ps3/xbox 360 situation analysis

[rowech]

In looking at these two things determining what to buy, I'm struck by two things...

1. Is Blue Ray versus HDDVD really that similar to VHS versus Beta? It seems, from what I remember, it's almost the same situation.

2. Could Xbox 360 not effectively end this whole battle by doing one of two things or possibly even both...a $50-$100 price cut in the current models. The addition of a model at the $399 price that has built in wi-fi, HDMI, and a bigger hard drive. I know some of this is rumored. (all of it?) It just strikes me that if the could do either (if not both) of these things it could devestate Sony who is in no position to lower their price right now but would almost be forced to.

3. Did MS see far enough in advance to know how important it would be to be first, throw out a good to great system know they would sell it until the PS3 came out and then bring out the "real" system once PS3 announced thus keeping their price the same, having the initial customers, and then racking up points with people like myself deciding between the two in their current states? I keep thinking that it wouldn't be beyond them to actually pull this off.

[rkmsuf]

In my day there was no "Collecovision vs Intellivision situation analysis".

[Travis]

Originally Posted by rowech

throw out a good to great system know they would sell it until the PS3 came out and then bring out the "real" system once PS3 announced thus keeping their price the same, having the initial customers, and then racking up points with people like myself deciding between the two in their current states? I keep thinking that it wouldn't be beyond them to actually pull this off.

I would imagine a strategy like that would more than tick off just a few of the people who have already purchased the 360, no matter the price they paid for it.

It really seems to me like Sony was willing to gamble by giving Microsoft an exclusive period without opposition to try and ensure that they have a more powerful product, and both probably didn't anticipate how popular the Nintendo product would be. In their favor, the Wii is cheap enough to be a secondary system, but the battle I'm guessing (360 vs PS3) will be in a year head start as far as titles, established following and the release of add ons (such as the HD DVD drive). If an upgraded 360 is released with components that can't be purchased as stand alone add ons to the existing version, that might disgruntle a few owners in that group, especially when making their purchasing decisions when the next gen consoles come out (of course there could be some sort of refund/rebate workaround involved as well, but that's a different discussion).

[rowech]

If I'm MS, I'm sorry but I got my money from those customers already. Many will have too much $$$ wrapped up in those things to change now.

[dawgfan]

I have no doubt MS will drop the price of both the premium system as well as some of the major add-on components (HD-DVD drive) at some point in the future, which will essentially accomplish what rowech is discussing. And consumers won't have any reason to bitch about it, because that's what happens with all consumer electronics - early adopters always pay more, and the longer a product is available for sale, the cheaper it becomes to buy.

The big question is when will MS drop prices? I'm sure they've already got a plan in place based off of sales figures and cost of manufacturing. But they will walk a fine line between trying to maximize revenue (i.e. minimize per unit sales losses on each 360 sold) by keeping their price points where they are and keeping a certain percentage of overall sales in the next-gen market (which will eventually require price drops). The longer they feel they can hold off dropping prices without sacrificing market share, the more money they make.

[stevew]

I think MS's sweet price point would be an updated 360 w/ hdmi, wifi and 100+gig HDD for like 299. At that point they would be destroying the PS3, and i don't think they are that far off from being able to make money at that point either. A 399 pack with the above upgrades and a bundled HDDVD could also help them in the DVD format wars as well. It' all in how they calculate how much winning the DVD adoption wars means to them, plus the added revenue from those discs as well.

[dawgfan]

Originally Posted by stevew

It' all in how they calculate how much winning the DVD adoption wars means to them, plus the added revenue from those discs as well.

I'm not sure that MS really cares that much about the DVD format war beyond the incentive to oppose Sony's initiative. Ultimately I think MS is positioning themselves to be at the leading edge of HD quality movie downloading via Xbox Live, thus bypassing the DVD format war altogether.

[Eaglesfan27]

Originally Posted by stevew

I think MS's sweet price point would be an updated 360 w/ hdmi, wifi and 100+gig HDD for like 299. At that point they would be destroying the PS3, and i don't think they are that far off from being able to make money at that point either. A 399 pack with the above upgrades and a bundled HDDVD could also help them in the DVD format wars as well. It' all in how they calculate how much winning the DVD adoption wars means to them, plus the added revenue from those discs as well.

I'd be very surprised if they did all of that for 299. I think if they release an HDMI version with a bigger hard drive it will be 399 like the original premium bundle. I'll be surprised if they include intregated wifi, although I think it would be a good move.

[Mizzou B-ball fan]

I really don't think MS should drop prices in any way. They're still selling consoles. There are various deals that stores have offered dropping the price 50-100 if people shop around enough. That's probably good enough for now, though I can certainly understand why the consumers hope for a price drop.

Microsoft needs to find a way to beat Sony elsewhere in the world if they want to pull ahead of Sony. While I understand that Americans generally just note the US market, Japan and Europe are major markets as well. The 360 is obviously getting pounded in Japan and the early reports regarding demand in Europe indicate that the PS3 will do well because of the region-free aspect of the PS3. Europe has been screwed out of a lot of titles in the past generations and with the 360 because of region restrictions. My guess is that MS will get rid of the region restrictions in future consoles to avoid this problem.

