"Like many of you, it’s hard for me to remember a time when the word "Playstation" was not synonymous with gaming. Sony has held the all mighty hardware throne for an astounding eleven years at the time of writing this. The same can be said for Nintendo’s 9 year reign with the NES and SNES from 1985 - 1994, and even more so with Atari’s 10 year reign ending with the collapse of the entire industry in 1981-1984. With that in mind, one must ask, is Sony placing to much faith in the Playstation moniker at this point or do they truly understand the business on such a level that the cat and mouse game they are playing with the PS3 and any information surrounding will ultimately pay off in the bolstering amount needed to save the ailing hardware giant.
In a recent interview through a European media outlet, Mr. Fornay Vice president of SCEE (Sony computer entertainment of Europe) made some rather astounding remarks regarding the PS3 price-point and the views being placed upon it. He hastily hinted that a Blu-ray player in the neighborhood of $599.99 would be an absolute steal, but as a stand alone gaming machine would be quite overpriced, as proven in the past. Sony was quick to issue a rebuttal on his behalf stating these were his personal views and not official commenting on the price of the PS3. Damage control at its finest. But keep in mind the massive cover up after Sony’s own CEO Howard Stringer hinted at the PS3's launch delay to Vanity Fair. Sony PR was quick to label it as "pure speculation" coming from the company’s own CEO, which was later to be proven completely accurate when the delay was made official mid-march of 2006. Sony isn’t one for honesty as a company entity however their head honcho's loose lips seem to deliver the only truth passing Sony’s door these days.
If the PS3 is delivered at $599.99 what does this mean for Sony? Historically gaming machines would have never sold for anything north of $299.99 (that was until the Xbox360 moved the line to 399.99 in winter of 2005). Just look at the complete failure of the 1990's powerhouse, the 3DO, at the relatively respectable price of $399.99 (roughly $449.99 inflation adjusted). With the PS3 now touting the largest price tag for any console in the history of gaming and higher then most mid-low end PC's at this point, does this spell disaster for the ailing hardware giant? Sony hasn’t posted net gains in the past three years until 2005 when they posted a depressing $580 million dollar profit after posting loss's in the billions for the last three fiscal years.
The true death blow at this point would really point to the HDCP compliance required for Blu-ray movie playback (as well as HD-DVD), making the PS3 no more then a video game system with a capacity of 50 gig games for anyone who purchased a HDTV in the past 6 years. So were does the PS3's $600.00 price tag come into play for us non-HDCP HDTV owners? The answer is nowhere.
PS3 production pricing at this point has been laid out to be anywhere from $850 - $956 per unit, meaning there will be a loss on each machine of approx $250 - $350 per console sold. If one million consoles sell in the first day of availability Sony will have wiped their entire fiscal gain for all of 2005 in under 24 hours.
In retrospect, Microsoft lost $150 per Xbox (Version 1) console, ending in a 4 billion dollar loss in the lifespan of Xbox (Version 1). With pockets deeper then the Atlantic Ocean, even Microsoft had to re-consider their standings in the console market, thus leading to an abruptly ended Xbox life span. So how will Sony bounce back for a variable $2 billion dollar hole in 2006? Answer is they won't at the price point they have “announced”.
Sony’s official statement in the face of the $599.99 price tag was "The console will not cost $750 dollars", meaning in short, I believe the damage control was laid down not in the face of the price tag being over priced, but more like being under priced. Expect the PS3 to weigh in above the $650 mark for Sony to have a substantial chance at a 2006 fiscal year that doesn’t sink the proverbial ship.
But what does all this mean for gamers as a whole? Basically with an astounding high price, and seemingly useless features for those of us with standard definition televisions or high definition televisions purchased in the past 6 years, we will be purchasing a half-complete machine for a fully complete hi-def included player price. This is Sony’s main hurdle, finding a way around the HDCP protocol. A blu-ray player with a price tag of $100.00 is still worthless to over 350 million Americans which is, I might add, Sony’s main demographic for hardware sales (North America).
Ailing stock prices, poor movie sales and a failing UMD (Sony PSP media) market, might add up to a low-cost buyout in Sony’s future. I personally see this happening regardless of the Blu-ray market by 2014. I for one can just see the looks on Sony’s main competitors faces at this time, all the gleaming in the world coming from One Microsoft way ( the road both Nintendo HQ and MS HQ reside on) as this could turn out to be the largest upset in consumer electronics history.
All this added up, you have to ask yourself. Will the next Playstation you purchase post-PS3 run a Microsoft operating system and have backwards compatibility for PS1 PS2 PS3 Xbox and Xbox360? Putting your rabid love for Sony aside, this doesn’t seem as far fetched as it once did, when the Sony name wasn’t covered in enough red tape to fill the Grand Canyon.
Blu-ray, Cell and a self-destructive obsession with one upping Microsoft, might have possibly put this king to rest... for good."
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