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Sony banks on "future-proof" tech to win next-generation console war

Back in May, Sony Computer Entertainment Inc. (SCEI) president Ken Kutaragi was quoted as saying that the $499 and $599 price points for its PlayStation 3 were "probably too cheap." Today, Sony CEO Howard stringer again defended the steep price of entry and justified its pricing structure to the best of his ability.

"The price of the PS3 is high... But you're paying for potential. Obviously, it's a higher-risk strategy as all new inventions are. But if the PS3 lives up to its total potential, then I don't think anyone will be worried about Nintendo or Xbox's cheaper price," said Stringer. Considering that consumers feel that a console purchase to be a long-term investment, Stringer feels that the PlayStation 3 is more future-proof which will allow potential customers to justify the price tag.

Stringer also notes that Hollywood studios may be the ones who determine whether HD DVD or Blu-ray wins this battle. Gamesindustry.biz reports:

Stringer went on to concede that Hollywood movie studios, currently divided over whether to support Blu-Ray or Toshiba's rival HD-DVD format, could ultimately determine who wins the next-gen war. However, the Sony CEO believes that film execs are "beginning to sense, in Blu-Ray, that the pendulum is swinging, and swinging for a clear reason" - namely that Blu-Ray discs can store more data.

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HMmmmm
By Master Kenobi (blog) on 6/26/2006 11:01:56 AM , Rating: 2
Well Sony has put all their eggs in one basket this time. Normally thats a bad strategy in business, since diversifying leaves yourself stable regardless of what happens. But this is either going to win big, or lose big for Sony. If they can win it, they will win it big. But if they can't, the cost of failure is extremely steep this time around, it might be enough to make them re-evaluate some of their current strategies.




RE: HMmmmm
By masher2 (blog) on 6/26/2006 11:10:11 AM , Rating: 1
> "Well Sony has put all their eggs in one basket this time"

The PS3 is their only basket? Did you forget?

Digital Cameras and Camcorders
Monitors
Desktop Computers and Laptops
Projectors
Car Audio
Recordable Media
Online PC Games
Pro Broadcasting Gear
High end Tape Drives
MP3 players
Mobile Phones
GPS Navigation
Semiconductors
Motion Picture Studios
Record labels (Columbia, Epic, etc)


RE: HMmmmm
By sxr7171 on 6/26/2006 5:25:06 PM , Rating: 1
None of which makes money. Next.


RE: HMmmmm
By Xavian on 6/26/2006 5:30:07 PM , Rating: 3
You *have* to remember very few parts of the Sony Corperation are actually making profits, Sony has reported net losses on every fiscal quarter since 2002. Sony is relying on the sheer licencing profits of being the winning format. They are not going to be making profits off the PS3 for quite some time (with the reported $200-$300 loss on every PS3 sold even at $599, plus development costs of Cell, Blu-ray and the PS3 itself)

Details on Sony's 5th consecutive quarterly year loss:
http://biz.yahoo.com/ap/060621/japan_sony.html?.v=...


RE: HMmmmm
By masher2 (blog) on 6/26/2006 11:12:16 AM , Rating: 1
Considering it'll have more processsing power than your average $2000 desktop (not to mention a free Blu Ray drive, which will run you $1000 as a separate unit), it very well might be worth a measly 500 bucks. Why not wait and see?


RE: HMmmmm
By Tebor0 on 6/26/2006 11:19:15 AM , Rating: 1
Pretty sure I can do a lot more with my $2000 desktop than I can with a DVD player and video console. Processing power is only part of the equation and that raw power means nothing if developers can't take advantage.

Wait and see... sure.. but horrible comparison.


RE: HMmmmm
By masher2 (blog) on 6/26/2006 11:25:00 AM , Rating: 1
> "Pretty sure I can do a lot more with my $2000 desktop than I can with a DVD player and video console"

Sony is trying to make just the opposite case...that'll you be able to do a lot more with your PS3 than your average desktop.

Do I believe them? Its marketing after all...but I'm willing to wait for more details before I make a snap judgement that the PS3 "isn't worth" its asking price.


RE: HMmmmm
By Tebor0 on 6/26/2006 11:38:09 AM , Rating: 2
The "is it worth it" question is going to be personal to each and every buyer so there's not going to be a right answer.

When really considering the product though it is too expensive. It's too expensive for a game console. $600 to play video games is rediculous. I can pretty much guarantee that you won't be able to install your copy of Office or Photoshop on the PS3 so that kind of kills the computer idea. Unless you're just wanting something to chat and browse the internet with and still you're better off with a cheap computer.

Besides.. this idea of this being an "investment" for the future and future tech... we're all talking about the same thing right? The tech that changes almost daily and still hasn't settled on a final initial format yet? Yeah.. future proof... right.


RE: HMmmmm
By masher2 (blog) on 6/26/2006 12:21:36 PM , Rating: 1
> "too expensive for a game console. $600 to play video games is rediculous"

Rather more accurate to say "$500 to play video games, watch Blu Ray or DVD movies, and surf the Internet". For many people, that's a downright steal.


