The PS3 is a Mess

[kyoukan]

are you suggesting that microsoft is illegally datamining non relevant information from people's computer and appliances via xbox 360 and profitting from it somehow? and that is where they are getting most of their money from, and not from game liscensing and royalty fees?

hey, I heard that if you wear a tin foil hat, xbox 360 can't beam the thoughts out of your brain into steva ballmer's palm top so he knows exactly what you're thinking at all times. try it!

[Fenna]

Step 1: Secretly gather private information using the X-Box 360.

Step 2:

Step 3: Profit

[miir]

There's something to the theory that anything free isn't worth having, so it would overplay their hand.

OTOH, what data are they gathering exactly? That my brother plays racing games more than any other genre? Wooo, I bet they'll be excited to know that if he ever gets an internet connection.

not just the gaming information. they are picking up other signals that come in through the wires from smart appliances and the like that broadcast or announce their existence in your home.

You're fucking loony.

[noel]

not just the gaming information. they are picking up other signals that come in through the wires from smart appliances and the like that broadcast or announce their existence in your home.

Huh?

If the 360 had such a capability (which it doesn't) the legions of modders would have discovered it months ago and there would be several class action lawsuits agains MS.

[cadalano]

uh think about it, you ignant sheep



what is the one thing that all appliances have? wires.

now consider this:

Wired is the name of a very popular tech magazine. Who was on the cover of the December '98 issue of this magazine?


Bill Gates.

Innocuous, you say? Allow me to continue.



Taking the date 12 - 1998 and adding up every digit individually, we arrive at a sum of 30.

30... look familiar? well it should.

because 3 and 0 are the beginning and ending numbers of 360. as in XBOX 360



I called Microsoft Headquarters to confront them on this issue, but I was harshly treated and quickly shuffled off the phone line. Just take a look at this transcript:

Microsoft: "For English, press one. Para español, oprima el número dos.”

Me: ?????????????????????????????????????????????





open your eyes, people. open your MIND

[Lynks]

You almost beat my boss on the tinfoil hat scale.

[noel]

uh think about it, you ignant sheep



what is the one thing that all appliances have? wires.

now consider this:

Wired is the name of a very popular tech magazine. Who was on the cover of the December '98 issue of this magazine?


Bill Gates.

Innocuous, you say? Allow me to continue.



Taking the date 12 - 1998 and adding up every digit individually, we arrive at a sum of 30.

30... look familiar? well it should.

because 3 and 0 are the beginning and ending numbers of 360. as in XBOX 360

Holy shit... YOU'RE RIGHT!

[Syenye]

it's a brilliant idea, think about it... if microsoft isn't doing it, then they should. but if i'd heard about it on a message board, i wouldn't believe it either.

[noel]

it's a brilliant idea, think about it...

It's a brilliant idea if the cost of the hardware necessary to promiscuously sniff 'EMF' signals and determine their origin is inexpensive and small enough to include in the 360 hardware.

It's a brilliant idea if you can convince the consumers that it's a feature they want/need and that it provides them value.

It's a brilliant idea if the necessary 'smartcards' (we'll call them that for the sake of simplicity) are being distributed with the appliances and you have a large installed base because (again) you've convinced the consumers that it's a feature they want/need and it provides them value.

Without all of those things, not only is it not a brilliant idea, it's actually NOT POSSIBLE and it's not fucking happening without a lawsuit with MS.

[Lynks]

Taking the date 12 - 1998 and adding up every digit individually, we arrive at a sum of 30.

30... look familiar? well it should.

because 3 and 0 are the beginning and ending numbers of 360. as in XBOX 360

Multiply 30 by the date and you get 360.

[Winnow]

I wish the Gates and Warren Buffett would have used their 60 billion to buy the U.S. eight or nine Aircraft Carriers*. So selfish!




*and a working Submarine for Canada

[noel]

Taking the date 12 - 1998 and adding up every digit individually, we arrive at a sum of 30.

30... look familiar? well it should.

because 3 and 0 are the beginning and ending numbers of 360. as in XBOX 360

Multiply 30 by the date and you get 360.

DON'T YOU KNOW THEY'RE LISTENING!?!?

[cadalano]

syenye can you please go into further detail on this? like how exactly are these signals received? what types of appliances transmit these smart signals? do you have any examples?

