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Sony Computer Entertainment is the first company whose game console was sold in more than 100 million quantity and whose PlayStation 2 game console is the best-selling game system ever produced with 147.6 million units sold. But the PlayStation 3 may not be as successful as its predecessors since its rivals are much stronger these days.

Just eight or ten years away Sony had to ensure that it had a significant number of exclusive game titles to attract attention to its console. The competition from Microsoft and Nintendo was not too significant as both struggled to deliver high-quality titles. Both Microsoft Corp. and Nintendo have radically more advanced offerings than back in the PlayStation 2 era and ex-executives of Sony admit that the PS3 may not win this round.

"I hope PS3 can match PS2, but I think the market dynamics are slightly different. It is much more competitive. For a large chunk of its life cycle PS2 did not really have any competition anywhere in the world, so Sony was able to sell a huge number of units. If PS3 does reach the same level it will take longer and it will be a more difficult challenge," said Phil Harrison, the former executive vice president of Sony Computer Entertainment Europe, in an interview with Eurogamer web-site.

According to estimates by VGChartz web-site, to date Sony sold 41.3 million PlayStation 3 game consoles, Microsoft shipped 45.4 million Xbox 360 systems and Nintendo managed to supply 76.3 million of its Wii game consoles.

The PlayStation 3 is generally on the right track in terms of leaving Xbox 360 behind in the next several months. But Microsoft is not standing still and may offer additional services for its console, which will improve its value to customers and will not let the system to drop to the third place in the home console race. Still, as the practice shows, the demand for consoles is pretty flexible and once Sony cuts the price of the PS3 once again, more people will get the PlayStation 3.

"I saw a prediction recently that PS3 will probably have the highest installed base of all the next-gen consoles. I do think that will be true, eventually. I think it can sell as many as PS2, maybe more. In the case of both PS1 and PS2, we sold more Slim units than original models. The PS3 Slim has only been out a couple of years. If you could get a PS3 for a hundred pounds... Can you imagine? It could go much higher and last longer," said David Reeves, the former president of Sony Computer Entertainment Europe who retired in 2009.

While Sony PS3 may leave Microsoft Xbox 360 behind, the most important battle is against Nintendo Wii, which is overwhelmingly popular and inexpensive to manufacture. This battle may never be won.

"Ken Kutaragi is a genius, but he got a little bit unlucky with PS3. You can't be lucky enough to get three gold medals in a row," said Chris Deering, , the former president of Sony Computer Entertainment Europe who retired in 2005.

The population of people interested in video games is increasing, so, Sony's PlayStation 3 may eventually outsell its predecessor. But the PS3 will never show the nearly 50% growth of unit sales of PS2 compared to the original PlayStation. In order to do that, SCEI will need to sell 225 million PS3s...

Tags: Sony, Playstation, Microsoft, Xbox, Nintendo, Wii, Business

Discussion

Comments currently: 2
Discussion started: 11/25/10 08:19:26 PM
Latest comment: 12/16/10 11:41:28 AM

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1. 
PS3 will likely outsell Xbox360 because of Microsoft's inability to attract Japanese gamers (where PS has sold almost 6 million units), as well as PS3's Blu-Ray functionality.

If we actually compared the attachment rate for the number of games the owners of these consoles purchase, we may have a better idea of which is actually the stronger gaming platform. It is interesting to note that Xbox360 has sold almost 26 million units in the Americas vs. just 16 million for PS3.

Either way you look at it, with sales already exceeding 40 million units for Xbox360 and PS3, being in 3rd place can hardly be considered a "loser" this generation.

The most unfortunate aspect of this gen. of consoles is their "extended useful life". Previously consoles would be replaced every 5-6 years. If PS3 and 360 are here until 2013-2015, PC gaming graphics and graphics in general will stagnate even more.
0 0 [Posted by: BestJinjo  | Date: 11/25/10 08:19:26 PM]
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2. 
I don't think graphics will stagnate as much as you imply, BestJinjo, because if the history of console games has taught us anything, it's that developers have a long learning curve on how to get the "most" out of each successive generation of consoles.

Many big development houses have only released their first big PS3 games - God of War 3, Final Fantasy XIII, etc. Companies get used to the technology on game #1 and then push it to the limits on game #2.

Granted that keeping the PS3 and Xbox 360 in the limelight for another 2-4 years means that gaming graphics won't take that next big "leap" for sometime, we're at a point where most people (gamers and companies alike) aren't exactly begging for much more graphical capability. It would be nice, but it's not going to give console gaming any more of an edge vs other platforms than it already has. Look at what the Xbox 360 and PS3 are competing with - the rise of iOS games, Wii, the Nintendo DS and soon to be the Nintendo 3DS. Graphics are not holding the "HD" systems back.

Furthermore, I'd say that it's in Sony and Microsoft's best interests to keep milking the current gen of hardware for a few years because the next big leap in graphics - heavy Tessellation - isn't at the point where the computing power is there yet to keep up with Tessellated scenes with lots of action and physics going on. We haven't reached that point yet where PC gaming is putting console graphics to shame yet.

The next gen of consoles would enable every game to be 1080p and probably include at least 4x antialiasing, it would include much more shader power and a bit more processing power, and, if currently released, it would definitely include MUCH more RAM - probably 2-4GB of memory (instead of the 512MB for each system).

Currently it would be sensible for the next gen of consoles to come with a 500GB 7200rpm 2.5" hard drive (since it's at a sweet spot of price and performance), or perhaps a custom designed hybrid hard drive (a better Seagate Momentus XT, if you will), but if console makers wait another year or two, it will become much more sensible to include 120-300GB of Solid State hard drives. Solid State in consoles will give systems load times that probably haven't been seen since the N64/cartridge days.

Furthermore, is the gaming market even ready to shell out another $500-600 for a new console yet? I'd say no. I certainly am not, and I'm comfortable with $299 for a PS3 at most. This is not the right economic conditions to release a $600 console in. The Xbox 360 was the first real "HD" system (aside from a couple 720p and 1080i capable games on the PS2 and Xbox), and the PS3 was the first out the door with 1080p and one of the first and still best Blu-Ray players. Right now, there's not much an Xbox 4 or PS 4 could offer over the current gen other than nicer graphics.

Many signs are pointing to the next gen of Xbox and Playstation to include the other big technology that's not quite ready for prime time and doesn't have any market penetration yet -- 3D.

I've seen demos of a few PS3 games in 3D at the Sony store, and they were amazing to look at. I personally don't feel that 3DTV is mature yet, and for Sports and TV shows it's generally a novelty, but for gaming it does add a lot to the immersiveness.

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So, for all of those reasons, I think a 2014 release date for the next Xbox and probably a 2015 release date for the next Playstation are reasonable, sensible, and the right thing to do. Let's have developers refine their graphics and gameplay for the next 3 years, not focus on graphics and getting used to new hardware all over again using tried and true formulas.

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I didn't even talk about the economic reasons why Sony and Microsoft need to keep selling the PS3 and Xbox 360 for 2-4 years, but that's another huge reason for them. Sony lost money on PS3's sold for 1-2 years and Microsoft lost piles of cash on the RROD debacle. The business model that both companies has in place is dependent on selling the games at a loss or at cost for 1-3 years and then making profits on the system for as many years after that as they can. Sony and Microsoft can't afford to sell systems at a loss right now, especially against the cash-generating Wii and iPod.
0 0 [Posted by: jiffylube1024  | Date: 12/16/10 11:41:28 AM]
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