Why PSP may do more harm than good to Sony.

Discussion in 'Games' started by manicdvln, Mar 19, 2005.

  1. manicdvln macrumors member

    Joined:
    Dec 9, 2004
    #1
    1. PSP is being sold as a loss, Sony is going in red by selling this machine too early and too cheap.

    http://www.kotaku.com/gaming/psp/launch/so...sold-032557.php

    2. The gap between software sales and PSP sales is huge! Everyone is buying a PSP but no one is buying the games which Sony depends to compensate for its hardware loses. This is the reason why in north america, Sony forced the value pack bundle and forcing big retailers to bundle the value pack with bunch of games you wouldnt consider even purchasing (EA games). Even though DS also had a bad software line-up, most if not all its games were constantly ranked in top 10 sales, while not so with PSP.

    http://www.the-magicbox.com/charts.htm

    3. UMD media will obviously fail because of laxed security on Memory sticks and high prices on UMD movies which cost more than a DVD!. It is no surprise that people will download, extract and upload movies they already own into PSP instead of buying it on UMD format. This will be counterproductive to Sony's battle (RIAA) against music/movie piracy by making a machine warez friendly!!!

    http://www.firstadopter.com/fa/archives/000693.html

    4. People who may consider purchasing a PS2 may now lean on getting a PSP instead, since it doesn't seem there is a big difference in game selection between these two consoles. Not to mention, PSP has almost same power in gfx than a PS2 and can do more than a PS2 and obviously costs cheaper than a PS2 when it was launched. Note that PSP is not profitable to Sony, while PS2 success in sales and games may be damaged by Sony competing against itself.

    http://www.us.playstation.com/psp/games.aspx?all

    No, we can't say the same with Nintendo, cause DS plays different games than GC as well as the GBA plays different games than both, while there is pretty much no difference between PS2 and PSP in games and gfx other than one being mobile and the other not.

    5. Sony now has to diversify it's financial ressources, which is already in a big slum, in many new divisons, now it has to make UMD media and try to keep it alive (which will fail), try to compete against ipod with PSP media capabilities (which will also fail) and also try go compete against Nintendo in handheld games which seems a big risk, since Nintendo has beaten 8 different handheld competitors before. This can also be detrimental for Sony future projects now being forced to concentrate its games and ressources more on PSP than PS3 (which makes sense since PS3 will pretty much be delayed).

    Sony financial/management troubles:

    a) http://quote.bloomberg.com/apps/news?pid=1...zAs0&refer=asia

    B) http://www.gameinformer.com/NR/exeres/BDA0...74F3D179771.htm

    c) http://www.gamegossip.com/comment.php?id=12305

    d) http://news.ft.com/cms/s/4e302fb4-8f1a-11d...000e2511c8.html

    Who will benefit from this Sony mistake? Maybe the consumer, maybe the competitors and maybe no one.
     
  2. ZildjianKX macrumors 68000

    ZildjianKX

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    May 18, 2003
    #2
    Hate to break it to you, but almost every game system made with the exception of Nintendo is sold at a loss. The PS2 was sold at a loss, look how well it did.

    With all the buzz and short demand, many people in Japan are hording the systems, i.e. buying it now because they think it's cool even if there isn't a game out yet that they want, definately not a horrible thing (increases their install base which Sony loves).

    Uploading a movie that you already bought to your PSP is hardly warez (you bought it afterall). And having to convert all your movies to MPEG4 at limited resolutions is hardly warez friendly.

    The PS2 is almost end of lifed, it launched in MARCH of 2000 in Japan! PS3 is demoed at E3...

    The Playstation branch is one of the most successful divisions for Sony, look how they have dominated the home console market. Expanding their successful branch is probably actually a great idea, especially when their new entry console is as impressive as it is.
     
  3. dotdotdot macrumors 68020

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    Jan 23, 2005
    #3
    The PSP is not going to hurt Sony - actually, Sony will benefit from having a portable system which plays music, movies, AND video games!

    You can buy, for $400 and up, a Portable Media Center or an Archos video MP3 player. You can buy, for $249 a PSP which can do all that. Battery life sucks but how much do you want to be someone makes a back up battery pack for the PSP?

    I think that it will be very profitable...
     
  4. pgc6000 macrumors 6502a

    Joined:
    Jul 12, 2004
    #4
    I won't be buying one, but the PSP won't hurt Sony at all. But I still don't see the point in watching movies on a PSP. Why would you want to watch movies on something that small? You could buy a portable DVD player, or hell, just use your laptop if you have one.
     
  5. edesignuk Moderator emeritus

    edesignuk

    Joined:
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    Location:
    London, England
    #5
    Oh yeah. Over 1m units sold in Japan (I read it somewhere, can't remember where). Pre-orders in the US and the EU, not sure of the figures, but it's a lot....yeah, must be hurting :rolleyes:

    Sony will not loose out here.
     