RE: HMmmmm
By Tebor0 on 6/26/2006 2:59:26 PM , Rating: 2
If I'm buying the PS3 for the Blu-Ray player then I've got high end equipment already and would likely rather spend the extra coin on a high end Blu-Ray player. The video game part would be just an added bonus and I'd probably be buying it anyway on top of another stand alone player.

If I'm an average user this purchase only becomes a "steal" after I've upgraded all my other equipment to all the new standards (HDMI for example) so that I can use see HD in all it's glory. By the time all my stuff is upgraded though I bet I'll be able to afford a better Blu-Ray player because it's now several years later and the tech has settled and oh crap.. my "steal" of a deal PS3 might now be out of date compared to those cheaper players.

This "steal" also depends on the format war. My "steal" could end up being a big rip-off if Blu-Ray doesn't become a major standard.


RE: HMmmmm
By masher2 (blog) on 6/26/2006 6:08:41 PM , Rating: 2
> "If I'm buying the PS3 for the Blu-Ray player then I've got high end equipment already and would likely rather spend the extra coin on a high end Blu-Ray player"

What sort of backwards logic is this? People are trying to claim people can't afford it...but they'll more likely to buy a standalone player at twice the price?

Fact is, the PS3 is being positioned for several different market segments:

- The hardcore Playstation fan, who will stay with the franchise regardless
- The hardcore gamer, who will buy the PS3 AND the 360
- The more casual gamer, who is willing to spend a little extra for Blu Ray capabilities.
- The budget videophile, who wants Blu Ray but doesn't want to shell out a full $1000+ for it.



RE: HMmmmm
By Zelvek on 6/27/2006 1:45:19 AM , Rating: 2
Thats a fairly small demograph and not all in it are going to buy PS3's.


RE: HMmmmm
By Scrogneugneu on 6/26/2006 10:31:27 PM , Rating: 2
How about this :

- I already have a DVD player with a DVD collection of movies, and I see no need at all to get some higher-priced stuff of the same kind just for the sake of it.

- I already have a computer, which already has access to the internet, therefore I don't think the Internet ability of the PS3 will be so useful to me.

- I already have a computer AND some gaming consoles, along with some games, enabling me to play video games.


So, all in all, everything the PS3 offers me, I already have. The difference?

- It's gonna be HD

The downsides?

- I'll have to pay for the console
- I'll have to pay for the games (again)
- I'll have to pay for the movies (again)
- I'll have to pay for the TV


So, your conclusion is perfectly right. It is a steal. Sony is (trying to) stealing me.


RE: HMmmmm
By masher2 (blog) on 6/26/2006 10:47:31 PM , Rating: 1
> "How about this - I already have a DVD player with a DVD collection of movies, and I see no need at all to get some higher-priced stuff "

Never fear. No one is going to knock on your door and force you to upgrade to either Blu-Ray or HD-DVD. You can die and be buried with your old DVD movies if you wish...I'll even toss a few VHS tapes in with you for nostalgia's sake.

There are those of us, though, who appreciate higher video quality, and who don't want to wait a few more years for it. I already own an HD-DVD player...and I intend to buy a PS3 as well. I'm sure I'll get my money's worth out of both.


RE: HMmmmm
By peternelson on 6/26/2006 4:08:48 PM , Rating: 3

Sony have said PS3 will run linux.

If that is true who cares if it won't run MS office, because openoffice can be run.

Who cares if it can't run photoshop since the GIMP can be run.

The big problem with linux is it doesn't support Windows GAMES.

BUT the PS3 overcomes this disadvantage as it will have hundreds of optimised games specifically for it.

Getting all this for $600 is a real steal.

I will either pay that much, or wait until after the holidays when prices are expected to drop a little (as has happened with x360) when it will be even better value.

Hey for a HDMI1.3 deepcolor pattern generator, it will be worth the cost alone.


RE: HMmmmm
By epsilonparadox on 6/26/2006 4:57:25 PM , Rating: 2
PS3 might run linux but if it provides the dismal support like it did for PS2, it won't count for much more than a marketing gimmick.


RE: HMmmmm
By Zelvek on 6/27/2006 1:51:14 AM , Rating: 2
Ah sure it will run linux... maybe. Lets not forget that Tivo is runing Linux and it won't do any thing as dramatic as what your claiming. So that means that odds are one will need to mod their PS3 for that sort of price who wants to risk that other than us geeks and who will even know about it other than us geeks.


RE: HMmmmm
By CKDragon on 6/26/2006 12:18:41 PM , Rating: 3
quote:
Sony is trying to make just the opposite case...that'll you be able to do a lot more with your PS3 than your average desktop.


If anyone entertains the idea for more than 5 seconds that you'll be able to do more with a PS3 than an average desktop then that person is a fvcking idiot.

That is all.


RE: HMmmmm
By masher2 (blog) on 6/26/2006 12:35:12 PM , Rating: