PSX5Central
Playstation/Gaming Discussions => PS3 Discussion => Topic started by: pstwo on November 14, 2001, 09:57:18 AM
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http://globalarchive.ft.com/globalarchive/article.html?id=011114001787&query=Sony
COMPANIES & FINANCE THE AMERICAS: Sony chief says Xbox threatens \'life cycle\'
Financial Times; Nov 14, 2001
By PAUL ABRAHAMS
Microsoft\'s Xbox could change the economics of the Dollars 20bn games-console business, warned Kunitake Ando, Sony\'s president and chief operating officer.
"The biggest threat to PlayStation 2 (Sony\'s console) is that the Xbox changes the industry\'s life cycle," explained Mr Ando. "It is unclear how long we can keep this business model."
Traditionally, consoles have sold for five-year product life cycles, allowing the manufacturers time to recoup initial losses on hardware and generate substantial profits through software sales.
However, Mr Ando said the Xbox, due to be launched in the US tomorrow, could radically shorten that life cycle. "If it reduces it to three years we are okay," he explained. He said the company might have to shift to the PS3 earlier than it intended, which would be a blow to Microsoft.
Mary Meeker, analyst at Morgan Stanley, estimates Microsoft could lose more than Dollars 1bn before Xbox breaks even in 2004.
Mr Ando said that Microsoft had replaced Nintendo as its main competitor in the console market. Sega was forced out of the hardware market following the disastrous launch of its DreamCast console.
Mr Ando said that Sony could quickly change the PlayStation 2 into an online gaming product and then a home portal device, but the company wanted to recoup its huge investment in chip manufacturing. The Xbox features a broadband connection and a hard drive.
But the importance of the PlayStation division for Sony had been overemphasised, said Mr Ando.
"Last year we had a big loss from the PlayStation business. This year we will make very high profits. Next year competition will be intense and after that the outlook is unclear. This is a very cyclical business. Other businesses such as colour televisions and camcorders are much more stable."
Mr Ando said there was a debate within the company whether it should invest in manufacturing the PS3 because of the capital costs.
He said Sony could contract out manufacturing such as Microsoft, which is using outside suppliers for chips and has outsourced Xbox assembly to Flextronics.
Mr Ando said: "Since August, we have cut costs enough that we are no longer losing money on each PlayStation 2 we make."
Copyright: The Financial Times Limited 1995-1998
and this is the Register take on it
http://www.theregister.co.uk/con...22844.html
Sony frets over PS2 (and XBox)
By Eurogamer.net
Posted: 14/11/2001 at 16:39 GMT
Sony is feeling the heat of competition breathing down its neck. Kunitake Ando, Sony’s president and COO, has told the FT that the presence of Xbox on the market could shorten console lifecycles. In other words Ando fears that the more powerful Xbox, which actually retails for the same price as PlayStation 2 in the States, will force Sony to manufacture the PlayStation 3 ahead of schedule.
Ando also uses the opportunity to take a pop at Nintendo, drawing attention to the disappointing sales of its new console in Japan.
Currently, Sony’s console is the only one on the market in the USA, but as of next week it will have two competitors to deal with. The PS2 has an awesome catalogue of titles, though (and not content with that, Konami has mysteriously decided to launch Metal Gear Solid 2 one day after the US Xbox launch).
The news that Sony feels PS3 production may need to be ramped up sooner is slightly confusing, because the company isn\'t used to backing away from current formats as soon as something else hits the market.
That was Sega\'s MO, and the last thing we want is Sony repeating this mistake. If it\'s so worried about market share slipping through its fingers, why not hack another $100 off the price of PS2? Don\'t forget, while we pay £199, American consumers still having to pay $299 – a shade over £200 at current exchange rates. Under normal circumstances we would expect to pay as many pounds as the American pay dollars. Sony isn\'t exactly giving itself every break, which is why this PS3 message seems somewhat confused.
