Comments on: The Economist agrees with this blog http://www.bruceongames.com/2007/12/14/the-economist-agrees-with-this-blog/ A veteran's view on marketing games Fri, 20 Nov 2009 21:07:25 -0800 http://wordpress.org/?v=2.8.5 hourly 1 By: Bruce http://www.bruceongames.com/2007/12/14/the-economist-agrees-with-this-blog/comment-page-1/#comment-641 Bruce Wed, 19 Dec 2007 13:56:51 +0000 http://www.bruceongames.com/2007/12/14/the-economist-agrees-with-this-blog/#comment-641 Hi Scott, there is a body of thought that the initial success of the PS2 was partly down to it being a cheap DVD player and that Sony expected to repeat this by putting blu-ray in the PS3. The problem with this is that standard TVs were ubiquitous at PS2 launch so the DVD function was of universal use. Now we have the situation where HD TVs are very much a minority device so the blu-ray function of PS3 is far less of a selling proposition. So far blu ray has cost Sony by contributing to the high costs of PS3 far more than it has created sales with the added functionality. Maybe this will change in 2008. Microsoft have taken a completely different strategic path. They are not bothered about media standards. Instead they have been fastidious about making the 360 cheap to manufacture and in driving down manufacturing costs after launch. This gives them far more flexibility to use the price mechanism to support sales. Hi Scott, there is a body of thought that the initial success of the PS2 was partly down to it being a cheap DVD player and that Sony expected to repeat this by putting blu-ray in the PS3.
The problem with this is that standard TVs were ubiquitous at PS2 launch so the DVD function was of universal use. Now we have the situation where HD TVs are very much a minority device so the blu-ray function of PS3 is far less of a selling proposition.
So far blu ray has cost Sony by contributing to the high costs of PS3 far more than it has created sales with the added functionality. Maybe this will change in 2008.

Microsoft have taken a completely different strategic path. They are not bothered about media standards. Instead they have been fastidious about making the 360 cheap to manufacture and in driving down manufacturing costs after launch. This gives them far more flexibility to use the price mechanism to support sales.

]]> By: Scott Thompson http://www.bruceongames.com/2007/12/14/the-economist-agrees-with-this-blog/comment-page-1/#comment-640 Scott Thompson Wed, 19 Dec 2007 13:23:23 +0000 http://www.bruceongames.com/2007/12/14/the-economist-agrees-with-this-blog/#comment-640 I can think of one good reason to buy a PS3- the blu-ray player. So perhaps Screen Digest are looking at it from the opposite angle to a traditional gaming point of view, and assuming that blu-ray discs will become the dominant format over the course of the next year, so the PS3 will become a popular way for the masses to gett hold of a high definition player, with the added bonus of being able to play the likes of SingStar/Guitar Hero/Buzz etc... I can think of one good reason to buy a PS3- the blu-ray player.

So perhaps Screen Digest are looking at it from the opposite angle to a traditional gaming point of view, and assuming that blu-ray discs will become the dominant format over the course of the next year, so the PS3 will become a popular way for the masses to gett hold of a high definition player, with the added bonus of being able to play the likes of SingStar/Guitar Hero/Buzz etc…

]]> By: KaKTy3 http://www.bruceongames.com/2007/12/14/the-economist-agrees-with-this-blog/comment-page-1/#comment-626 KaKTy3 Mon, 17 Dec 2007 10:38:33 +0000 http://www.bruceongames.com/2007/12/14/the-economist-agrees-with-this-blog/#comment-626 [Another problem with that graph is that it shows no seasonality in Wii sales. This just cannot be right.] Simple. One cannot expect to see any mid-year seasonality in the time series, where the chart is clearly labelled "year-end figures". Also, can I just say I really enjoy reading your blog, Bruce, having come here via "Information Arbitrage" about a month ago. Keep up the good work! ;) [Another problem with that graph is that it shows no seasonality in Wii sales. This just cannot be right.]

Simple. One cannot expect to see any mid-year seasonality in the time series, where the chart is clearly labelled “year-end figures”.

Also, can I just say I really enjoy reading your blog, Bruce, having come here via “Information Arbitrage” about a month ago. Keep up the good work! ;)

