5. Mehdi

    Member Mehdi Lemonade by Psyfira

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    Sony will never die, they will never die.
     
  6. Costello

    Administrator Costello Headmaster

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    I recall reading recent news about games being around 5,000 Yen (between $50 and $60 USD) in Japan.

    I'm pretty sure games aren't $90 anyway [​IMG]
     
  7. Ace Gunman
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    Former Staff Ace Gunman ~••Lucky҉Shot••~

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    Well, I actually meant graphical power. I wasn't comparing disk capacity, as Blu-ray is obviously superior to standard DVD in that area. But graphically they're about equal, and sources have also stated that the Xbox 360 allows for superior AI. Also, yatzr, say ony doesn't go with the 10 year lifespan plan. Say they change their mind and go with the usual 6 (before releasing a new console, that is). That equals them being broke, simple as that. They will notbe seeing any money from PS3 sales for atleast 5 years. If they released a PS4 (tentative) to compete with whatever the competiton puts out, they would be breaking themselves financially, even more-so than they already are.

    EDIT: Costello, games are $50 - $60 USD in North America, in Japan they're around $85 (which I'm assuming doesn't cover tax, raising the price). The reason for the price shift is simple, since they're making less money on the reduced hardware price, they compensate by raising the software prices.
     
  8. legendofphil

    Member legendofphil Phil no Densetsu

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    JPN games will sell between 5,040 yen (~$43) and 8,190 yen (~$70) at launch.

    From IGN
     
  9. Ace Gunman
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    Former Staff Ace Gunman ~••Lucky҉Shot••~

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  10. Bowser128

    Member Bowser128 King Koopa

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    There are a few (read: many) holes in the first article's argument. Obviously Sony are going to lose money on the console itself, only Nintendo has dodged that bullet. But as always, the consoles aren't where the money is for any of the three companies, it's the games, and Sony have the money to make sure they get big developers on board for plenty of lucrative exclusive franchises and therefore make themselves money. Lots of money.
     
  11. ds6220

    Member ds6220 GBAtemp Fan

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    I have got to say congratulations to Ace. No wonder you have a 60 billion double dollar price on your head. You have the put together a great post with appropriate references to help back up your argument. Very well thought out and concise. I happen to agree with the assessment that Sony is in big trouble and I just wanted to give you a thumbs up. [​IMG] I, for one, am tired of the attitude of "it is not next gen unless we say so".
     
  12. forkyfork

    Member forkyfork GBAtemp Regular

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    What are the latest details about the XBOX HD DVD player. When will it be released (or has it already?).. Is $200 the final price?
     
  13. Ace Gunman
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    Former Staff Ace Gunman ~••Lucky҉Shot••~

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    While that may be true, that won't stop the billions in losses. And billions is alot of money, no matter who you are. However, there's also another factor: as you said, they make money on software. But as stated above most companies are going cross-platform. Sony's heaviest hitter (Square-Enix) is moving, and considering moving some of its largest franchises to the other two next-gen consoles. Now that's just one example of course. But that brings me to my next point, if you could buy Final Fantasy XII (this is a hypothetical) on Xbox 360, which costs significantly less, and is equally powerful, wouldn't you be more likely to do that rather than than spend a bundle on a PS3? I know that's what I'd do.

    Which brings up Assassin's Cross again: back when it was PS3 exclusive I was thinking "That's a nice looking game, it's a shame it's only on PS3, but maybe when/if I get a PS3 some day I'll get it". Then it was announced for Xbox 360, and all of the sudden, the one reason I had to buy a PS3 was now gone (for now, there may be other exclusives I'm interested in in the future). And I can guarantee you alot of people are thinking the same thing. "If my favorite brand, the one reason I had for buying a PS3 is on Xbox 360 as well... why shell out the extra money?"

    EDIT: forkyfork, the HD-DVD drive will retail for close to $200, and is scheduled for release in Japan on November 17th 2006. And I believe seeing something about it hitting North American retailers in December, but don't quote me on that. But here's the way I see it, is the HD-DVD drive expensive? Yes. But the difference between the PS3 and Xbox 360, is that if I don't want an HD-DVD drive, I don't have to buy it and pay a bundle extra. And at this point it'll be atleast a year until I buy a next-gen DVD format player, so that works out great.
     
