Sony sales dropping...
Hey, perhaps that $99 Christmas price drop isn't that ridiculous after all.
Re: Sony sales dropping...
Wow. This is ugly, ugly news -- not just for Sony, but for the videogame industry as a whole. When Sony suffers, so does almost every third-party publisher and videogame retailer, as well. I knew that Sony as a whole was struggling, but the gruesome details of the PS division's woes caught me way off-guard.Originally Posted by kai123
-- Z.
Sorry guys, it's all my fault.
I've obviously repaired too many PS2 systems, and totally fu**ed up their business plan.
I've started the next crash!!!
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I agree with zmeston. I, like everybody else, likes to get cheaper stuff, but not with the knowledge that the business is hurting. I doubt this will result in more intense competition in better games, since at this point money isn't there in the first place to make the games, and secondly we've already started to see this competition.
Looking forward to a good import PS2 someday soon though.
I don't understand something, I thought that once a company made their hardware got it into everybody's home that's when the money was going to start kicking in. I have always heard that Xbox and Sony could sell consoles for a loss because they would make it up in software sales. Now I suspect that 80% of the people that were ever going to buy a PS2 have already bought one. So now all sony had to do was rake in money from third party software sales. Now I know that the PS3 is eating a lot of cash and man power and not making 1 cent for sony. But I just don't see how now is when they would be losing money. The only thing I can think of is that people are only buying 2-5 games for their PS2. If this happens to Microsoft, the red ink is really going to fly.
Look, Sony doesn't care about dropping the price of PS2, they are so obsessed with PS3 and the PSP is going to be super-popular anyway. So why worry about them not having as many sales, they still probably gained more money from sales than
xbox
So what's the big deal?
My new SwanCrystal:
A massive price drop will compound Sony's financial woes, but they have to drop MSRP somewhat to boost demand -- a classic no-win situation. I'd guess $129, which leaves 'em maimed instead of murdered.
AND they have to approve more third-party games to boost their primary source of income. Looks like Sony needs SNK and Working Designs after all!
-- Z.
You're young, so I will forgive you your ignorance this once. Read that article again, and note the financial ripples that Sony's announcement generated throughout the videogame industry. Sony's health, at this point, equals the game industry's health.
Sony most DEFINITELY cares about the sales performance of the PS2, along with dozens of third-party publishers and their thousands of employees. Nor can third parties just "jump" over to Microsoft or Nintendo and instantly be okay, because the PS2's market share is larger than the Xbox and Cube combined. Not to mention third-party Cube titles aren't moving at all, with the exception of Soul Calibur II (which has Link in it, so it's a notable exception).
-- Z.
I don't have any stats in front of me, but in fact, the average consumer DOES only buy a handful of games for his console. I expect this number has gone up with the advent of budget console releases, but not a great deal.The only thing I can think of is that people are only buying 2-5 games for their PS2. If this happens to Microsoft, the red ink is really going to fly.
Look at the NPS/TRST sales charts -- the raw numbers, that is -- and note that a handful of videogames generate the majority of sales. GTA3, Madden, Zelda. Those are the games which break through to the "mainstream" player. Everything else fights for the table scraps.
-- Z.
Ah well, I don't need to chime in again. I will say that the picture of a BS-X unit with the words "Super Famicom lives on!!" is rather misguided, to say the least...did you think that was the prototype PlayStation or what, dude?
I doubt this will generate any opportunity for Nintendo, either. PS2s will simply drop in price and Joe Schmo will sit up and say "HEY! cheap! Cool!"
Zach is right in what he said, of course, but I can't help but hope that Nintendo and Microsoft use this as a chance to increase their own market sales and try to throw Sony off it's crown as a 'big bad monoply', which they are in HIGH danger of becoming!
"Four o'clock and all is well.....wish I was in bed, Sir."
-- Guard in the Imperial City, Oblivion
Nah, Sony has to stay competitive and I don't see how they're becoming this "monopoly." After all, GC sales outpaced PS2 sales this month.
It's a nice thought, but Nintendo and Microsoft are struggling just to maintain their market slices of what, judging from this mind-blowing news, is a shrinking pie. Neither of them are in a position to capitalize.
I mean, what can Nintendo do? They can't drop the Cube's MSRP any lower, and they've already shipped all their A-list franchises.
As for Microsoft, everyone's waiting for Halo 2, and that doesn't ship 'til next year.
This could be the ugliest Christmas for the game industry in a long, long time.
-- Z.
This is where the sound financials of Nintendo need to be understood in context. The game market like many media markets is cyclical and trend driven. Nintendo realized this early on, most likely from the examples of Atari and Sega et al. They have diversified their properties, somewhat, and maintain large cash positions with reasonable liquidity. This is not dissimilar to Apple Computers cash position and is the key to their survival as a entity. It is a sound and conservative course that insulates the companies from radical market shifts.
Sony, as I have suspected, is in a much worse position as the market leader. They rely on diversification within their core areas of competency to hopefully insulate them from market swings. Unfortunately, their areas of business are getting hammered at once as they are within electronics and media production or dissemination. These all demand a great deal of cash to maintain manufacturing and R&D.
It will be interesting to see the success and follow through the have with PSP. I am eager to see if they can launch this device at a price point that will be consumer attractive and not hemorrhage cash. My guess from past attempts is that they will follow the model of marketing the PSP as they did the PS1 and PS2. If so they will introduce it at a loss intending to break even a year or two into the life the product. This will be very hard in a shrinking market, and with Sony's other lines of business demanding cash infusions. The next 5 years will be hard for Sony.
Like I said, it's just hopefull thinking.
I think Sony needs to lower the price of the PS2, entice more third party companies to make more games for the systems, push their 'improved' PS2's that are starting to go on sale, and offer 'bundle' deals to get people to buy more.
I hope this news is'nt as bad as it sounds, but it goes along with other articles I was reading this year that this is a sluggish year for hardware sales due to no new systems and sluggish for software due to lack of A titles coming out in the forth quarter. This should be a short term slump, with things better by the end of 2004.
The PC gaming market is affected also, as their A list games are being delayed (Doom 3, Half Life 2, etc.) and the top quality systems and video cards are WAY too expensive right now. Still, I'm buying more PC then console games these days.
We have a tightly connected and high money gaming industry now and it's interesting to see how one company has affected it this much. Economics is not my strong suit, however.
"Four o'clock and all is well.....wish I was in bed, Sir."
-- Guard in the Imperial City, Oblivion
But not sound enough to keep them from recently suffering their first-ever losses. They have a remarkably different corporate structure than Sony, no question, but the next battle of the Console Wars is going to be at least as trying for them.
-- Z.
I have to admit that I AM surprised that Sony was affected this badly. After all, the video game division is just one small part of the company, and they crank out hundreds of products. Unlike Nintendo, which makes games and games only. I recall reading in 2001 that Sony made 40 percent of their TOTAL money from the PlayStation division. Could Sony be depending too much on their video game division to make money for them, similar to how Paramount depended too much on Star Trek? Does Sony need to do some changing in ALL aspects of the company?
"Four o'clock and all is well.....wish I was in bed, Sir."
-- Guard in the Imperial City, Oblivion
What with Sony's non-gaming businesses getting hammered, Sony is unquestionably depending on its videogame division for profits. There was plenty of speculation that the PSX and PSp (but especially the former) were created at the behest of Sony management, as opposed to the PS division seeing new opportunities.
-- Z.
how many people need to buy another console. man more or less everyone i know that plays games at this time has a ps2, and like me 3 of them have bought ones to replace broken ones, and mroe fo another 4 have bought japanese playstations.
What i'm saying is i have never bought so many games for one system new, so many systems new. Everyone i see getting this game or that. I don't get why the slump, unless they have reached everyone.
My life and perception has changed, but my principals are the same.
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