  6. GFLPraxis macrumors 604

    GFLPraxis

    Joined:
    Mar 17, 2004
    #6
    Okay, as you read this, we are NOT saying the PSP sucks. We're saying Sony will lose money on it, even if its good.

    Right, but remember, they need to make up for it with software sales.


    However, the big problem is that games are much more expensive on the PSP, so people will buy less games.

    Firstly, cracking the encryption on a DVD when you rip it is legal, so it counts as warez. Now, I understand you might do this anyway. That doesn't matter.

    You're actually AGREEING with him. Most people will UPLOAD MOVIES to the PSP. The UMD movies won't sell. Therefore, Sony won't make any money off people uploading UMD movies, or any money off people uploading their own movies.


    And not released for OVER a full year AFTER E3. Sony has plenty of time to profit. Look at Nintendo, they're releasing a flurry of new GameCube games this year (new Zelda, w00t).

    Of course, but if it's losing MONEY, it's a problem, isn't it? :rolleyes:

    Okay this is just ignorance.
    The $250 PSP isn't capable of ANY of that. To make it capable you have to buy a $150 1 GB Duo stick. So now you have a $400 PSP that can hold 1 GB of videos on a less-than-TV resolution screen.


    The Creative Portable Media Center on the other hand has a 20 GB hard drive 20 times the space! And a 7 hour video playback battery life (22 hours for music, compared to 10 on the PSP)!


    Sorry, the PSP is vastly inferior as a media center. Jack of all trades, master of none. If you want it, get it as a GAMING system. NOT a media center.

    ???
    Have you not read any of this thread?
    Remember, Sony makes a loss on every PSP sold.

    THEREFORE,
    If everyone buys a PSP to use as a Media Center, and doesn't buy games, Sony makes a HUGE loss.

    So having extra features is not necessarily a benefit here!

    You're thinking as a consumer, not the company.

    To the consumer: More sold = better.

    That's not true.

    1 million sold in Japan- with a loss on EVERY ONE. If Sony doesn't sell several million games, they don't make up the loss.

    We're not talking about Sony losing the console war, we're talking about them losing loads of cash.


    (Just for reference, the DS has sold several million in Japan, though, so don't get overconfident)
     
  7. Timelessblur macrumors 65816

    Timelessblur

    Joined:
    Jun 26, 2004
    #7
    Ok some really does not know much what he is talking about. by the looks of it you look like a Nintendo fan boy but that not the point.

    Lets me make a list of thing that people have stated that have been proven wrong.

    Lets start with the PS. People where saying that that the orginal Play station was a bad Idea. Oh now it controls the market. it also started off with no software.

    Xbox. People really hated that one. It had next to no software. very low software sells at the begining. Now lets look at it. Oh yeah it extermly popular and is doing great.

    Game cube. It was stated that it was to far behind the PS2 and the Xbox. Nope that wrong.

    Right now software sells are low but it happen for all of them and there was little at the begining and over time it picks up. It going to take a while to get into the market. They are going to have to take some heavy losses if they want to break the Nintiedo power house their. Nintiedo used to be the huge in the consulal market and now they are quickly falling in that air to MS and Sony which both to losses to get in and once you get you foot it easy to keep it going. You have to wait about a year or so to see how it plays out.
     
  8. edesignuk Moderator emeritus

    edesignuk

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    Mar 25, 2002
    Location:
    London, England
    #8
    But as has already been said, companies often take a hit on the hardware, fact is the more you can shift (even if at a loss) the more software you will be able to sell later on - $$$$$$$$$$!!!!!
     
  9. GFLPraxis macrumors 604

    GFLPraxis

    Joined:
    Mar 17, 2004
    #9
    Actually, the XBox FAILED. They may have sold a bunch, but they lost more than they gained. XBox's profits were negative while Sony and Nintendo had large numbers (Sony's the highest, but barely, barely above Nintendo's. Since Nintendo sold considerably less GC's, they must have been taking less of a loss on them since they almost tied Sony).

    The thing is, UMD disks are obviously not going to sell well, and with the high prices of the PSP games they won't be flying off the shelves (people will buy them once in a while instead of a lot at once). That makes it very difficult to make a profit.


    Now, Sony may be trying to pull an XBox- take an overall complete loss in cash just to get the system out the door and establish a fan club, so that when they release a PSP2, THEN they can try to make a profit. That could be what they're doing. Because it seems like they won't be making a lot of profit on the PSP, even if they completely outsold the DS, unless the software prices go down.


    P.S. take a wild guess what game I played on my DS for five hours yesterday... :D
    MegaMan Zero 3. (I notice your avatar features Zero)
    I killed X, too. That was fun. :)
     
  10. ZildjianKX macrumors 68000

    ZildjianKX

    Joined:
    May 18, 2003
    #10
    Well, technically from the DMCA it is illegal to circumvent the encryption on a DVD, but at the same time it's legal to back up a movie for fair use (Sony betamax cases)... so it's really a catch-22 since the DMCA is conflicting with the other law.

