The Death of the PS3

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Let’s take a look at why I’m proclaiming the death of Sony’s PS3:

The Sony Playstation 3 is a great piece of hardware.  It slices, it dices, it plays you new Blue Ray DVD’s with ease.  It finds your compatible media collection on an approved media device and can stream it to your PS3.  It even allows you to legally run Linux on the PS3 if you choose.  It does so many things, so why does it lag in sales compared to Nintendo Wii and the XBOX 360?  There are a few things that are working against the Sony PS3 and I’ll share my thoughts how these things are going to kill the PS3.

First and foremost, the Wii is killing the PS3.

Nintendo’s domination in this market is slowly digging the grave for the PS3.  While I believe there’s room for three next-gen game consoles, I contend last place can’t belong to the most expensive console that is still losing money on each console produced.  Say what you want, but Sony desperately needs to be the industry leader if they want to make a profit.  After all, isn’t making a profit Sony’s motivation?  Don’t let anyone fool you that Sony is OK with losing money on every console produced.  They have to make up these losses somewhere, but where would it come from?  Software sales keep the PS3 afloat as long as software sales are strong. 

But are the software sales strong enough?  In a purely subjective answer… no.  Since the Sony PS3 is consistently third in US hardware sales each month, it needs a much higher attachment rate than the Wii or XBOX 360 to be profitable.  As of September 2008, the PS3 ranks third in game attachment rate with a 5.3 games per console.  Why would the least selling console have the highest attachment rate? 

Realistically, it wouldn’t make sense to come to that conclusion.  I have to admit – I like what I see in Resistance 2 and Killzone 2… they look amazing.  Can these games save Sony’s PS3 this holiday?  I hope so, but I’m not counting on it.  I know with the release of a highly anticipated game brings on a spike in console sales, but is it enough?  I am an enthusiast, not the general public.  I’m no Joe Plumber in the video game community.

Secondly, Microsoft is going on a marketing onslaught, price reductions, and in-game bundle promotions to take on the Wii.

Microsoft has already forgotten about Sony.  They are looking to take it right to the Wii.  Since you can now buy a XBOX 360 for $50 less than a Wii, people are going to actually consider the XBOX 360 over the Wii.  The Wii is a great game console and it has some excellent games and original titles that will draw many to the Wii. 

But in this economy, the wallet will have some say over the matter. More people, but not everyone, will turn to the XBOX 360 as a gaming machine purely because of its price point.  The cutesiness of the Wii still draws many to it, even non-gamers.  I do not see the Wii being surpassed anytime soon as the store shelves are generally empty of the Wii consoles.  But, the popularity of the XBOX 360 will increase as the XBOX 360 now has a direct competitor with the Wii.  I only see the PS3’s deficit increasing instead of gaining popularity.  Sony has indicated several times they do not expect to see a price reduction this holiday season.  Take it for what it’s worth, but it appears that Sony is saying that they can’t afford to lose any more money on each console.  Perhaps Sony priced themselves out of this console race?

People will be quick to argue that the XBOX 360 is plagued by shoddy hardware.  People will argue that the Wii is a glorified Game Cube – just slightly more powerful than the last generation XBOX.  It’s true that the XBOX 360 has the RRoD and other technological disadvantages that hurts their reputation.  Sony fans will be quick to point to these issues, but in reality the XBOX 360 is still selling more consoles than the PS3, so we can put that argument to rest. 

In defense of the Wii, it’s all about the games, and right now the Wii has some very entertaining titles that make great use of their Wii-mote.  I might sound like a fanboy, but I’m really not.  I own all three consoles and each one has its own merits.  Yes, the XBOX 360 has been plagued with hardware issues, but with the introduction of the Falcon motherboard revision, these issues have supposedly decreased to within industry standards.  As I type, the soon to be released “Jasper” version of the XBOX 360 will start appearing within weeks.  The updated XBOX 360 motherboard will provide a much sought after relief from the RRoD with a die shrink on the GPU thus reducing the heat output and increasing the lifespan of the console.

People will also argue about the storage capacity of the media used for the XBOX 360 and Wii. 

