Tuesday, March 17, 2009

More Third Party devs threaten to leave Sony for Nintendo


Sony Corp. is under pressure from video-game publishers to cut the price of the PlayStation 3 console or risk seeing more development funds shift to Nintendo Co.’s Wii.

Sony, which has resisted calls for lower prices, is likely to shave $50 to $100 off the PS3 this month or next, said Mike Hickey, an analyst with Janco Partners Inc. in Greenwood Village, Colorado. Starting at $399.99, the PS3 is $200 more than the lowest-priced Xbox 360 from Microsoft Corp. and $150 more than the market-leading Wii.

Three years into the latest generation of game consoles, Sony is stuck in third place, data from the manufacturers show. The Tokyo-based company, once the dominant player, has half the worldwide users of Wii, even though the PS3 has earned praise for its processing power, graphics and Blu-ray movie player. U.S. sales of the PS3 have declined for three straight months.

“If they can’t meaningfully increase their install base, then you will likely see a capital reallocation,” Hickey said.

In 2008, Activision Blizzard Inc., the world’s largest game company, generated 32 percent of its console revenue from Wii titles. That compared with 19 percent for PS3, according to Activision.

Electronic Arts Inc. is releasing some titles solely for Wii as part of a push to stem two years of losses, and showcased games for the Nintendo player at a company event last week.

“You can’t ignore the guy who has half the market,” said Peter Moore, head of sports games at Redwood City, California- based Electronic Arts, maker of the “Madden NFL” series.

‘A Ways to Go’

“Sony obviously still has a ways to go with their pricing,” Moore, a former executive in Microsoft’s Xbox division, said in an interview. Electronic Arts is committed to the PS3 and expects a cut eventually, he said. PS3 games increased to 27 percent of the company’s console sales last quarter, bolstered by a popular soccer title.

Sony has no immediate plan to reduce prices, said Peter Dille, senior vice president of marketing for Sony Computer Entertainment America in Foster City, California.

“Everybody in the development community would love for the PS3 to be free, so they could just sell razor blades,” Dille said in an interview. Sony is concerned with profitability, as well as the installed base, he said.

Sony, the world’s second-largest consumer-electronics maker, is in the middle of a corporate overhaul, cutting 16,000 jobs and closing factories. Chief Executive Officer Howard Stringer took over the main electronics business last month and named Kazuo Hirai, who leads the game unit, to head a new division combining Vaio computers, the Walkman and the PlayStation.

Exclusive Games

Sony is benefiting from exclusive titles for PS3, including the recently released “Killzone 2,” and non-gaming deals like the one announced March 10 to deliver movies and television shows for NBC Universal over the PlayStation 3, Dille said.

Earlier this month, PS3 weekly sales in Japan topped Wii and Xbox ahead of the release of Capcom Co.’s latest “Resident Evil” installment, the Web sites GameSpot and IGN Entertainment reported, citing researcher Media Create.

Not everyone predicts a big shift in spending, because PS3 and Xbox 360 share many titles and costs. Game companies who fail to commit enough money to PS3 risk losing business, said Mark Rein, vice president of Epic Games Inc., the Cary, North Carolina-based maker of “Gears of War.”

“You make very good money on PlayStation 3 if you develop a good game,” Rein said in an interview. “You can very easily take that game to Xbox 360 or PC.”

Seventh Generation

Sony climbed 1.1 percent to close at 1,913 yen on the Tokyo Stock Exchange. It has lost 54 percent in the past year.

The seventh generation of game systems began hitting stores in November 2005 with Microsoft’s Xbox 360. Sony and Kyoto-based Nintendo followed a year later. At the end of December, Sony had sold 21 million PS3s worldwide, compared with Nintendo’s almost 45 million Wii players and Microsoft’s 28 million-plus Xbox 360s, according to the companies.

PS3 sales in the next 12 months are likely to total 14 million, compared with 28 million Wiis and 9.7 million Xbox 360s, according to the Daiwa Institute of Research, a Tokyo-based researcher and consultant.

Price cuts have an immediate impact.

Sony reduced the PS3 price from $499.99 in October 2007 and sales more than doubled in the next month. In September, Redmond, Washington-based Microsoft released its lowest-priced Xbox 360, at $199.99. The company almost doubled Sony’s U.S. shipments from October to January after trailing PS3 in the prior three months, NPD data show.

Two Directions

“Anytime a console manufacturer reduces the price, software publishers benefit,” Yves Guillemot, chief executive officer of Ubisoft Entertainment SA, Europe’s largest video-game maker, said in an e-mail.

