Video Games

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Sony delays PlayStation 3
After the problems of mass production is a key component of its Blu-ray DVD player, Sony (SNE) the European launch of next-generation video game console delay, the PlayStation 3 (PS3) will. Sony is also the number of PS3 units now available in the U.S. and Japan.
In the U.S. the PS3 on 17 November will be introduced, with approximately 400,000 consoles available for sale. The market launch in the U.S. is now almost a week after the launch, which will consist of only 100,000 Japanese.
Sony PlayStation 3 is the successor to the PlayStation 2, the most popular (and recently, in July the world's best-selling) video game consoles.
The number that really matters
The fact that only 400,000 PS3 units available for sale in the United States on 17 November is totally irrelevant. The launch date itself is irrelevant. What counts is how many units will be offered for sale in mid to late December.
Sony says it is offered to take 1 to 1.2 million consoles for sale of 31 December. I think it is safe to assume that many have no plans between 26 December and 31 Must be received in December. Suppose that there is at least a million PS3 consoles for sale in the U.S. available for Christmas.
It is enough to get a PlayStation in the living room of every family that wants to put it?
No, it almost certainly many people who are going without a PS3 for Christmas needs, but is willing to pay the very high price Sony is asking. But that's nothing new. Other consoles (including Xbox 360) were without an adequate number of units launched for sale immediately.
This is not like he was never quite satisfied with garbage bags on the shelves. Once the console is started, should not have to spend limited availability of many people, their proposed acquisition. If you want, and it's over, she would wait for him.
A delay is much worse than a shortage. It is a promise (and a tangible product) behind a console that has already begun. So few people in the U.S. or Japan to buy a PS3 is planned around their heads, because a lack of change at Christmas - no matter how severe.
The really important things
The success of a gaming platform is largely based on five factors:
Title available
Start date to
Price
Installed base of previous
Technology
Of these five, the technology is by far the least important. The four main factors (titles available, relative launch date, price and installed base predecessors) are hard to separate. Sure, with a predecessor with a large installed base (as the PS2) can be enormously helpful if you are happy to get reviews in the other three areas (titles, launch date and price).
Installed base of previous
The PlayStation 3 dominates when it comes to a predecessor with a large installed base. So how do you score in the other three areas?
In terms of available titles, the PS3 scores as well as all of its competitors, if not better. But none of the three consoles (Xbox 360, PS3 or Wii) works very well in this respect. Unfortunately, the title was somewhat isolated from the console. There will be games for each system, but almost no one buys all three. In short, there are some games to be exclusive to each console would be a lot of people like to play - but can not.
In addition, there is a risk that both the PS3 and the Xbox 360 as an adult and less casual will be on display consoles. Microsoft (MSFT), Nintendo and Sony are to blame - but we have the problem aside.
Start date to
Return to the list of factors that determine the success of a console view, the question of the start date. Sony clearly has a bit of "a problem in Europe because it will have one less vacation time that both the Xbox 360 and Wii. Some analysts think Sony will lose no more than a few hundred thousand console sales to substitutions. If this is true, loss of revenue could be hundreds of millions, rather than billions.
Strong sales of Xbox in Europe during the Christmas period would be a very bad sign for Sony. The combined price of an Xbox and PS3 is prohibitively expensive. Furthermore, the two consoles are far more similar to each other than they are for the Wii. As a result, while some European Wii sales might of Sony recoverable at a later date, because individuals choose to buy their first Wii and the PS3 would later, very few Xbox 360 sales be recoverable. Essentially, all Xbox sold in Europe this Christmas is a PS3 that will never be born.
Three separate markets
The United States, Japan and Europe are really three very different markets. And "quite possible that you have a console that go very successful in one market, and yet in a position to a real dynamic in another.
Before this delay, I felt strongly that Europe is the market where the PS3 could come closest, is the performance of the PS2 in terms of market share to duplicate. It is a long-term risk that Microsoft gained market share in the U.S. and Nintendo market share in the U.S. and Japan.
