PS3 Causes Heartache for Sony 9 comments
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The business model for console games in this generation is not a good one. Games are very expensive to develop but most make a loss, it is only the occasional hits that keep the industry going.
The reason the games cost so much to make is that the consoles are far more content hungry than previous generations of machines yet are not powerful enough to use the large swathes of middleware necessary to reduce production costs.
And the market has changed. Increasingly each product niche is owned by just one title, which can sell massively. All the competitors to that dominant title sell in far smaller numbers than they did in previous generations. Making a “me too” title is no longer a good idea, now you have to try and ensure that each title you release dominates its niche, something EA (for instance) have failed to do.
In this generation the Wii is by far the cheapest to develop for because it is not HD. However game sales are dominated by Nintendo (NTDOY.PK) first party titles and much that has come from third parties has been shovelware dross that is a waste of everyone’s time. Here, once again, are the rules for Wii game development:
1) Don’t do shovelware. You are just damaging your brand[s].
2) Write Wii specific titles. Don’t port. You have to respect the interface difference.
3) Understand that most Wiis live in the lounge. And most other consoles live in the bedroom.
4) Polish, lots. Then polish some more.
5) Realise that you have to provide entertainment for the population at large. FPS titles are not a good idea.
6) You need to market completely differently. PR in women’s magazines will work a lot better than adverts in game magazines.
7) Talk to your wife/girlfriend. They understand the Wii better than you do.
The Microsoft (MSFT) Xbox 360 has been a huge success as a platform to develop for. It has simple, elegant, architecture and Microsoft have supported it with good tools, as you would expect from a software company. No surprise then that Metacritic lists 645 games for the Xbox 360 against 425 for the Wii and only 351 for the Sony (SNE) Playstation PS3.
The problems of the PS3 are multiple. It has a quirky new CPU architecture and a poor GPU which acts as a bottleneck, hobbling the capabilities of the machine. If this weren’t enough, there is the unavoidable fact that the PS3 isn’t selling very well. We are in mid cycle now, the point at which sales volumes should be ramping up. And for the PS3, they aren’t. The main reason for this is price, the PS3 is still vastly too expensive for the market and is cruelly exposed by the bargain that is the Xbox 360.
Sony are caught between a rock and a hard place. The PS3 design contained so many newly developed bits that it was, and remains, very expensive to manufacture. But Sony are not in good financial health so do not have the resources to subsidise a price reduction. Already they have lost billions on the PS3 project. It has proved to be probably the biggest loss maker in the history of video gaming.
And now things are getting even worse for Sony. Activision (ATVI) is the biggest game publisher and their boss is Bobby Kotick. He is not happy with the PS3:
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”. And this unhappiness becomes a threat: “They 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.
In the real world very few games are actually developed for the PS3. They are mainly developed for the Xbox 360 and then converted to run on the PS3. So things are very bad when that conversion cost is becoming uneconomic.
Disclosure: No positions
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This article has 9 comments:
Add the fact that they simply have no solid games that aren't on Xbox and why is a gamer supposed to drop $399? The problem is gamers move on, multiplayer like COD is huge and XBL is the cadillac of online gaming. How'd that HOME project work out?
Sony's biggest fault was milking the PS2 for longer then they should have, that system is often outselling PS3 and something is wrong with that.
Once you have Blu Ray, there really is no going back. The picture quality is crazy, and for gaming the huge benefit of Blu Ray is memory.
The 360 is a great system, dont get me wrong. But your complaints with the ps3 lack substance.
On Jun 23 06:15 AM Frank Castle wrote:
> Lets not kid ourselves. Sony forces BluRay onto the gaming public
> as they wanted to win the format war. Nevermind the fact that majority
> of games could careless about playing movies on their console.<br/>
>
> Add the fact that they simply have no solid games that aren't on
> Xbox and why is a gamer supposed to drop $399? The problem is gamers
> move on, multiplayer like COD is huge and XBL is the cadillac of
> online gaming. How'd that HOME project work out?
>
> Sony's biggest fault was milking the PS2 for longer then they should
> have, that system is often outselling PS3 and something is wrong
> with that.
It's true that Sony is losing money, but wow, what an ignorant article in many ways. Have you not seen all the Sony exclusives coming out this year and the next, while Xbox has very few?
Did you also not notice that Sony has sold just as many PS3s by this point in its life cycle than the 360 did at the same point?
Interesting that he has the undertone that the Xbox is the "winner" of the console war because of this. I believe regarding simplicity, the wii will be much more simple to program. The current leader is the Wii and the 360 and the PS3 is more or less the same considering the fact that the 360 is launched 1 year before the PS3.
The number of games available for each system is also questionable:
en.wikipedia.org/wiki/... 684
en.wikipedia.org/wiki/... 557
Isn't that much of a lead huh considering the 1 year head start?
Finally, is the variety of games a good indicator of.. how good a console is? Perhaps. But not the absolute quantity of variety, but rather, the quality(if you are a gamer) and quantity sold(if you are the company).
The wii is currently the clear cut winner in terms of profit making. But the PS3 is the leading console for quality games. Judging from the recent and recently announced exclusive titles, the PS3 list seems more promising(Uncharted 2, God of War III, FFXIII versus, FFIV, Ninja Gaiden Sigma II, InFamous, Killzone 2, MAG, Heavy Rain).
The PS2 has a base of 130 million hardcore gamers, even adding up all 3 7th gen consoles sales, (PS3)22m + (360)30m +(wii)50m doesn't match that. Moreover, the wii has neglected lots of their base(gamers) while they profit greatly from a new market(non-gamers).
Now if Microsoft and Sony were to expand into motion-sensing, they would very well penetrate into the non-gamer market. Sony is less likely out of the 3 though, to forget its base due to the apparent extra emphasis on quality games(high precision motion control) interaction.
From what it looks, Sony(and PS3 fans) seems to have a prospective 2010, much more than Microsoft or Nintendo. Sony has a more "future proof" hardware, though it requires extra effort for developers to develop games for it, and the returns may not be immediate. But ultimately, I believe it is worth-while since its fan base is set to grow soon.
Lastly just some technical correction, "It has a quirky new CPU architecture and a poor GPU which acts as a bottleneck, hobbling the capabilities of the machine."
Just stating it is "quirky" isn't much of a fair statement. It is true that the Cell is difficult to program for since it is a completely new technology. But having 7 processors over 360's 3 processors translate almost to twice the computing power. The GPU is not poorer per se. The main problem is with the video ram distribution. 360 has a unified ram between CPU and GPU, which means if the situation calls for, the xbox can use more than 256 ram for the GPU and less for CPU, but the total amount is the same. MOREOVER, the ram speed of the ps3 is 3.2ghz compared to 700mhz on the 360. Added to the fact that the PS3 Cell is a much more superior CPU(7core vs 3, all clocked at 3.2ghz) than the Xenos, the PS3 is definitely much more powerful, technically, and could support much higher graphic quality when developers start to learn to utilize it. This is very much evident in exclusive games such as Uncharted, MGS4 and Killzone2(of those already released), there is hardly an xbox360 title that matches that kind of quality.