[Edward64]

Ars reporting there may be a $50-$100 price drop on the PS3.

http://arstechnica.com/news.ars/post/20070202-8759.html

Still too pricey for me ... hoping to catch a wii soon.

[Eaglesfan27]

As a consumer I hope they cut the price soon, but as a potential stock holder, that would seem like a very bad sign. I'm not saying they are going out of business or anything like that, but they are already losing a large amount of money on each unit. Cutting the price now or soon would certainly seem like a panic move, in response to there being units on shelves so soon after launch.

[TroyF]

Originally Posted by Eaglesfan27

As a consumer I hope they cut the price soon, but as a potential stock holder, that would seem like a very bad sign. I'm not saying they are going out of business or anything like that, but they are already losing a large amount of money on each unit. Cutting the price now or soon would certainly seem like a panic move, in response to there being units on shelves so soon after launch.

All they can do now is damage control. With the year delay, the high price and the lack of any system selling games combined with the Wii being better than anyone thought and the 360 coming out with a string of good games, Sony is in trouble and it knows it.

I picked up a Wii last weekend and am having a blast with it. I'm thinking of upgrading my PC as my next big move. That puts the PS3 aside as a possible buy until the fall at the earliest. I'm honestly starting to wonder if I'll EVER get a PS3 now.

There is going to have to be some terrific games for me to consider it at this point. Sony miscalculated just about everything on this launch. I'm going to be interested to see how they can recover now. I think a price drop and getting systems sold quickly is the only way at this point.

[Mike Lowe]

I've played all three systems. I think the PS3 is by-far the superior system. In one year's time, once the PS3 has had a year to develop games, I think most people will be going after PS3 (since the Wii epidemic will have worn off...I mean seriously...it's fun but for only so long). I think people will grow old of the same Wii game being remade over and over and over and over...

My opinion at least. Obviously, I own the PS3 and nothing else.

[TroyF]

Originally Posted by Mike Lowe

I've played all three systems. I think the PS3 is by-far the superior system. In one year's time, once the PS3 has had a year to develop games, I think most people will be going after PS3 (since the Wii epidemic will have worn off...I mean seriously...it's fun but for only so long). I think people will grow old of the same Wii game being remade over and over and over and over...

My opinion at least. Obviously, I own the PS3 and nothing else.

I think you are wildly underestimating the Wii. It'll be a worthwhile system if Nintendo just keeps pumping out their hits for it. Zelda, Mario games, Wario games, Metroid, etc. I had more FUN with Madden football on the Wii in twenty minutes than I had with the game on the 360 this year in total. Not more realistic, but a hell of a lot more fun.

As for the PS3 being the superior system, I'm not disagreeing with it, but I'm not sure how anyone could make the statement yet. Resistance is a nice game, but it's not "superior" to Gears of War or Rainbow Six: Vegas. In a year, it may flex it's superiority and we'll see what it's really made of. But now, I just don't see how anyone could say with any certainty it's superior to the 360. (and yes, I've played both, side by side and compared)

[Mike Lowe]

Originally Posted by TroyF

I think you are wildly underestimating the Wii. It'll be a worthwhile system if Nintendo just keeps pumping out their hits for it. Zelda, Mario games, Wario games, Metroid, etc. I had more FUN with Madden football on the Wii in twenty minutes than I had with the game on the 360 this year in total. Not more realistic, but a hell of a lot more fun.

As for the PS3 being the superior system, I'm not disagreeing with it, but I'm not sure how anyone could make the statement yet. Resistance is a nice game, but it's not "superior" to Gears of War or Rainbow Six: Vegas. In a year, it may flex it's superiority and we'll see what it's really made of. But now, I just don't see how anyone could say with any certainty it's superior to the 360. (and yes, I've played both, side by side and compared)

Sure, no problem. I was just throwing my $.02 in. I stand by what I say. Only time will tell. Either way, as long as we're all having fun, who cares!

[14ers]

Who will be the first to come out with a ripoff to the Wii controller? Now that the wii controller has proved itself I would think both the PS3 and xbox have people working overtime to release their own version.

[dawgfan]

Originally Posted by 14ers

Who will be the first to come out with a ripoff to the Wii controller? Now that the wii controller has proved itself I would think both the PS3 and xbox have people working overtime to release their own version.

It's not quite as simple as that - the Wii controller is only cool if games make creative use of them. And a game-maker is unlikely to make a game that makes use of that cool controller unless they are sure a very large pool of potential consumers has that controller.

In the case of the Wii, no problem - that's the controller that comes with the system.

In the case of the PS3, it has some of the elements of the Wii controller in that it can detect the tilt of the controller in any axis. How well this technology works in comparison to the Wii I'm not sure, and it obviously doesn't have the point capabilities of the Wii remote nor the second controller option of the nunchuck. I would expect though that the tilt capability of the PS3 controller will be exploited by many games.

