Why the Wii needs a price cut fast

Smooth ride up until now

The Wii needs a price cut fast and here is why. Up until now, Nintendo has had a very smooth ride this generation. They started out with the lowest price proposition by far and the most revolutionary, intuitive and immersive control scheme and biggest fun factor to top it all off. At least, that is what more than 50 million people around the globe think.

Sure, the white box can only deliver 480p as its top resolution. And the rest of its hardware is equally modest, making sure that most graphics-intensive games by third parties get either a toned down version, a completely unique adaptation (some examples are ´Overlord: Dark Legend´, ´Dead Space Extraction´, ´Resident Evil: Darkside Chronicles´) or pass the console by completely. But, all the unquestionable Nintendo goodness aside (´Metroid Prime 3´, ´Zelda: Twilight Princess´, ´Super Mario Galaxy´), hardcore gamers got a few third party gems, too. Particularly in the survival horror genre, Wii boasts more titles than any other console ever offered, I reckon (I have counted 20 already) and some are absolute must-haves. So, Wii sold to new gamers as well as to veterans, who probably own more than one console anyway. And it has been smooth sailing for Nintendo up until now, with Wii selling about as many units as the two competitors put together.

Microsoft seemed to endlessly tweak the SKU variety of their Xbox360 as well as their price. And, leaving the elusive fun factor aside, the 360 has been the best value proposition by far for a long time. But even this circumstance could not change the reality that is each companies' respective market share. Sure, Nintendo has hit dry spells in the past, with other consoles selling more units for a few months in one territory or another. But these dips were usually related to a lighter release calendar. When bigger titles drew nearer, sales rose again.

Software no longer moves hardware

Not anymore, it seems. The news of Wii hardware sales taking a 30 percent dip in the US last month despite the release of ´Wii Sports Resort´ should have Nintendo worried. Very worried, in my opinion. Because the title should move hardware as much as any other Nintendo game. A gigantic marketing campaign in the US should have made sure that the consumers were aware of the release. The fact that it did not move a significant amount of hardware can only really mean one thing: everyone that wanted to buy a Wii in the said territory has bought one. If a title like ´Wii Sports Resort´ cannot invigorate sales, then no title can (at least not of Nintendo's casual variety, which undoubtedly was the backbone of the console's success). The only option available to Nintendo of America may be a price drop. This would surely convince more people to hop on the Wii bandwagon. But software no longer seems to move hardware.

Upcoming games to disappoint

First, a little reality check: Am I being unfair here? Of course, all the other consoles sold badly in July. Well, yes. But the PS3 only took a 25 percent dip and the 360 went down a mere 15 points, only half of the Wii's loss. That is a significant difference. But what about other territories? In Japan, year-to-date year-over-year changes show big losses for the console. Europe may be the Wii's last resort (this is actually a double pun, if you remember an obscure PC game from 1996) but a worldwide downward trend is becoming clearer and clearer, it seems.

But what about other upcoming titles, particularly the third party portfolio, which is still a sore spot for Wii owners? Surely, exclusive titles like ´Monster Hunter Tri´ or ´Red Steel 2´ will sell hardware to the traditional crowd, if the more casual titles now fail to shift consoles. Unfortunately, I have it on good authority that both of these highly anticipated games will not deliver. They may look nice, but both titles are being rushed out of the door. Wii owners will have a few good survival horror titles to mull over. But there is no shortage of those on the platforms. So a ´Dead Space Extraction´, no matter how good it will be, will not become the killer app that a polished ´Monster Hunter Tri´ could have become.

Price cut the only solution

Especially with the PlayStation3's price drop and sleeker re-design, as well as motion control around the corner for both high definition consoles, Nintendo is coming under intense pressure this generation for the very first time. The only way out seems to be a price cut, preferably to be announced around Tokyo Game Show next month (though Nintendo will not exhibit, as always). I do not see any alternative for Nintendo (and I am not alone with this opinion), if they want to maintain the impressive momentum they have exhibited so far. This is the curse of a runaway success: maintaining it. After all, a boom, in economics, is a highly unstable and volatile state. And if they do not re-position the Wii's price point, Nintendo may soon find out the hard way.

EDIT Looks like I was spot on with my analysis. The following image was published by Kotaku. It may be fake, of course. But both the timing and extent of the price cut would fit perfectly, so I believe it is legit.


Source: Joystiq, Joystiq, Chart Get! Chart Get!
Thanks to: Some German Guy

Sony CEO shrugs off mounting pressure to cut PS3 price

Sony Corp. CEO Howard Stringer has shrugged off Activision's demand to either cut the price of the PlayStation3 or risk losing the Activision portfolio. Stringer spoke to Reuters about the threat issued by Activision CEO Robert A. Kotick:

He likes to make a lot of noise. (...) He's putting pressure on me and I'm putting pressure on him. That's the nature of business.

Reuters then asked Stringer about the logic of not giving in to the demands and cutting the price, to which Stringer mysteriously replied:

I (would) lose money on every PlayStation I make -- how's that for logic.

This statement is an odd one because Sony has lost money on every unit sold from day one and still is, according to Sony CFO Nobuyuki Oneda. Referring to the end of March, Oneda stated that Sony still subsidized each console sold with around $42.

I contacted the author and editor of the article to verify how and why the word ´would´ was added. This is the reply I received.

I think you can use the story without the word "would". It was probably added in the editing process in an attempt to clarify the quote, which was "I lose money on every PlayStation I make -- how's that for logic."

So what did Stringer mean? Was he self-critical of his company's business model of subsidizing consoles? Confronted with the assertion that there is no logic in not cutting the price, did his reply insinuate that there is already no logic in Sony's business model of heavy subsidies? Please discuss.