[Lynks]

Shit, I'd leave now, but they are probably tracking me with the chips implanted in my shoes.

[Fairweather Pure]

If you've ever touched a penny, then the government has everything they need to recreate a perfect clone of you, right down to your bad breath. I hear it's the only reason that penny's are in circulation.

[Syenye]

syenye can you please go into further detail on this? like how exactly are these signals received? what types of appliances transmit these smart signals? do you have any examples?

smart appliances are devices that are networked in your home and typically allow some level of remote administration. my uncle was a quadraplegic and had a number of appliances he could control. things like refrigerators and washing machines are being built with this tech. from what i understand, a lot of this works by announcing it's existence over the wires, so anything listening can pick up the signal.

at any rate, it's irrelevant... i still have my 360 plugged in and plan to leave it that way. back to the topic at hand: the PS3 release list is unimpressive, and the wii has trauma center: second opinion on it. no contest.

[cadalano]

Syenye, thank god quadripelegics would have no reason to own an XBox or they could have already been compromised. It sounds like this spy network is still in its budding stages in America.

wait a second... these "wires" that these devices are transmitting on.. that would be the ordinary power cord then, right? If so, then its probable that Microsoft can pick up data on an entire Neighborhood or even COUNTY with just one xbox. I'm starting to believe this shit.

It makes me sick to think that every time i open my fridge Microsoft earns another dollar. What is your plan of action?

[noel]

smart appliances are devices that are networked in your home and typically allow some level of remote administration. my uncle was a quadraplegic and had a number of appliances he could control. things like refrigerators and washing machines are being built with this tech. from what i understand, a lot of this works by announcing it's existence over the wires, so anything listening can pick up the signal.

Again, the key here is that the appliances are enabled and the consumer is aware.

What this has to do with the 360 I have no idea.

[Syenye]

no one believes this so it's irrelevant to keep talking about it. i do happen to believe it, based on discussions i've had with an expert in the field, which i am not, so i can't really answer your questions and i'm fine with that. i admit that i shouldn't have brought it up in the first place. so let's just pretend i never said anything, and you guys can go on just thinking i'm a paranoid nintendo fangirl.

[Animalor]

Console bashing, pissing matches and conspiracy theories.

This thread delivers!

[noel]

no one believes this so it's irrelevant to keep talking about it. i do happen to believe it, based on discussions i've had with an expert in the field, which i am not, so i can't really answer your questions and i'm fine with that. i admit that i shouldn't have brought it up in the first place. so let's just pretend i never said anything, and you guys can go on just thinking i'm a paranoid nintendo fangirl.

I'll grant you that I've had a bit of fun with your assertion, but I'm really trying to understand where it's coming from. At this point, I can pretty much unequivocally state that your friend is incorrect if he feels that a 360 in it's default state could do this.

Given additional hardware and some specific software, the 360 could definitely do this (after all, it's really just a PC) but only if the appliances in the given home were already enabled for this.

Believe me if you want, but that's the reality.

[Neost]

SWEET!

you mean if i buy an xbox 360 it can monitor my refigerator and re-order for me if I run out of beer and ice cream?

[cadalano]

Right well let's not stand on ceremony. Let's start the show.

On behalf of the United States, I hereby declare war on all smart appliances

[Dal-KoE]

Console bashing, missing matches and conspiracy theories.

This thread delivers!

Hahahh ..yeah it has something for everyone!!


Syene.. one question, Did the U.S. (NASA) actually land a man on the moon? (Careful of your answer, they are listening)

[Sylvus]

Just looking at it from the devil's advocate POV, and since this fight is too one-sided, I have to wonder exactly why Microsoft would be willing to take a hit like they are in the production costs of the 360. Sure, some of the loss will be recovered through sales of games and there is value in attempting to become the leader in that market.

But, knowing Microsoft, their strength isn't so much in their innovation or the quality of their product. I'd be willing to go out on a limb and say that their Marketing department has had quite a hand in making them the juggernaut that they are today.

That said, the 360 is most appealing to the type of people that are a standard deviation or two above the mean in terms of embracing technology and amount of disposable income. It's practically required that you have an always-on internet connection, and it's pretty much designed for a High Definition TV. You have to be a bit more of a technophile than Joe Sixpack to have both of those things, and those pieces of technology coupled with the pricetag of the 360 mean that you probably make a bit more money than he.

