Can PS3 survive for long?

[20 June 2007]

By Victor Godinez

The Dallas Morning News (MCT)

The latest U.S. monthly sales numbers for video-game consoles came out last week, and you almost have to feel sorry for the PS3.

The PS3 is doing so poorly, and it’s costing Sony so much money, that I wonder how much longer Sony can afford to keep this albatross around its neck.

According to the tally from the NPD Group, Nintendo took the top hardware spot in May, with about 423,000 Nintendo DS handhelds sold. Nintendo’s Wii console was in second place, with sales of 338,000. Third was the handheld Sony PSP (a quiet success story that deserves its own column) with sales of 221,000, while the venerable PS2 was in fourth place with 187,000 consoles sold.

Huffing and panting across the finish line in fifth was the Xbox 360 with 155,000 consoles sold, while the PS3 was sixth, with a mere 81,000 systems sold.

The PS3 is occupying the sales slot that, in the last two console generations, was reserved for Nintendo’s GameCube and N64 systems.

The difference, though, is that Nintendo always eked out a small profit on those consoles, even when they were easily outsold by the PS2 and original PlayStation. Sony will lose almost $500 million on its game division this year, according to analysts polled last week by the Financial Times.

That is simply untenable for Sony.

Not only is the console not selling well, but people who do buy it aren’t buying games, which is where the real money is.

According to GameDaily.biz, of the top 10 best-selling games in May, four were for the Nintendo Wii or DS, four were on the Xbox 360, and two were on the PS2.

Not a single PS3 game made the top 10.

Microsoft can ride out the wave of Nintendo mania a little longer, because Xbox 360 fans are dedicated, and they’re being rewarded with excellent games. Halo 3 alone could easily entice several million people to buy a 360 later this year.

But Sony’s console isn’t seen as the system for the hard-core gamer, as is the 360. It’s seen as the system for rich people who already own a 360 and are looking for something frivolous to spend their cash on.

For a mass-market consumer electronics maker like Sony, that customer demographic is simply too small. After all, more than 100 million PS2s have been sold since the system was released in 2000. At this rate, we’ll all be dead and buried - or be cyborgs kept alive by nanobots and genetic engineering - before the PS3 hits that milestone.

So Sony has two choices: slash the price (and a $100 discount may not be enough anymore) and hope that higher game sales can offset the hardware loss. Or get out of the home console business and focus on handhelds.

Things sure do change in a hurry.

Tagged as: nintendo | ps3
 
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Comments

Total tripe.  I noticed how you tagged this Nintendo, despite having nothing at all to do with Nintendo..  Just a sad Wii owner, with nothing to play it seems…

Anyway.  The PS3 is selling great, it’s sold over a million in Europe in 8 weeks.  It’s sold 4.5 million globally since November.  It’s reliable, quiet, and the firmware updates have added great functionality.

If you want to look at facts here are some:

The PS3 is actually selling better than the 360 at the same point in it’s life.  The 360 was also selling at Xmas (the prime sales time, compared to summer).

The PS3 growth rates are almost identical to the PS1 and PS2 growth rates.  There is nothing going wrong at all.  If anything, the market is more tighter now, with 3 consoles all gunning for the top spot.

Basically, you have no idea what your talking about…

Comment by Steve — June 20, 2007 @ 8:18 am

Agreed.  I’m tired of reading uninformed, baseless articles proclaiming doom and gloom for the Playstation 3.  Does PS3 have its challenges?  Sure.  But to credit the previous post here, PS3 is really about where it should be in terms of sales if you think about it.  Slow sales—and the lack of software royalties the article points out—are the result of two things: the sticker price and a lack of software titles.  Sony needs to work on the price, but people will pay for something if you give them a compelling reason—like fantastic games which showcase the PS3’s abilities.  Right now they don’t have that, and there’s a big lull in software releases.  Wow, a new console with a lack of software—that almost never happens, right?  Note to author: try to understand the basic principles involved in the life cycle of a console before you write an article like this.

There’s no doubt the PS3 is in a big lull right now, at least in the US, but there is absolutely NO way you can even start to base its future performance on how things are right now.  Even in a historical context this would be incredibly stupid.  You can start to judge a console 18 months after it launches, if that’s what you want, when there’s software available for it.

This article is as uninformed as it is misleading.

(And yeah, I own a PS3.  And a 360.  You could call me a fanboy for both.  I just can’t stand ignorant, inaccurate garbage like this article.)

