More Microsoft/Nintendo/Sony
I saw this Reuters story linked from Evil Avatar a few minutes ago (Wii Stealing Show):The wait to try out the Wii at E3 pushed past four hours on Thursday afternoon, while the wait for hands-on time with Sony Corp's Playstation 3 was barely 30 minutes.
I'm sure that "30 minute" number refers to the line up the stairs I saw for the special Sony area.
Like I said, that's a catastrophe for Sony. Gaming journalists generally are gamers first, journalists second (or third). The PS3 now has zero buzz, and for consumers, a large segment of which are price sensitive, the PS3 costs more than double what the Wii costs.
Microsoft execs must have been drinking champagne from the minute Sony announced their price. They had a strong show, with plenty of excellent games, impressive announcements (Grand Theft Auto 4 on October 16 of next year, Halo 3 confirmed, Alan Wake a Microsoft exclusive), and no gaffes.
Here's one other thing about Microsoft: if Viva Pinata was a Nintendo game, people would be bursting with proclamations about how it demonstrates the genius of Nintendo. That game is going to be huge, and I'm not sure anyone quite realizes it yet.
Here's an economic explanation of Sony's problem. The Xbox 360 was $200 cheaper when it was launched last year. By November, the 360 will have sold somewhere in the neighborhood of 10 million units.
I seriously doubt that Sony will launch in the U.S. this year, but just for the sake of discussion, let's assume that they do and they hit their worldwide launch target of 3 million units. Actually, that's a ridiculous number and totally unattainable, so let's use 2 million. If Sony sells out, the gap between them and Microsoft will be 8 million units.
That's as close as it's going to get.
Microsoft, after ten milion units, will have lowered their production costs to the point where they can drop their unit price to $349 whenever they want to. Sony, after 2 million units, will be nowhere near the point where they can start closing the gap.
The only way this works for Sony is if they sell machines at a much, much faster rate than Microsoft. That would help them move along the production curve and eventually get them to price parity with Micrsoft. But that's not going to happen with a $200 price delta. The difference in the gaming capabilities of the two machines is negligible.
Look at it this way, because many people will. You'll be able to buy the Xbox 360 for $399 AND the Wii for $249--for $50 more than the price of a PS3.
Which would you rather have?
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