Looking forward, those people who were the first to have broadband internet connections, HD TVs, and an xbox 360 are probably going to be the first to buy the next generation of... well, anything that comes out. I believe kyoukan told me that the refrigerator that she bought has an ethernet jack in it (why, I don't know, but it does). A few years back I had a ReplayTV (like a Tivo, but squashed by lawsuits) that connected to my home network and allowed me to access it remotely.

Those are the only things that come to me off the top of my head, but if you know anything about how Bill Gates' house works or have watched any interviews with him in the last year or so, he seems pretty convinced that the interaction between his appliances at his house are where we are all heading. I'm sure there are more smart appliances out there, with more being added every day (some of them bluetooth or wifi, some requiring cable) already enabled to talk to each other.

I have no idea what sort of protocol these devices have for speaking with each other, but I do know that if you have a computer running WMC and your 360 gets on the same network, they automagically recognize each other. It's not that far fetched to say that the ability for the 360 to recognize other devices that hit said network isn't already built in, and if it's not already built in I'm sure it would just be a matter of dashboard update.

What devious plan MS has for using that information to become richer than astronauts is beyond my speculation, but it certainly doesn't seem like that much of a "tin foil hat" idea to me.

P.S. I'm not knocking MS, I think they're a great company.

[noel]

Again, I'm not saying it's not possible, or it's not coming. I'm just saying that this statement:

they are picking up other signals that come in through the wires from smart appliances and the like that broadcast or announce their existence in your home.

Is patently false. There is no device on the market that legally does this without the knowledge of the consumer. Certainly there are people that might want to know the level of ice in their freezer, temperature of their fridge, or time left on that batch of brownies in their oven from their 360 console, but all I'm saying is... this requires the appliance hardware to be in place, the 360 to be connected to that same network, and the software to receive this information to be installed on the 360.

There is no nefarious money making scheme on the part of Microsoft that will occur without them A) announcing this capability on the 360 and B) partnering with someone like Whirlpool or Kenmore or Bosch to sell them and develop for them software that runs on the appliances.

[Syenye]

some appliances do already broadcast their existence, whether they are marketed as 'smart appliances' or not. the potential for marketing is huge. embedded advertisements are the next thing on the horizon... say for example, i have a GE high efficiency washer. based on this information, advertisements could target me as a potential buyer of, for example, tide for high efficiency washers. it IS ridiculous to think that microsoft cares about what joe asswipe does in his spare time, but if thousand joe asswipes are doing the same thing in a given area, there are conclusions to be drawn from it that are huge in marketing.

if the 360 isn't set up to send the data now, it would be easy to do with a firmware upgrade.

i don't understand why everyone thinks it's such a farfetched idea. it's all just copper wire, and they're all sending the same 1s and 0s. techwise, it's not really a complicated concept.

[noel]

some appliances do already broadcast their existence, whether they are marketed as 'smart appliances' or not. the potential for marketing is huge. embedded advertisements are the next thing on the horizon... say for example, i have a GE high efficiency washer. based on this information, advertisements could target me as a potential buyer of, for example, tide for high efficiency washers. it IS ridiculous to think that microsoft cares about what joe asswipe does in his spare time, but if thousand joe asswipes are doing the same thing in a given area, there are conclusions to be drawn from it that are huge in marketing.

if the 360 isn't set up to send the data now, it would be easy to do with a firmware upgrade.

i don't understand why everyone thinks it's such a farfetched idea. it's all just copper wire, and they're all sending the same 1s and 0s. techwise, it's not really a complicated concept.

I'm not making a technical argument here. I'm making a legal one. Correct me if I'm wrong, but you're claiming that the 360 is doing this without the knowledge of the consumer. If I'm misunderstanding you then I apologize. If however I'm understanding you correctly, it should be easy to understand that this is a violation of the consumer's privacy.

[Syenye]

Again, I'm not saying it's not possible, or it's not coming. I'm just saying that this statement:

they are picking up other signals that come in through the wires from smart appliances and the like that broadcast or announce their existence in your home.

Is patently false. There is no device on the market that legally does this without the knowledge of the consumer. Certainly there are people that might want to know the level of ice in their freezer, temperature of their fridge, or time left on that batch of brownies in their oven from their 360 console, but all I'm saying is... this requires the appliance hardware to be in place, the 360 to be connected to that same network, and the software to receive this information to be installed on the 360.

