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Why Sony Will Be the Biggest Loser this Gen


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Why Sony Will Be the Biggest Loser this Gen

 

Written by Tyranis

Tuesday, 22 July 2008

 

From: http://neocrisis.com/content/view/1775/134/

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Many people predicted that upon the PS3s release that it was set to dominate the market as it's predecessor the PS2 did last generation. It is kind of interesting how things can change in the videogame market. The roles have almost completely reversed for the current generation of consoles when one compares them to their previous incarnations. Nintendo seems to have completely turned things aroung and shocked the world by it's massive takeover of the casual sector. While in the meantime Microsoft and Sony seem to be content with battling it out for second place. They completely dismiss Nintendo as being a competitor and only see each other as rivals. No matter which way you analyze it even if Sony does come out on top they will still be the biggest losers in the end. Reason being, they will have lost more market share than either of their competitors.

 

This is a graphical representation of how the global market was split last generation in percentages

 

Image2-1.png

 

Last generation Sony owned over half of the market and the PS2 is still currently selling well. This is the reason that the PS2 had so many exclusives last generation. The amount of market share Sony had was very attractive for third parties developers. The reason being that they would see massive profit from supporting PS2. Sure there were 3rd party games that were multiplatform but PS2 was the real bread and butter for 3rd parties. People seem to think that there was some sort of brand loyalty between 3rd parties and Sony. This is inaccurate. Profit is number one from a business perspective.

 

Fast forward to current day. This is the graphical representation of the current global market split represented in percentages.

 

Image3.png

 

Xbox 360 released a full year ahead of Wii and PS3. The simple fact is though that in that time the Wii has already surpassed the worldwide install base of the Xbox 360. The Same can't be said for Sony. Sony had the strongest brand recognition last generation and it is painfully obvious the same can't be said for the current market trends.

 

The install base is what leads to more third party support. At the present time the PS3 has the smallest therefore exclusive third party support has diminished significantly. Many once exclusive games to the Playstation brand have jumped ship. Devil May Cry, Ace Combat, Final Fantasy, Dragon Quest - the list could go on and on.

 

It is true that PS3 sales have picked up. But at the current rate it will take the PS3 years to catch the Wii and even the 360. The PS3 is currently over 5 million units behind even the 360 with the Wii being even further ahead.

 

One thing is for sure. The market has seen a dramatic shift. It is almost like a repeat of the N64 era. With all the consoles switching positions in the race. One thing is certain though and that is that the install base will be a lot more evenly distributed this generation and Sony will not dominate as they have previously. If sales trends continue on the current path they are following both Microsoft and Nintendo will surpass their previous generation's install base within the next year.

 

Can the same be said for Sony? Definitely not. Sony may end up selling on par with it's competitors but they are by far the biggest losers so far of the current generation. They have lost significant ground while their competitors are about to eclipse their previous generation in install base. And when the console lifecycle reaches it's end Sony will have most likely lost the most overall market share when compared to it's rivals. I keep on reading about this 10 year lifecycle and I find it amusing. Is it really in the consumers best interest to be playing outdated hardware? And how hard is it NOT to release a new console. Over the years console hardware becomes cheaper to produce so the only true benefactors of a long console lifecycle are the companies who make them. And who is to say that Microsoft and Nintendo aren't thinking the exact same thing.

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Dont want the console wars to start again but can't help but say this is a load of BS .. though I am not a Sony fanboy .. look at the statement below -

 

"The install base is what leads to more third party support. At the present time the PS3 has the smallest therefore exclusive third party support has diminished significantly."

 

By this statement, since Wii has the largest install base it should have most third party support. But just look at the games Wii has or the games per console ratio of Wii, it is really abysmal.

 

Yes, MS has time on its side as it launched earlier but after a couple of years (say 2010) that wont mean anything and PS3 and Xbox 360 will be on level pegging with similar games and similar add-on services ..

 

Wii as rightly said by many will be like an expensive toy meant for players/casual gamers .. for me its more like an expensive board game (like Monopoly etc.) that a family can enjoy .. its not a game console per se ..

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By this statement, since Wii has the largest install base it should have most third party support. But just look at the games Wii has or the games per console ratio of Wii, it is really abysmal.

Actually, the Wii has tremendous third party support. Unfortunately, most of the products of this support are

 

shovelware_2.jpg

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Actually, the Wii has tremendous third party support. Unfortunately, most of the products of this support are

 

, thats right, Trash!!

But there are a couple more problems with this guy's points -

1. Surpassing one's last generation sales cannot be a benchmark - the guy with the lowest base (denominator) will most probably win. Its got to be the current market share and that is changing still. Its not stabilised and skewing towards PS3.

2. About a shorter console life cycle - whilst 10 years might not be the most ideal scenario everybody wants but it definitely not as easy as waking up one day and releasing another console. It has taken 3 years for 360 to make profit and God knows how much time PS3 will take, and no company would like to go in another gestation that long even every 10 years.

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Kaz Hirai Isn't Sure How Long The Xbox 360 Cycle Is...

 

giant_kaz_face_returns.jpg

 

Sony Computer Entertainment honcho Kaz Hirai is confused. Just look at his Giant Kaz Face, see how tranquilly baffled it is? That's some serious confusion. When Xbox bossman Don Mattrick said Microsoft would sell more consoles than the PS3 this generation, Hirai wasn't quite sure what that meant. How long does Microsoft think the generation is? Is the Xbox 360 going to be around for ten years like Sony claims the PS3 is? Questions, questions, questions. Here's Kaz's take:

 

The key word there is this ‘lifecycle’ or ‘this generation’. As you probably know, we’re working on a ten-year lifecycle, we’ve said that since day one and we’ve proven it with PSOne and PS2. I guess Don is saying they’re also going to be embarking on a ten-year lifecycle, then? If they are then that’s terrific, but I’ve never seen them manage it before. Last time I checked, the Xbox went by the wayside four or five years after launch.

 

Last time I checked, the Xbox went by the wayside four or five years after launch. On the other hand, if he’s saying that Microsoft will outsell us after five years, if he calls that this generation, then he’s saying he’s going to exit the 360 business within five years. I’m not exactly sure when he says ‘this lifecycle’ or ‘this generation’ what standard he’s using — five years, 10 years, I don’t know.

 

Don Mattrick is obviously on Don Mattrick Time. You can't put a time-frame on DMT, you just can't.

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Coz of that optical disc - bluray

Coz of that optical disc <airquote> bluray </airquote>

 

No. You chose to enclose bluray in brackets. You truly win the internet.

Just don't let ANYONE tell you otherwise.

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meh i dont want either sony or m$ to loose .. let the bloodletting continue .. so that we keep getting good games.. not the piece of crap wat wii owners r getting coz there is no one which competes with nintendo in casual gaming niche.. I hope psn home kicks off well and delivers watever has been promised so that more casual gamers r lured coz of social networking of home and good psn games like high velocity bowling and ofcourse blue ray ,

 

I dont hate nintendo or wii its just that it pisses me off when see it selling for f**king 300$ while it cant even play dvds and graphics are worse than ps2 games ... gameplay is important .. so is rest of the stuff too ...

 

 

 

EDIT: fixed typo ..

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