Game makers now focus development in two directions: one for the top-selling Wii and the other for Xbox 360, PS3 and personal computers.

Titles for Microsoft and Sony are typically more expensive to produce. Sony posts a loss on each console it makes at the current price, according to researcher iSuppli Corp.

“The publishers need the PS3 install base to grow in order for most of these games to be profitable,” said Evan Wilson, an analyst at Pacific Crest Securities in Portland, Oregon. “It’s an easy equation for them, but it’s very different from the one that Sony has to take on.”

Link

In my opinion it would take a drastic move on Sony's part to really even begin to cut into Nintendo's lead with the Wii. More power never meant more sales....

23 comments:

Anonymous said...

im sorry but this 3rd party sony suck up is going to destroy gaming WHY ARE THEY DEMANDING A PS3 PRICE CUT when theres a console called wii doing the sales they require IT HAS NOTHING TO DO WITH PS3 AND SONY ANYMORE talk about barking up the wrong tree 3RD PARTYS WII BIT OF ADVICE BACK Wii and stop sack licking sony

Anonymous said...

forget sony there are at least 25 million core wii gamers that want AAA games more often

predator said...

Wii is the number 1 console and yet most of the games we get are ports with Ps2 graphics and the games that we do get that have good graphics are rare.

evrdayblues said...

The Wii ain't in direct competition with the PS3, so Sony cannot have a piece of Nintendo's pie anyway. The pie is exclusive.

One of your quotes even said that development of games has taken 2 branches:

-Wii

and

-X360, PS3, PC

The second branch is becoming less profitable, duh, because the 3 platforms are competing directly creating some kind of cannibalizing effect.

Low cost, fun, globally appealing games are the future of this industry.

MS and Sony have lost.

So now whoever believed that HD (cough... HIGH COST...cough) games were the future, is now paying the price.

Biohazard said...

The emphasis on high-definition was premature at best. As much as I enjoyed the HD visuals and content from the Xbox 360 and PlayStation 3, I can still live without them.

I remember Matt from IGN go apeshit over Nintendo not taking the Wii, which was Revolution at the time, to high-definition, saying that it is an insane move. Now, it looks like Matt has to eat his own words because the consumers have spoken - high-definition was never the key to success in this generation. The only thing it can provide is convenience for the consumer, but for the business, that is another story. Bar none, high-definition will eventually be the next standard in the next couple of years, but for gaming, it's not there yet and Sony and Microsoft will have to settle with getting very little out of it.

With that said, many third-party developers will continue to be stubborn about the Wii's profitability. They still will try to give the PlayStation 3 and Xbox 360 a chance because the industry has become more tech-based than ever before. Don't expect a huge jump on Nintendo's platform just yet, not until they bring out WiiHD or Wii 2 or whatever pipe dream that helps put hardcore gamers to sleep.

Anonymous said...

BRING ON A WII UPGRADE THAT ALSO INCLUDES "SUPER RESOLUTION" AND HIGH PERFORMANCE AA,FILTERING KEEP COSTS LOW BUT ALSO BOOST GRAPHICS AND FULLY SUPPORT HD a wii HDi come on nintendo a DSi like upgrade with HD supprted thru super res makes perfect sense

Anonymous said...

Nintendo took a big chance for this generation, and they were right. In 2006, HD TVs had not penetrated the market. Having said said that, HD TVs are currently growing and I wouldn't mind playing Wii games in 720p WITH smooth frame rate.
I would definitely buy the "next" Wii or even a mid-level upgrade. I hope it will not just be HD, but a bump in polygons, hardware effects, physics, and etc.

Arius Dion said...

I love the whole "Wii is not in direct competition" line. Give it a break, kid. If they weren't in direct competition, the third parties wouldn't be threatening to allocate more resources to Nintendo.

TanookiTravis said...

Despite this entire article boasting almost entirely facts I thought I would point this out:

I grew up in Greenwood Village, CO where this Janco company is located.

Metaldave said...

Travis, is that a good or bad thing? lol

evrdayblues said...

Arius Dion said...
I love the whole "Wii is not in direct competition" line. Give it a break, kid. If they weren't in direct competition, the third parties wouldn't be threatening to allocate more resources to Nintendo.

