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Is The Playstation 3 Dead In The Water? May 11, 2006 |
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Summary: Going into E3 everyone thought Sony had a can't miss product with their upcoming PlayStation 3 console, but after Monday's E3 press conference many in the industry feel that the console may not outsell its rivals. We chatted with some people in the industry who feel the same and give our opinion on Sony's chances for success at launch.
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How times have changed.
On Monday night, Sony once again held a massive pre-E3 press conference at one of the huge sound stages at the Sony Pictures studio in Culver City, CA. Sony execs came on stage to tout once again how the PS3 would not just be a video game console but a full-fleged entertainment device.
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And then they started showing off the first launch title PS3 games, some of which were playable to press conference attendees at the end of the pre-E3 press conference. Graphically, the games looked a lot better than games on Sony's previous PS2 machine, but they certainly didn't look like a lot of the movies that Sony showed off at last year's press conference. Moreover, games like Warhawk, Resistance, and Gran Turismo HD didn't look all that much better, if at all better, than current games on Microsoft's Xbox 360.
Then came the more surprising and at the same time most disappointing news of all: pricing. Normally price points and exact release dates for new consoles don't come during E3, but later in the year and closer to the actual launch date. Not this time for the PS3 as Sony announced two separate versions, one with a 20 GB hard drive and the other with a 60 GB hard drive, which will retail for $499.99 and $599.99, respectively. A US launch date of Nov 17 was also announced.
The crowd at the conference didn't really know what to make of it. Most people had assumed that the PS3 would be expensive, and certainly more expensive than the PS2 which launched for $300 back in 2000 in the US. But no one expected that the high-end PS3 version (which besides having a bigger hard drive will have several other features that the 20 GB version won't have) would retail for twice as much as the PS2 launch price.
I spoke with several people who attended the press conference right after it concluded. Their opinion was one of shock and dismay that Sony would ask such a high price for a product that, at first glance, didn't seem to be a huge quantum leap over the Xbox 360 in terms of hardware features. One very well known game developer told me that it was a surprise that Sony would reveal the pricing for the PS3 at E3. "That was a big mistake," was the game developer's response. A well know game journalist also told me that the PS3 press conference showed that the console was dead in the water. "There will not be a PS4," according to this journalist.
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So how did Sony, who was on top of the world at last year's E3, come crashing down so hard this year? There are several factors, in our opinion…
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The timing of the price announcement: There is still confusion as to why Sony would offer up a price point for the console over six months before its launch. Perhaps Sony was trying to prepare people for such a huge leap in the cost of their new machine well ahead of time. However, the fact is that tons of people would have lined up to pre-order the PS3 for months before the final price was revealed. Now that the price is out there pre-orders for the console could be affected.
The price itself: $499 and $599, no matter how you look at it, is a lot of money. The economic picture today is a lot different than 2000 when the PS2 launched with prices for gas and other essential items was far cheaper than it is today. With such a high price tag, it could be that the retail price could end up being a psychological barrier preventing some people from purchasing the product, especially with the Xbox 360 Premium currently selling for $399 and the Nintendo Wii likely to cost even less.
The tech: Sony has banked on their Cell multiprocessor CPU and their Blu-Ray disk drive as their two big leaps in technology. However, it is clear that the launch games for the console as shown during E3 are not using Cell to its fullest extent. Current Xbox 360 games already look almost as good if not as good as the PS3 games shown at the press conference and on the show floor. As for Blu-Ray, the PS3 will launch less than five months after the first stand alone Blu-Ray disk players. That means only a few hundred Blu-Ray movies will be available to purchase compared to the thousands of DVD movies available to PS2 owners when it launched three years after the first DVD player was in stores in 1997. Also Microsoft plans to have a add-on disk player for Xbox 360 owners that will play rival HD-DVD movies. With millions of Xbox 360 owners already out there, it's likely that a number of them will pick up the HD-DVD add-on which will likely cost a lot less than picking up a PS3 (exact pricing for the HD-DVD add-on has not yet been revealed.
The games: Much like the PS2 launch, the PS3 doesn't look like it will have a lot of "Wow, I must have that!" game titles when it launches in November. Games like Resistance, Heavenly Sword, Warhawk and more are currently looking pretty standard fare. This would be fine for Sony if this was the same situation as the PS2 launch when there was no real competition. Not so this time. Xbox 360 will have its second-gen titles ready to go by the time of the PS3 launch and those games, particularly Gears of War from developer Epic Games, look amazing months before launch. The Nintendo Wii, while not a graphical powerhouse like the PS3 or Xbox 360, also has some promising launch titles, particularly Legend of Zelda: Twilight Princess and Metroid Prime 3.
Conclusion
So what can Sony do about this? At this stage there is little that the company can do. The only short term solution is to announce an even lower price for the PS3 but that seems unlikely and it won't affect the fact that their launch title line-up is not looking up to speed. The only thing that might save the PS3 at this point is yet another multi-million selling exclusive game franchise that comes out of nowhere like Grand Theft Auto III did for the PS2 in 2001, one year after the launch of the console. Again the competition for such a game is much bigger (the next GTA game will launch for the PS3 and Xbox 360 at the same time next year for example) but if Sony can find that game it might be able to pull it off. At the moment, however, things look bleak and in our opinion we would rather spend our money this fall on upcoming Xbox 360 games and/or a Nintendo Wii and its titles than spend a whopping $600 on just hardware.
At this point, the biggest selling point of Sony’s PS3 console appears to be its Blu-Ray disc drive. That may not be enough for many gamers to plunk down $500 or $600 once the euphoria at launch dies down.