  14. Bowser128

    Member Bowser128 King Koopa

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    Yes, Square-Enix jumping ship and Assassin's Creed losing its exclusivity are big blows for Sony, but like you say, Sony are putting everything they have into this, so there's no doubt the huge investment they're willing to make will procure their system many a most-wanted exclusive.
     
  15. Ace Gunman
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    Former Staff Ace Gunman ~••Lucky҉Shot••~

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    Well, from what I've seen most developers are backing away from exclusives. It's not good business in the next-gen era. Very few developers have faith in the PS3 (due to Sony and their bad choices), and the same can be said for any developer trying to market a game in Japan Xbox 360-wise. So logicially most of them are heading onto the cross-platform bandwagon, as it will be the most likely to be profitable.
     
  16. Sick Wario

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    scary article there.... but the observant have noticed Sony slipping for a while
    sooooo many media outrages from DRM, the failure of UMD, lower hardware sales, low PSP sales, a sinking movie division and the slow adoption of blu ray. Add on the multiple push backs for PS3 release, such a high price initially, and sony looks to be doomed in my eyes.
    what really pisses me off is the attitude of the company itself. that "work more hours...buy PS3" comment cracks me up...
    I think Sony had become too comfortable with ps/ps2 dominating market share.

    and WTF were they thinking not changing the dual shock, even while losing the vibration!? I almost would've rather seen them release the bommerang
     
  17. Hitto

    Member Hitto MKDS Tournament Winner

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    Nah, sony won't die. I doubt they will have first place again this gen, but they still have mindshare. Most people I know will buy sony MP3 players because the store clerk told'em so. Don't think that us internet nerds are the majority of the population, who have never heard of rootkits.

    And again, people KEEP FORGETTING no matter how expensive it will be, it WILL sell out at launch, and even for the poorest of the poor, the price will *not* be an issue.

    I wonder where that fucking myth comes from, but next time you visit the projects in your city, ask yourself why family mothers struggling on welfare and / or cleaning jobs still put money aside to buy 200$ brand name sports shoes for their kids. The price is an issue only with the middle class. We're more jaded, and expect a LOT MORE for six hundred bucks than john doe "mario is for kiddies" does.

    On the "they're losing billions no matter what" side, you also forget that a huge company (isn't sony a keiretsu?), even if they had a deficit comparable to what the US spends every day to wage war in Iraq, they would be protected by the state. Nobody wants a hike in unemployment rates. So, to keep the illusion of being a big fish, sony can lose all the money they want, it doesn't matter. What they want is to recreate what Microsoft did to the PC world. You have to keep growing and growing, and the best part is, stocks and shares do not give a fuck about profits or losses 75% of the time. They care about market domination, and chest-beating CEOs. Do you seriously think sony is run by idiots? The arrogance is what makes them relevant today. Would *you* say, after more than ten years of utter market domination, say "we don't believe in our product" ? Of course not!

    Look, I hate sony as much as the next guy, but they're not going anywhere. They might suffer a lot, but eventually, they'll go back to being the company that invented the fucking walkman instead of pushing rootkit, bluray discs and racist ads. And it will be good for the consumers.
     
  18. Bowser128

    Member Bowser128 King Koopa

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    I guess we'll only properly know who's right in a few years time (I hope you are, me =/= a Sony fan). Until then we can only speculate.
     
  19. Ace Gunman
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    Former Staff Ace Gunman ~••Lucky҉Shot••~

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    When they're losing money in every one of their industries, that's a bad sign. Even if the company as whole manages to survive, I have no doubt their video game division will perish. The true irony of the situation is that if they do die out in the video game market (once again sales = losses. No sales = losses, so selling out is just as bad as not selling at all)... anyways, the irony of the situation is that if they do die out video game console-wise, they stand to make more money that way. Because really, if your Sony's competition and they're selling off their brand, and you want the power of of said brand, you're going to pay millions apon millions to get it from them.
     
  20. yatzr

    Member yatzr GBAtemp Regular

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    you're forgetting, no sales = no sales of software = losses. selling out = selling games = losses (if any) will be far less than no sales of hardware.

    so no, selling out is not as bad as not selling at all.
     
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