A slight interval to the 'Blackbird posts', I couldn't resist telling you guys about Sony's continued console woes. Since last I blogged about the console wars, the Wii has become the top selling console, followed by the 360, while the PS3 remains a distant 3rd place. The PS2 remains the highest selling console even today (month by month), and of all time.

A while back, a Sony official let slip that they would consider a price cut of around the value of a Wii, early next year as part of the sales strategy. I can imagine the PR guys behind him all planting their heads into their palms and crying as the blogshpere whirled into action warning anyone who *was* thinking of buying a PS3 to wait a while, and buy a Wii in the mean time.
Sony soon made it clear their would not be a price cut for at least 2 years. Not so willing to wait 2 years, Sony buyers reconsidered, but I have a feeling that announcement will give them a major headache next year when the X-Box gets a big price cut and Microsoft smiles widely waiting for them to compete and betray their loyalist fans, or stay to their word and reduce sales to zero.

But that's a year away. And Sony aren't the kind of people who'll avoid screwing up now just cos they've already planted screw ups for the year ahead.

I need to explain a few things before the blunder makes sense. First of all...

Games:
Right now, the PS3 has between 20 and 30 games available, excluding the PS2 games that it can run as well. 20-30 games is pitiful - the X-Box soars in 3 digit figures of HD games released (specifically for the X-Box 360). Many of the 30 PS3 games that will be out by European Launch are, well... they're crap (as, to be fair, are many of the 360 games I'm sure). So really, there's maybe 5 games. Luckily, there's loads of games available for the PS2, and you can play almost all of them on the PS3.

Cost:
Just a reminder, the PS3 is more expensive by some way than the X-Box, which is some way more costly than the Wii. The PS3 is in fact sold at a loss. It costs $840.35 to make each PS3 (60GB model), not including cables, controllers or packaging. RRP of $599, Sony lose $241.35 on every sale. They do this, because the money in consoles is not in the box - it's in the games sales made afterwards, and for Sony, the royalties on Blueray for every film released on that format. Oh yes - Sony tie the console war to the format war - All or Nothing (actually, All or Huge losses).
By the by, the X-Box in comparison, costs $323.30 and sells for $399, making $75.70 on each box.

And now to the latest decisions... Sony have decided to redesign the PS3 for all PAL area's (EU being a PAL area). In the redesign, they're dropping the chip that allows you to run it like a PS2, so... you can't play PS2 games on it now. They're replacing it with a software emulator, which wont work for all games but will work for 'many'. Sony aren't saying which games will or wont run, but basically, you can expect to have a choice of the maybe 5 games available for PS3 and nothing more for some time.
So why have they done this?
At a time when the 360 is roaring ahead because it has more games... why cut the titles they already have?

Well, there's 2 reasons. First, money. Cutting the chip reduces development costs ($27 per console), making the PS3 sell at a slightly smaller loss. This was the official reason, spoken out loud for about 20 seconds before the head of PR leapt from the side and tackled the announcer from the games division to the ground, beating him senseless and mumbling something about working under these conditions. You see, an idiot in Sony already made it impossible for a price cut - so they're now saying, "We know this removes a massive attraction, but we're willing to screw you over for a small percent saving, and you can still suck up the bigger price tag."
In fact, the UK RRP is higher than the US in value, but the UK PS3 will not be as good? Making sense? Hell no. So another public beating of the Sony brand follows, with the only escape route, a price cut, blocked a few weeks earlier by a bumbled interview. It's not a job you'd want to have right now.

The second reason I see is to 'strong arm' the game developers. Game developers still make PS2 games. They make their money on the number of games sold, and there are over 120 million PS2's out there. There are around 100 thousand PS3's, so there's no way they'll sell as many copies of their games if they release for PS3, especially since anyone with a PS3 can still play your game thanks to the PS3's backward compatibility. Add that to the fact that it's significantly more costly to make a PS3 game than a PS2 game... and you can see why no-one's inclined to jump camp. Removing backward compatibility means the PS3 few are out of your reach if you stick with PS2, so as more PS3's sell, game developers will move.

But even with this encouragement, the PS2 still vastly outnumbers the PS3, and it still makes no sense to switch. Blaming game developers also didn't turn out to be a strong move, as it turns out they can talk to the press too.
They've come out saying they tried to work with the PS3 but Sony have made a completely new architecture and while they've provided expert support for the changes in the OS (software), they haven't been able to provide hardware engineers to help the developers adapt, leaving hardware power inaccessible. The chief example being the cell processor - the feature the PS3 holds over the X-Box claiming the power potential will bring better games. Sony didn't make or much understand it themselves, for that they have IBM, who the game developers don't have a ready hotline or support deal with.
Valve Software's chief Gabe Newell said, "The PS3 is a total disaster on so many levels, I think It's really clear that Sony lost track of what customers and what developers wanted." He added, "I'd say, even at this late date, they should just cancel it and do a do over. Just say, 'This was a horrible disaster and we're sorry and we're going to stop selling this and stop trying to convince people to develop for it'."
And they're not the only major games production house speaking out, or pulling exclusive agreements. If it becomes a full throttle trend, no-one's going to touch the PS3 with a 10 foot novelty sized inflatable Wii controller.

I wouldn't say this is the final nail in the coffin, luckily Sony still have a lot of money and they can make amends yet. I think. Maybe.
Like.. you know... a huge price cut and bribing game makers. I dunno. Definitely, sticking it to the consumers and the developers in the same week was probably something to run by a media consultant though... think about that Sony... think about it.
__
Phil

Pack up all your care and woes,
Here I go, singing low,
Bye Bye Blackbird.
Where somebody waits for me,
Sugar's sweet, so is he,
Bye Bye Blackbird.
No-one here can love and understand me,
Oh what sorry stories they all hand me,
Make the bed and light the light,
I'll be home late tonight,
Blackbird, Bye Bye.

 

Bluebird, bluebird, calling me far away
I've been longing for you.
Bluebird, bluebird, what do I hear you say?
Skies are turning to blue, I'm like a flower that's fading here,
Where ev'ry hour is one long tear.
Bluebird, bluebird this is my lucky day.
Now my dreams will come true.