PlayStation 3: Not About Quantity, About Profitability

July 11, 2008July 11, 2008| schommerschommer| 0 Comment| 2:22 pm
Categories:

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?

0 thoughts on “PlayStation 3: Not About Quantity, About Profitability”

  1. Pingback: Final Fantasy XIII - Xbox 360 | Gaming Podcast

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Post

Tales of Vesperia: Xbox 360 Outsells PS3 In JapanTales of Vesperia: Xbox 360 Outsells PS3 In Japan

Sony’s been talking about how they’ve overtaken the Xbox 360 here in the States, perhaps this is because Microsoft shifted their attention to pwning them in Japan? Xbox 360 sold 25,000 units to PlayStation 3‘s minor 9,673 units according to Edge Online, that’s 2.5 times more if you’re into that math thing.

Seriously though, Microsoft didn’t really shift any effort, they just got a Japanese style game called Tales of Vesperia from Namco Bandai. Go figure, when a Japanese focused game arrives for a console Japanese gamer will go out and buy it.

The big barrier to the 360 in Japan is the games and their contents. Microsoft is in tune with the needs and demands of the United States gamers, it usually involves FPS titles and excessive killing. Japanese gamers are not exactly huge FPS fans, we’ve seen the Asian community dominate in RTS style games (Starcraft is a great example) and they’ve always had interest in MMO’s, especially micro-transaction based games and we all know that’s the land of Final Fantasy. Is it so surprising the Xbox 360 moves off Japanese shelves when they have a game or two the gamers actually want to play?

This is only partly Microsoft’s fault, Microsoft doesn’t specialize in Japanese games anymore than Square Enix excels at western style games. The big difference? Square Enix doesn’t manufacturer its own console hardware. It is Microsoft’s console and they should have an interest in making games the Japanese people will like, thankfully Namco Bandai came through for them this time!

Read MoreRead More

Episode 228: Two Thirds ShowEpisode 228: Two Thirds Show

This week is a shorter-than-usual show as Paul S. Nowak is away on a birthday vacation. Instead, Jonah and Jordan discuss the Sega Saturn game Burning Rangers, and the following news topics:

There’s also reader feedback and the Question of the Week: What do you look for first in a game’s bullet-point features? Also, check out some of the outtakes after the show ends.

Read MoreRead More

GTA IV: 46th Best-Selling Game In AugustGTA IV: 46th Best-Selling Game In August

Like a washed up superstar, Grand Theft Auto IV continues to drop in NPD figures. This Axl Rose of video games came on strong and sputtered out into oblivion with barely a notice, leaving the spotlight and all hype behind it. This drastic fall may hurt any negotiations “behind closed doors” with Electronic Arts and their constant attempts to take over Take-Two.

Prior to the release of GTA IV we, in our gaming podcast, predicted a huge launch would up the anti against the bids on Take-Two from EA but things didn’t work out exactly as we expected. Although the game has sold 8.5-million units, it might not add any new bargaining power to the back door negotiations.

A game company is only as good as their games. A hit title which dies out quick helps financially guide the future of the company; technically the future isn’t so bright. With the title quickly falling off the top game sales charts we may never see it hit record sales figures to match that of smaller titles. Having one hot title every four years that “breaks records” for a week isn’t a strong weapon against a low bid from a larger publisher.

While EA may not have any record setting “one week” sales titles yet, they do have a consistently strong set of titles which stick on the charts for months with newer titles arriving to take their spot when they fade. The same can be said for a few other notable publishers, Activision and Ubisoft. To survive in the hot game industry, especially with market downturns, one must have a cycle of great games to publish throughout the year consistently year-over-year in order to provide evidence of their financial stability.

Assuming the bid won’t raise for GTA IV, where does that leave Take-Two? Perhaps Take-Two is better off under the umbrella of Electronic Arts after all. The waters are getting more hostile in the industry as companies compete for gamers attention with 100-million dollar titles and casual games and game consoles (read: Wii) start to build a whole new none-gamer-style momentum.

Is Take-Two better off under the EA brand?

Read MoreRead More