In the case of the 360, it's likely too late; unless a game comes out that includes a Wii-style controller, I don't think there's any reason to expect a Wii-type controller for the system. Even then, I don't think you'd see many games made that capitalized on that controller unless it was wildly successful, and even if that was the case, it would take a while for developers to write such a game.

[TroyF]

Originally Posted by dawgfan

It's not quite as simple as that - the Wii controller is only cool if games make creative use of them. And a game-maker is unlikely to make a game that makes use of that cool controller unless they are sure a very large pool of potential consumers has that controller.

In the case of the Wii, no problem - that's the controller that comes with the system.

In the case of the PS3, it has some of the elements of the Wii controller in that it can detect the tilt of the controller in any axis. How well this technology works in comparison to the Wii I'm not sure, and it obviously doesn't have the point capabilities of the Wii remote nor the second controller option of the nunchuck. I would expect though that the tilt capability of the PS3 controller will be exploited by many games.

In the case of the 360, it's likely too late; unless a game comes out that includes a Wii-style controller, I don't think there's any reason to expect a Wii-type controller for the system. Even then, I don't think you'd see many games made that capitalized on that controller unless it was wildly successful, and even if that was the case, it would take a while for developers to write such a game.

Still, you have to believe there will at least be a half assed attempt for both the PS3 and the 360. Even if it bombs miserably, I can't believe both will pretend it doesn't exist.

[dawgfan]

Originally Posted by TroyF

Still, you have to believe there will at least be a half assed attempt for both the PS3 and the 360. Even if it bombs miserably, I can't believe both will pretend it doesn't exist.

I definitely think developers will look harder at how to maximize the tilt capabilities in the PS3 controller to attempt to cash in on the unique gameplay experience the Wii provides.

With the 360 though, I really have a hard time seeing it. The controller is the fundamental interface to the game machine, and unless you package a controller with your game (i.e. Guitar Hero), you have to assume that the player has the base-level controller that comes with the system.

Now, if the Wii continues to be wildly successful to the extent that MS feels the gameplay of that system is taking away sales in a significant way from the 360, they could panic and develop a Wii-like controller and a title to go with it, package the whole thing for a reasonable price ($50-60) as well as selling the controllers seperately, promote the hell out of it, and hope enough of the controllers are sold that non-MS publishers start seeing enough of an install base to spend time and money developing a game that utilizes such a controller. But understand the amount of lag time we're talking about here - by the time that such a controller could hit the market, develop a reasonable install base and be in the hands of developers and then give the developers time to create a game for that controller, you're probably talking 2-3 years down the road. And with that being the case, I could easily see MS saying "Fuck it" and taking it as a lesson learned for the next go-round.

Still, I suppose MS could look at "Wario Ware", figure that game couldn't have cost much money in terms of development and decide that the figures could make sense to create a quick but fun game that could be packaged with a Wii-like controller and not have them losing money on each sale.

[Raiders Army]

The 360 controller is far more flexible with computers (see XP and Vista). I think it's a different market.

[Ryan S]

Originally Posted by rowech

1. Is Blue Ray versus HDDVD really that similar to VHS versus Beta? It seems, from what I remember, it's almost the same situation.

If the new LG blu ray/hd dvd player takes off it should start a trend of multiformat players, much like the DVD R +/- burners. If that happens, being tied to a single format could be a major disadvantage, which would be more bad news for Sony.

[14ers]

Originally Posted by Ryan S

If the new LG blu ray/hd dvd player takes off it should start a trend of multiformat players, much like the DVD R +/- burners. If that happens, being tied to a single format could be a major disadvantage, which would be more bad news for Sony.

Why? This would put more blu-ray players in homes. Since Sony is blu-ray this would help them convince more studios to release their movies on blu-ray. Remember, blu-ray is the superior format, and is almost impossible to copy for the average person. The porn industry may hate blu-ray, but Hollywood and the Software industry are going to love it.

Sony may lose some market share of blu-ray players, but they will make it back by getting more companies to use their format. I think these blu-ray clones are going to strengthen Sony's case.

[Mizzou B-ball fan]

Originally Posted by Ryan S

If the new LG blu ray/hd dvd player takes off it should start a trend of multiformat players, much like the DVD R +/- burners. If that happens, being tied to a single format could be a major disadvantage, which would be more bad news for Sony.

Honestly, there's really not a whole lot to debate about from the high-def DVD wars at this point. Sony already has a much larger installed base. BR DVD's are already outselling the HD-DVD's by a large margin. Add in that the top 5 movies from last year and 11 of the top 15 movies are Blu-ray exclusives and that puts the HD-DVD format behind the 8-ball. Also, Disney movies are exclusive only to Blu-ray. Any retailer that sells DVD products will tell you that having Disney exclusively in your corner is a major get.

As far as the gaming end, the news for Sony will also be improving quite a bit as there are major releases coming for the PS3 in the next couple of months and a launch in Europe is upcoming. A price drop during the holiday season because of the new Cell chip would be a huge help as well.