The pressure on Sony to cut the price is certainly mounting. Only days ago, the CEO of Tecmo Koei, Kenji Matsubara, chimed in on the debate in an interview with CVG:

Whenever I discuss this with Sony reps I always ask them: "Please cut the price", but I don't have a clear view on Sony's situation. Yes, from a publisher's point of view we would welcome a price cut for PS3, and we are waiting, definitely.

It's definitely a way of boosting the PS3 market, but it's Sony's strategy and I don't know their cost structure. Sony introduced cutting-edge technology in the PS3, that's why people in the industry accept that the PS3 cost is so high, but we'd welcome a price cut.

In 2007, Ubisoft CEO Yves Guillemot and Square Enix president Yoichi Wada were the first to criticize Sony's pricing and marketing strategy, respectively.

Sources: Reuters, CVG
Thanks to: idahoblue, Some Guy

Activision Blizzard threatens to stop PlayStation support

Activision Blizzard, the world's largest third party publisher, has warned that they "might have to stop supporting Sony" as early as next year, the company's CEO Robert A. Kotick told the British daily newspaper The Times.

I'm getting concerned about Sony; the PlayStation 3 is losing a bit of momentum and they don't make it easy for me to support the platform. It's expensive to develop for the console, and the Wii and the Xbox are just selling better. Games generate a better return on invested capital on the Xbox than on the PlayStation. (...)

They [Sony] have to cut the price, because if they don't, the attach rates are likely to slow. If we are being realistic, we might have to stop supporting Sony. (...) When we look at 2010 and 2011, we might want to consider if we support the console — and the PSP [portable] too.

Analysts have already predicted doom and gloom for Sony Computer Entertainment, which is nothing unusual. Analysts do not have to be terribly diplomatic and others have voiced similar criticism concerning the other console manufacturers. But this is not the first time that Sony has been confronted with unusually harsh criticism by third party publishers, which is rare in this industry.

Back in May and September of 2007, respectively, Ubisoft CEO Yves Guillemot demanded a price cut for the console ("They have to decrease the price quite significantly") and Square Enix president Yoichi Wada criticized Sony's marketing efforts ("[The future of the PS3] would be tough if its marketing strategy is not straightened up.")

The future of the PlayStation depends on when Sony will reduce the PS3's price tag. The latest guess by an analyst is August. But I maintain that Sony simply has not got the financial resources to reduce the price until Christmas. Sony CEO Stringer has made it quite clear that he puts profitability above everything else.

The real question is, though, whether Activision Blizzard is merely bluffing or if these unusually harsh comments contain a very real threat. Sure, a number of the publisher's games sold more than a million on the PS3. So the console generates revenue for them. We simply don't know what little profit is left. Kotick revealed some of the additional costs of developing for Sony, noting that Activision Blizzard "paid $500 million to Sony in royalties and other goods last year." Again, such a disclosure is highly unusual. What is Kotick up to? Please share your thoughts in the comments section.

EDIT Videogame analyst Michael Pachter has commented on the story, noting:

Of course Bobby’s bluffing, and good for him. (...) I think Bobby’s obviously interested in Sony selling as many PS3s as they possibly can, and he’s not happy with their penetration so far. I think he favours a price cut, and would rather see one sooner than later.

Sony Computer Entertainment has yet to respond in a meaningful way.

I would also like to remind you of the last big debate about whether the PlayStation3 is dead or dying. Back in December, an analyst's assertion that the PS3 was a "sinking ship" which was "flopping so badly" had sparked a lively debate which I quoted extensively.

EDIT As expected, the news of Activision's threat has sparked a lively debate, which I will attempt to capture here, in the familiar style of guest commentary.

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Sony's clearly in a pinch

Is the PS3 really losing momentum? It depends, as usual, on where you're standing. Since the system launched in late 2006, it's clearly been growing in year over year unit sales. In 2008--the system's best year yet--Sony sold over 10 million PS3s worldwide. And while sales have been down for all contenders recently, Sony's sold nearly as many PS3s worldwide as Microsoft has Xbox 360s so far this year. Of course Microsoft still has more than a third as many Xbox 360s in the wild, but since 2008, Sony's slowly (very slowly) been gaining. (...)

That said, Sony's clearly in a pinch. Its game division lost nearly $600 million in 2008, the PS3 consistently lags in NPD's US sales reports, and the system charts the fewest high sales software titles month after month.

If Sony lowers the PS3's price, we've been assuming they'll lose even more money. But if they keep it sky-high, they theoretically stifle sales and by virtue thereof, their growth rate, frustrating publishers, who naturally want to sell to as many customers as possible.
PC World

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Stark and somewhat surprising

A stark and somewhat surprising statement. (...) PS3 price cut soon, surely?
Play.tm

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Could seriously hurt console sales

That’s pretty serious considering Activision is the largest video game publisher in the world. It probably won’t come to that — I can’t see them not lowering the cost in the next year or so regardless of what Kotick thinks — but if I were Sony I would definitely be a little nervous about this. If this inspires some bravado in EA and they make a similar statement it could seriously hurt console sales.
A+E Interactive

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The pressure is on

For its part, Sony, which is mired in third place behind Nintendo and Microsoft in the next-gen game-console wars, keeps saying it won't be pressured into trimming the price of the PS3. But with industry heavyweights like Activision making these types of remarks, it's becoming more and more clear that the pressure is indeed on.
CNET

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Ever saw a publisher threaten a platform holder?