Comment by S9 — June 20, 2007 @ 8:50 am

another fanboy!!!

Comment by john — June 20, 2007 @ 9:04 am

I agree with the two posts above.  You have to look at the BIG picture. Sony is going to have several great exclusives in the next couple of months not just one ie. Halo, which by the way is getting really old.  Can’t Microsuck/Bungie come up with anything or new or orgiginal?

Give Sony some time.

Coming soon…...

1)Home
2)Ratchet & Clank
3)LittleBigPlanet
4)Metal Gear Solid 4
5)Final Fantasy 13
6)Lair
7)Warhawk
8)Heavenly Sword

and many more!!

Comment by Lakuma from Somewhere — June 20, 2007 @ 9:07 am

These negative articles about the PS3 keep popping up again and again.  I noticed that once microsoft entered the market the video game console debate has turned vicious.  People are ready to declare one system dead which hasn’t even been around for a year yet.  I just don’t remember the same kinds of arguments between the snes and genesis.  My friends had genesis and I had an snes.  That was it.  We didn’t trash one system over the other.  Microsoft has launched a great media campaign and it’s fans are helping. Microsoft has paid 50 million dollars for exclusive Grand Theft Auto content, a sony exclusive before.  Microsoft has also gone ahead and sued the maker of the rumble technology because they claim that they have exclusive rights to that technology, a technology that was sony exclusive before as well.  Microsoft is in this to win.  They want to be the only game in town and their mindless fans are helping them. I like it that there are multiple systems and think we as the consumer get better games out of it.  I don’t want a company like Microsoft to be the only game in town (no pun intended) because we as the consumer will suffer from lack of diversity in the market.  I just don’t get where this Playstation hating came from.

Comment by Moshedanger — June 20, 2007 @ 10:50 am

i’m glad that this article ,based on similar gloom and doom articles rather than researched fact , is getting the lashing it deserves, everyone brought up the the best points: Get Nintendo and MS’s balls out of your cheeks -check the FIRST PARTY GAME LIST for the PS3 , twice, then check the competitions- Re-evaluate just how temtping Halo is after its been shown in Beta form- keep thinking mere numbers and conjecture are enough to make a claim like yours, and your articles will continue to be “untenable”!

Comment by pantyhelmet from here — June 20, 2007 @ 2:29 pm

Wow. Another negative article about the PS3, what do you know?

I have heard all this before with the PS2.

It was going to fail.

It didn’t have any games.

PS2 messed up by using DVD, because CD-ROM was definatly enough storage capacity for the time.

PS2 was too expensive, nobody would pay that much for it when they could get a Dreamcast for free.

7 years later, PS2 is the most successful gaming console in the history of gaming.

Hmmm yeah PS3 is definatly DEAD, it’s only been 7 months, and there are no games! OH MY GOSH! 360 had SO many cool games 7 months after release! I can’t name any but boy were they awesome!

Quit writing garbage, you damn pundit.

Comment by Jessie from Holland, MI — June 20, 2007 @ 6:09 pm

Agree with all the above and wanted to add some advice for this obviously rookie writer.

Do a little research on your subject and understand the history and lifecycle of gaming consoles.

I’ll also add that the vast, existing PS2 and PS1 game libraries are compatible with the PS3.  The advantage here is that ALL those consumers that are STILL buying PS2’s will have a clear upgrade path in the future when the PS3 comes down in price.

Comment by Mike from Brockton, MA — June 20, 2007 @ 6:31 pm

Yeah, the console is losing money, but the XboX, and I mean in all of it’s existance, NEVER made money for Microsoft. It’s 5 billion dollars in the hole, and it’s not looking any better even if Halo 3 hits sales

Comment by pixelsword from here — June 21, 2007 @ 8:01 am

Yeah you ps3 fanboys better check your numbers - where did you get 4.5 mil sold. More like 3.5 mil. And if you think Home is going to sell even 1 system, you’re delusional. Yeah I’ll get a ps3 when a must have game comes out - til then I’m not shelling out 600 bucks so Sony can win a format war(which thay’ve been trying to do since the 80’s), and all you that beleive that Blu-ray is necessary for games are total dumb-asses - Oblivion fit perfectly fine on dvd and look how massive that game is. I own a 360 and a Wii. And last gen I owned 3 ps2s, 1 xbox, 1 Dreamcast, and 2 Gamecubes. So talk to me about failure rates again.

Comment by Larry — June 21, 2007 @ 8:16 am

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