Monday, September 25, 2006

PlayStation 3 may Kill Sony

It really is an interesting article. When the PlayStation Portable came out I saw a similar trend. The DS was making money. The PSP was losing it. So long as the DS sold a game per system, they would make way more money then the PSP. It was an eary thought. And it seems to be what is causing the downfall of the PSP.
The idea of selling at a loss has been around since the original PlayStation. Sony takes a loss for the first 2 - 2.5 years. The idea is that Games will make you break even. But if the games are putting the publishers at a loss as well, then it means that the more profitable system will win again.
Basically it is very similar to the .Com Industry bubble burst. The companies that where built to make money are still around. They are making quite a bit of money still. The majority of the companies did everything at a loss, expecting to make it back from investors and product sales. But they rarely had a good product to sell. So it burst.
Sony is selling the PS3 at a loss, with the idea that everything inside it will begin to sell well. A Blue Ray drive will help sell Blue-Ray movies. The HDMI cords and HD capabilities will sell TVs. The thing is though, most people will not be buying a HD TV. Blue Ray is competing with Downloadable content - which is much cheaper for everyone involved, and adds the ability to update every program pretty easily- And thus we see that PS3 will be at a loss.
This is a bit sad for me. I do like the Nintendo Systems better, but I realize that the other systems have some great games. I have been hoping that the Nintendo Wii will have emulators for PS2 and PS1 systems, as well as the XBox and Dreamcast. This would be easier for me, having only one system to hook up is quite convenient. And signs point to this happening. Which would make the ability to play PS2 games on the PS3 useless.
Sony can still make money. In fact the PS3 may be able to help them out. The ability to hold a smaller tax for system on the older systems may help them out. Think about it, the contracts with Sony for certain games may still stand. Those products would be easy to manufacture and sell, either online or on disk. Sony makes a profit off of those, Plus Nintendo makes money off the System sales and new games. A win/Win situation.
Will this happen. I have no idea, but it would be convenient for me. I happen to want to play Okami.

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