Wired editorial on the PS3

[Concept]

http://www.wired.com/wired/archive/14.09/sony.html

A very interesting read, though it is quite a long one weighing in at four pages. I didn't know for example, that Sony has $6 billion in reserve (I thought they had more) and the PS3 may potentially eat into near half. That really is playing with fire.

Thoughts? Valid criticisms or a recycling to what's already been debated?

[MikeRox]

I'd read before that Sony are pretty much putting their entire business operation on the line with PS3 and Blu Ray. It's a big gamble, but if it pays off as well as the PS2 did, they'll be minted for a good while to come.

[Concept]

I'd have thought that, but have they really been profitble with the PS2? It says in the above article that Sony's electronics division (which SCE may be part of) has only posted a profit once in five years. It's widely known Sony have been in trouble for a long time now, but I thought the PS2 was a success story too.

[charlesr]

Went to the pub on Sunday and was getting quizzed about the PS3 release by some very casual gamer friends. They are all getting a PS3 and remain unconvinced about the 360 and the Wii. Sony don't have a problem apart from perhaps not making as much money this time around due to increase in uptake by more regular gamers of MS's 360. As long as they stop going on about how it's a computer at the heart of a networked home and start banging on about some games, then they'll do ok.

[Soi]

Sony's electronics division is separate to the Playstation division.

Playstation has been very profitable the last few years, while the performance of the movie, music and electronics divisions has not been stellar. Playstation means a huge amount to Sony as a company.

[charlesr]

The games division is different from the electronics division I believe. The games division is a healthy earner.

edit. beaten to the mark

[charlesr]

Interesting article though all told.

[Concept]

Sony's electronics division is separate to the Playstation division.

Playstation has been very profitable the last few years, while the performance of the movie, music and electronics divisions has not been stellar. Playstation means a huge amount to Sony as a company.

Cheers.

I'm surprised that Sony are betting so much on the PS3 though. If it all goes pear-shaped, where do they go? Do they have the resources to grind out the rough weather like MS did with the beginning of the Xbox if the PS3 doesn't perform as well as expected?

[fishbowlhead]

dont forget that the ps3 may be costing more initially, both for sony and the consumer, but its going to have a 10 year life cycle at least as there main console so its a very long term game plan theyve got.

[charlesr]

Where does this 10 year lifecycle come from? If someone else releases a more powerful console in 5 years time that makes it look dump, then they'll have no choice but to release a rival.

[Concept]

You really believe that ten year claim? Sony recently used the PSone as an example to back it up.

We all know the PSone was dead on its feet in 2000.

The next-gen will probably always be triggered when one of the traditional big three console makers jumps first and forces the others to do so in order to stay competitive.

[Kongster]

If consoles had a life span of 10 years, it would be great. But in reality it's only half that.

With the PSP and PS3 selling at a loss, Sony will be taking quite a hit. Still, it won't matter if it all pays off in the long term.

[Kubrick]

I didn't know for example, that Sony has $6 billion in reserve (I thought they had more) and the PS3 may potentially eat into near half. That really is playing with fire.

Something else that will trouble Sony that the piece doesn't mention, is that they've recently had to recall millions of lithium batteries from Dell and Apple laptops because they were catching fire. The share price took a nosedive last week because of it.

[Soi]

We all know the PSone was dead on its feet in 2000.

In the main markets of Europe, US and Japan it was. In emerging markets such as Brazil, Mexico, parts of Eastern Europe it was selling well. The "10 year" lifetime is refering to the overall lifetime, not just the lifetime in the main markets.

Remember that for any electronics product, one of the biggest manufacturing costs is at the outset when you have to build the plant to make the chips. Semiconductor plants to make computer chips cost billions. All the R&D costs are at the outset too.

Therefore, along with improvements in processing effeciency that inevitably come with time, the profit towards the end of a consoles lifetime is high -even if sales are low in relative terms. So I'd imagine that selling a few tens of thousands of units in South America tens years into the console's lifetime is a nice little earner.

[Concept]

I was more or less talking about software development, not units sold. Post-2000, there was little of note on the PSone to sustain development growth. In this case, as with every generation the publishers and the development houses (probably driven by the latter) move on to technology that serves of greater interest.

Personally, I'd like to believe in an extended lifespan. For MS, Sony and Nintendo to get together and agree in principle in not launching new hardware for a longer period of time so the technology of the respective formats can be pushed, and when development costs have been pushed down due to tool standardisation/development games are judged less on the latest technological 'wow' as they are on gameplay and art design.

In practice though, the temptation is usually too much and you either have one of the major companies trying to up one on the others, or engineers and programmers growing bored and doing new things elsewhere, say on the PC. This creates a chain-reaction.

Perhaps, albeit indirectly, the continued evolution of the PC bears a weight in the progressive drive of the console market in terms of perception.

Coming back to the PSone, while I realise manufacturing costs for the PSone post-2000 will have probably been brought down low enough for Sony to turn in a profit, the actual development side of the market is nearly always lop-sided to development of technology and so the talent inevitably ends up moving on.