There is no nefarious money making scheme on the part of Microsoft that will occur without them A) announcing this capability on the 360 and B) partnering with someone like Whirlpool or Kenmore or Bosch to sell them and develop for them software that runs on the appliances.

i wouldn't say it's nefarious, it has huge potential and as long as they aren't collecting any private data (ie associating me with my devices), it's fine by me. but you're right, i can't unequivocally say that they are doing it now. it wouldn't surprise me though. i also don't think it's limited to what we call a network... power lines, cable, phone, it's all just wire.

[Syenye]

I'm not making a technical argument here. I'm making a legal one. Correct me if I'm wrong, but you're claiming that the 360 is doing this without the knowledge of the consumer. If I'm misunderstanding you then I apologize. If however I'm understanding you correctly, it should be easy to understand that this is a violation of the consumer's privacy.

you could argue that owning and using a device that broadcasts it's existence and is clear about doing such is consent to having that information broadcast. and it's not a privacy issue if the 360 or any system is collecting information that it doesn't associate with a specific user, and this information collected is considered system data that is covered in the terms of agreement. i'm not a lawyer, but i think the TOA are flaky enough for microsoft to claim it's covered:

Microsoft may, among other things... retrieve information from the original Xbox or Xbox 360 console and any connected peripheral device used to log onto the Service as necessary to operate and protect the security of the Service, and to enforce this Agreement;

[Winnow]

Syenye will have the last laugh on this topic. She isn't explaning it well but I know exactly what she' talking about. It's one of the things we were working on while I was at Motorola.

I doubt that this generation of Xbox 360 has the capability but it very well may be what Microsoft has in mind for the future and why they are establishing their brand inside the home.

(IDG) -- It's pretty obvious that we're heading toward the integration of computers with pretty much everything else that runs off a silicon chip. Whether it's a good idea or not, the day will soon arrive when you will be unable to find a decent vacuum cleaner that isn't running Java, Windows CE, Lucent's Inferno, or some other embedded operating system undoubtedly networked in some way with the rest of your household devices.

For about 100 years, household-appliance makers have gone through tedious product development, stabilized on a good model, then left the products alone. Unfortunately for those appliances, the attitude of appliance users has shifted. Home dwellers now accustomed to "smart" working environments want to come home to equally smart households. So the technology industry is making that happen.

There's no question that smart appliances are on their way, the only question is how far it will go. Although some glumly predict developments as ridiculous as IP-enabled disposable razors, many believe it will stop before that. Phil Morettini, vice president of sales at Patriot Scientific, a San Diego-based Java microprocessor developer, opines, "Where I draw the line is with cost; I don't see embedded Web servers in the toaster, but I do see them in the refrigerator. The division [of complexity] is where you'd call a service guy if it [breaks] vs. just throwing it out."

[Animalor]

The latest vocal salvo from Sony. - MS copies us.

"Every time we go down a path, we look behind and they're right there - we just can't shake these guys. I wish that they would come up with some strategies of their own..."

http://www.joystiq.com/2006/06/29/kaz-s ... pies-sony/

[Aruman]

The latest vocal salvo from Sony. - MS copies us.

"Every time we go down a path, we look behind and they're right there - we just can't shake these guys. I wish that they would come up with some strategies of their own..."

http://www.joystiq.com/2006/06/29/kaz-s ... pies-sony/

Response to the above from another non-MS or Sony site:

Really, Sony? Microsoft follows you around? Wait, didn't Sony shun Microsoft's tiered console pricing scheme, only to adopt it in the PS3? And wasn't the PlayStation originally only a response to their failed partnership with Nintendo? And wasn't the PSP merely a response to the hegemonic success of the Game Boy? And what about the new motion controller developers told us was a last minute feature creep to counter Nintendo's Wiimote? And the PS3 online service, slated for introduction long after Xbox Live? Sorry guys, you're not winning any hearts and minds when you try to pull the hype-woven wool over the everybody's eyes.

http://gaming.engadget.com/2006/06/28/c ... -copycats/

[Lynks]

this requires the appliance hardware to be in place, the 360 to be connected to that same network, and the software to receive this information to be installed on the 360.

I complete forgot something earlier but there is a way for a device to communicate without the knowledge of the cutstomer. If its legal or not I don't know but there is a way.

