Of course, there are the obvious reasons for its lackluster performance. These include price, a lack of good games, and supply problems. That's all well and good, but the PS3 was supposed to be huge, it was supposed to be the future of gaming, the machine that nobody could live without. What went wrong?
Leading up to the launch, many in the industry, us included, were not very enthused about the PS3, mainly because of the price. Influential gaming sites, like Penny Arcade, at their Penny Arcade expo back in August, publicly stated that they wouldn't be buying a PS3 because of price. The gaming press and the gaming community felt that Sony was trying to rip them off.
The argument on the other side, and this came mostly from videophiles, was that you simply couldn't get a Blu-Ray player for under $1,000, therefore, the $600 PS3 was a bargain. Although gamers and videophiles do overlap in some circumstances, many of us who play a ton of games could care less about watching movies on a Blu-Ray drive and many who care about the Blu-Ray drive don't really care about games.
Then came the speculators. Those people who knew they could buy a PS3 at launch, pop it up on eBay and make a steep profit. And they did. In the first 24 hours after launch the average price for the $600 retail PS3 was over $2,000. It went down over the next few weeks, but speculators were still easily making $400 - $500.
Proof that there were a good number of speculators buying the PS3 was the attach rate of games, that is, how many games were sold with each console. GameStop reported that the PS3 had an attach rate of 1.5 while the Wii enjoyed a 3.0. These numbers are a lot higher than the initial launch estimates that I read which said that the PS3 had an attach rate lower than 1.0. Obviously, speculators who didn't plan on actually playing the PS3 didn't buy a game with it.
Therefore, the launch audience for the PS3 were videophiles and speculators. Gamers, being the intelligent folk that they are, knew not to get involved in this free-for-all. They knew that historically, Sony launch hardware has kinks (the PS3 was no exception), that there were few good games at launch, and that the price would inevitably have to come down in the next year or so. Waiting that extra year for the machine, therefore meant that the kinks would be worked out, that more games would be available, and that the price may be lower.
Lack of Games
Quiz time! Name three PS3 games! What's that, "Resistance: Fall of Man". Uh huh. That's one. Can you come up with another two? Riiiight. Most non-gamers would not have even come up with one. Now, how about I ask you to name three Wii games. You'd probably name 'Zelda' and 'that one that comes with the console', aka, 'Wii Sports'. If you were really good you might also name 'Red Steel' or 'Rayman' or 'Super Monkey Ball'.
What's the difference here? A killer launch title. This intertwines with price when many gamers said to themselves: "If I'm going to spend $600 there better darn well be a great game to show off my hardware!"
On that front, Sony failed, however, this isn't a mortal wound, more like a deep laceration. It usually takes a good year or so for a new console to have a killer title. The 360 just got 'Gears of War', and the PS2 wasn't all that until it wrapped up 'GTA3' as an exclusive.
That leads me to mention that the Wii launch, with two smash hits, 'Zelda' and 'Wii Sports,' is an anomaly, and, what ultimately has led to the current state of the PS3. But first, a quick note on supply.
My dad called on the day of the PS3 launch to ask if we had gotten one. We did indeed get one, being in the business and all, we figured it be good to have one (which we ended up selling on eBay...don't hate us). Anyway, my dad said something that many were thinking, a conspiratorial line of thought, that Sony purposely tightened supply in order to create huge demand for the PS3.
That's a bunch of bull honkey, but not insignificant bull honkey. It doesn't matter whether or not Sony was manipulating its shipments (and personally, I don't think they were...I just don't think they could make them fast enough) but the fact that people thought that Sony was being devious futhered the notion that Sony was trying to rip them off.
Add in the news reports of shootings, beatings, and stampedes at the launch and what you have is the negative stereotype of the crazed gamer pining for their fix. The funny thing is, it wasn't crazed gamers, but crazed speculators that were causing the problems. Seriously, if each PS3 represented a profit of $1,400 for you, wouldn't you be a little more apt to trample somebody to get one?
Therefore, the tight supply resulted in the furthering of an already negative feeling that Sony was out to take advantage of the very gamer that they were counting on, and also resulted in a slew of negative press which the news outlets made to look like the LA riots.
The Wii -- The unforseen downfall of the PS3
Leading up to the launch of the PS3 many people suggested that, for the same price as one PS3, a gamer could get an Xbox 360 and a Wii. This was referred to as the NintendSoft bundle or the WiiBox (I'm sure there were other names, these are the ones I remember seeing).
This, of course, assumes that a person has $600 to spend on their gaming machine(s). It also assumes that there is a need for the cutting edge technology of either the Xbox 360 or the PS3. These assumptions were wrong.
Let's take the Wii out of the picture for a moment and create an alternate universe where the launch of the PS3 was going up against a year old Xbox 360. In Japan, where the Xbox has struggled to sell as if it were a Chevy SUV, the PS3 would have absolutely dominated. Everybody would have had to have one.
In the US, using this same alternate universe, the PS3 and Xbox 360 would essentially be in a pissing match of who has the best processor, who can render more polygons, and which high def DVD is better. It's like Pepsi and Coke doing battle...same product, slightly different taste. In this battle, the PS3 would have done well because, in all honesty, it does have slightly more horsepower and to the American consumer, that is actually very important.
Now, let's leave this dichotomous parallel universe and enter the real world. The world where the Wii launched the day after the PS3 here in the States and three weeks after the PS3 in Japan. The Wii also launched in Europe, which the PS3 will not do until March '07.
In the real world, people, some gamers, but many just regular people, were ready for a new game machine. They didn't care about graphics, polygons, or processors. They cared about having fun. They cared about not being presented with a 12 button cluster of controls. They cared about not paying $600.
And that's how the Wii killed the PS3. It was the third option. The Sprite to the Coke and Pepsi that most people were tired of. It shattered Sony's assumption that power and graphics were the way to go. It blew away Sony's focus on the Xbox 360 as its competition. The Wii was different, it was approachable, it came with a game (really five games), it had a fun controller, and, most importantly, it only cost $250.
It's been a rocky start for the PS3, but any new console has a rocky start. That's to be expected. What Sony didn't factor in was the appeal of the Wii. The Wii whose launch couldn't have gone better. The Wii which has the Nintendo name that us 30 somethings fondly remember from our childhood, not to mention the 'Zelda' bond that we all have. The Wii which only cost $250 and could be played right out of the box for hours on end.
The PS3 is not dead in the water, but it's close.
Look for Part 2 of this article tomorrow, "How Sony can save the PS3".
Oh, and to toot my own horn, take a look at the story I wrote up during E3 2006 titled, "Why the PS3 is poised to lose the Next-Gen battle". How right can a guy be?