PS3 launch hammers Sony's bottom line
By Thomas Ricker 
posted May 16th 2007 7:14AM
posted May 16th 2007 7:14AM
We don't typically cover financial statements here at Engadget, but when a company like Sony suffers a year of missteps highlighted by a massive battery recall and PS3 launch delays, well, we can't help but take a peek at that gnarled wreckage across the center divide. In the quarter ending March 31st, Sony suffered a ¥67.6 billion ($563 million) loss attributed primarily to the launch of the PS3 -- their worst quarter in four years. The matter was compounded by the fact that they reduced the price of the uber spec'd console and then sold only 5.5 of the 6 million PS3s they had targeted for the entire fiscal year. Still, Sony's once highly profitably games division is expected to make a recovery -- at least in part -- after they "strengthen" their game lineup this summer in their quest to sell 11 million PS3s before March of 2008. Godspeed Sony, you'll need it.
I am a big fan of sony, but I am also a big fan of xbox 360. I do not havea biased opinion so I can say this fairly:
The Ps3 beats 360 hands down. When new systems come out they are always rough, but when sony is out for the same time the xbox is out now, it will be twice as good. the ps3 online service is lacking a bit but at least you dont need memberships and its all free.
You can do anything with the ps3, and its easy too. I love the look of the xbox but it just doesnt matter when you really think about what it is.
I know this isnt a debate about who is better but im just saying this to show that sony will make a recovery, because they have always owned the averge gamer game market. they will revive them selvs and when they do, you will see a lot more systems in north america, like you do in japan compared to the xbox.
Sony has not "always owned" the gaming market... they were successful with the PS1/2 because they simply knew how to market the things properly.
I am well aware that *before* NES there was Atari, arcade machines, pinball, Pong, etc. They owned first. And they're classics :p
Well, let me get one thing first - straightened out: The PS1 was the result of Nintendo saying "no" to a third party (Sony) for an add-on CD peripheral (which would have made Nintendo big but they would have suffered having to pay Sony the big-time royalties out of their hardware sales) thus the deal was a bust, and the PS1 was born out of it - and killed the N64.
The PS2 wasn't what I'd call revolutionary but it kind of more or less "went with the flow" of the technology at the time (DVD? great!). That is what made the PS2 a success: good marketing. The Xbox had an online community first though. The Gamecube was behind but still considered in-sync with the generation of consoles being released at the time.
Now what could make or break the PS3 is Blu-Ray; it's not exactly a "standard" yet because we have HD-DVD... and from what I hear there's not much games to go with it (for now anyway)... It is somewhat more future friendly (as I would call it) but I don't think it will "flop" either because it has long term support for the hardware and software end (meaning one could buy this thing, use it as a computer for 10 years without worrying). Now as far as HD-DVD and Blu-Ray go, we probably will see both standards eventually integrated into one solution (because most middle-aged folk don't know the diff. anyway, and probably are using standard def. TV's to boot). (It would be wise to say that DVD is here to stay)... ok back on topic: I like the PS3 for what it's worth. Especially because of the ability to run Linux (I'm going to run Ubuntu when I get mine)...
Not everything is futureproof anyway - while Sony may have a great product - I don't see many people rushing out and buying one (and don't look at me as being biased - I don't exactly see Wii's flying off the shelves where I live either).... all in good time I guess.
Personally I'm happy with the classics, I love to collect these things when they get "old".
well actually atari and a lot of the other home game systems sucked. They were super expensive and were not really practical. I took a lot of machines to first catch the market.
And by own I mean dominated during its stay. As soon as the ps1 came in, it held the highest percent in the market. the ps2, same thing. now every single system ever made has been critisized to death. the xbox came in and everyone said ms was wasting their time and was just tring to get into the market for more money.
now the xbox 360 is out and its more popular then another system (because its been out the longest) but only in north america. japan hates xbox. they love the ps3 and wii. wiis are popular but only the same as an arcade game would be. the ps3 is the future.
Now about BR-DVD and HD-DVD, its hard to say. where bluray has more room to hold more content and better quality, so did sony's beta. and we all know how that went. so its possible that hd could win because of that and the name is more simple too. high definition dvd. thats simple. its high def. blu ray. wtf? it uses blue rays. annnnddd?
so little things like that are good, but keep in mind, sony owns a lot of companies like the one with the statue of liberty, and the other with pegisus. not to mention sony pictures entertainment.
the game base is week becasue it just came out. the graphisc on the system are the same as the xbox 360, but the graphics will get better as developers have more time and know the boundaries of the ps3. so the ps3 games will be better looking, more intense, and the online scene with sonys new "home" will drive straight back into the market. and now that they stopped developement on their 20 gig systems and just focused on the 60 gig, it will make it easier on sales, and make it better for consumers. i got a 360 and a ps3 and I have compared every aspect of each system and the 360 has a lot of really cool features, but the ps3 dominates big time.
im just waiting for the mac game system to come in. they have ipods, cams, pcs, software, phones, why not a game system.... it could really boost there os and pc sales.
