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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Blu-ray Doesn’t Validate Your Console, SonyBlu-ray Doesn’t Validate Your Console, Sony

Is Blu-ray dead? Tech Sites around the Net are calling it a “death spiral” and we’re now looking at the downfall of the winning high definition format. Many non-PS3 Blu-ray players are still in the USD $200.00 range, a bit high for mass market adopters, and people aren’t planning to run out and buy a Blu-Ray player in our economic slump.

What’s the market share of the Blu-ray product? Four Percent. Blu-ray and the PlayStation 3 have a lot of battle scares after the fight with HD-DVD to “win” the format war. In the end, Sony won the battle but the war was not with the HD-DVD format, it’s with the average Joe consumer.

Does this effect the PlayStation 3? One of the up sells of the PlayStation 3 was the Blu-ray capabilities, it games and it’s an entertainment device all-in-one. It’s a great deal right?

“The advent of low cost up-sampling DVD players dramatically cut the video quality advantage of Blu-ray DVDs. Suddenly, for $100, your average consumer can put good video on their HDTV using standard DVDs. When Blu-ray got started no one dreamed this would happen.” (zdnet)

The obstacles against the Blu-ray format are huge, especially with NetFlix coming to the Xbox 360, high definition download options and licensing costs on the Blu-ray to movie creators. Blu-ray won’t die in this generation of PlayStation 3 consoles but many folks, including Apple, are pausing to see if it has any chance at all to break into the industry.

Four percent just isn’t enough to inpsire confidence.

Diablo 3 Content Creation PhaseDiablo 3 Content Creation Phase

Now that Blizzard feels their engine is solid, it’s time to move on to creating content for the full game. Jay Wilson, Diablo 3‘s lead designer, says the game engine is in an advance stage of completion and much of the art team has moved onto Act 2. Don’t read into that, he said game engine.

Blizzard is obviously not hurting for money, given the success of World of Warcraft and they’ve always taken their time with projects to make them solid products. Blizzard’s name is on the line and they’re brand consists of three major franchises: Warcraft, Starcraft and Diablo. When you produce so few games you’re expected to do them perfectly.

How do they do it? As Wilson says, “If we haven’t rebuilt something five times it really doesn’t deserve to be shipped. That’s pretty much our policy.” (eurogamer) While a game engine is the foundation for a great game experience, the content is king. Blizzard is deep in the mire of content production so, although the engine might be solid, the final product is probably still far from complete.

End result, expect a high quality product once again from Blizzard.