Tuesday, February 27, 2007

The Upcoming Implosion

I don't think people are quite understanding this yet, but here it comes.

Here's the thing: the installed base of the Playstation 2, worldwide, is over 100 million units.

If we take Sony at their "most recent" word, the PS3 will not have a price cut this year, and without one, they're looking at a worldwide installed base of maybe 10 million units by the end of the year. I think that's a little on the high side, actually, but let's be very generous.

So gaming companies are selling to an installed base that's smaller by 90 million units. Yes, some of those units are out of commission, but even with that adjustment, we're talking an incredible difference in installed bases.

No problem, you might think. Publishers will just support the PS2 for another year or two--that way, they'll capture both the gigantic PS2 market and the emerging PS3 market.

Well, think again.

Here's how many PS2 games are coming out after May in the U.S. from the major publishers (according to EB Games):
Electronic Arts--4

Holy crap!

Even worse, some of the people buying the PS3 aren't buying it for games--they're buying it as the least expensive Blu-Ray player. So that installed base isn't even 100% "gamer," so to speak.

So the PS3 is (according to the industry) much more expensive to develop for than the PS2, and the installed base is one-tenth. And that's one-tenth at the END of the year, not right now. Right now, it's one-fiftieth.

Japanese developers will support the PS2 for much longer, just like they did with the original Playstation. Outside Japan, though, there will be carnage. I don't see how this adds up to anything less than disaster.

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