In that absolute worst-case scenario, that would mean no Call of Duty for Sony consoles. No Guitar Hero for Sony consoles. No Tony Hawk, either. It probably won't ever come to that, of course, but Kotick's words are still worth noting. After all, when was the last time you ever saw a third-party publisher so openly threaten a major platform holder?
Kotaku

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A huge bomb

Activision boss Bobby Kotick has dropped a huge bomb on Sony. (...) While Kotick may sound a bit cocky here, I don't think Sony wants to sit on statements like these. And no one is going to argue about the PS3 needing a price cut either.
Destructoid

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Nintendo has issued similar denials

Sony has continued to insist that it will not be pressured into lowering PS3 prices before the 2009 holiday season.

"I think everybody but us would love to see it given away for free," Jack Tretton, president and CEO of Sony Computer Entertainment of America told CNBC. He added that cheapest wasn't always the most successful, but rather, "what you get for your dollar."

It should be noted that Nintendo has issued similar denials regarding a lowered Wii price tag, despite confirmation of a (May) 57 percent year-on-year drop in sales.
TG Daily

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What if EA said the same thing?

Now, Kotick's words are just corporate smacktalk (bottom line: Activision still makes money on the platform). But what if a company like EA came forward and said the same thing? No good can come of this for Sony.
Gizmodo

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Activision Blizzard needs the numbers Sony delivers

Is it a credible threat? That is hard to say, but the industry has ample evidence of just how ruthless Activision Blizzard has become. (...) By slamming the console maker in public it creates a perception of weakness witih Sony's platforms. Now the developer is in a very good position to bargain for lower licensing fees, help with advertising dollars, or other financial rewards to "stick with" the PS3 and PSP platforms.

It's doubtful Activision Blizzard has lost money by supporting the PS3 and PSP as platforms, and again, the company needs the numbers Sony delivers to meet its goal of having Modern Warfare 2 be the "biggest property launch of all time." What Kotick can do is attack Sony in the press and create a perception of weakness and then exploit it for better terms when releasing these blockbuster titles, and that's what we're seeing here.
Ars Technica

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A crazy precedent

Activision is the world's largest third-party publisher, with huge franchises like World of Warcraft, Guitar Hero and, most importantly, Call of Duty under its belt. The loss of even Call of Duty seems to me like it would significantly hurt the PS3. Still, the big question everyone is wondering is if Kotick has enough sway to actually force Sony into a price drop. Maybe Kotick's just blowing steam, but it'd be a crazy precedent for the largest publisher to drop the system entirely.
GameSpy

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Cutting prices would be difficult for Sony

Kotick's comments have weight because of the market strength of Activision. The company is the world's largest independent computer games company and has a market value of $16 billion.

Cutting PS3 prices would be difficult for Sony. The company last month reported its first annual loss in 14 years, caused by a strong yen and a sales slump in its consumer electronics business. While the economic downturn hurt sales, Sony also suffered from competitors' lower prices.

As a result, sales in Sony's electronics business fell 17% from the previous fiscal year, and revenue from its game unit fell 18%. While Sony sold more units of the PS3 and PSP, the company saw a drop in software sales.
InformationWeek

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PS3 could be Sony's last big console

Could Activision really be considering ditching the PS3? If so, this concept breathes a lot of life into the possibility that the PS3 could be Sony's last big console. Sure, the company would stay afloat if Activision was the only publisher to back away, but that might encourage a lot of publishers to get out of Dodge. Is Sony a sinking ship? (...)

I'm a firm believer in the idea that all three console makers should have a spot on the market. Competition breeds excellence and innovation. Sony cannot disappear, if they do... what would happen to gaming?
Kombo

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A total bluff

Sounds like a total bluff — I can’t see Activision pulling support from Sony, but I can see them attempting to influence PS3’s price by publicly threatening to.
Wired

Sources: The Times, VG247
Thanks to: Joystiq

E3 2009: Microsoft challenging Nintendo, Sony finished

So, the three press briefings have come and gone. What remains? Quite obviously, Microsoft had the biggest surprise in store for us. Project Natal is certainly ambitious and may serve to position the Xbox360 quite differently in terms of target demographic. Nintendo, while briefly showing that odd finger sensor had almost no surprises when it comes to hardware. Team Ninja working on a new Metroid game was the big news of the briefing and it is hard to exaggerate the ramifications of this collaboration, given Nintendo’s poor track record with third party developers in the past.

Immediately, arguments ensued over whether Xbox360’s Natal or Wii’s Motion Plus will be the more accurate system. But that appears to be an academic debate. The big question in my mind is: where does that leave Sony? The truly gargantuan sales figures of a ´Brain Age´ and a ´Wii Fit´ clearly show where the gaming mainstream has shifted to (or rather, where the new mainstream has been discovered). This is precisely where Nintendo is positioned and it clearly is where Microsoft would like to be with Natal. Sony, however, will have nothing to offer this new mainstream. If they really are working on a Wiimote-like controller themselves, they will show it no earlier than E3 2010 and it will launch no earlier than 2011. This will be too late for this generation because, in my mind, by 2011, Microsoft and Nintendo will be talking about their successor consoles. And with the next generation of consoles, no one will care about a PS3 peripheral.

It seems quite obvious that the PlayStation3 will be falling behind even further, after the E3 announcements. While mainstream gaming has shifted (and opened up to millions new gamers in the process), Sony has remained where the mainstream used to be. Of course, ´God of War III´ will be a spectacular game. But, in terms of sales figures, it will be a niche product and fail to move substantial amounts of hardware. Especially given that Sony boss Stringer will not allow a price cut until Christmas at the earliest. I am absolutely sure: Sony will remain in third place for this generation and I am even less optimistic about Sony’s progress in the next console cycle.