6:53 PM, March 17, 2009
----------------------------
Um, I'm sorry but it's true...
Wii is not competing with PS3, X360 and PC. That's why there aren't any multiplatform games that make it to Wii, aside from the ones that go to PS2 to begin with. There are a few exceptions, but for the most part the only successful Wii games are those done from the ground up with design choices that cater to the Wii's market. And thus, these games are not made to compete directly with HD games, as they are completely different games, period.

A Call of Duty game on Wii, with watered down content will never sell as well as the HD counterparts. That's what I call "failed" direct competition. Whereas a game like Shawn White Snowboarding, which was made from the ground up for Wii, sold very well, and did much better critically than the HD versions.

The largest part of the Wii’s market is this new “expanded” market, and don’t try and tell me that piece comes from PS3, X360’s market share. This generation, Sony and MS concentrated on capturing as much of the competitors market share as possible, while Nintendo concentrated on creating a brand new market, and succeeded. They are mostly successful because they are NOT in direct competition with HD consoles.

That is a fact, so don’t ridicule me. I’m not the only one that sees this.

Arius Dion said...

Sure, keep telling yourself that, kid. While you're at it revision history since N64 was so much more powerful than the PS1, turns out THEY weren't competing either. Did you even read the article? The FACT that third parties have threatened SONY with allocating resources from them to Nintendo is proof that the folks that matter, see them as competitors.

It is really that simple. Wii is the market leader because it has sold nearly what the HD consoles have sold combined. If the only distinction is resolution, that's not enough of a distinction to claim "they aren't competing"

It just sounds like "If you can't beat em..ignore em"

Anonymous said...

Nintendo created another market by changing the way we interact with gaming. They realized that 20 button configurations were too intimidating to most people, gamers or not. This single factor blew everyone away. Of course, the naysayers will be singing a different tune when the other consoles implement or copies this type of controller. The fact that Nintendo "CONTINUES" to innovate is what also sets them apart. Whether you like it or not, Nintendo always seems to be 1 to 2 steps ahead. From 8-bit machines to today, they always bring something (that incidentally,everyone copies) to the industry. This generation, their Wii remote/motion control is the thing to beat. And as we all know, Microsoft and Sony are scrambling to come out with their version of the Wii remote. I now prefer to play my games with the Wii remote than even dual action joysticks/controllers.

Anonymous said...

post above please read birdman artical nintendo ARE in direct competition AND DIDNT PS2 SELL TO THE EXPANDED MARKET....

THERES NO SUCH THING AS A CASUAL OR CORE CONSOLE THERE IS ONLY GAMES CONSOLES THAT ARE ALL IN COMPETITION

http://malstrom.50webs.com/birdman.html

GO THERE READ ARTICLE AND SEE THE TRUTH BEHIND NINTENDO S PLAN its basically destroy the industry around it stand alone as the winner and control it from then on the wii is the nes/snes alover again build the games industry from scratch remember nintendo holds power over gaming like the federal bank does the global economy NINTENDO ARE THAT POWERFUL


GO READ THE ARTICAL NINTENDOS ENEMYS ARE CLEARLY SONY AND MICROSOFT DONT EVEN TRY TO DENY IT

Anonymous said...

Nintendo: “We are following the strategy of disruption!”
NPD: “Nintendo wins!”
Journalist: “How are you winning, Nintendo?”
Nintendo: “We are following the strategy of disruption!”
Journalist: (ignores Nintendo) “What is going on here, analysts and third parties?”
Analyst: “It is a casual gamer boom!”
Third Parties: “OMG! Easy money! Quick guys, everyone start making casual games!”
Nintendo: “We are following the strategy of disruption!”
Journalist: (philosophically) “Will casual games cause the downfall of the hardcore games? Let me write many editorials about this!”
Analyst: (philosophically) “Is the casual game boom a fad? Let us pontificate over this.”
Third Parties: “Hey guys! How you like my casual games? They sure are snazzy! I will make millions! I am such the business whiz!”
Nintendo: “We are following the strategy of disruption!”
Journalist: (scratches head) “You hear something?”
Analyst: “It was just Nintendo speaking. They are saying the same thing.”
Journalist: “Yeah! Haha! Same old marketing speak. I am so much smarter about business than Nintendo. In my next interview with Iwata, I’ll give him some business lessons.”
Third Parties: (cries) “Oh no! My casual games are not selling!”
Journalist: “Obviously, this is because people buy Nintendo consoles for Nintendo games.”
Analyst: “Nintendo needs to assist these third parties in getting their casual games to sell.”
Third Parties: “That’s right! They need to do what WE want them to!”
Nintendo: “We are following the strategy of disruption!”
Journalist: (yawns) “Is that all they say? (becomes excited) Ohhh! Look! A new hardcore game is being made with fresh textures.” (runs off)
Analyst: “Obviously, Sony and Microsoft are branching with casual games themselves. Poor Nintendo. Too bad they are out of tricks. I expect Playstation 3 to be surpassing them in a year or two. The market revolves around technology you know.”
Third Parties: “My casual games aren’t selling? Why!? I do not understand!”