The Ps3 beats 360 hands down??!! In what?
Games? let me know when you can play on the PS3 something like Gears of War, Halo 3, Dead rising, F.E.A.R. and/or Command and conquer. How about the multiplatform games? Need for speed carbon, call of duty 3, Fight night round... all of them look better and play better on the 360. The only game that was improved on the PS3 was Oblivion but it was released one year after it was released to the 360!
Technology? The 360's memory is totally configurable between the graphics card and the main purpose memory while the PS3 is limited to 256 MB on each, hence the frame rate on many games. The Xbox 360 GPU is more powerful than the one installed on the PS3. Online gaming? Don't even compare XBox live to what you have on the PS3. CPUs? I agree that the cell has more raw power. However, programming for it is a nightmare. Microsoft APIs are much better and it is a lot easier to program for the 360. The cell shouldn't be included on a gaming console, it is better for gaming purposes to have general processors than the 1-7 architecture the PS3 has.
Price... hands down to the 360..
So the only technological advance is the blue ray.... in case you want a movie player, that has nothing to do with gaming. Microsoft is offering the HD movie player as an add on, but it is not needed for gaming yet. The war between BR and HD-DVD just begun so I really wouldn't like to be stuck with a propietary format.
Seriously, for gaming, what make you think that the PS3 is better?
The Xbox 360 beats the PS3 hands down, and anyone with half a brain can see that. But honestly, Sony saw this coming, this is less about video games and more about making the much more lucrative Blu-Ray disc the next-gen media winner in the long run. They'll eat whatever costs they can to make Blu-Ray a success.
And seriously, 600 dollars? I could make my PC capable of playing Crysis (when it comes out) at Maximum with 600 dollars. And they want that for their DX9 console? What a joke. Screw Sony
beats it how? in units sold? Yeah so it does, for right now. Having spent many hours on both systems I can say WITH AN EDUCATED OPINION that the PS3 is a superior system. I have easily logged twice as many hours on my 360 due to the time length of ownership however it doesn't compare to the beauty of the PS3. Just imagine when game developers figure out how to fully tap into the 3's power, 360 will be clearly blown out of the water even in the eyes of a jackass like you.
you have to be an idiot to say that forking out 600 dollars for the ps3 is more exspensive then building a pc that does the same thing. building a pc to run the games a ps3 does would cost thousands of dollars. a blu ray disc player alone is over 800 dollars. sony is losing money on the system but they want the technology out so that it will get cheaper. same thing they did with the ps2, they lost billions the first year it was out but now they made 10s of billions back.
when the hd dvd add on for the 360 comes out, it will be at least a 400 hundred dollar add on making the system over 700 dollars to match the ps3. the ps3 is 600. not to mention the fact that regardless if blu ray wins or hd dvd wins, sony will still use the blu ray becasue all its games are in blu ray format. so if the movie industry uses hd, then the games will still be made in blu ray.
also if the hd loses, then microsoft will then start having to make blu ray disc add-ons becasue the hd ones will be useless. see what i mean? if xbox had of made the games on the hd then it would have an intergrated hd player making its more expensive. but they didnt so they are taking a chance which means they are not sure whats going to happen. which is will the xbox is 400 and the ps3 is 600. and that is why the ps3 like every other ps will own big time
to say xbox is going to hold the highest market is a lie, becasue look at japan, there are like 7 xboxs there. and like 7 million ps3.
bad numbers but it is pretty extreme. where we all live in north america we only see the xboxs. but honestly think about the numbers, and look at the trends. you all stupid for saying xbox owns, it is good, great games, nice franchies etc but doesnt match the ps3
and about grand theft auto
its coming out for both systems with exclusive content on both.
rockstar would never dedicate its game to just one system, not gta.
dont beleive me about the gta part, just look at their website.
I have all three consoles. While I think the Xbox 360 is an awesome device, I totally see PS3 taking off soon. The only thing it needs is games. You get great games....you get free word-of-mouth advertisement. In this day and age where teens are forking of $$$ for cell phones and iPods...the PS3 could and will be easily had.....just need the games.