EDIT I stand corrected. Sony did show motion controls other than the Sixaxis. I was unable to watch the Sony conference and really had not seen the motion control section in Joystiq’s live transcription. Sorry. Thanks to Some Guy for pointing out my mistake.

It is interesting to note that I wrote about the patent most likely implicated by this technology back in 2005 and I even tried out a similar prototype at the 2001 ECTS, London’s former videogame expo. There, a webcam connected to the PlayStation2 was tuned to certain bright colours and had the dimensions of various tools and weapons stored in memory. Holding a brightly coloured plastic sword or mace, the console could estimate a 3D position based on the object’s dimensions by comparing them to the actual view in perspective. This way, the same weapon was replicated in the game and moved almost in real-time to my movements. Considering this was fake 3D – since the console only estimated a spatial position based on the distorted perspective of a 2D image – it worked pretty well. It seems to me that the demo shown at the Sony conference was almost the same technology and will work the same way.

However, even if the technology shown will be available next year and works well, it is still no comparison to Nintendo’s and Microsoft’s real 3D motion controls. The only advantage is that Sony’s approach should work with a standard webcam, which will make it the cheapest of the three. But the experience may be less immersive, too. So I stand by my initial judgement: Microsoft may be successfully moving on what now is Nintendo’s turf – the new mainstream – but Sony will most likely fail to catch up.

Nibris subsidiary Bloober Team emerges

Bloober Team, the subsidiary studio of Poland-based ´Sadness´ developer Nibris has finally launched their website, announcing three new games and dishing out information on their various in-house graphics engines.




For a start, Bloober Team claims to be an approved developer by both Nintendo and Sony, currently seeking Microsoft approval. The studio also claims to be developing four titles and has apparently developed two graphics engines.

Games
´Last Flight´ (WiiWare); development status: demo ready
´Troopies series´ (Xbox360, WiiWare, PSP); development status: early stage of production
´Engineering an Empire: Egypt´ (DS, PSP, PC); development status: unknown
Undisclosed RPG project (Xbox360, WiiWare); development status: preproduction

Engines
´Cross Engine´ (Wii, PC, with Xbox360 and PSP support by the end of the year)
´Black Horse engine´ (DS)

No screenshots are available on the site. Instead, the studio shows three pieces of artwork for ´Last Flight´. Here is one of them:




Interestingly enough, the website seems to make no mention of parent studio Nibris, although some images are shared between the websites and Nibris links to Bloober as a "befriended studio".

While the site looks professional, it also contains some spelling mistakes and awkward use of English.

It seems also worthy of note that the studio appears to concentrate solely on digital distribution. It seems that they will not release any games on physical media.




I know some of have been waiting for my in-depth analysis of Nibris for some time. While I must apologize for the time it took me so far, it is coming along and will be published as soon my little son gives me some time off. I estimate that it should be done within the next four weeks.

Source: Bloober Team

3D after all?, part III

There are rumours that the PlayStation3 will be the next console to offer stereoscopic three-dimensional visuals. Apparently, Sony "fully intends" to support 3D output, both for gaming and Blu-ray playback as of 2009.

The rumours originate from a website called Meant to be seen, a self-proclaimed "stereoscopic 3D Certification and Advocacy group" financed by some 3D hardware manufacturers. The website has published an article which claims:

I have received confirmation from Blitz Games Studios that Sony "fully intends" to support stereoscopic 3D gaming and Blu-ray 3D on the Sony Playstation 3 (PS3) in 2009. Blitz will of course be helping back this technology with their Blitz Tech engine.

The best part is console support will only need a bios upgrade to work, and we are told that the ability to add this capability via bios may be unique to Sony PS3 versus the other console solutions.

Blitz Games Studios has developed the ´King Games´ for Burger King, ´Fuzion Frenzy´ and ´Zapper´, as well as the questionable ´Reservoir Dogs´ and ´Bad Boys II´. The company also licenses middleware technology called BlitzTech, which they claim has "powered over 25 titles, totalling over 70 releases covering 8 platforms". It would appear, though, as if the studio has been unable to sell their technology to other developers.

Nevertheless, the BlitzTech features make an impressive read. The paragraph about 3DTV is accompanied by the following mock-up - bearing a PlayStation3 controller.

BlitzTech is at the forefront of rising interest in 3D displays for the home with exciting possibilities for presenting content with higher realism and sense of player immersion in breathtaking 3D. In a complex market with competing technologies the key to increasing adoption is to ensure compatibility with the widest possible range of displays to unlock the potential of amazing 3D display hardware out there. The engine provides a highly flexible stock solution that supports all current suitable formats including active and passive glasses as well as newer auto-stereoscopic displays not only on PC but uniquely also on high-definition console - an industry first.

While there have always been third party solutions for converting standard video signals into stereoscopic 3D images by means of shutter glasses, this would be only the second time ever that a console manufacturer fully endorses the technology, after Nintendo's failed Virtual Boy.

I am a little suspicious of this rumour. Auto-stereoscopic displays still are too expensive to reach a mass market. Of course, videogame companies have been toying with this technology for years. But, currently, headgear is the only possible means to bring 3D visuals to a large audience. And what normal person wants to sit on a couch wearing glasses?

Ubisoft is developing a 3D game, which apparently will use shutter glasses. But in a trailer from 2007, the publisher made it quite clear that they want to do away with those glasses, if possible.

I am sure that there is some truth to this rumour. If Sony is being mentioned, they must have been in talks with the studio. However, I can only cynically assume that both the studio and the so-called advocacy group blew Sony's positive feedback totally out of proportion. After all, building hype is just what these two companies want.