]]> By: Bruce http://www.bruceongames.com/2007/12/14/the-economist-agrees-with-this-blog/comment-page-1/#comment-621 Bruce Sun, 16 Dec 2007 18:40:41 +0000 http://www.bruceongames.com/2007/12/14/the-economist-agrees-with-this-blog/#comment-621 Kspraydad. Thank you very much for your contribution to this discussion, it is much appreciated. We have had analyst graphs for the last year that show PS3 just about to take off next month. And it never does. Hence I am so cynical about this one. In many ways the 360 is the better machine. Especially the GPU and the ease of development. It also has far more platform exclusive AAAs, which is what it is all about. I have written an article for this coming Tuesday which goes some way to how I think that Microsoft will get their volumes. One thing is for sure, we have 10 year overlapping cycles so we are just at the very beginning of where PS3 and 360 will be. A lot can happen in the next 8+ years. Kspraydad.
Thank you very much for your contribution to this discussion, it is much appreciated.
We have had analyst graphs for the last year that show PS3 just about to take off next month. And it never does. Hence I am so cynical about this one.
In many ways the 360 is the better machine. Especially the GPU and the ease of development. It also has far more platform exclusive AAAs, which is what it is all about.
I have written an article for this coming Tuesday which goes some way to how I think that Microsoft will get their volumes.
One thing is for sure, we have 10 year overlapping cycles so we are just at the very beginning of where PS3 and 360 will be. A lot can happen in the next 8+ years.

]]> By: Kspraydad http://www.bruceongames.com/2007/12/14/the-economist-agrees-with-this-blog/comment-page-1/#comment-620 Kspraydad Sun, 16 Dec 2007 14:09:16 +0000 http://www.bruceongames.com/2007/12/14/the-economist-agrees-with-this-blog/#comment-620 Regarding: "They seem to have the 360 and PS3 captions the wrong way around!" I was hoping that your site would offer credible critiques but this statement is beyond the pale. Please tell us why in the world you would think the Xbox 360 would sell 80 Million units any more than the PS3 would? The Xbox 360 does not have the 'legs' outside of the NA market to get any where near these levels. At current ratios they would have to sell 55 million in the US ALONE in order to reach 80 million world wide. That would be 50% MORE than the PS2 sold in the US market in 7 years. This will not happen. Regarding: “They seem to have the 360 and PS3 captions the wrong way around!”

I was hoping that your site would offer credible critiques but this statement is beyond the pale.

Please tell us why in the world you would think the Xbox 360 would sell 80 Million units any more than the PS3 would?

The Xbox 360 does not have the ‘legs’ outside of the NA market to get any where near these levels. At current ratios they would have to sell 55 million in the US ALONE in order to reach 80 million world wide.

That would be 50% MORE than the PS2 sold in the US market in 7 years. This will not happen.

]]> By: Evan http://www.bruceongames.com/2007/12/14/the-economist-agrees-with-this-blog/comment-page-1/#comment-618 Evan Sat, 15 Dec 2007 16:15:23 +0000 http://www.bruceongames.com/2007/12/14/the-economist-agrees-with-this-blog/#comment-618 It's an interesting chart, but difficult to evaluate without knowing the assumptions behind the curves. On the one hand, time seems to be a friend to the PS3. With each passing month, the relative advantages of the 360 over the PS3 diminish, and the features and the likely longevity of the PS3 become more attractive. Certainly, for any gamer who has not yet purchased a next-gen console, the PS3 is now (finally) a reasonable, even econonical, choice, particularly if they need WiFi or want a Blu-Ray player. On the other hand, we must also assume that Microsoft will come up with a few new ideas with the passage of time. However, I do believe that software and price alone will no longer do the trick for the 360 against the PS3. If the 360 could not deliver a killing blow against the PS3 based on those factors in 2006 and 2007 (when the PS3 had almost nothing to offer), it will really have a tough time going forward. It's time for a new round of creative thinking at Microsoft. Based on the latest NPD numbers, the good news for gamers is that the competition is still fierce, and the three next-gen platforms all remain viable choices. It’s an interesting chart, but difficult to evaluate without knowing the assumptions behind the curves. On the one hand, time seems to be a friend to the PS3. With each passing month, the relative advantages of the 360 over the PS3 diminish, and the features and the likely longevity of the PS3 become more attractive. Certainly, for any gamer who has not yet purchased a next-gen console, the PS3 is now (finally) a reasonable, even econonical, choice, particularly if they need WiFi or want a Blu-Ray player.

On the other hand, we must also assume that Microsoft will come up with a few new ideas with the passage of time. However, I do believe that software and price alone will no longer do the trick for the 360 against the PS3. If the 360 could not deliver a killing blow against the PS3 based on those factors in 2006 and 2007 (when the PS3 had almost nothing to offer), it will really have a tough time going forward. It’s time for a new round of creative thinking at Microsoft.

Based on the latest NPD numbers, the good news for gamers is that the competition is still fierce, and the three next-gen platforms all remain viable choices.

]]> By: JC Barnett http://www.bruceongames.com/2007/12/14/the-economist-agrees-with-this-blog/comment-page-1/#comment-617 JC Barnett Sat, 15 Dec 2007 15:07:40 +0000 http://www.bruceongames.com/2007/12/14/the-economist-agrees-with-this-blog/#comment-617 Troll comments, congratulations! You're part of the mainstream now. S Pampel is on to something; it's hard to see any seasonal effects if the console is not meeting demand all through the year. There is an interesting graph in this week's Famitsu that shows Wii sales in Japan having fairly evened out now. A huge spike around last year and the start of this year, since settled with few spikes, and not even very high spikes at that. You can easily purchase a Wii in Japan these days. Sales figures for the next few weeks in Japan should be interesting; it is bonus week and there is the new year gift season coming. My bets are on DS, though Wii Fit may sell too. No Metal Gear Solid 4 yet, so I am guessing PS3 will have another lacklusture January. Though I think the PS3 curve will continue to bend slightly upwards, it's hard to imagine under what circumstances it would rocket up like it does in the graph above. Sony executives keeping their traps shut would help, I think. Troll comments, congratulations! You’re part of the mainstream now.

