Red rings, yellow lights; what no blue mouth?
We know all too well about the Xbox’s infamous red ring of death and now the PS3 seems to want a piece of the action with its yellow light of failure.
This kind of attention is not necessarily the best type of attention, but they always said that any publicity is good publicity. So what about it Nintendo, are we going to see a ‘blue mouth of MotionLess’?
Neil Berman
Wii might drop to $199
First ToysRUs and now BestBuy ads have been spotted listing the Wii at a possible future price of $199. It’s pretty amazing that the console has gone so long at its original price, with such strong sales, especially having been christened with such a peculiar name. Who would have thought it possible way back in 2006!
With the PS3 Slim now out at $299 and looking like a good value proposition with its BluRay drive compared to the Xbox 360 Elite, battle is now formally joined at the top end of the 3rd gen tree. It’s therefore not entirely surprising to see rumors appearing of a Wii price reduction as at $249 it must now be coming under significant pressure.
Nintendo must be pretty happy about the great run it’s had so far, well done to them for making this a three horse race. Back in 2006 many of us feared you might walk in the footsteps of Sega.
Neil Berman
Cheaper PS3 Still Too Expensive To Worry XBox 360
Hmmm…$299 for the lowest PS3 in the range a number of years into the current Wii/PS3/Xbox 360 cycle. Well it’s a start I guess, but let’s not expect it to turn the XBox 360/PS3 balance on its head anytime soon.
At $199 the XBox 360 arcade is still the obvious choice for the recession conscious consumer and it comes with access to a huge selection of games compared to the PS3. The Wii continues to be the broad-based family-fun choice. With many of Sony’s businesses languishing, is it really the right time for its cheapest PS3 to still be a Benjamin more expensive than the cheapest XBox 360?
Neil Berman
Wii Fit auction ends at three times retail price
Game on at the library
But like the phrase’s democratic ideal of share and share alike, ‘Game on at the library’ brought the wonders of modern consoles to anyone to try for free.
Are Wii seeing the demise of the Playstation – Part 2
Read the earlier post from August 2007 here.
During some of last year Nintendo’s Wii was outselling Sony’s Playstation 3 by two to one. At the time it looked like we were seeing a fundamental shift in console market dynamics. NPD has just released the latest console sales figures for February (New York Times 3/14/08), so let’s see what’s been happening.
According to NPD, the top selling console was Nintendo’s DS at 587,600 units. Next was the Wii at 432,000 units amid supply constraints. In other words, if there had been more Wiis available in stores then they would likely have been sold.
Microsoft’s Xbox 360 sold 254,600 units, also amid supply constraints. Sony’s Playstation 3 sold 280,800 with no reported supply constraints, although interestingly consumers continue to prefer the positioning of the previous generation model – the Playstation 2 sold 351,800 units.
What does this mean?
1. PS3 is gaining ground
The ratio of Wii to PS3 sales has narrowed to 1.5 : 1. So although Wii continues to sell better than PS3, the trending suggests that their relative monthly sales volumes may become equal or possibly inverse over time. I.e. PS3 may start to outsell Wii in the future. However I expect it unlikely that PS3 will ever achieve a higher total sales volume than Wii, unless its production lifespan significantly outlasts Wii’s.
2. Upcoming mega-games will have an impact
Major releases this year will be key, now that PS3 is more affordable. I anticipate that Wii Fit, which is a big Wii release due in May, is likely to trigger significant cross-generational game and console purchasing. Sales of the much awaited GTA4 for Xbox 360 and PS3 are expected to be 2 to 1 on each console respectively throughout most of 2008 according to an analyst quoted in the aforementioned NY Times article.
If we assume that 360 and PS3 owners buy similar titles, then based on current figures we can predict that PS3 is unlikely to ever have a total console sales volume greater than Xbox 360, all other factors being equal. This leaves PS3 in a highly probable third place at the end of the 3rd gen life cycle unless PS3 sales start increasing significantly.
3. The Blu-Ray victory factor
Blu-Ray’s recent victory as the next gen DVD format should help PS3 sales during 2008, although it is too early to assess an impact from just the February sales figures.