Is it not amazing how everyone talks about the casual gamer boom except Nintendo? Instead, Nintendo keeps talking disruption while everyone either ignores these quotes or misinterpret ‘disruption’ to mean ‘change’ or ‘innovation’.

evrdayblues said...

Arius Dion said...
Sure, keep telling yourself that, kid. While you're at it revision history since N64 was so much more powerful than the PS1, turns out THEY weren't competing either. Did you even read the article? The FACT that third parties have threatened SONY with allocating resources from them to Nintendo is proof that the folks that matter, see them as competitors.

It is really that simple. Wii is the market leader because it has sold nearly what the HD consoles have sold combined. If the only distinction is resolution, that's not enough of a distinction to claim "they aren't competing"

It just sounds like "If you can't beat em..ignore em"

8:52 AM, March 18, 2009

-On the subject of resource re-allocation. Yes, third parties may be threatening Sony with the possibility of allocating resources to the development and promotion of Wii software. I agree, that means that Sony is competing for third party support, in the form of resource allocation. However, that has nothing to do with Nintendo competing in the consumer market. Nintendo doesn’t even care about third party support. The top selling games on Wii are all first party, and are all system sellers. How much money does Nintendo make on 3rd party games compared to the games they make themselves? So there, Nintendo is not competing for 3rd party support, they don’t even need to! The 3rd parties don’t need extra incentive to develop for Wii either. They have been fooling themselves all along and now they finally see what’s there. The Wii has the largest installed base, duh, so they should invest there. The developers are threatening Sony because they see no other way of coaxing Sony into dropping their hardware prices, so that they can sell more software to a larger installed base. It’s all a game…

Quote from you…

“If the only distinction is resolution, that's not enough of a distinction to claim "they aren't competing"”

So how do you explain this?

“Game makers now focus development in two directions: one for the top-selling Wii and the other for Xbox 360, PS3 and personal computers.”
(Taken from the article we are now discussing!)

-Developers focus in two separate developmental directions in order to make games with half the screen display resolution? And you are saying that “I” did not read the article?

-I already said this…The top selling Wii games are developed from the ground up for Wii only, and they are made to appeal to the widest audience possible. The experience you’ll have with a Wii game is completely different from the experience you’ll have with a game from a different console. That is how the best selling Wii games are not competing with the best selling X360, PS3 games. I’m only talking about the best selling games because that is what developers and investors care about. Maximum profitability is what they are striving for. And if they make games that compete directly with HD console games, then the consumers will buy the HD versions of the game, because they know a watered down game when they see one. What sold better: “Call of Duty Wii” or “Call of Duty HD”? See how they fail? You can’t compete directly; you have to offer something different, jeez, are you blind to this? 50 million people can’t be wrong! The consumers buy Wii Fit and Wii Play, not CoD Watered down. Don’t forget that many more consumers own multiple platforms this generation compared to two generation back. There is not use in making a game on Wii that competes directly with X360 etc, and the sales figures prove it, you can’t deny that.

And I want to stress this sentence:
“You can’t compete directly; you have to offer something different.”
Wii’s success is built on that. It don’t take a genius to see it.

Ok…somebody mentioned Malstrom!

I love that guy’s articles! I read “Birdmen and the Casual Fallacy” and I read his entire Blue Ocean article series. And basically, those articles are showing how Nintendo Zigged when the industry Zagged, and that alone shows that Malstrom believes that Nintendo is not in direct competition with MS and Sony.

Basically, according to Malstrom, Nintendo has created a “Blue Ocean” and that, of course, has nothing to do with all this nonsense about “casual gamers”, but rather has everything to do with Nintendo’s philosophy of “fighting against indifference.”

I won’t spoil it too much; I encourage you all to read it, and not to misinterpret it…

Anyway…Sorry for taking up so much space MetalDave, I usually don’t, but Arius Dion insulted me twice already and I want people to see all the facts behind what I believe and how he contradicted himself. In the end, I’m a Wii only user too, so chill out people.

Arius Dion said...