DVD’s only hold 8GB of data compared to a max of 50GB for the Blue Ray discs.  I have to revert back to the sales numbers:  Sony’s PS3 is last in sales relative to the next generation consoles.  I don’t think the general public gives a hoot about the media’s storage capacity and what it means in gaming.  The only people who really care about media capacity are the actual game developers and video game enthusiasts in this industry.  These people (myself included) make up less than 10% of the buying population in console gaming. 

I don’t think the general public is too worried that if they had a Blue Ray drive in their Wii that Super Mario Kart would have more track.  They like the game – period.  We, the enthusiasts, like to think that we are the voice for the gaming community and the console manufacturers should listen to us and satisfy our wants in the quest for the perfect gaming machine.  In reality, 90% of the buying public could care less about these things.

What about wireless and the hard drive options you say? 

Yes, the XBOX 360 doesn’t have the wireless capability as a standard feature.  Yes, Microsoft should include the wireless connectivity as a standard feature, and shame on Microsoft for leaving that out so they can gouge us with an overly priced wireless adapter.  But the Wii does have wireless capabilities and I go back again to my previous comment that both consoles are selling better than the PS3.  This article isn’t about why the PS3 should win, only why it’s not winning.  Hard drives are a moot point as this becomes more of an enthusiast upgrade.  Most people have not even used half of their hard drive capacity on the original 20GB XBOX 360 units and PS3’s and the Wii shows you that you really don’t need a hard drive for storage space when SD memory cards work out well.

You could also debate the XBOX Live subscription plan vs. Sony’s free online play with PSN. 

I don’t think arguing this topic does any good either.  If you want to play online with friends, you’ll pay for it – if that’s what you really want.  Look at Blizzard’s World of Warcraft subscription model.  Does it make sense?  Not really, but millions of gamers continue to pay $15 every month to play online.  So, Sony supporters can’t really use free online play as a persuasion tactic to attract gamers.  Would Sony alienate their fan base by charging for online play?  Probably not, and I personally think they need to adopt Blizzard’s and Microsoft’s strategy in order to get some of the manufacturing costs back from the PS3 hardware.

Thirdly and lastly, the technology driving the biggest reason to have a PS3 is now going to be one of the reasons not to buy one.

The PS3 has a great game library.  The PS3 is a great gaming console.  As I stated in the opening of this article, the PS3 is a great piece of machinery.  But if we’re using logic, we are not going to pay $400 for a game system when you can play over 85% of the same games with little to no difference in game play and presentation on a cheaper game console.  If you shelled out $399 for the PS3, the Blue Ray player capable of playing Blue Ray high definition movies was perhaps one of the biggest reasons to buy a PS3. 

Six months ago, that was a great argument because the PS3 was the cheapest Blue Ray movie player on the market and it played games in high definition – that’s what sold me on the PS3.  I predicted Blue Ray would win, not by it being installed in the PS3 but for other reasons.  Disney choosing Blue Ray as their high definition media of choice made me feel that Blue Ray would win the high definition format war. 

The argument that the PS3 is the cheapest Blue Ray player no longer exists – in fact, a popular electronics retailer has a Blue Ray movie player selling for less than $200 now.  You can find refurbished Blue Ray players for $150 and come Black Friday, the biggest shopping day of the year, retailers will be luring you with incredible deals on Blue Ray players. 

What does this mean?  It means right now you can go to an electronics retailer and pick up a dedicated Blue Ray Player and a XBOX 360 for the same price as the PS3.  What about Black Friday?  Well, the deals should only get better.  After Thanksgiving, Sony will have lost any advantage to having a Blue Ray player in their consoles.  In fact, I’ll go out on a limb and now say it will become a disadvantage.  How so? 

Well, the all-in-one combo TV/DVD players are fine and convenient.  But what happens when one of the features breaks and you want to have it repaired?  The whole unit gets sent in for repair, rendering both devices unusable until the repaired unit arrives.  The PS3 will soon fall into this genre and buyers will see the same thing.  If PS3 owners can’t watch their high definition movies, they’re not playing the games either.

This article may come as surprise, but instead of looking at it from gamers point of view, look at it from a consumer’s point of view.  Which gaming system will offer the most for my money?  Unless Sony has a major price reduction on the PS3, they don’t stand a chance.

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