Washington, D.C.
(March 22, 2007)
-- Nintendo's Wii and Microsoft's XBox 360 outsold
Sony's PlayStation 3 in February by a wide margin.
According to the NPD Group, Wii sold 335,000 units while XBox sold 228,000 and PS3 sold 127,000.
The numbers are staggering considering that PS3's launch last November was accompanied by a media blitz and long lines of shoppers at retail stores.
However, most industry observers believe that PS3's price ($499 and $599) has dampened enthusiasm for the console. The Wii is just $249 while the XBox 360 is $399. Perhaps even more damaging, Sony's PS2 costs just $129 and it continues to sell well.
So why did Sony price the PS3 the way it did?
To save Blu-ray.
According to the NPD Group, Wii sold 335,000 units while XBox sold 228,000 and PS3 sold 127,000.
The numbers are staggering considering that PS3's launch last November was accompanied by a media blitz and long lines of shoppers at retail stores.
However, most industry observers believe that PS3's price ($499 and $599) has dampened enthusiasm for the console. The Wii is just $249 while the XBox 360 is $399. Perhaps even more damaging, Sony's PS2 costs just $129 and it continues to sell well.
So why did Sony price the PS3 the way it did?
To save Blu-ray.
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Last year, Blu-ray was locked in a death struggle with its rival high-def DVD format, the HD-DVD. The latter format launched earlier and offered player prices roughly 50 percent less than Blu-ray. While most of the studios were backing the Sony-supported Blu-ray, it appeared that the format was headed for difficult times.
But Sony had an ace in the hole.
The company had decided to include a Blu-ray player inside the PS3. The decision forced the company to increase manufacturing costs and, consequently, the suggested retail price. However, Sony believed that game players would embrace both the game player and the high-def DVD player, even at the higher prices.
For Blu-ray, it appears that Sony's decision was a home run. While PS3s sales are not meeting expectations, there are still about 1.1 million in U.S. homes.
That has given the format a big advantage over HD-DVD, which has been demonstrated in disc sales. Shortly after the launch of PS3, Blu-ray title sales begin outselling HD-DVD by a 2-1 margin. Now, some industry observers are saying that Blu-ray may be enroute to a format victory.
But the price of that victory may be long-term difficulties for the PS3. One Wall Street firm is speculating that Sony will soon drop the price of the PS3 to enhance sales.
That gambit might work, but it might not. Game players may have been forever alienated by PS3's original lofty price tag.
And if that's the case, PS3 may be a permanent third-place finisher.
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© TVPredictions.com
____________________________________________
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Last year, Blu-ray was locked in a death struggle with its rival high-def DVD format, the HD-DVD. The latter format launched earlier and offered player prices roughly 50 percent less than Blu-ray. While most of the studios were backing the Sony-supported Blu-ray, it appeared that the format was headed for difficult times.
But Sony had an ace in the hole.
The company had decided to include a Blu-ray player inside the PS3. The decision forced the company to increase manufacturing costs and, consequently, the suggested retail price. However, Sony believed that game players would embrace both the game player and the high-def DVD player, even at the higher prices.
For Blu-ray, it appears that Sony's decision was a home run. While PS3s sales are not meeting expectations, there are still about 1.1 million in U.S. homes.
That has given the format a big advantage over HD-DVD, which has been demonstrated in disc sales. Shortly after the launch of PS3, Blu-ray title sales begin outselling HD-DVD by a 2-1 margin. Now, some industry observers are saying that Blu-ray may be enroute to a format victory.
But the price of that victory may be long-term difficulties for the PS3. One Wall Street firm is speculating that Sony will soon drop the price of the PS3 to enhance sales.
That gambit might work, but it might not. Game players may have been forever alienated by PS3's original lofty price tag.
And if that's the case, PS3 may be a permanent third-place finisher.
Comment on this article!
Click TVPredictions.com to see today's Swanni Sez.
© TVPredictions.com
____________________________________________
Phillip Swann is president and publisher of
TVPredictions.com. He has been quoted in dozens of
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Fox News, Inside Edition, The New York Times, The
Washington Post, The Chicago Tribune, The Financial
Times, The Associated Press and The Hollywood
Reporter. He can be reached at
swann@tvpredictions.com
or at 703-505-3064.
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