Right now, my boss an I are engineering something called a powerline moden. The way this works is that you can send and receive data through your electrical outlets at home. Using filters and other routines (that we are currently trying to get a patent on), you can isolate certain frequencies over the powerlines.

Normally, you would have something sending out packets (in this case an appliance) to know what you are getting, but it is still possible to listen for certain frequencies if you know what appliances are generating through their adapters. My boss and I have the cost down to about 50$ US but are very confident we can cut that price in half. Hell, if it was on an XBOX 360, all you would need to do is throw in a couple of resistors and some code to make it work.

If you are using the same power with all your appliances in your household, then they are all connected on the same network. Do I think they are doing this though? No.

[noel]

There have been for several years Ethernet Adapters that simply plug into the wall and use your home's power infrastructure to transmit the Ethernet signals. I can't remember if there were speed/duplex limitations, but I know it's available.

[kyoukan]

I complete forgot something earlier but there is a way for a device to communicate without the knowledge of the cutstomer. If its legal or not I don't know but there is a way.

Right now, my boss an I are engineering something called a powerline moden. The way this works is that you can send and receive data through your electrical outlets at home. Using filters and other routines (that we are currently trying to get a patent on), you can isolate certain frequencies over the powerlines.

I hope you have better luck on your patent than with the "wheel" I invented last year.

[Lynks]

There have been for several years Ethernet Adapters that simply plug into the wall and use your home's power infrastructure to transmit the Ethernet signals. I can't remember if there were speed/duplex limitations, but I know it's available.

Yes, there are speed limitations but if you are just gathering information on what people own, then you don't need to send a lot of information. Our product is very slow at the moment (1 packet/10 minutes), but we are able to send this data over 20 KM.

[noel]

That's cool! It would be a great technology in a few specific applications I can think of.

[Fash]

Our product is very slow at the moment (1 packet/10 minutes), but we are able to send this data over 20 KM.

Sounds like you set your sights a little low there... 1 packet every 10 minutes? btw the year is 2006.

[Lynks]

The mining industry is our main market. The product is still at least a year away and we are getting calls asking us when it will be done.

1 packet/10 minutes is slow and I have talked to my boss about speeding it up a tad but he is a stubborn fuck. His argument is that mines don't need updates often, maybe once an hour or 2, which makes sense to me. I was a doubter too when we first started this

[noel]

I was thinking your application would be like... sold to an electrical company that would make use of they're infrastructure to send packets informing them of usage (super small amount of data) for billing purposes.

I guess my question is... Why not just roll some single mode fiber down into the mine and hook whatever it is up to a switch at the end of the fiber. Is 1 packet an Ethernet packet? I'm having trouble understanding what value a single 1500 byte packet once every 10 minutes would provide.

Yes I know fiber is fragile and this could be a problem in a mine.

[Lynks]

Its not only fragile, but expensive to implement. Mines, although very rich, don't want to spend money. They need a way to turn exhaust fans on or get readings from them using a 4-20 output. If they sent a man down 2 KM to turn 1 fan on, that could take half a day since the elevator shaft only works 4 times a day. Wireless is also out of the question because of line of sight and interference.

[Zaelath]

Just looking at it from the devil's advocate POV, and since this fight is too one-sided, I have to wonder exactly why Microsoft would be willing to take a hit like they are in the production costs of the 360. Sure, some of the loss will be recovered through sales of games and there is value in attempting to become the leader in that market.

Power and the hubris that comes with it. That and the market fixation on quarterly results; if they're to keep increasing profits they have to open new markets because with dominance comes saturation.

[Winnow]

Just looking at it from the devil's advocate POV, and since this fight is too one-sided, I have to wonder exactly why Microsoft would be willing to take a hit like they are in the production costs of the 360. Sure, some of the loss will be recovered through sales of games and there is value in attempting to become the leader in that market.

Power and the hubris that comes with it. That and the market fixation on quarterly results; if they're to keep increasing profits they have to open new markets because with dominance comes saturation.

If use of the word hubris keeps up at this pace, VV is going to need a filter for it like a lot (OMGIAMRETARDEDCAUSEALOTISTWOWORDS) and cliqué (fnord).

[Zaelath]

If use of the word hubris keeps up at this pace, VV is going to need a filter for it like a lot (OMGIAMRETARDEDCAUSEALOTISTWOWORDS) and cliqué (fnord).