Having said that, I would absolutely love it if this rumour was true and I could watch my EyePet run circles around me next year. That would no doubt become the system seller which Sony so badly needs.

Sources: Meant to be seen, Blitz Games Studios
Thanks to: Raphael, Joystiq

Analyst calls PS3 a "sinking ship"

PS3 "flopping so badly"

An analyst with Silicon Alley Insider has called the PlayStation3 a "sinking ship" which is "flopping so badly". The site is run and written by reputable industry analysts.

Sony's PS3 is dying on the shelves. (...) There's really only one option left for Sony to remain in the game: deep price cuts, and not just for people with good credit. Tell yourself the PS3 has superior graphics if it makes you feel better, but a $400 console with a mediocre game library simply cannot compete against an Xbox 360 priced at $200 in this economy.

The same analyst later wrote a similar article about the PlayStation Portable, noting it was in just as much trouble.

What's wrong? The problems with the PSP are surprisingly similar to the problems with the PS3. It's overpriced ($170 to $130 for the DS Lite), has superior graphics no one cares about, and a mediocre game library. And because PSP console sales stink, game publishers are unlikely to devote resources to making more quality PSP titles.

Sony rules out PSP2 for now

These are harsh words to say the least, if not exaggerated. Of course, the discussion whether the PSP is a dead platform is an admissible one. SCEE president David Reeves told MCV UK in unusually blunt words that the PSP was struggling and that a successor was not yet being planned - at least not to his knowledge.

There are currently no plans for a PSP2. I go to Tokyo quite a lot and no one has referred to it – I think they have their hands full at the moment. (...) We just launched the PSP-3000 so we are still focused on this generation of the platform. (...)

The PSP is as successful in numbers as PS2 – it tracks its numbers in a cumulative basis. (...) Its weakness, however, is its software. And that’s because developers, when it comes to placing their bets, have to choose PS3 and 360, then Wii, then DS, maybe even PS2 before PSP. It’s the same at our internal studios, where the focus has been on PS3. They’ve also focused a lot on PS2 as well because we have to get the SingStars out for that format. So PSP games will come – they just take a while longer.

EDIT A PSP2 is in the works, after all, Eurogamer has learned from anonymous "publishing sources". Apparently, yet another PSP revision is due to launch in 2009. A proper successor to the handheld will follow later. Publishers have already started developing games for the new system, the article claims.

Third round of Sony lay-offs

One worrying sign are another round of lay-offs at the corporation. A three year restructuring program called ´Transformation 60´announced in October 2003 already cut the workforce by 20.000 employees.

In 2007, around a hundred people were fired from the US PlayStation division, Sony Computer Entertainment America. The division's then head of PR, Dave Karraker, attempted to reassure everyone that these renewed redundancies are "not wholly related to any one product in our portfolio."

Now, Sony is firing another 8.000 employees from the "electronics business". This means that SCE will again be affected.

EDIT Apparently, Sony Computer Entertainment Europe will not be affected by those job cuts. Dutch television station RTL Nederland broadcast a 15-minute interview with SCEE president David Reeves today (interview in English). Reeves talks at length about Sony's hardware and software sales in the face of the worldwide economic crisis. About a PlayStation4, similarly to what he said above about a PSP2, Reeves notes that he has no knowledge of it and is "not even sure it is being planned."

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Sony platforms in last place

Remember the analyst who said two years ago that there will never be a PlayStation4? The same analyst now said in a Reuters article that the race for supremacy in this console generation is over. Yuta Sakurai from Nomura Securities believes that the Wii will remain at the top.

The competition stage is over. (...) The spread on shipment volumes is so large that it's not even worth talking about it. They aren't rivals.

The sales figures are indeed quite clear. Reuters compiled a nice chart comparing the three home consoles, as well as both portables. Take a look for yourself, but bear in mind that Forbes painted a more grim picture with their PS3 lifetime sales totalling a mere 13 million units.





The Reuters figures source the manufacturers and Sony only ever publishes sell-in data, i.e. the amount of consoles sold to stores. If the Forbes figures are a true reflection of consoles sold to consumers, then the PS3 is indeed dying on the shelves - millions of units, that is.





So, here we have another harsh analyst's statement. Should we care? Of course, we need to cut the populist rhetoric (particularly the swear words). What remains, is still a substantial problem. Both Sony consoles have been caught in the downward spiral of dwindling sales causing third parties to devote their money to other platforms, which in turn makes for even worse sales figures.

As noted above, the PSP may be seen as a dead platform, (although some key publishers have recently told me about renewed interest). The PS3, it may be argued, will stay in third place. I strongly believe so and in this, I agree with the articles above.

But there is a key difference between PSP and PS3. The former introduced a storage medium which failed. The latter introduced a storage medium that is set to become the new industry standard. Of course, winning against HD-DVD was no final victory. Blu-ray still has to win against the regular DVD - and before physical storage media become obsolete. But continued adoption of the Blu-ray format may make for a push significant enough to keep the PS3 afloat. It may end up in the same situation Nintendo was in when their Gamecube came in a close third.

I myself am sceptical whether Sony president Howard Stringer really can rally up shareholder support for another multi-billion investment called PlayStation4. Perhaps he himself has no such intentions. But also bear in mind that the PlayStation brand remains one of the strongest brand names in consumer electronics and even Stringer will try his utmost to reap at least some rewards from it.

Incidentally, this is the very reason why Microsoft will not pull out of this market. For all their investments into both Xbox projects, Microsoft has losses of around six billion dollars to show to the shareholders. But after establishing a strong brand, as well as making and solidifying third party relations, they would be fools to pull out now. Of course, Microsoft has the money, if they only want to. With Sony, money may end up too tight to play the home console roulette for a fourth time.

