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Content Tagged with PS3 + Technology-News
Sony Cuts 8,000 Jobs — Time to Cut the PS3, Too?
With the economy deep in the throes of a recession, the only question these days is who — or what — is next? Today it was Sony’s turn, which, citing “the sudden and rapid changes in the global economic environment,” said it’s laying off 8,000 employees in its electronics division and shuttering 10 percent of its manufacturing facilities. In the subsequent corporate restructuring to come, “unprofitable or non-core businesses” are in the firing line, Game Industry Biz reports — most notably, the company’s Playstation division is under review.
What this means is too soon to tell, but if you were to ask me, I’d say it’s time for Sony to walk away from the Playstation 3 as much as possible. Its $400 price point is uniquely ill-suited for these recessionary times, and while the company could lower that MSRP, it already loses $130-$260 on each sale (depending on who you believe.) Meanwhile, the Xbox 360 sold twice as many units as the PS3 in October, the most recent month for which data is available (though both consoles trail far behind the Wii.) With the PS3’s install base so small in comparison, and the appeal of its highly touted Blu-ray drive questionable at best, it’s hard to see Sony benefiting from Playstation 3.
I checked in with Wedbush Morgan game analyst Michael Pachter to get his take; he thinks that with the PS3, Sony has “too much at stake to walk away.” Instead, he continued in his email message, the company needs to “plug away until manufacturing efficiencies allow them to be cost competitive. I don’t see them taking many risks over the next few years, but think that they can get by with a relatively lean operation until they become profitable.”
Maybe so. I think Sony could invest more resources in its Playstation 2 line, which is still selling almost as well as the PS3, and can easily be revamped into an attractive, cheap alternative to the Wii. Even at an $130 MSRP, Sony sells the PS2 at a profit, and the line’s record-breaking install base of 140 million units means a large audience to which Sony can sell peripherals and upgrades.
Whatever they decide, Sony has some tough choices to make. Of course that’s true for most game companies nowadays, but since Sony’s stuck with the white elephant called the Playstation 3, that pain will be all the more keen.
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Why the Wii Could Win the World (but Probably Won’t)
Last month I had the chance to chat with a top U.S. Nintendo exec and suggest how, with a few savvy improvements to the Wii system, the company could turn it into the living room Net appliance of choice. But despite the opportunity Nintendo has with the Wii, the company seems determined to let it remain a mere video game console.
Big-screen HDTVs have reached a price point of several hundred dollars. That means consumers are now bringing home television displays both large and crisp enough for browsing the Net from their couches. And all the latest video game consoles come with Net access. Yet the Xbox 360 and Sony PS3, despite attempts to broaden their user base and include new mainstream-friendly features, seem unable to expand beyond their niche audience of hardcore gamers. Meanwhile, the Wii’s global install base is already double that of its competitors combined — and its growth shows no sign of slowing down. Indeed, Merrill Lynch expects the console, which has attracted buyers from both genders and across the demographic spectrum, to reside in one of three households by 2011.
Add to this the Wii’s innovative Wiimote, which is essentially a 3D mouse, and thus ideally suited for the speedy, point/click/drag navigation that a true big-screen Internet experience requires.
With that in mind, I think Nintendo would only need to add three features in order to win it the world — or at least, the world’s living rooms.
1. Full-featured, optimized web browser
The Opera browser that comes pre-installed in the Wii is no-frills, and frustrating to use. A Yahoo-style web portal would greatly increase its popular appeal; a version of Opera robust enough for, say, watching Quicktime movies, editing Google Docs, and playing casual Flash games, would be even more compelling. Add a Nintendo-branded keyboard peripheral, and your game console suddenly becomes a low-budget, cloud-computing PC.
2. iTunes-like interface for purchasing content with Wii Points
Wii Points already links virtual currency to users’ credit cards, but other than casual and classic video games sold in the remarkably crippled Wii Channels, there’s little to actually buy with them. Wii Points cry out for purchasable movies, music, and other audio/video content, but none have been forthcoming. (The lack of a hard drive for downloading content is, of course, part of the problem.) Why stop there? Imagine if a site like Amazon were added to Wii Channels and accepted Nintendo’s currency. The Wii would become an online retail shopping appliance, too.
3. Multiplatform social network with seamless chat/IM
With little ability to really interact across the Net, the Wii’s cute-but-trivial Miis are avatars without an MMO or a social network to give them a community. Linked to Facebook, the iPhone, Nintendo’s handheld DS, and other platforms, Miis would become your “home” avatar, the communication stream you’d use from your couch.
While the Nintendo exec I spoke with listened attentively, he explained that such features don’t fit the company’s main goal: to provide a platform for fun and games. For the moment, then, the Wii seems destined to become this generation’s Playstation 2 — an epically popular game console, but little else. Which is a shame, because if Nintendo misses out on this opportunity, we do, too.
Image credit: wii.com
New PS3 Model Means Price Cuts Soon?
