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The Gamer's Quarter
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dhex
Breeder
Joined: 13 Dec 2004
Posts: 6319
Location: brooklyn, Nev Yiork
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 Posted: Sun Nov 19, 2006 11:18 am Post subject: economist on sony launch |
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i was going to include a bunch of cursing and stuff about the whole "microsoft/sony is intentionally fucking over their launch to build hype!" theme - the perils of doing random searches for reactions to the launch - but the long and the short of it is that i think that stance is offensively stupid, i can't murder and/or ship everyone off to camps to make them less offensively stupid/turn their bones into furniture and enslave their children and pets, and i should just get back to finishing my fucking projects.
yes, the world is stupid, but that's perhaps for the best. it makes it easier to control it.
| Quote: | Copyright 2006 The Economist Newspapers Ltd.
All Rights Reserved
The Economist
November 18, 2006
U.S. Edition
SECTION: BUSINESS
LENGTH: 1064 words
HEADLINE: Playing a long game;
Sony
DATELINE: london, tokyo and new york
BODY:
Can the PlayStation 3 revive the ailing electronics giant?
THINGS have not been going well for Sony lately. Last month senior executives at the Japanese electronics giant issued an unprecedented apology after discovering that 9.6m laptop batteries, supplied to other computer-makers, were faulty and would have to be recalled at a cost of $436m. Sony's Blu-ray high-definition technology, launched this summer, has suffered from delays and component shortages, and is embroiled in a standards war with the rival HD-DVD format. American regulators began investigating the company last month as part of an inquiry into allegations of price-fixing in the memory-chip market. And having long been the world's most valuable electronics firm by stockmarket value, Sony's market capitalisation has fallen to less than half that of Samsung, its South Korean rival. "They really need some good news," says Paul Jackson of Forrester, a consultancy.
So a lot is riding on the PlayStation 3 (PS3), the latest incarnation of Sony's industry-leading games console, which was launched with much fanfare in Japan on November 11th. In Akihabara, Tokyo's neon-lit electronics district, stores drafted in extra workers to cope with easily the biggest product launch of the year. At the Yurakucho flagship store of Bic Camera, one of Japan's largest electronics retailers, hundreds of gamers queued through a cold, damp night. Ken Kutaragi, who runs Sony's gaming division, was there to welcome them in the morning.
At Yodobashi Camera in the southern city of Fukuoka, half of the 400 people queuing were Chinese immigrants with orders to snap up the store's assignment for resale online in China. Across Japan, the PS3 had sold out by lunchtime. Similar scenes were expected at its American launch on November 17th. On Tuesday there were already over 100 people camping outside Sony's New York store.
Sony needs the PS3 to succeed for three reasons: to maintain its lucrative dominance of the games industry; to seed the market for Blu-ray and establish Sony in the emerging market for internet video downloads; and to demonstrate that the turnaround being led by Howard Stringer, who took over as chief executive in 2005, is working and that Sony's gaming, electronics and content divisions really can work together. Despite the enthusiasm of the PS3's early buyers, success in each of these areas is far from assured.
In gaming, Sony faces far stronger competition than it did when it launched the PlayStation 2 in 2000. The PS2 went on to sell over 100m units, giving Sony 70% of the market. But gaming is a cyclical business, and success in one round does not guarantee success in the next. Microsoft has already sold over 6m of its Xbox 360 consoles, launched a year ago, and expects to have sold 10m by the end of 2006. Nintendo, Sony's other rival, will launch its new console, the Wii, on November 19th, and expects to sell 4m units by the end of the year. Manufacturing problems delayed the PS3's launch from May and meant that only 93,000 consoles were available for the Japanese launch. Sony hopes to sell 2m by the end of the year, but even if it does so, it will start the race in third place.
Availability is one weakness; pricing is another. The PS3 is available in two configurations, costing $500 and $600 in America, and ¥50,000 ($425) and ¥60,000 ($510) in Japan. That is far more than rival consoles (the Xbox 360 starts at $300 and the Wii costs $250) and is due to the inclusion of a Blu-ray optical drive in every PS3.
Sony will lose money on each PS3 sold for the first couple of years until higher volumes and design improvements reduce costs. But it will make money by taking a cut of everygame sold. Worryingly, however, less than one game was sold per PS3 in Japan this week, which suggests that some buyers regard the PS3 as a subsidised Blu-ray player—which it is. Dedicated Blu-ray players start at around $750. The PS3, in short, will not be the moneyspinner that the PS2 was for quite some time, and it seems unlikely to achieve the market share of its predecessors (see chart on next page).
The PS3 is also meant to ensure that Blu-ray triumphs over HD-DVD as the high-definition successor to the DVD video format. The idea is that millions of PS3s bought by gamers will seed the market for Blu-ray, providing it with critical mass and ensuring that Hollywood studios, which are reluctant to back two rival standards, plump for Blu-ray over HD-DVD. But instead of riding the PS3 as a Trojan horse, Blu-ray has instead hobbled it by increasing its price and delaying its introduction. The battle between Blu-ray and HD-DVD may even prove irrelevant, as internet downloads become the medium of choice for high-definition video. Both Sony and Microsoft plan to sell high-definition video downloads via their consoles.