EDIT The people over at Ars Technica have more interesting graphics to illustrate the console race in November in the US. And Chart Get! has calculated that Nintendo platforms took more than 65 percent of the total console market in that time, promising more charts to break down the numbers in detail soon.

EDIT The above article has now appeared over on CNN Money.

EDIT A number of other media outlets have picked up on the Silicon Alley / CNN story. Here are their key points below, in the familiar style of guest commentary.

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A little hard to swallow

It's hard to argue with their conclusion that the PS3 needs a price cut soon, and a substantive one at that. Ten year lifespan or not, it stands on the brink of falling behind the Xbox 360 by an insurmountable margin. (...)

Acknowledging the price issue, the other two [key reasons given] fall into a much more gray area. Blu-Ray shows more signs of life with each month that passes since it won the HD format war. (...) Admittedly, the question of whether the PS3 has a library of must-have titles is more subjective. But dismissing Metal Gear Solid 4, LittleBIGPlanet, Resistance 1 and 2, and Uncharted alone is a little hard to swallow.

PC Magazine (via Yahoo News)

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What were the Sony execs thinking?

The Nintendo Wii remains the most popular system in the land, and, at $250, isn't necessarily a budget buster. XBox 360 has made serious inroads by dropping the price of its core system to $199. So how did Sony respond?

By releasing a new version of the PS3 ... that's $100 more expensive. Yes, it comes with a game, and yes, it has more hard-drive space, to which I respond: Who cares? Was the marketplace clamoring for more memory from the PS3? Is that why its market penetration is so low compared to its predecessors and competition? What were the Sony execs thinking? (...)

Market penetration remains low, and every month people don't buy a Blu-ray player is a month they get closer to downloadable HD movies and the death of the format as a whole. Sony would be wise to step it up and do a better job at getting Blu-ray players into people's homes.

Washington Times

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Sony has actually been playing catchup

Sony rightly points out that the PS3 has seen hardware sales grow 60% year-to-date. I realize the PS3 wasn't selling well in 2007, so that figure's less impressive than it sounds, but growth is growth, any way you slice it. What's more, look at PS3 and Xbox 360 units sold in total worldwide, and Sony pretty much throughout 2008 has actually been playing catchup. (...)

On the other hand, CNN's whacking the nail on the head when it raises the problem of the PlayStation 3's price. The recession's been on well and long enough for Sony to have reacted by now, and yet it's stubbornly clung to that $400 entry point.

Washington Post

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Sony has put on a brave face

Sony has put a brave face on its Christmas failure. It said that over the last year sales have been picking up on the console. The figure it claims is about 60 per cent.

Now given the fact that sales during 2007 were even worse than 2008 that is not something you want to crow too much about. However Sony seems to think that means that 2009 will be even better.

The Inquirer

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How far should Sony go?

The question is, how much of the PS3's sluggish sales are due to pricing? And if they do cut prices, how far should Sony go? $300? $200?

Firing Squad

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Blu-ray awesome, exclusives are there

Blu-ray is catching on big time, and I think the first-day sales numbers of The Dark Knight and Iron Man will back me up on that one. As for the third point, LittleBigPlanet, Valkyria Chronicles, and Resistance 2 say “Hi.” Heck, even IGN declared the PS3 the place to go for exclusives in 2008.

It’s obvious that a price cut would help the PS3’s competitive position, but it seems silly at this point to brand the black beauty a sinking ship. After all, Blu-ray is awesome, the exclusives are there (with more on the way), and we haven’t even begun to review emergency procedures (it’s men and old people first, right?).

TVG blog

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Sales will need to improve significantly, and soon

Sony is still trying to make the PlayStation 3 business profitable and start paying off the costs of developing the hardware. Its software sales are strong, despite weaker hardware sales, but both will need to improve significantly, and soon. Given Sony's ironclad devotion to profitability in the near term, the quickest route to higher PS3 sales -- a price drop -- simply is not feasible.

As an alternative, Sony could publish a must-have software title that attracts more consumers willing to pay the price for its hardware. Short of Metal Gear Solid 4 in June 2008, it would appear that no exclusive software has really driven hardware sales. Even Sony's flagship holiday title, LittleBigPlanet, only managed 141,000 units during November.

Gamasutra

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A formidable presence in this industry

We're still seeing the PS3 business ramp up and that the story is going to take a little longer to unfold this generation than in previous cycles. Sony is a formidable presence in this industry and year-to-date has achieved a pretty significant increase over last year. I think we're just going to have to wait and see how 2009 unfolds.

NPD analyst Anita Frazier (via GameDaily)

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Slow to react to the current crisis

We believe fundamental changes to its business structure are necessary. (...) Compared to its peers both at home and overseas, Sony has been slow to react to the current crisis. [These comments were made after Sony announced worldwide job cuts of 8.000.]

Credit Suisse analyst Koya Tabata (via Bloomberg)

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Too overpriced to penetrate the market

If you’re worried about your job, are you going to buy a $400 PS3? (...) Christmas is not going to have the same glow. (...) The PS3 is too overpriced to penetrate the market we are in today.

Janco Partners analyst Mike Hickey (via Bloomberg)

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Between a rock and a hard place

Sony should be worried. (...) The value proposition for the PS3/Xbox 360 is now out of whack in favor of the Xbox 360. I think there will be some very hard decisions to make after the New Year. They might not be able to afford a price cut, but on the other hand they might not be able to afford their current price. They are between a rock and a hard place. Like I said, my biggest concern for the PS3 is if they let the Xbox 360 gain big momentum in Europe.