Sony unveiled a new 80GB PS3 model today, scheduled to launch this June in the broadband-pervasive South Korea. The news comes amid slow sales of the pricey console and just one month after pulling the cheaper 20GB version from North American shelves.
“At this time there are no concrete plans [to sell the 80GB model in other markets],” said one company spokesman, speaking with PC World. However, Sony also denied rumors of the newest PS3 back in March, despite filing a change request with the FCC that mentioned the 80GB’s existence.
The common belief behind the new move is that Sony may be prepping for an earlier-than-expected price drop of the PS3’s steep $599 MSRP. What better way to do it than by introducing a larger capacity machine whilst dropping the current 60GB model to $499?
Even then it will take at least a $200 reduction in price before consumers resolve to buy the system en masse, independent of upcoming games in the pipeline. Don’t get me wrong; the PS3’s technology is extremely impressive and probably worth the asking price. It’s just that Sony overestimated most gamers’ willingness to swallow the pricetag, when originally deciding to include the costly Blu-ray and Cell processor. Porsches are really nice and easily worth the money, but way more people drive Toyotas.
Beyond the bigger hard drive, company officials said the new PS3 shares the exact specifications as the 60GB version. It launches June 16 for 518,000 won (US$581).
Kutaragi to Step Down From Sony
In an announcement that shouldn’t surprise regular GigaOM readers in the slightest (warning signs emerged as far back as last February, and reached crescendo pitch in November and December), Sony Computer Entertainment Inc. just announced that CEO Ken Kutaragi, the “father of the Playstation”, will leave his post in June and become an “honorary chairman of SCEI”.
By most appearances, his new title will be an “emeritus” position in the sense attributed to Rupert Murdoch, when he showed a Newscorp exec the door: “The ‘e’ means you’ve been given the elbow and the ‘meritus’ means that you bloody deserve it!” Unsurprisingly, most analysts attribute the departure to the Playstation 3’s poor performance against the Wii, and worst blow of all, as compared to the Xbox 360.
Not entirely deserved, however, for despite the numerous missteps in its development, pricing, and marketing, the PS3 ultimately failed because Kutaragi succeeded with the PS2 so well. Though seven years old now, the Playstation 2 is still selling better than the Playstation 3; with a 116 million+ installed base, a massive library, and a list price under $100, there’s little incentive for Playstation fans to spend $600 upgrading. (Especially when quality backward compatibility was in doubt.)
So there’s tragic irony in Kutaragi’s departure. Having transformed videogaming into a truly massive entertainment medium, he seems to have assumed that the market he did so much to create would follow him to the next level.
As IDC analyst Billy Pidgeon put it to the AP, “Sony didn’t notice that their audience was dwindling and didn’t increase the base by playing to a wider demographic, and instead it played the old-school game of playing to the 18- to 32-year-old male early adopter.” But in those seven years, the young men who had eagerly snatched up the PS2 were now having kids of their own, making them ripe targets for a console that could appeal to their whole family. So rises the Wii– and so goes Kutaragi-san.
Analyst: Microsoft’s Gaming Effort “Disastrous” - O RLY?
As a gamer, Roger Ehrenberg is a fan of the Xbox 360; unfortunately for Peter Moore, however, his day job is President of a Wall Street analysis firm. And the investor’s perspective is decidedly at odds with the gamer’s. To wit, as he writes on his blog:
“Gaming has been a disastrous endeavor for Microsoft, particularly from an investment perspective…” [Emph. mine]
His argument for a statement of such face-punching boldness is threefold: basically, 1) after blowing $21 billion over five years on their Home & Entertainment division, all Microsoft really has for its efforts is $5.4 billion in total operating losses, 2) the Xbox line has simply failed to take off in Japan, heart of the console industry, and 3) despite their stated intentions, the 360 has failed to diversify its audience much beyond hardcore gamers who own HDTVs.
It’s a solid analysis– read it all here. But is it correct? Short term, maybe. To take Microsoft’s side (and if I won’t, who will?), I can suggest three big picture rejoinders:
1 – Microsoft has finally bested Sony in the console wars.
After the first Xbox failed to capture the market away from the PS2, the 360 dominates over PS3, and looks poised to continue doing so.
2 – The Wii and the 360 aren’t directly competing.
While it’s true the Wii has succeeded magnificently, it did so by being an extremely cheap, non-HDTV console that has far less of the 360’s non-game features.
3 – The 360’s a full entertainment platform.
Where the Wii has revolutionary game functionality and Web browsing, the 360’s success as a next gen console will boost its appeal for downloading high-definition TV and films, and being a music/podcast hub for the Zune—content that the Wii can’t (so far) provide. (And hey: first console-based keyboard out the [next gen] gate.)
So—disastrous in terms of money spent versus profits (not) earned? Sure. A failure 3-5 years from now, when HDTVs are much cheaper and broadband is better and faster? I suspect not.
Hat tip: Infendo.