I vote for "tendancy to act like a cocksucker", perhaps I've been watching too much Deadwood...

[Winnow]

If use of the word hubris keeps up at this pace, VV is going to need a filter for it like a lot (OMGIAMRETARDEDCAUSEALOTISTWOWORDS) and cliqué (fnord).

I vote for "tendancy to act like a cocksucker", perhaps I've been watching too much Deadwood...

Can play, "guess what the real word" is:

I saw a Catholic cocksucker by choice blessing some fruit.

[Winnow]

Because I hate you, more PS3 negative news:

Updated: Friday, 30 June 2006
PS3 'Could Come Third' in Console Battle

By David Cole

DFC Intelligence's David Cole ponders Sony's future, and says the firm could wind up behind Microsoft and Nintendo in the next generation.
Digg this article here.

Finally most of the cards are on the table and we can start making some more definitive statements about where we think the video game market is going. DFC Intelligence is always adjusting its forecasting model based on changes in the marketplace. Suffice to say events of the past six months have forced us to overhaul our models like never before.

It now appears clear that this new generation of console systems is going to result in a big shake-up in the game industry power structure. While it has always been clear that Sony's dominant market share was destined to decline, there now appears to be the distinct possibility the PlayStation 3 could end up third in market share behind both the Xbox 360 and Nintendo Wii.

However, we should emphasize a third place finish for Sony is only one of several possible scenarios. Unlike many market prognosticators, DFC does not claim to know exactly how the market will shakeout. We have no way of knowing exactly what sales will be and which platform will be the market leader.

Different Factors

When we release forecasts we use multiple scenarios that adjust for different factors like price decreases, hit software titles, market competition etc. In the entertainment market there are always unknowns when it comes to consumer behavior and we like to build that uncertainty into our forecast models. When we say the PlayStation 3 could end up in third place that is a worst case scenario for Sony. Furthermore, much will depend on variables such as Sony's execution and most importantly how rapidly they can bring down the PS3 price.

When building forecasts we use several factors to estimate how well a system will do. Many of the variables in our forecasts are assumptions of future performance. By changing these future assumptions we can build different scenarios. Obviously, the more factors that are set in stone the more confident the forecast. When it comes to forecasting video game hardware performance the key factors include:


Brand, Current Market Position and Past Consumer Behavior relative to all players in the marketplace.
Current Software including Software Diversity, Third Party Support, Exclusives and Big Hits.
Current Software for the Competition looking at all the above factors.
Expected Upcoming Software looking at all the above factors.
Expected Upcoming Software for the Competition looking at all the above factors.
Current Price
Current Price for the Competition.
Expected Future Price.
Expected Future Price for the Competition.
Hardware, Extra Features, the "Wow Factor," Intangibles and the Ability to Pull a Rabbit Out of a Hat.

In looking at all these elements, Sony's clear strength is the first factor: brand strength and current market position. The glaring weakness of the PlayStation 3 is price, especially when compared to the competition.

However, it is more than just an issue of whether the PlayStation brand strength can justify a premium price. Of course, Sony would like to point to the hardware horsepower and extra features like Blu-ray. The problem is that is only one factor in our forecasting matrix. Furthermore, with the competition having features like Xbox Live and the Nintendo Wii controller, the PS3 may not have that much of an advantage in the elusive "Wow Factor."

That gets to the heart of the biggest concern with the PlayStation 3. Sony has done very little to justify why the system is worth a premium price for consumers that don't care about raw hardware performance and are not hard-core audio/visual consumers. Unfortunately we believe that represents over 90% of the consumers in the marketplace.

It has often been said that it all comes down to software, i.e. the games. While our matrix has only 4 out of 10 variables that deal with software, obviously software is crucial. When talking about entertainment software, people often refer to the "killer application," or the hit product that drives a system's sales.

However, we think hit software is only one part of the equation. It is our view that the PlayStation systems have been successful not because of hit software but mainly because of software diversity and third-party support. In essence, Sony helped expand the market by reaching a more casual consumer that wasn't so concerned with the latest big hit.

Of course, the PlayStation 2 had more than its share of big hits, most notably the Grand Theft Auto series. However, we estimate that less than 20% of PlayStation 2 owners bought a GTA game. Meanwhile the Xbox with Halo and Nintendo's lineup of mega-franchises were nothing to sneeze at in the hits department.