DFC Intelligence analyst David Cole (via GameDaily)

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Plenty of time left to catch up

With both the PS3 and the PSP being the highest priced platforms in their segment, it is no surprise that both were the only next-gen platforms to post a year-over-year decline. (...)

In terms of cutting prices, currently, it wouldn't be financially responsible or beneficial for them to cut the PS3's price point; manufacturing costs are just too high. That being said, I do expect the PS3 to receive a price cut in early 2009. This is when Sony should reach a point of manufacturing efficiency that would financially warrant a price cut. (...)

We are not even at the half-way point for this generation, there is still plenty of time left for Sony to catch up and I believe in the long-term, Sony will gain a significant amount of ground on the Xbox 360. It just might take longer than what Sony expected; except in the handheld market – I think we can all agree there is no hope for the PSP in North America at this point.

EEDAR analyst Jesse Divnich (via GameDaily)

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A greater victim of the recession

I think Sony is a greater victim of the recession, more because they are a consumer electronics company than a video game company; people aren't buying HDTVs and that's why Best Buy has been talking about their same store sales being down 5-15%. It's really hard to get people to come in and spend on the super big ticket items. I think Sony is feeling the pain of that and I had expected that there would be a high attach rate this holiday of PS3s to HDTVs because Best Buy was pushing it... and that's not happening.

So that's the first problem. Secondly, you can't buy a PS3 for less than $399, and the average of all Xbox 360 SKUs in November was $270. So the Xbox 360 average price is $129 less than the PS3, and that's hurting [Sony]. The other factor is that the Wii is ridiculously cheaper. So Sony has all these things working against it, and then at the end of the day, their game lineup, which is very good, is still not sufficiently differentiated to induce people to say "I've just got to buy a PS3."

Wedbush Morgan analyst Michael Pachter (via GameDaily)

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The cash-haemorraghing disaster that has been PS3

So, they've decided to release HOME as a public Beta. That's HOME, the amazing virtual world that had game journalists and PS3 fanboys proclaiming the greatness of Sony and how it would be the best thing EVER! Except, it's not. Two years on, it turns out to be a half empty, badly thought out mess (queuing to play a game of Pool?!) and clearly nothing more than a cynical attempt to actually make some money out of the cash-haemorraghing disaster that has been PS3. And with nothing on the horizon, save GT5, surely the 'nail in the coffin'. Even ThreeSpeech can't be arsed to Big It Up like they did with Little Big Planet (already being sold for £19.99)

UK:RESISTANCE

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Should the price be cut? No.

Yes the PS3 is in last place in sales in November. But once you look at the year over all and add in one other geographic sales area, Japan, suddenly the PS3 is in second place for yearly sales to date. Logic can be frustrating to those with a plan based on a house of lies. I am sure that if the truth were to escape, there are 360 fans that would be hurling themselves off the roof. I would not care for that but I would really like to see Eric Krangel and the staff of Kotaku take a header. The gaming community would be better for their absence.

With the combined sales of the US and Japan putting the PS3 in second place by just over 30,000 consoles, should the price be cut? Again, no. The main persons crowing for a price cut are the uninformered, the cheap, and those interested in Sony losing money. But what about Europe you say? Other than some spurts in the UK, the PS3 is soundly winning in Europe. The only place sweating that territory is Microsoft.

Playstation Army

Sources: Silicon Alley Insider, Silicon Alley Insider, Reuters, MCV UK, EDGE, Eurogamer
Thanks to: Joystiq, Joystiq, Kotaku, Games Industry

´Metal Gear Solid 4´ no longer PS3 exclusive?, part VIII

Hideo Kojima is hinting at a new installment in the ´Metal Gear´ series, possibly on Xbox360, via this teaser site. It contains a flash animation that apparently features the Xbox360's ring of light, pictured below the screengrab for comparison:





Alternatively, the small caps letter ´i´ could hint at a whole number of other platforms: the iPhone, the DSi and the Wii. The exclamation mark is part of the ´Metal Gear Acid´ logo, but could also reference the MGS series symbol for being discovered by the enemy. A reference to ´Metal Gear Acid´ is unlikely since the directory the teaser animation is in reads ´MGST´. This strongly suggests a ´Metal Gear Solid´ title, perhaps with a subtitle beginning with the letter ´T´.

Only in mid-October, a Konami spokesperson confirmed: "We're actively looking into a [Metal Gear Solid 4] release for the Xbox 360" in a Japanese magazine. Shortly afterwards, the journal removed the quote from the article.

Speaking to Eurogamer in late August, the series' creator Hideo Kojima tried to dispel the rumours about an Xbox360 version and wished people would stop asking.

Because MGS4 was optimised for the PS3 it is probably not possible. But, you know, what kind of disturbs me sometimes, because a lot of people ask me about this PS3/360 question, is that it's not about the hardware - I want people to look at the game itself. Sometimes I even feel like it should be on a PC so that people don't ask me about hardware and platforms.

Still, Kojima himself hinted at an Xbox360 version. Many industry experts, myself included, have taken the non-exclusivity for granted. The PlayStation3's poor hardware sales and the game's staggering budget simply do not make an unlimited exclusivity a viable option from an economic point of view. And there were plenty of indicators that an Xbox360 version was already in the works. Here is another updated rundown of all the other hints and rumours regarding this debate from day one.

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Part I, October 2006

Electronic Gaming Monthly tease readers with the headline ´Metal Gear Solid 4 on Xbox 360?´ on the magazine´s cover.

However, on the NeoGAF forums, former EGM editor Che Chou seeks to squash the rumours.

