PlayStation 3: Not About Quantity, About Profitability

The Xbox 360 price drop rumors flow like water and it’s all but officially been announced at this point. What about PlayStation 3 and their price? No.

Nobuyuki Oneda, the Sony’s chief financial officer said, “our plan is not to reduce the price. Our strategy is not to sell more quantity for PS3 but to concentrate on profitability.” (gamespot) This makes complete sense coming from their chief financial officer, as their motivation is to make money, not lose it.

The question remains, how will they actually make money if they’re no longer in the race for competitive market prices? Considering game licensing must Net them some amount of profit Sony’s idea seems to be the exact opposite of their original PlayStation method: saturate the market and sell them all games.

So far we’ve seen very few “need to have” games for the PlayStation 3 console while Xbox 360 continues to build a substantial library and Wii continues to break sales records for apparently no reason. When a game publisher has to decide on a platform to launch a new game, why would they choose the one that doesn’t care to be competitively priced in the market? The one that doesn’t care about quantity of sales?

Sony intends to reverse the entire razor blade philosophy where one sells a cheap razor and charges users for the blades over and over again. Their take on this concept is to sell really expensive razors and put out small half-quality blades. Is that a good market strategy at this point?

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Microsoft Shoots for Number Two In Console WarMicrosoft Shoots for Number Two In Console War

Microsoft recently announced their price cuts on the Xbox 360, effective today, but what is motivating them? Microsoft’s not going to make much additional money by passing off the savings to the customer but they will, more than likely, sell a bunch of great new Xbox 360‘s to a new crowd of gamer.

Motivation? Sony.

“I’m not at a point where I can say we’re going to beat Nintendo,” says Don Mattrick, senior vice-president of Microsoft’s Interactive Entertainment Business. Indeed, Nintendo is likely to run away with the lead in the current generation of console gaming, leaving Microsoft and Sony to battle for second place. (businessweek)

Who would have thought Sony and Microsoft would be battling out this generation for second place while Nintendo breezes through with their Wii console and a handful of games with mediocre game reviews? Don’t answer that, it’s a rhetorical question. If you saw this coming and you’re not on the marketing or project planning for one of these console makers you better prep your resume!

The battle isn’t cooling, Microsoft drops their price to compete with their big competitor Sony which also brings it closer to the price tag on the Wii getting two bird with one stone. The reason Wii is winning is clearly due to its broad demographic of grandpa and grandma non-gamers along with hardcore gamers who have to collect all the consoles and younger gamers that want to fit the trend.

Microsoft’s clearly shooting for second place by installing more units into the consumers home as possible. They’ve got a great library of first person shooter titles, a few RPG’s and RTS titles and the typical contraversial titles like GTA and Saints Row with more hot blockbusters (read: Gears of War 2) arriving soon.

I see this as a great opportunity for casual game developers to get into the Xbox Live Arcade market and start making themselves (and Microsoft) some money off the new gamers that will buy their first Xbox 360 for $199 and up. Microsoft’s getting closer to the low-budget gamer crowd with their price cuts so it would be great if they can take advantage of that market with lower cost titles as well.

If you’re a game developer looking for console stick time and you want to grab the attention of a large pool of gamers, the Xbox 360 isn’t a bad start!

While Microsoft isn’t aiming at Nintendo just yet, there is no doubt Nintendo will be in their sights if they can smoke the pants off Sony in the near future (by this holiday).

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This episode was delayed a few days thanks to some acting work for Jonah Falcon. The podcast moving forward will be recorded on Wednesdays, partly because videogame releases are on Tuesdays. The guys also discuss the disaster No Man’s Sky has been.

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Sony Should Buy Ubisoft and Here is WhySony Should Buy Ubisoft and Here is Why

Sony’s been putting a lot of effort (read: money) into the PlayStation 3 product line with very little impact in the market. They’ve got this “10 year plan” but haven’t really executed a strong plan for their first two years of said plan. Sony’s plan seems to be “outlive the competition’s technology” while all of its competition stomps on their sales and market share with older and a bit “outdated” products.

Thus far there have been five spins of the PlayStation 3 hardware with price cuts only coming as a result of a “fire sale” of old hardware revisions. Sony, like many, believes the Nintendo Wii isn’t a direct competitor in their space; the outstanding sales of the Wii probably haven’t impacted the PlayStation 3 sales too much. The Xbox 360, however, has definitely cut them deep in all regions of sales.

Microsoft has built some unexpected momentum in Japan with Square-Enix making them a few console seller titles and the price cuts in Europe boosted sales over 200% all while the US continues to buy into the 360 hardware despite its most obvious red-ringing flaws. Microsoft has great partnerships with some fabulous companies, Bungie and Epic for instance, to build them exclusives that move even more 360 units.

Motorstorm is one of the PlayStation 3’s best games, selling over 3-million copies. While, as of January 2008, Halo 3 sold 8.1 million units for the Xbox 360. Now, Metal Gear Solid 4 has sold roughly 3.94 million copies since August of 2008 yet unsubstantiated rumors exist stating MGS4 could make its way to the 360. Combined awesome titles for the PlayStation 3 may not even exceed one of the competitors best selling products; where is the PS3 excitement?

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