Travis
"I totally see PS3 taking off soon. The only thing it needs is games."
Seems like I've heard this before. Only then we were talking about the PSP. Where are we with that?
Hope those games come soon, i think ill hold to Shadow of the colossus to buy my PS3, meanwhile i have lots of fun with Gears of War and winning eleven.
its too big, its an awful design, its ugly, its too expensive, its has no games.
no surprise its a failure
How many times does it have to be said?
They need games. Good ones, ones that aren't warmed-over year-old 360 ports. They need decent exclusives that actually sell the system, rather than offer it as a more expensive yet somehow lesser gaming platform.
And they don't have GTA to bring in the tens of millions of players. At least, they're splitting it with a technologically similar and rather cheaper competitor with deep pockets.
I just got a PS3 less than two weeks ago. It's a damn impressive system!
How do you sell 5.5 PS3s?
Either they sold 5, or 6 - which is it?
5.5million = 5,500,000
...that's what it means. And obviously, that's the worldwide total.
Loud noises!!!
Seriously, rather than screaming, "My console beats your console, hands down", let's just acknowledge that both of them have distinct strengths and weaknesses. The 360 has been absolutely groundbreaking with its online capabilities and with its 10M or so users, is really beginnig to bring in some fantastic games. The PS3 is undeniably a powerhouse with great potential, but will need time, just like all consoles, to build the user-base necessary for 3rd parties to justify the heavy production costs inherent in today's video games.
The nice thing about rivalry is that it will continue to force innovation - just look at the Wii. I'm willing to bet that both the 360 and the PS3 will continue to evolve (hey - they're online and capable of accepting firmware updates!) as consumer preferences change.
Bottom line - enjoy what you have! No need to get angry at one another!
Personally, it's obvious to me that the whole Microsoft v Song thing is a battle that will rage on for years to come.....and hopefully it is us gamers that will reap at least a little of the rewards!
With regard to this 'generation' you really have to take a step back and take a look at 'last gen'. People have been and STILL ARE buying Playstation 2 by the bucket load. Now, forgive me if I'm wrong but don't we all kind of like our fave brands? I really like Sony as a brand, end of. Innovative, original, and good quality in the main. It makes me laugh out loud when I see people saying how Microsoft has a huge toe-hold in this gen as they forget the massive size 14's that Sony has in this gen with Playstation 2!! People who have a PS2 will eventually buy a Playstation 3 - you'll see....if you can't see that, well........Not all will make the transition but many will. Sont won't have such a grip this time around as PS2 was and STILL IS a total phenomenon, but it will still be huge that's for sure. As for 'winners', who cares because that will be us. But Sony will sell more hardware with PS3 this gen than any other console.....here endeth my two penneth :)
Oh lord, not this shit again.
360 vs PS3... Stop the bullshit please.
Still paying for content that's supposed to be free? feel that burn yet? I bet you are. I wonder how much money you've really spent. Well, I'll leave that for another topic.
Brought to you from the great Wisdom Cube.
Have a good day!
Having content that generates revenue for game developers ensures more development. It's that simple.
That's not really the point though. This isn't about the 360 vs the PS3. (The 360, though inferior with regard to hardware, has better games now and better games to come, and Xbox Live is fantastic.) It's really about Microsoft vs Sony. Microsoft's launch plan and marketing have an enormous toe hold while Sony is hanging from the cliff by a finger. Surely they won't fall off the mountain, but when they do finally get back on, Microsoft will already be at the top.
You ever put the PS3 and Xbox 360 side by side? The PS3 is hardly much bigger at all. I own the wii, 360, and the PS3. For overall the PS3 wins hands down. The games are coming out in full force, and given the number of xbox 360 games out...the ones that are actually worthwhile are few in ratio comparison. You don't have to pay for online services, and PS3's Home will blow Xbox Live out of the water. I've yet to see the problems with the PS3 as the Xbox 360 has. I work at BBuy and return a good 3-5 360's a week. I've only seen 5 total PS3's returned since the launch. You 360 fan's need to experience the PS3 before you run your mouth off. Since a majority of you haven't used it or used it briefly and have no clue what you are talking about.
Exactly. the PSP has impressive features and hardware... like the PS3. And it has a few good titles, but IMO no very impressive titles... no Mario Kart DS type title that will push systems. It's essentially an expensive toy, an mp3 player and video player that requires (somewhat) expensive memory cards to utilize those features adequately.