It's simply a rumor that Konami higher-ups are pressuring Kojima Productions to consider making MGS4 a multiplatform game because production costs on the game are unsurprisingly high and only getting higher. With PS3 install base numbers not looking all that rosy due to console cost and manufacturing problems, Konami is scared they can't recoup their investment on only 1 platform alone.

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Part II, December 2006

On his blog, industry insider Daniel Boutros claims that an Xbox360 version of MGS4 has been confirmed behind closed doors.

It's coming a few months later than the PS3 game, but it's happening folks.

This is said to be because publishers - including Konami - don't believe there'll be enough PS3s out there by the time the game hits because of the blu ray diode failure issues. (...)

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Part III, January 2007

Speaking to GamePro, Hideo Kojima himself says that ´MGS4 is actually for the PS3 only,´ adding a significant ´so far´.

If I say too much, Mr. Kutaragi might get really upset. I think that the PS3 is difficult to work with, but so was the PS2. (...)

I do have strong interest in creating something for the Xbox 360. In the US and Europe, it is selling, and I think it will sell a lot this year as well. I'm a fan of Gears of War as well, it's very interesting.

Frankly speaking, I want to create something on the PC. It's a multi-platform [format]. I've been regularly studying work on the PC anyways, and I want to provide something as a world-wide platform because of the consequences with timing on the PlayStation platforms, MGS4 is actually for the PS3 only so far.

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Part IV, April 2007

The VG Resource Center claims to have received a statement by an anonymous source within Konami.

Yes, in fact, we are working on putting Metal Gear Solid 4 on the Xbox 360 and PC, which should both come out roughly 6 months after the PS3 release. However, we've been working with Microsoft so the 360 and PC versions will both take advantage of Xbox Live and Games for Windows Live, with such features as achievements and the ability for 360 and PC owners to play against each other in multiplayer.

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Part V, May 2007

An alleged Microsoft employee writing for Destructoid confirms that the game will be released on Xbox360 no more than one year after the PlayStation3 version. The article reads:

Metal Gear Solid 4: Guns of the Patriots will not be a PS3 exclusive after all. It has been confirmed that it will make its way to the Xbox 360 in 2008.

There is no true date set for the release at this point, but November of 2008 has been mentioned. This is not set in stone as Konami is working with Microsoft to bring the date forward as much as possible. (...) The announcement hasn't been officially made yet, but the source works for Konami, and I know for a fact that MS has been negotiating this for months.

The article has since been subjected to a ´Cease and Desist´ order.

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Part VI, July 2007

A Reuters article cites Kazumi Kitaue, head of Konami's North American and European operations speaking about a multi-platform MGS4.

Kitaue said Konami may need to expand the target hardware for its blockbuster fighting game Metal Gear Solid, which has so far been developed for Sony's PlayStation machines, to other consoles in the future to recoup development costs.

"Since Metal Gear Solid was born for the PlayStation, we would like to keep it a PlayStation game. But we might have to take some steps," Kitaue said. (...)

Only days later, the Official Xbox Magazine claims a "bankable source" confirmed that the game would be coming to Xbox360 "a few months" after the PS3 version.

Soon after, music and videogame retailer HMV lists a PS3 and an Xbox360 version on its website, detailing 2008 release dates of April 18 and September 26, respectively, later claiming an "admin error".

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Part VII, January 2008

Xbox site XboxFamily claimed to have been told about an Xbox360 version of ´Metal Gear Solid 4´ being in the works, citing an inside source with the game´s publisher.

Speaking to a Konami rep at an undisclosed distribution meeting, I was told, after a lot of nagging, that yes indeed MGS was in development for the 360. The rep stated that Metal Gear Solid will be released for the Xbox 360 between 12 to 14 months after the PS3 version hits shelves. This is not a rumor.

Only some months before, in a Reuters article published in late November, the game´s assistant producer Ryan Payton said the following about the publisher´s high expectations for the game.

Payton said the new "Metal Gear Solid" needs to sell over a million copies on the first day it goes on sale due to its costly production, but that may be a tough mark to hit given sluggish PS3 sales.

EDIT Here are some interesting theories by other media outlets, starting with the brand new Offworld, Boing Boing's gaming site.

Back in July, as many may have forgot, a French games blog suggested a rumor that Kojima Productions might have a December Surprise up its sleeve. December 12th, they said, six months after the release of the game (that length of time, players will note, fitting in nicely with the fiction of ´Metal Gear Solid 4´) might trigger an in-game event.

PC World (via Yahoo News) also has some interesting comments on this:

Since the colors are electric green on black, and since the symbol to the right looks an awful lot like the symbol in the middle of the power button on the face of the 360, it's not hard to see why.

On the other hand, it's actually just the universal power symbol, also known as IEC 5009 (which refers to "power" but alternatively to "standby" or both "power/standby") as well as IEEE 1621, where it refers explicitly to the "power control user interface." It's also on Apple laptops, Windows-based laptops, desktops, various other electronic devices, and if you look at the touch button on your PS3 -- yep, it's there too. That it's green may have some significance...or it may be a red herring. Hard to say.

EDIT Here is another interesting theory, courtesy of TVG, focussing on the inverted exclamation mark.

TVG has its own theory: MGS4 was released globally on the 12th of June (12/06). Invert that date like the exclamation point, and you get '06/12' – which is tomorrow.

So, is Konami finally confirming tomorrow that MGS4 will be heading to Microsoft as the last great third-party PlayStation exclusive to go multi-platform?

Sources: Konami, Joystiq, Joystiq, Eurogamer, Offworld, PC World (via Yahoo News)
Thanks to: Kolt, Kotaku, Kotaku