4. Market positioning
Sony has been only partially competing in the 3rd gen console market. This is because the PS3 is still positioned at the upper end of the market and so is not yet within the budget of many mass market consumers. Sony has continued to market the 2nd gen PS2 at the opposite end of the market.
In doing so, Sony has failed to win the all-important middle of the bell curve, which is owned by Wii and Xbox 360. Microsoft compromised on hardware but offered next gen (and now defunct) HD DVD as an accesory option. This allowed Xbox 360 to sell at a reasonable price, which is still significantly less than the basic PS3.
The recent PS3 price cuts have attempted to move the console towards this mainstream price range of $200-350. However Sony has huge R&D costs to recover either through console or game sales so how much further can it really drop the price?
5. Franchise building
The fact that PS2 is still significantly outselling PS3 does have some benefit to Sony, because those owners experience the Playstation franchise. Sony now has to figure out how to turn these customers into future PS3 buyers.
I expect that a poll of Wii and 360 owners would reveal that many converted across from PS2s due to either the new gaming experience (Wii) or price (360), rather than buying a Ps3. Many modern day first time PS2 buyers are probably choosing that model because of its low price in the overall market.
Sony is likely to have a tough time converting them into future PS3 owners rather than losing them to Nintendo or Microsoft, unless the PS3 price falls significantly further. I would anticipate that a base PS3 model would need to cost $249 to appeal to current PS2 buyers as a follow-on purchase.
So has the market dynamic changed since August?
Yes, PS3 does seem to be making inroads. The price drop has helped and I expect the Blu-Ray studio victory will win it extra sales during 2008. But Wii’s position in the lead seems strong and Xbox 360 continues to look like a solid second.
Would a further PS3 price cut help? Perhaps. Sony might end up selling more of them but the payback period to recover the huge R&D costs would probably lengthen…and that I think is what will be taught in business schools once when we look back on the 3rd gen console wars: Sony’s over-engineering led to an inability to compete on the shelves; Nintendo and Microsoft played a better game.
Read the earlier post from August 2007 here.
Neil Berman
Predictions for 2008
1. Ultra Mobile PCs: Various form factors continue to emerge without mass-market penetration until 2010.
Innovative UMPC products continue to come to market with no all-conquering form factor. Price, size to weight ratio and successful keyboard/mouse implementation are the biggest factors to achieving good sales. Solid state drives become increasingly prevalent across UMPCs, which benefit from the resulting weight, speed and energy efficiencies. UMPCs fail to win mass-market penetration until 2010 when the laptop market is saturated and consumers see the UMPC as a more portable extension to their now-indispensable laptop.
2. Laptop market: Laptops become fashion accessories, mainstream consumers reduce focus upon technology as most machines will have key features.
Comparative features between models converge and manufacturers have difficulty differentiating themselves based upon technology. Increasingly in 2008 consumers base laptop buying decisions upon image. Laptops start to become mainstream fashion statements by the end of the year. Similar to the clothing market, the cost of buying into the image falls as mainstream manufacturers mass produce designer-style laptops and all-in-ones. Apple’s computer division comes under resulting pressure and the recessionary economic environment forces it to launch a budget MacBook.
3. Digital cameras: Cellphones put pressure on lower end of market.
By the end of 2008, the lower end of the digital camera market starts to come under pressure from cellphones. It is the start of the market’s decline towards a predominantly enthusiast consumer base by 2012.
4. Music downloads: More choice and more DRM-free tracks; iPod market share under pressure.
Driven by pricing pressures, sufficient numbers of record companies break their relationship with Apple. This reduces iTunes’ market share and puts pressure on the iPod range. The principal benefactor is Zune Marketplace, which also gains market share through mass availability of DRM-free downloads.
5. Video downloads: Lots of adverts but no popcorn.
Mobile pay TV and video downloading fail to take off due to pricing concerns from the studios, who fear a repeat of what happened with the music industry.