Finally, the PS3 is a litmus test for Sir Howard's turnaround effort, one of the aims of which is to get Sony's various divisions to co-operate more fully. (A spat between its electronics and content units left the field open for Apple's iPod.) The company insists that despite recent problems such as the battery recall, the turnaround is going well behind the scenes. Sony has improved margins in its electronics business and reduced headcount by 10,000 ahead of schedule. It is also on track with factory closures, asset disposals and winnowing its product line-up to focus on "champions" such as Cyber-shot digital cameras, Bravia televisions and, of course, the PS3. Sir Howard even suggested this week that the battery fiasco had helped by making it easier for him to convince doubters within Sony of the need to change.
Yet it will be some time before it is possible to tell whether the PS3 can rescue Sony. Beneath the short-term troubles, the company is playing a long game. "This is not a battle that's just about this Christmas," says Rob Wiesenthal, the finance chief of Sony's American division. Sony is betting that the PS3's advanced technology will sustain the company for a decade by extending the PlayStation franchise beyond gaming. So a few teething problems in the early days are nothing to worry about; besides, the PS2 was also criticised for being expensive, over-engineered and unreliable when it first appeared. But having achieved 70% market share last time around, Sony is certain to lose ground this time. The only question is how much.
LOAD-DATE: November 16, 2006 |
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Nana Komatsu
weak sauce
Joined: 17 Jul 2006
Posts: 1293
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| Posted: Mon Nov 20, 2006 5:45 am Post subject: |
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I get the feeling that if we ever met in person, you'd just strangle me to death before I had a chance to open my mouth.
That said, I don't believe that Sony is intentionally trying to screw their launch over by holding back hardware or anything, but they're trying to make the best of what they had and doing quite well as a result anyway. |
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friedchicken
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Joined: 16 Mar 2005
Posts: 496
Location: Port Land, OR
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| Posted: Mon Nov 20, 2006 10:41 am Post subject: |
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| I already said it once: I've been convinced that the miniscule number of systems produced was due to other factors than trying to build up hype, even though I think that's been an excellent outcome for Sony, which I personally think will pay off for them. I still find it irritating. |
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dhex
Breeder
Joined: 13 Dec 2004
Posts: 6319
Location: brooklyn, Nev Yiork
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| Posted: Mon Nov 20, 2006 10:47 am Post subject: |
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no, but i would give you a small gift of some kind.
i was out and about reading the interwebs the night before i posted that. outside of fort i don't think i've come across that from folks here. anyway, some of my reading was school project related (a book on games and brand identity would be interesting given the proper amount of money and research assistants) but mostly hopping from forum to forum.
the results were cataclysmically jungian.
nintendo is the magna mater / effeminate-deviant
microsoft is the pantocrator / jew-usurper-other
sony is horus / set
spinning out of control, i found myself adrift in the machine-like repetition of these themes. i even saw a strange kind of metabranding positioning, where all manner of essence (in the aquinas sense) is given over to companies and, by default, all of their actions. that's the madness - it's like 9/11 conspiracy theories. someone had to be behind it! there simply must be order over chaos. even if it's giant lizards from outer space, at least someone is in control.
i read; and i think i began to understand what leo strauss meant by "noble lie."
a kind of paranoid megalomania grows out of attachment, especially this manaical attachment that attributes all actions to sony/microsoft's wickedness/genius. yes, there are people who argue in the other direction, that fucking yourself upon launch is the work of a mastermind. that's actually more surprising than the people who think they're just evil; everyone appreciates fighting against a great black tower of evil and terrible awfulness, as it gives the soul focus and helps nourish resentment. but flipping that, well, i have to wonder what the payoff is.
the line seems to be rather firm; nintendo v. msoft/sony as the great battle of light v. dark. (as well as the great number of people who do not care at all) or kiddiez v. awesomez, since nintendo fans appear to be the only people making actual moral arguments about one's choice of console and which age it will help usher in. it's got a creepy slave morality vibe to it (i.e. at least we'll go down fighting; at least we tried) in some applications, especially when the personification of these companies (and utter ignorance of their histories) collides.
in short, therevada buddhists are right, leo strauss was right and i suppose if we have to flounder about in a delusion, this is preferable to mesoamerican religion. (though the idea of world leaders running stingray spines through their cocks to draw blood and call up their ancestors before making policy decisions does fill me with a kind of satisfied fairness, which is the power of the mayan bread and circus trick. it's a good gimmick.)
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Fred
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Joined: 18 Apr 2006
Posts: 99
Location: Iowa
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| Posted: Tue Nov 21, 2006 1:25 am Post subject: |
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| dhex wrote: | the line seems to be rather firm; nintendo v. msoft/sony as the great battle of light v. dark. (as well as the great number of people who do not care at all) or kiddiez v. awesomez, since nintendo fans appear to be the only people making actual moral arguments about one's choice of console and which age it will help usher in. it's got a creepy slave morality vibe to it (i.e. at least we'll go down fighting; at least we tried) in some applications, especially when the personification of these companies (and utter ignorance of their histories) collides.
in short, therevada buddhists are right, leo strauss was right and i suppose if we have to flounder about in a delusion, this is preferable to mesoamerican religion. (though the idea of world leaders running stingray spines through their cocks to draw blood and call up their ancestors before making policy decisions does fill me with a kind of satisfied fairness, which is the power of the mayan bread and circus trick. it's a good gimmick.) |
Bwahaha. That's good stuff.
I'm beyond drunk enough to crack out the Campbellian thematic elements and carry on your fine "analysis," and I feel sad because that's a good vein. You could flesh it out to 10,000 words and sell it to the New Yorker, I'm sure, or at least McSweeney's; make some money off the console wankery article trend.
All I have to say, in seriousness, is--remember the so-called "Hanlon's Razor," friends. It is the guiding law of Business in this, the Global Age. |
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