S Pampel is on to something; it’s hard to see any seasonal effects if the console is not meeting demand all through the year. There is an interesting graph in this week’s Famitsu that shows Wii sales in Japan having fairly evened out now. A huge spike around last year and the start of this year, since settled with few spikes, and not even very high spikes at that. You can easily purchase a Wii in Japan these days. Sales figures for the next few weeks in Japan should be interesting; it is bonus week and there is the new year gift season coming. My bets are on DS, though Wii Fit may sell too. No Metal Gear Solid 4 yet, so I am guessing PS3 will have another lacklusture January.

Though I think the PS3 curve will continue to bend slightly upwards, it’s hard to imagine under what circumstances it would rocket up like it does in the graph above. Sony executives keeping their traps shut would help, I think.

]]> By: S Pampel http://www.bruceongames.com/2007/12/14/the-economist-agrees-with-this-blog/comment-page-1/#comment-616 S Pampel Sat, 15 Dec 2007 09:05:09 +0000 http://www.bruceongames.com/2007/12/14/the-economist-agrees-with-this-blog/#comment-616 Has there actually been any seasonality in Wii sales ? Obviously one would expect seasonality when production is able to meet demand, but since demand has outstripped production ever since the Wii's release, I wouldn't really expect any seasonality unless production itself is seasonal (which you could possibly argue it is, since production must be ramped up in anticipation of key seasonal periods - obviously not enough however!). Very disappointed they got the PS3 / Xbox 360 graph the wrong way around. Has there actually been any seasonality in Wii sales ?
Obviously one would expect seasonality when production is able to meet demand, but since demand has outstripped production ever since the Wii’s release, I wouldn’t really expect any seasonality unless production itself is seasonal (which you could possibly argue it is, since production must be ramped up in anticipation of key seasonal periods – obviously not enough however!).
Very disappointed they got the PS3 / Xbox 360 graph the wrong way around.

]]> By: Bill http://www.bruceongames.com/2007/12/14/the-economist-agrees-with-this-blog/comment-page-1/#comment-615 Bill Sat, 15 Dec 2007 07:25:43 +0000 http://www.bruceongames.com/2007/12/14/the-economist-agrees-with-this-blog/#comment-615 Some intelligent comments up there... You're right Bruce, there really is no good reason to own a PS3 right now, and banking on future content at $399 US is not a tempting proposition. Looking at the NPD numbers (I'm not sure about worldwide) of the recent "big guns" for the PS3, namely Uncharted, Ratchet & Clank, and even Heavenly sword really highlights a kind of PS3 apathy. Right now the biggest thing on PS3 is Call of Duty 4, which is a cross-platform title and has sold devastatingly well on 360 (1.5mil in the US in November). In some ways the PS3's problems are a bit disconcerting. So far this holiday season the PS3 is even being outsold by the PS2. It's not uncommon for a console to have a shaky start, but a year later and it's time to start worrying. I don't think you're off in the least when doubting PS3's future viability. Also, fantastic blog, I've looked forward to reading it every since you've started. Keep it up. Some intelligent comments up there…

You’re right Bruce, there really is no good reason to own a PS3 right now, and banking on future content at $399 US is not a tempting proposition. Looking at the NPD numbers (I’m not sure about worldwide) of the recent “big guns” for the PS3, namely Uncharted, Ratchet & Clank, and even Heavenly sword really highlights a kind of PS3 apathy. Right now the biggest thing on PS3 is Call of Duty 4, which is a cross-platform title and has sold devastatingly well on 360 (1.5mil in the US in November).

In some ways the PS3’s problems are a bit disconcerting. So far this holiday season the PS3 is even being outsold by the PS2. It’s not uncommon for a console to have a shaky start, but a year later and it’s time to start worrying. I don’t think you’re off in the least when doubting PS3’s future viability.

Also, fantastic blog, I’ve looked forward to reading it every since you’ve started. Keep it up.

]]> By: Redh3lix http://www.bruceongames.com/2007/12/14/the-economist-agrees-with-this-blog/comment-page-1/#comment-614 Redh3lix Fri, 14 Dec 2007 21:00:35 +0000 http://www.bruceongames.com/2007/12/14/the-economist-agrees-with-this-blog/#comment-614 Ah, dont even get me started on Micro$oft :/ Ah, dont even get me started on Micro$oft :/

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