The truth is, Sony may not be losing much money on PS2 units at the moment, but with another $100 off the price it would be, and in order to get PS3 production online early (which Ando-san believes his company may need to do) it needs to recoup a lot of iinvestment in chip manufacturing. Perhaps now it\'s regretting its decision not to farm out console production to another firm, as Microsoft have done with Xbox...
If Sony is in this position, it\'s a no-winner. The company cannot afford to drop the price of PlayStation 2 because it needs to recoup costs. But neither can it afford to let Microsoft steal their market share by undercutting them in the near future. So which is worse? Losing the ability to construct PlayStation 3 in time to deal with an Xbox successor (HomeStation is still happening, as far as we know), or losing market share?
It\'s an unenviable position to be in. But we think that Microsoft has the greatest fight on its hands. MS has no previous success in the games console sector upon which to base promotions, few if any killer applications (Jet Set Radio Future isn\'t even out yet, so forget that), and it is opting for the higher price of $299.
With things the way they are now, Sony\'s next move may decide whether Xbox is a success or a failure.
© Eurogamer.net. All rights reserved.
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Who got game? PS2 does!!! Damn I hope Sony will bring the PS3 out sooner. ;)
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Interesting article. Did sony worry when the Dreamcast and Nintendo 64 came out? Most likely. Both were more powerfull, and both appealed to developers.
I think this article is a worse case scenario. A situation where the X-Box takes a big part of the market away from sony.
Sony is going to lose some market share. But in the past Sony has pulled through by making some really high quality games and getting developers to make quality games as well.
The PS1 was an inferior system to the DreamCast for quite a long time, but its still out did and out sold it.
Its all about the gamers. Win the gamers over and you are succesfull. Forget about them and you might as well shoot yourself now. MS has a lot of work cut out for them. They don\'t have the best customer service track record. They may have the shinnest gem out there but it wont matter if they don\'t win the gamers over.
No matter what PS2 is here, will be here. Now 1-2 years down the road, if they loose a good portion of their customers to MS then you will see some quick moves by Sony.
But remember this Competition is a good thing. Now that Sony is seeing what MS can produce, its going to make Sony strive harder to build another supieror product. So for the gamers, we will win in the end. No matter if you a MS fanboy, or PS2 Fanboy. Its a great time to be a gamer.
If you read all that then good for you.. Sorry for the rambling on, but those are my thoughts..
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Hmmm, i think it wouldn\'t be wise for SONY to launch PS3 early, although it would be cool to have "better" graphics than the XBox. :D
SONY should be more interested in encouraging developers to come up with incredible titles, that sell systems, instead of taking the easy route and just launching PS3 2 years early or what have you…
I mean if we would be getting games comparable to MGS2, TM:B every month, wouldn’t we buy them? I know I would, even if the graphics weren’t as great as the Xbox’s.
Games sell systems. IMO. Not Technical specifications.
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LOL..
As Kirath said, they\'re prolly talking about a worse case scenario..
1st.. The "cell" processor is far from complete
2nd.. I dont see how Xbox nor GameCube could catch up with a 20 million userbase.. (2 years)
3rd... PS2 has the STRONGEST 3rd party support..
4th... What would the leader of SONY know about this?
Why not interview the "father" of the Playstation, Kutaragi-san????
(Sony Computer Entertainment)
This article was written by a fanboy for fanboys.. ;)
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Well personally I have nothing against shorter lifecycles. It\'s always nice to have something to look forward to :p
But I really doubt that they\'d push the PS.3 just because of the X-Box. The PS.2 can\'t hold it\'s own.
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Those are old news, and have already been unconfirmed at http://www.sonyweb.com PS3 wont come out until 2005 around in Japan.
PS2 is already prepared for Broadband networks, it just didnt came out with the HDD obviosly because @ the time it would be incredibly expensive, and infrastructures arent enough, in spite even if they were, i doubt i´d pay for another ISP services.
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Well I for one would rather the PS3 stay further down the road. Jumping from system to system gets expensive.