Despite the impressive hardware (upgradeable HD, wifi, bluray, HDMI 1.3, etc.) it's also handcuffed (no upconverting of dvds, no IR remote). Just wait a year or so before those batteries die in those sixaxis controllers.
Okay Sugar....
Like the PS3 doesn't have hit titles on it's way? What you just said man is some pure 360 fanboy garbage. I'm well aware of what's in store for the 360. But, the PS3 just came out the door and for you to sit there and say MS will come out on top is totally premature. Come back to me and say that next year around this time and we will see what the deal is.
Um, isn't the fact that they only sold 5.5 million, not 6 million, a good thing for their bottom line, since they lose money on each unit?
It seems they've already manufactured the consoles, and therefore they are losing even more money on the ones they don't sell... therefore not selling half a million consoles is a bad thing.
Lets face it, guys. It is the games, and the developers of those games that is going to make a difference.
Sony is in a precarious position because they basically declared that they were going to compete directly with Microsoft as the biggest thing.
Only problem is that Wii totally and completely stole the hype of the PS3.
With Wii stealing the PS3's thunder, all you have left are the negative aspects about it. Xbox has managed to establish a huge install base that developers want to take advantage of, so as a result, you aren't seeing many PS3 exclusives that really look good. This is going to keep the sales down, which is going to continue giving Xbox the advantage.
PS3 lacks the install base compared to the other two consoles, which doesn't attract the developers. In turn, the lack of developers doesn't attract new consumers to buy the console to increase the install base. Vicious cycle. Sony needs to do something major to SHOW consumers and developers alike that it really IS better than Xbox 360 or IT. WILL. FAIL.
COMPLETELY.
You can say all you want about which is technically superior. I won't argue that. PS3 has disc capacity, and HDMI and all that crap, Xbox is easier to develop for, has more games, better online service, yadda yadda. But the consumers and developers are what makes or breaks the deal. My prediction is that Sony's success will depend almost entirely on the success of LittleBigPlanet.
"Seems like I've heard this before. Only then we were talking about the PSP. Where are we with that?"
24.5 million sold. Faster to 10 million units than the PS2, and we know how that console turned out.
Don't feel bad -- J Allard was wrong, too:
http://www.1up.com/do/newsStory?cId=3159279
They haven't actually *sold* 5.5 million units. Afaik, Sony only reports shipped units and for them "shipped" means "shipped from the assembling factory", which is still a long way off from being sold to actual customers. Considering that the game division's inventory almost doubled during the last quarter, it is safe to assume that, at the moment, a significant part of these 5.5 million PS3s is gathering dust in Sony's warehouses. In short, it doesn't look good for the PS3 at all.
Let's clear up this misconception about shipped or sold. To any major corp it doesn't matter. Seeing as they get paid when the order is placed.
Not moving a product off the shelf only becomes a concern when retailers order less because of large volumes of unsold inventory.
No one especially retailers, warehouse much of anything anymore. Everyone's doing JIT so, if they are still shipping units retailers are still buying them. Which means consumers are buying them.
Have any of you guys ever taken a business course? On a loss leading product (i.e. it costs more to make than what you sell it for) A loss is going to be reflected in your financials on that line item. For a $800.000 product selling at $600 of which you sold 5.5 million of, a huge monetary loss is expected.
To a Sony exec and anyone in the know the more important number is the 5 mil. because you sell a loss leading device to grow a consumer base to sell profitable products. While under forecast 5 million sold is very promising for Sony. Coupled with the fact that the PS3 sold that much after all the bad pub, is an impressive piece of tech (which people are starting to realize), with even more untapped potential. Sony execs are probably pretty excited.
man the ps3 is huge! is it really that big or has it been enhanced in that picture! OMG no wonder the japanese are worried not being able to fit into their apartments!
Retailers have only sold about 3 million of that 5.5 million shipped, meaning there are 2.5 million sitting on retailers shelves world wide. In USA and Japan we have pretty accurate numbers, due to NDP and Mediacreate.
PS3 NPD total 1,188,700
Japan (Media Create) 874,614
Total US + Japan =2,063,314
Sony says they shipped 3,880,000 shipped to these two areas, meaning nearly 2 million are sitting on shelves in Japan and USA.
With Sony selling about 100 000/month in USA, and 50 000/month in Japan, that 2 million could take up to a whole year to sell out. Even if the PS3 makes a wonderful recovery and sells at 3 times its current rate, Sony need not ship a SINGLE PS3 for the next 4 months (and remember, sales slow over summer). They may as well shut their factories down.