Malstrom is the man. Your quote is taken from the point where he is describing the landscape and current idealogy of third parties concerning the Wii.

You can't be "competing on one hand" and NOT competing on the other. Competing for third party support is competing no matter how you wanna spin it.

Also doesn't Malstrom also sate how Wii aims to render the other two competitors irrelevant?

evrdayblues said...

Arius Dion said...

Also doesn't Malstrom also state how Wii aims to render the other two competitors irrelevant?

-

The other two competitors have been irrelevant from the start. That's why I say there is no competition. Nintendo has won from day one. The competition is non-existent right now.

And to end this:

When I say that "Nintendo is not competing directly", what I'm really saying is that Nintendo is concentrating on a broader, more comprehensive market, the bulk of which is untouched by Sony and MS.
-
Here is an example of direct competition:

AMD Processors
vs.
Intel Processors
-
Here is an example of indirect competition:

Boeing 747 Airplanes
vs.
Bombardier Private Jets.

In this example, Boeing is not selling planes to the same consumers that buy Private Jets, at least not in significant numbers. And vice-versa.

There is a nuance between the two concepts.

Peace

Anonymous said...

the only differance in concept is thus FACTUAL NOT OPINION

WII IS NEXT GEN NEW GEN FORWARD

PS3 AND X360 ARE OLD GEN NOT NEW OLD CONCEPT IN OTHER WORDS THERE OBSOLETE WII AND DS AND NEW GEN PSP PS3 AND X360 ARE OLD GEN

THATS FACTUAL DONT EVEN TRY AND AGUE IT


NINTENDO S Policy IS BLUE OCEAN VIA disruption

if wii isnt in competition with ps3 and x360

THEN WHO IS NINTENDO DISRUPTING THEMSELFS

PS3 X360 ARE IN DIRECT COMPETITION THAT IS A FACT


funny those saying otherwise wouldnt be saying it if wii wasnt the lead format ITS CALLED BEING A FANBOY

Anonymous said...

WHOS BEING DISRUPTED IF WII HAS NO COMPETITION.... PLEASE EXPLAIN THIS INTELLIGENT SONY/MICROSOFT FANBOYS PLEASE EXPLAIN THIS AWAY.....

YOUR THINKING LIKE BIRDMEN JUST LIKE THE BIRDMEN ARTICLE SAYS

evrdayblues said...

Do you all understand English?
Just want to make sure...

So, where in my comments did I write that Wii was not next gen? I wrote that Nintendo is owning the industry all over the place. How did you miss that? I even wrote this:

"
MS and Sony have lost.

So now whoever believed that HD (cough... HIGH COST...cough) games were the future, is now paying the price.
"

How does that translate to:

"SONY/MICROSOFT FANBOYS" ???

Again, do you all understand English? Are you sure you are reading all the words carefully?

Anonymous said...

the ps3 x360 goofs among us keep insisting Nintendo's motion controls are some quick buck thought at the last minute console seller that's a fad FUNNY WEN ASKED ABOUT GAMING IN THE SNES ERA SHIGSY CLEARLY STATED

I AWAIT A DAY WERE YOU CAN INTERACT IN A 3D WORLD LIKE A PUPPETEER FUNNY THAT DREAM CAME TRUE ITS CALLED Wii

this was planned 20 years ago nintendo waited for cheap tech to catch up

AGAIN THE SONY/MICROSOFT FANBOYS OPINIONS ARE BLOWN AWAY AS MEAR NET MYTHS INVENTED BY STUPID PEOPLE

I.E BIRDMEN

Anonymous said...

http://newlevelgaming.blog-city.com/capcoms_5_year_plan_did_not_include_wii.htm


go read oh look nintendo won via DISRUPTION VS XBOX/ SONY/ AND 3RD PARTY'S THIS IS NINTENDO DECLARING A GAMING WAR ON THE WORLD AND WINNING.....

NINTENDO PEARL HARBORED BOTH OTHER CONSOLE MAKERS AND ALL 3RD PARTYS WHY DID THEY DO THIS TO LET THOSE """LESS POWERFUL""" UNDERSTAND WHOS IN CHARGE

NINTENDO WAS CALLED A SLEEPING DRAGON BY FANS DO YOU NOW UNDERSTND WHY

ALSO OFICIALLY MAN FOR MAN HOUR FOR HOUR NINTENDO IS THE MOST PROFITABLE COMPANY ON EARTH

LIVE WITH FACT INSTEAD OF FANBOYING SONY/MICROSOFT FANS