One thing\'s for sure though, M$ just turned the heat up on the oven.
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Originally posted by EmperorRob
Well I for one would rather the PS3 stay further down the road. Jumping from system to system gets expensive.
One thing\'s for sure though, M$ just turned the heat up on the oven.
Trust me..
PS3 aint coming early.. I mean, why would it?
PS2 is doing great to say the least?
20 million consoles in 2 years..
:fro:
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Originally posted by fastson
Trust me..
PS3 aint coming early.. I mean, why would it?
PS2 is doing great to say the least?
20 million consoles in 2 years..
:fro:
thats 20million shiped not sold. Cha-ching$$$$ get it rite fastson.
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Actually to me this is cool news
I really do not have any problems buying a PS3 in 2 or 3 more years cause you know it will be significantly more powerful then anything on the market and will have the usual Sony backing
This is why I feel Xbox\'s and MS\'s entry into the market is a good thing. The competition and huge pocketbooks of these comanies will push the indstry ahead extremly fast
If Sony announces the PS3 then about 6 months before it goes on sale I\'ll sell off all my PS2 stuff enjoy Xbox\'s peak and pick up the PS3 at its launch
to me a few $100 every couple of years on state of the art systems is well worth it
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How well do you think the X Box will sell. Do you realy think it will sell more than Playstation 2? Will it flop like Panasonic\'s 3DO? I\'m interested in X Box, but something inside me says don\'t buy it yet. When I bought Dreamcast, I knew that it\'s life span would be short, but after I saw Soul Calibur I knew it was a good console and would have more quality games than the Saturn had. It lived up to my expectations with a huge library of games. I bought a PS2 because I knew it would be an instant success. It\'s hard to say when predicting the future of X Box. To Microsoft, a Billion dollar Company it\'s just an experiment. Console gaming is totally new to them. What do you think?:surprised
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Sony would be foolish to deal out the PS3 early cuz\' they would lose alot of money.
You can\'t just create a new system every three years, the best way is to let a sytem sit for 5 years or more. That\'s what happened with the Super Nintendo. It lived for a good 6 years and did Nintendo alotta good. Now look what happened when Sega quickly built the Dreamcast after the Saturn? They got screwed.
Point is, creating a new system every couple years is a bad move and very costly.
I\'d be happy to see the PS3 in 2006. PS2 has way too much life in it and way too many games ahead of it to be put in the basement.
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All credit was lost in this article when he said...
"Sega was forced out of the hardware market following the disastrous launch of its DreamCast console. "
What a bunch of bull****. Dreamcast had the best system launch ever in it\'s time. EVER!
Eric Jacob
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As much as I would want the PS2 earlier, I hope it doesnt. A 5 year cycle is good. The average gamer isnt made of money
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Originally posted by QuDDus
thats 20million shiped not sold. Cha-ching$$$$ get it rite fastson.
you are working on the old figures
they are either close to or have breached that figure by now.
if not then they soon will as the PS2 enjoys a solo run to Christmas in Europe.
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personally I reckon that the Xbox is only a threat to Sony in the US market, not the rest of the world
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Originally posted by Vulcan Raven
As much as I would want the PS2 earlier, I hope it doesnt. A 5 year cycle is good. The average gamer isnt made of money
I HAVE GREAT NEWS FOR YOU VULCAN!!!!
You can have a PS2 now, like today!!!!! WHOO HOOO what great news..
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Originally posted by AlteredBeast
All credit was lost in this article when he said...
"Sega was forced out of the hardware market following the disastrous launch of its DreamCast console. "
What a bunch of bull****. Dreamcast had the best system launch ever in it\'s time. EVER!