Of course, Europe is not well defined a market like the U.S. or Japan. So it is very difficult to predict how a certain type of console or a certain type of game it will work. The United States and Japan are very clearly defined game markets, largely because they are very clearly defined consumer cultures in general, entertainment and culture in particular have.
What is the average delay for the future Sony PS3 in Europe? It is hard to say. I am more interested to see what the installed base of each new generation of how the American and Japanese markets worry consoles Christmas 2007, if you have to be the first real chance to predict how this round of console wars will play out.
Of course there are some predictions that seem safe enough now. For example, it seems safe to say Sony will lose market share worldwide. In short, the PS3 will not be able to play a dominant market share of PS2.
So we probably talk Sony's PS3 falling somewhere north of catastrophic failure and south of the market share gains. While I believe that these two scenarios are very unlikely, more likely is catastrophic failure, because the increase in market share when the PS2 seems a virtual impossibility, since the competition much tougher this time.
There is a real risk that the PS3 might end up being a disastrous failure? I do not think just because the number of PS2 systems still out there. Price with solid competition on both sides of the combined Sony is the only thing that such a failure could cause. If the price prevents widespread acceptance of the system, support for third-party publisher is a problem down the line would be. Nintendo has not much to support others. Sony ago.
Although I think Sony is doing serious harm to its PlayStation line insisting upon including Blu-ray and put a ridiculous price, I do not think a lot of managerial ineptitude is likely the catastrophic failure of a successor to that cause dominant as the PS2 console.
Price
If the price is not the elephant in the room, it is should. Most of the articles I read recently announced PS3 delay / production scale-down does not say much about the price of the PS3. This is a bug - especially since the withdrawal of several articles in the laptop's battery, which has nothing to do with the PS3 and do very little to do with Sony (which has to do with lithium-ion batteries, regardless by their manufacturer).
The price of the PS3 is a big problem. One that is manifested in poor Christmas sales may have, if the number of available units for sale had approached the expected demand. For now, Sony is planning to have so few units available in the U.S. at Christmas that the launch goes well, even if the PS3 ultimately a failure. Sony says it will have 6 million units by the end of the fiscal year. A few analysts are skeptical, but Sony intends to maintain this line.
In the coming weeks, Sony expects to make a big deal because the PS3 will actually make units was made available by the end of December compared to the number of Xbox 360 by Microsoft last year around the same time. It is a valid number. But it lacks two important facts. The PS3 is starting for the Xbox 360 and there are more PS2 owners that want to trade for the new system.
Since the PS3 is on the Xbox 360 launch is no one to see what would look like the alternative. You already know what the Xbox 360 is doing what it can do and what (some) games are available for them. Once to start the PS3, the comparison can start. It was not possible when the Xbox 360 was launched, and each knew the PS3 on the road.
The second reason why there is no parallel between the demand for Xbox 360 at launch and the demand for the PS3 at launch is simply that it is more PS2s out there. As a result, Sony had so many units available for Christmas, such as Microsoft in the year before was very similar to Gillette, that so too many new razors available as Schick had produced the year before. The difference in market share can remove any comparison.
So, although I think the PS3 is too expensive to give at Christmas time, I'm pretty sure that this fact is not evident in sales figures because it will be a severe PS3 shortage throughout 2006. Although the PlayStation 3 is too expensive, appear as if it sells well because it does not produce enough of them just in 2006.
Why are so confident that the PS3 is priced too high?
The PS3 is too expensive to be a Christmas present. Around Christmas, a lot of these consoles are bought by parents as gifts for their children. The parents are willing to pay much for it because it has a major role when the child (and parents were informed of the hearing long before the start). But prices in 2006 may be downloaded for the PS3 are simply beyond what parents are willing to spend.
It is not a question of what consumers have to set the value you get to spend in comparison. It is a question of not psychologically prepared to pay such a price for each gift.
May a price older gamers are willing to condemn for a PS3 for themselves. But, not a price parents are willing to spend on their children.
About the Author
Geoff Gannon writes a daily basis investing value investing blog and produces a value of twice weekly (half hour) to invest in Podcast Gannon.
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