The PS3, a great Blu-ray player, that can do games also...
surur
That is probably the best anaysis I have seen posted yet. Which points to a major problem for Sony. Without deeper penetration they are going to have a tough time convincing developers to build something strictly "Sony". There just aren't enough PS3's in homes to justify the cost of exclusive game development.
my 3.5 cents....with change to spare
That interpretation is straight from neogaf, but of course anyone can verify the numbers for themselves. They have overshipped massively, and their target of shipping another 11 million for the next 12 months seems highly optimistic. Their best games are only coming in Q4 2007, and I think 6 million (tracking the Xbox 360 shipment numbers) are much more realistic.
They had a similar issue with the PSP, due to massive channel stuffing and huge retailer inventories earlier that year,leading to them only shipping 10 000 PSP's in Q4 2006.
"Microsoft has a huge toe-hold in this gen as they forget the massive size 14's that Sony has in this gen with Play station 2!! People who have a PS2 will eventually buy a Playstation 3 - you'll see....if you can't see that, well.."
One must remember Sony unseated Nintendo, who dominated the market prior to the PS1. Past performance is not necessarily an indication of future performance. The Wii seems set to dominate the console market this time around. it already outsells the PS3 8:1 in Japan, Sony's traditional stronghold, and is set to do the same in USA once supply issues get sorted out.
At some point, just due to the numbers itself, it will be impossible for Sony to catch up within the next two years. As many people say, to catch up you have to outsell your competitors with their installed base first. The PS3, constantly placed 2nd or 3rd in sales numbers, is not showing any sign of catching up.
Fair comment above.
One word though - games. PS3 has none right now.
Also, I fall into the category of the sceptics when it comes to the Wii's stayability. I won't call it a gimmick like some people do as that's rather disrespectful in my opinion. However, I'm just not convinced it will have the legs for the long road ahead.....
One other thing, sales of the XBox360 are obviously being affected by sales of PS2's. Just over 10 million sales to date when it had no competition for a while this gen is not that immpressive to me. It will be interesting to see what side all the PS2 owners fall down on. Remember, for all the millions of people that have recently purchased a PS2, many of the mass market won't be interested in the next gen for a couple of years.....there will undoubtedley have been a few price cuts regarding the PS3 by then.
Phil - I used to be a huge PS2 fan, but I didn’t buy a PS3. I played my PS2 into the ground. But when it came to buying a nexgen counsel I took many things into consideration instead of blindly buying a PS3 because I had a PS2.
Sure on paper the PS3 seems to be a superior product. The Blu-Ray player seemed nice but then I realized, I don’t have an HD TV. After seeing the games that were available for the 360 and PS3 and the games that were on their way it was obvious that 360 had the advantage. That with its superior online support and less expensive price made it an easy choice for me to pick the 360 of the PS3.
Wait isn’t good price and great games the same way the Sony took over the market from Nintendo?
Since they take a large loss on each unit, they haven't introduced that many games unit, they still haven't reach significant market penetration on either blu-ray or this unit, and they have spent quite a sum on OLED but still haven't put out those products, it's not by accident they are hemorrhaging some money. These are long-term investments. I wonder if when they are doing well in 2 years will their be another financial summary on this website to illustrate how wonderful Sony is doing and to congratulate them in the same vein as their thinly-veiled attempt at slamming them this time. I seriously doubt it.
the problem with the ps3 is it looks like a 1980s vcr.
oh and it costs 1,000 australian dollars.
and it has no rumble
and it's not a Wii
Wow. That was an impressive quarter. Considering that they lost only US$563 million this quarter when the battery recall cost them US$425 million for the year. Sales for the year totalled US$69 billion! Not too shabby there.
yeah plus the "entertainment" division lost 1.9 Bln! Not bad recouping that across the other divisions...
how is selling 5.5million units failing? honestly people - just shut up with the stupid arguments
Now that the numbers are out the post is a bit of a joke. Sony still rose profit for Q1 by 2.2% over last year. Not a bad quater at all. Certainly not a four year worst.
http://www.tgdaily.com/content/view/32064/118/
Yeah the PS3 lost a lot of $$$, but Sony knew it was coming. They plan to make it all up once the install base is there. There are sweet games coming out for the PS3. Final Fantasy, Star Ocean, Heavenly Sword, Ninja Gaiden, GTA, etc... Some of them are exclusive and some arn't, but who cares they will sell systems. In 4 to 5 years Sony will have made a ton of money. It makes no difference what happens in the first couple years. At least not to the big guys. Look at the first XBOX. It was just a tool to get MS in place for the 360. It was never made to do much and it didn't do much.