Eric Jacob
might be to you but to me, there was only one game that intersterd me which was SC (highly overrated anyway)
anywayz
I dont like this news, I\'m going to buy a ps2 this month and do NOT want to hear about ps3
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Originally posted by Metal_Gear_Ray
might be to you but to me, there was only one game that intersterd me which was SC (highly overrated anyway)
anywayz
I dont like this news, I\'m going to buy a ps2 this month and do NOT want to hear about ps3
Don\'t worry,PS3 won\'t be released until 2005 :)
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yeah... the Cell that IBM, Sony and I think Toshiba are working on (new and very powerful CPU) is scheduled to be finished in 2004. The PS3 which will most likely have this CPU in it would probably see a release in 2005. And I doubt that Sony is scared of the competition - from what I have heard, they are welcoming it. Sony has no reason to fear Microsoft at that position where they are today.
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Originally posted by AlteredBeast
All credit was lost in this article when he said...
"Sega was forced out of the hardware market following the disastrous launch of its DreamCast console. "
What a bunch of bull****. Dreamcast had the best system launch ever in it\'s time. EVER!
Eric Jacob
Agree\'d...
Soul Calibur, Sonic Adventure, House of the Dead 2, Hydro THunder...AH, the list goes on.
;)
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Ahh... the old PS3 discussion ! No serious, I\'m not a fan of shorter console life cycles. The games industry is gonna be already \'FULL\' with 3 consoles. You don\'t want to mess with key factors like those 5 year cycles ; it might bring the games industry to crash. What I mean by this, is that the industry could get so saturated so fast that all games content from every party involved will start to look alike, quality decrease and such.... the consumer/gamer will get fed up with it... just like the first videogame industry crash when everybody was tired of the same Pong consoles or the second time when innovation was lost and everybody copied Space Invaders.
Gamers will only win if companies max out the capacaties of their franchise. I think it would be a shame to not be able to see how the PS2 developing will evolve, especially because it of it\'s \'alternative\' hardware/architecture. Wouldn\'t it be cool to see the PS2 \'innovative technology\' ( even if it\'s not the most powerfull when speaking in raw terms of Mhz and stuff )come out on top at the end and ppl would look back and admit how over pessimistic they were when devs were nagging about \'how difficult\' it was supposed to be.
So XBOX should IMO be a boost for quality in the games industry, not a \'fast n sloppy\' kind of thing.
Knotter8
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The five year cycle has developed over time, and really is the best sytem. It combines a lot of factors:
1) Allows people to afford that (in Canada) 400-500 dollar console, something most people won\'t spend every two years. Notice I said most. I know some of you can afford that, I could probably technically afford to buy three 450 dollar consoles every two years - but I wouldn\'t, and I don\'t think others would either.
2) Allows a smooth, long transition for developers. They\'re still making games for the PSone you know, and it\'s taken two years for devs to really blow me away with the ps2\'s avaiable hardware.
3) If there is a big tech gap (ie, going from PSone, to PS2 w emotion engine, to PS3 cell cpu), then people will really feel like they\'re getting their money\'s worth, consumers will be happier with what they get.
When I took home my PS2, played it\'s games, and it blew away all my older stuff, I was happy, and said to myself "that was worth it". When I uprade my computer (which I do constanly, in little bits), and see a 5% performance increase, it\'s no big deal, it\'s just, you know, peh.
4) If you have a two year cycle, even three years, you will end up with two current systems per company. What I mean is If they started a 2 year cycle today, the PS3 would be coming out, along with MGS2, FFX, and in a year FFXI... where would the games go? Would devs be dropping promising titles and just start working towards launch titles for the next system, just a short time away? That\'s the worst thing that can happen. It takes devs a couple of years to really learn the systems, so you don\'t want to change it just as people master the hardware. 400 dollar systems mean I DEMAND my money\'s worth, I want to see a huge library of games, a damn 5 year library, not two years.
5) These console changes, or lifecycles, are not upgrades. When you go out and spend 500 dollars on your computer, it\'s an upgrade, you don\'t have to throw away that old 8 gig HDD, or 64 mb simm. With consoles, each new system represents a TOTAL shift to a new series of specifications. I personally would find it horrendously wastefull to be buying consoles every few years - as it is, I\'ve got around eight consoles in my house already.