6. Cellphones: Apple successfully widens product mix amongst consumers, but fails to penetrate corporate market; established players continue to lag behind on user interface but move ahead on technology and features.
iPhone 2.0 comes out and the original model is reduced in price and made available at a new tariff to achieve broader market penetration. Corporates experience increased employee pressure to support iPhone but decline to do so due to security and strategic infrastructure compatibility issues. WiFi VoIP cellphones remain a niche market. LG and Samsung become main emerging threats to Apple in the fashion-conscious market. SonyEricsson continues to lead in music and camera implementation. Nokia’s N-series leads consumer data implementations. HTC originated smartphones fail to win significant market share from RIM in the corporate sector, whose Blackberry devices continue to become more multimedia and consumer orientated.
7. Processor technology: Energy saving on the road and cores races on the desktop.
Exceptionally low voltage x86 instruction-set CPUs start to emerge, allowing smartphones and other highly power-conscious ultra-mobile devices to achieve greater convergence with mainstream PCs. Laptops benefit from further processor energy saving technology. Desktop marketing becomes driven by the number of cores in a processor, but beyond a certain point mainstream operating system and application code fails to derive corresponding performance benefit from this race. OS releases and applications play catch-up in optimizing themselves for multi-core implementations.
8. Gaming: Wii gains wider appeal, PSP vs. DS goes to round two.
The release of Wii Fit gives Nintendo’s platform mass cross-generation market penetration. Playstation 3 finally gets flagship games but these come too late to challenge Wii for global dominance. However Blu-ray’s victory over HD-DVD boosts PS3 sales. Details emerge about the next generation of PSP and DS gaming handhelds. Gyroscope tilt controls and vibration feedback are built-in, as are webcams giving VoIP capability. PSP 2.0 gets two joystick controls. Rumours continue to circulate about an Xbox handheld, but this only arrives in 2009 when the Xbox 360 brand is more firmly established globally.
9. Home entertainment: OLEDs light up living rooms…of the rich and famous, next gen DVD format war continues throughout the year.
Organic LED displays provoke plenty of excitement but fail to enter the mass market yet due to prohibitive cost. It takes until 2010 for prices to start becoming genuinely affordable. The HD-DVD vs Blu-ray format war comes to an end, with Blu-ray winning following studio support.
10. Biggest 2008 rumour which does not become a successful production product: Apple UMPC
So many core Apple multimedia applications require substantial CPU, graphics and screen real estate resources that there is no mass market for an Apple UMPC. The fact that current Apples ship with such serious Intel Core 2 Duo power compared to most PCs means that an entirely new application suite would be needed for an Apple UMPC to be useful on a low power platform. This would be too risky for Apple in 2008, given that the UMPC market is so small and its stylish computer ranges will come under unprecedented pressure from competitors as well as economic recessionary forces.
Neil Berman
Zap…Wii are surrounded!
I had to search for a while, but I finally found Wii Zapper stock. At an unreasonably cheap $19.99 including Links Crossbow Training from a major retailer, it would have been rude not to buy it.
The ingenious Zapper is simply a plastic moulding with a trigger and housings for the Wii Remote and Nunchuck. Once these two controllers are fitted into place, with satisfyingly secure feeling mechanisms, the Zapper becomes a light gun with joystick control provided by the Nunchuck. A hole at the front allows communication with the Wii Sensor Bar.
Links Crossbow Training is a fun arcade shooter with a variety of mini games through its levels. The games are amusing, each lasting a brief time before transitioning to the next sprite shooting fest. If goblins, walking skeletons and huge ice creatures are not your thing then the zapper is compatible with many of the Wii shooters out there, such as Ghost Squad.
The packaged game on its own is probably worth the twenty bucks I paid for the whole shebang. At this price the Wii Zapper should help Nintendo to further broaden the Wii’s appeal, if it even needs any help at this stage. As ever when I went into the store the PS3 and Xbox 360 boxes were piled high and a hastily scrawled sign at customer services read “We have no Wiis”. Nintendo seems to have the competition Zapped at the moment.
theONbutton
Turning the world on, one gadget at a time.
