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Why the PS3 is Poised to Lose the Next-Gen Battle

Filed under: E3 | PS3
Posted by Jeremy on May 9, 2006 9:02 AM
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Sony's annoucement of price, launch plans, and the motion sensing controller, all add up to one thing: third place in the next gen console war. First, the price. Launching in an Xbox 360-esque two tiered platform, the 20 GB PS3 will be $499 and the 60 GB will $599. What's worse, us Americans have it the best with Europe, Japan, and Australia paying anywhere from $20-$80 more. In case you didn't catch that, $500 is the base price for a PS3!!! Way too expensive. The Xbox 360 has already sold 3.2 million units at a $300/$400 price point. By this November, I would imagine a $50 price drop at both levels making it $250/$350. The Nintendo Wii will most likely debut at $299/$249 (we may find out in a few minutes during the press conference). That means that the PS3 will be twice as expensive as the other two next-gen consoles.

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Next, the launch plans. Sony is attempting a world-wide launch starting in Japan on November 11 and the rest of the world on November 17. Remember what happened to Microsoft? Shortages, angered die hard fans, stores ripping people off (Best Buy, I'm looking in your direction), and sluggish software sales due to fewer than expected consoles made Microsoft look pretty bad. Unless Sony has some sort of magic carpet delivery service and Santa's elves working on production of the system, there are going to be problems getting the system into the hands of the people.

Such shortages at holiday time, when pressure is on to buy something, will benefit both Microsoft and Nintendo (who has yet to announce Wii launch plans). If the PS3 isn't in stock, the customer will be happy to pick up the X360 or the Wii, and save a few hundred dollars at that.

Sony has announced that they expect to ship 5-6 million PS3's by March '07. Microsoft expected similar numbers, but again, if the machines don't get made and shipped, there is nothing to buy. I forsee similar circumstances for the PS3, especially since their chips and Blu-ray discs are more complicated than were the X360 production. Obviously, this doesn't automatically mean that there will be problems, but it is a huge obstacle.

Also, of note is that Microsoft had (and still has) a TON of cash on hand to absorb all the costs, losses, and extra shipping costs. Sony is not in such a financially stable position.

Finally, the controller. At first glance, it looks like a fine tuned PS2 Dualshock controller. However, inside that controller are gyroscopes which can sense motion in six different directions. This revelation has launched many articles of how Sony has stolen Nintendo's idea and how terrible that is, etc. Despite the corporate espionage, Sony just doesn't seem to "get it". The Nintendo Wii controller is going to be amazing. It will pull the gamer into the game. It can be weilded with one hand, it points, it twists, and most importantly, the Wii was designed around it.

In Sony's case, the motion controller is an add-on; an afterthought. And, since the controller is designed to be held with two hands and not used as a pointing device, well, to me it just seems like it's a kitschy peripheral, like the Nintendo Power Glove. Who knows, maybe they'll come up with a good pinball game.

Sony is in trouble. Many things are working against them. Stiff competition from an established X360, a low priced and revolutionary Wii, a high price point, and predicted shortages will make for a poor holiday season. By the time Sony gets back up on their feet, the X360 will have a firm hold on units sold, and Nintendo will be the darling of the industry. Unless there is a quick price cut on the PS3 or some sort of huge new announcement, Sony may have to focus on making TVs for the other consoles.

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