Without GTA buyers, the PS2 would still have outsold the competition by more than 3 to 1. The secret to the PS2's success was more in the wide range of product offerings: all kinds of sports games, racing games, RPGs, action titles, big name licenses, kid friendly products, RPGs with Disney characters, etc. Japan had Final Fantasy and Dragon Quest, Europe had EyeToy and SingStar. In all markets, the PlayStation2 was a complete entertainment system for the family priced under $300.

Different consumer

It now appears all that wasn't good enough for Sony. With the PlayStation 3 the company is going after the high-end power user. It is almost as if Coca-Cola not only decided to go with a new formula, but also decided to exit the low brow soft drink business to go into high-end wines. Of course, there is a market for high-end products but it is 1) a very different consumer type and 2) not nearly as big as the blue collar mass market. Wal-mart sells more toys than FAO Schwartz and McDonald's sells more beef than Ruth's Chris Steak House.

Looking at Sony's portable PSP system shows some other dangers in trying to be too many things at once. The PSP is designed to be much more than a game system, it is a complete portable entertainment package. With a beautiful, sleek look, the ability to play music, movies, games, wi-fi connectivity etc, the PSP seemed like a bargain at $250 and less.

On the surface it seems like the PSP has been a huge success. By the end of fiscal 2006, Sony announced they had shipped over 17 million PSP systems worldwide. This was comparable to the Nintendo DS shipments at almost twice the price. However, underneath the surface the PSP seems more about style than substance. The system truly excels at none of its functions. Meanwhile, the DS seems to be really expanding the market where the PlayStation brand had been dominant. Titles like Nintendogs and Brain Age add the type of product diversity that drove over 100 million consumers to buy each of the first two PlayStation systems.


Trend Conscious

Right now, the Nintendo DS is having some of its strongest success in Japan, while the PSP holds its own in North America and Europe. However, Japan's trend conscious consumers are often a harbinger of worldwide success. In the 1990s, Nintendo's business in Japan started to decline faster than it did in North America. Could the PSP's performance in Japan be a harbinger of things to come for Sony?

Of course, the big problem with the PlayStation 3 is price, and in theory that can be easily solved by simply lowering the price. There is always that core group of consumers that will rush out to buy a new PlayStation system no matter what the price. So it would make sense for Sony to gain as much revenue as possible from those consumers before lowering the price. The vast majority of consumers will not be in the market for a new system until holiday 2007 or later.

Our concern is that 1) Sony's hands may be tied in regard to price cuts and 2) Sony drastically underestimated the competition. The price of the PlayStation 3 does not exist in a vacuum and consumers will clearly look at the competitive alternatives. Right now both the Xbox 360 and Nintendo Wii are looking like much better alternatives than they did a year ago. Core PlayStation franchises like Grand Theft Auto, Final Fantasy, Dragon Quest and others are starting to appear on other systems. In short, we have seen absolutely nothing that would justify a $200 price difference.

Can Sony afford to lose its position in the video game marketplace for a generation of game systems? That is becoming a crucial question. If Sony took a $200 loss on every system to become more price competitive and maintain market share that works out to $2 billion for every 10 million units. Will Sony investors swallow that type of loss?

In forecasting the market we can say this with confidence: a $600 price point is okay for launch but it will not fly in holiday 2007. If Sony wants to drive unit volume 2007 needs to be not only the year of price cuts, but the year of drastic price cuts. There is going to be a shakeup in the video game industry and even if Sony executes perfectly there could be a new market leader in two years. Stay tuned, next month we will formally unveil some of the actual numbers in our forecasts. This month we will just say that yes, Sony could easily go from first to worst in the video game market.

DFC Intelligence's research services provide detailed strategic analysis of the interactive entertainment industry.

[Siji]

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[vn_Tanc]

PS3 'Could Come Third' in Console Battle

I stopped reading here.

DUST I TELL YOU!!!!

[Animalor]

Conjecture at this point really.

Some analysts were predicting that the Gamecube would take it all last generation and look at how that worked out.

I hope for Sony that they're able to chop some serious costs on their manufacturing and parts to lower that price per unit as fast as they can.

http://www.joystiq.com/2006/07/03/sega- ... p-in-2007/

I find it interesting that CEO's of 3rd party developpers are concerned/commenting on Sony's pricing now too.