Japan does not love the PS3. Despite the PS3 being the cheapest there, its also the area with the worst adoption. Not even a mullion PS3's have been sold there, and sales are slowing down week by week. At the current rate it looks like the Wii will reach 3 million sold in Japan before the PS3 hits 1 million.
In fact the PS3 is doing so poorly in Japan, its installed base is actually comparable to the XBox 360 vs the Wii,and the XBox 360 software often outsells the PS3 software in Japan.
The trend unfortunately does not favor the PS3. You may need to do a bit more reading. The XBox HD Drive costs $200 BTW.
look at the facts. The ps3 out sells the xbox by over twice as much. Its way bigger there and it is doing very well in japan. i think you need to read more
They didn't *sell* 5.5 million, only about 3.6 million. As I already pointed out, "shipped" means "shipped from the manufacturing facilities" for Sony. So the remaning 1.9 million units are sitting in Sony's warehouses at the moment. It's all there (2nd paragraph): http://www.businessweek.com/globalbiz/content/may2007/gb20070516_346923.htm
I owned both previous PlayStation systems because they had games I wanted and couldn't get anywhere else. I refused to buy the original Xbox because it had no system-exclusive games I cared about.
I am now the proud owner of an Xbox 360. Not only does it already have more system-exclusive games that I want than the PlayStation 3, but Microsoft are also doing a great job of luring the exclusives away from Sony. The system's performance in the east is worrying, but the line-up is far stronger than its predecessor's.
It's going to get better, too. Games such as Eternal Sonata, Mass Effect, Bioshock, Two Worlds and Halo 3 should be monster hits.
Xbox Live is also the online gaming network to beat. The pricing of some of the items in the marketplace is disgusting, but the service is still far more compelling than what Sony are offering right now.
As a total package, the Xbox 360 should be very appealing to the hardcore.
The PlayStation 2 continues to do great numbers, but when its userbase decides to upgrade that box under the TV, I'm not sure the PlayStation 3 is going to be the logical leap as some commentors are suggesting. You don't sell that many systems by only catering to the hardcore, and while more dedicated gamers might be able to justify a $600 system, the majority of consumers will not.
These people are fickle and more often than not price-motivated. The Wii is the more logical choice for these people as it has huge amounts of buzz and the lowest retail. If Nintendo's supply picks up, I see the system taking a huge slice of the pie.
"Japan does not love the PS3. Despite the PS3 being the cheapest there, its also the area with the worst adoption."
That's BS. Based on MSRP, the PlayStation 3 has the lowest price in Hong Kong, after you've converted the currency.
Wii≥xbox 360 or
Wii60>Ps3
A little disjunction (or conjunction i dont remeber...) for ya all... I hate microsoft...(apple fanboy) but its obvious the 360 is superior! Better games more exclusives (ps3 is losing them FAST) Cheaper (with the hd add on its the same, but its a game system...some people don't want a format shuved down there trought), smaller, better online, rumble and the list goes on and on. BUT If i had money i would buy a PS3, just cause i dont like FPSs, but i can admit the 360 is superior.
Why are most of you over looking one very important fact: The PS3 is too expensive. Let's think about this for a second: who purchased PS3's? The hardcore gamer, the people who wanted to sell them on eBay, people who wanted cheap bluray and the parents of children who "had to have it". Basically, people who were prepared to give up $600. Wonder why PS2's are still selling? It's cheap. It has great games, true, but it's CHEAP. The Wii? Cool little console, and it's CHEAP. People, until Sony lowers the price of this thing, they're going to have a hard time. Games are a big factor, but it's still $600. That's quite a bit of change. A lot of what I'm reading is that the Wii is attractive to the casual and the non-gamer. You think they're going to spend $600 on a system? It may hurt them, but they really need to line this up with the Elite. Chosing between two $500 systems may help them sell that 5 million a lot faster ...
As time goes by and the PS3 lowers it's price, guess what, so will the 360 and Wii. The PS3 will continue to be the most Expensive Console this Generation for it's entire life! Why is the PS2 still selling so well, and the Wii flying off shelfs? PRICE!!! It's as simple as that.
No Console Manufacture has been on TOP for more then 2 generations. Sony is done being on top with the PS1 and PS2. Like others before, they think no one else can beat them and do stupid things and end up failing in the end. Who knows maybe a PS4 with the HD DVD drive will do better?!?!