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Maybe some of you have never heard there was a lot of in house fighting at Sony to get the go ahead to produce the original PSX. This interview may be nothing more than residual resentment, a bit of pissing on the success of the golden child beforehand in case all does not go according to plan.
Fatson has the right idea. Interview Ken Kutaragi and you\'ll get a whole different story. Mr. Ando is probably basing this worst case scenario on nothing more than MS big talk. It certainly wasn\'t based on what went on today, which was not much. There\'s only one place in my town to get an xbox, Walmart. As of an hour ago they still have plenty, in fact the section devoted to the xbox was packed full. Compare that to not seeing a single PS2 on the shelves until a full six months after launch. You get the idea. I\'m still fairly certain xbox will have a tough time outselling DC. Talk of an early launch for PS3 at this point is absurd.
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As a playstation fan, I am pissed to hear this new. I just hope ps2 will be a five year plan system instead of 3, better if longer! Hate it if sony is going to sell it out on 2003! I have high hopes on ps2, but when I hear this new, it makes me feels like sony is admitting they are going to loose this gen console and are going to make a ps3 to compete. I can\'t really see why, I know xbox come with built in hard drive and enternet adapter, but PS2 still have the upper hand due to lots of triple A games coming out for it. I just bought MGS2 and I enjoy it as much as the first. So, lets ps2 is longer than five years lifespan, six years is great! I hope ps3 cell engine will be complete on 2005 instead of 2004 and come out on 2006 instead of 2003 or 2005. (my six years lifespan for ps2.)
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Originally posted by Heretic
Fatson has the right idea. Interview Ken Kutaragi and you\'ll get a whole different story.
It\'s pronounced Fastson, NOT Fatson. I just thought it would be better hearing this from me than from Fastson. You don\'t want to know what he does to people who call him Fatson. :)
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Originally posted by IronFist
It\'s pronounced Fastson, NOT Fatson. I just thought it would be better hearing this from me than from Fastson. You don\'t want to know what he does to people who call him Fatson. :)
Ah.. Thanks IronFist..
Yes I do awefull things with people who call me Fatson.. (crush them under my weight is one of them!) ;)
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Originally posted by fastson
Yes I do awefull things with people who call me Fatson.. (crush them under my weight is one of them!) ;)
lol. :laughing:
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Originally posted by fastson
Ah.. Thanks IronFist..
Yes I do awefull things with people who call me Fatson.. (crush them under my weight is one of them!) ;)
:eek:
Fastson, please accept my apologies. Though I do think of you as a HUGE Sony fan there was never any disrespect intended as I myself am a HUGE Fastson fan, in spirit if not so much in girth.
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Well i think that article was a bit "only marketing" oriented.
I have readed worse things in a NVIDIA document when there was 3dfx alive. Now nVidia is up and 3dfx... well.. you know.
(don\'t flame please i had 2 voodoo2 sli and a voodoo1).
One thing worry me...: XBox it\'s more simple to became XBox2 than Play2 to Play3.
I mean... if you take the original hw architecture of XBox... put in a P4 2Ghz, put in 512Mb of ram... well you have 50% of work done. You can use nVidia GeForce5 GPU and the XBox2 it\'s done.
(With 100% games compatibility... you know.. directX).
For PS3 maybe they must rewrite all the hw architecture. Bye bye old games etc.
Maybe they need to design a good new hw architecture ONE time and use it for new generation console.
only my opinion.
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Sony just has everything covered...don\'t they...?
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Originally posted by Heretic
:eek:
Fastson, please accept my apologies. Though I do think of you as a HUGE Sony fan there was never any disrespect intended as I myself am a HUGE Fastson fan, in spirit if not so much in girth.
I forgive you.. :cool:
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I, personally dont think this will have a good effect for MS. If they make a new console to early people may not want to buy it yet. Why sell a console for 2 years then make a new one?