Sunday, December 14, 2008

CNN Money - Sony's PS3 A Sinking Ship: Sales Plummet


Sony's PS3 A Sinking Ship: Sales Plummet
By Eric Krangel
December 12, 2008: 09:21 AM ET

( -- Sony's (SNE) PS3 is dying on the shelves.

Alone among the three major videogame consoles, sales of the PS3 are down about 19% from November 2007, according to the latest stats from the NPD Group. Sony was only able to sell 378,000 PS3s this November, compared to 466,000 last year.

And the problem for Sony isn't the recession, it's the PS3. Microsoft (MSFT) put up respectable numbers with its Xbox 360, selling 836,000 units vs 777,000 in November 2007. And Nintendo's (NTDOY) Wii continues to dominate the market, more than doubling sales from 981,000 to 2.04 million.

So why is the PS3 flopping so badly?

It's the most expensive console on the market, $150 - $200 more than its rivals. Even if you believe the video game industry is "recession-proof" (it isn't), a tanking economy makes consumers more price-conscious.

The PS3's big bonus is its ability to double as a Blu-Ray player. Too bad no one seems to care about hi-def DVDs. The differences between Blu-Ray and DVD are hard to see on a TV less than 50".

The PS3 just doesn't have any must-have titles exclusive to the console. "LittleBigPlanet" has generated decent buzz but isn't a game-changer, and neither is Sony's new virtual world "Home."

There's really only one option left for Sony to remain in the game: deep price cuts, and not just for people with good credit. Tell yourself the PS3 has superior graphics if it makes you feel better, but a $400 console with a mediocre game library simply cannot compete against an Xbox 360 priced at $200 in this economy.

My comment:

This console generation is a pretty tough one to be in (for hardcore gamers). You've got the Xbox 360 which has the best games but the hardware is failure prone. You've got the Playstation 3 which is so expensive from both a hardware and software standpoint, and whose game library is far more sparse relative to the Xbox 360's. And you've got the Nintendo Wii, where most of the best games are first-party titles, leaving you with little diversity (You've got Mario, Zelda, Metroid, and everything else). Couple that with the fact that the Wii is not an HD-capable device and can't deliver graphics on the same level as the Xbox 360 or the PS3. The Wii might be a great hit with the casual gamers, but for hardcore gamers like me, it's a one hit wonder. I played it once, was entertained, but I can't, for the life of me, find a good reason to actually buy one or own one. The novelty just wore off so quickly. But I can understand why it's such a hit with the non-gaming / casual gaming mainstream.

It's hard to decide on an overall winner because each platform has its own faults. If we're talking about hardware AND software sales, the Xbox 360 is clearly the winner based on its high attach rate and its consistent pace of selling. If we're talking about hardware sales ALONE, the Nintendo Wii is the clear winner. But, personally, in terms of which console I'm really happy with, I can't pick one; again, because all of them have some deep flaw that prevents me from simply saying, hey, this console is the best. I can't recall a console generation that had this kind of scenario in the past.

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