    My main response was the PSP is not a "warez machine," which it's not. Having to convert the films (super pain in the ass) to MPEG4 is very limiting. Saying that it can play MP3s is against Sony and the RIAA is just absurd, you better tell that to every MP3 maker out there (especially since the PSP will probably get support for the Sony online music store).

    Movies coming out for the PSP are going to be Sony films (excluding the handful of Disney that were just announced), so if you want to watch those on your PSP, guess what? You have to buy the Sony DVD. And if you choose to rip a movie and put it on your PSP, it's going to be lesser quality because they limit the MPEG4 resolution, and also you have to buy a VERY expensive Sony Memory stick (believe me, they know what they are doing).

    There is no way the PSP is going to hurt the PS2 sales. Have you seen the Japanese PS2 sales? Still going strong. Hell, most of the PS2 fans are BUYING the PSP. There really isn't a conflict between the two consoles since handhelds are totally a different market (I buy one to hook up to my HDTV at home and relax, the other to have something to do on the train). The Sony PS2 has made Sony so much money that no matter what happpens, they have made their money. And I don't think they really care about their PS2 console base at the moment... it's super high, and like it was said, they make their money off of their games and they're still selling strong.

    Still not sure why people are arguing it will lose money... (plus they are selling the system at cost pretty much, thank you value pack with $10 of manufactured accessories tops).
     
  11. GFLPraxis macrumors 604

    GFLPraxis

    Joined:
    Mar 17, 2004
    #11

    Very true, but Sony's in the awkward position of selling an expensive system while still taking a loss ($250 is very expensive for a handheld, and the PSP's hardware is worth more than that, so Sony loses a lot of money). They also have the position of selling handheld games that cost a whopping $50.

    That means people that don't have a lot of money and saved up for a while to buy the PSP aren't quite ready to run out and buy a bunch of games. That'll hurt their profits.

    Now, as I said, they could be pulling an XBox- selling with the intention of getting a loss, just to get the console out the door. If so, it is a brilliant move, assuming Sony has the money to cover for the losses.

    Guess they have more money than me. If I bought a $250 handheld system and a $50 game, having just spent $300, I would probably not buy any other games for quite some time :D Heck, I even did that after buying my DS.
     
  12. ZildjianKX macrumors 68000

    ZildjianKX

    Joined:
    May 18, 2003
    #12
    Well, I loaded up on EBgames giftcards, so I ended up paying $220 for my PSP after tax.

    Then Sam Goody had a nice free shipping sale with $10 off $50 orders, so I ended up getting 4 $40 games for about $130... then ebgames had a trade-in deal, so I traded in 2 very old gamecube games and a $4.99 PS2 Jampack for Wipeout Pure + tax, so I really can't complain money wise about the PSP too much (about $360 for the system and 5 games after having traded in 2 bad old games).
     
  13. GFLPraxis macrumors 604

    GFLPraxis

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    #13
    LOL, very nice :D
     
  14. eva01 macrumors 601

    eva01

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    Location:
    Gah! Plymouth
    #14
    every single sony hardware i have ever owned has broken T_T.

    none of my Bose, Apple, Nintendo, Yamaha, hell even RCA haven't broken

    that is why i wont get a PSP. if i did the screen would implode
     
  15. ZildjianKX macrumors 68000

    ZildjianKX

    Joined:
    May 18, 2003
    #15
    Hate to agree with you, but Sony really lacks it in the quality of their consoles at times. Look at all the damn revisions to the PS2 console (more than 1 a year, they are like on revision 8). I may be forced to buy an extended warranty from EB because I just know a bug fixed model might come out later.
     
  16. GFLPraxis macrumors 604

    GFLPraxis

    Joined:
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    #16
    It could just be you, I have a friend whom, every time he walks in my house one of the computers (Windows PCs) crash. If I'm trying to fix something and can't, and he steps back, suddenly it starts working. :D

    Computers and consoles just hate certain people ;)
     
  17. zimtheinvader macrumors regular

    zimtheinvader

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    Location:
    the capitol
    #17
    There is no comparison between the PS2 library and that of the PSP, the PS2 can play hundreds of PS1+PS2 games, while the PSP can only play the select few that have been or are being ported.

    I think Sony may have hit this particular market on the head, esp. since the DS is flailing w/ its limited game appeal, (more wierd child-like puzzle games...)

    What I don't understand is why Sony doesn't come right off the bat w/ a port of Quake (or Quake II/III!) or even Doom or Descent or something, That would be the death knell once and forever for Nintendo's portable market for 17+yr olds.
     
  18. GFLPraxis macrumors 604

    GFLPraxis

    Joined:
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    #18
    The DS's only real problem is that the developers are making new games from scratch while the PSP developers are porting games like nuts.

    Most of the good DS games don't come out till September :(

    As a result, the DS's game library doesn't look too good ATM. But the future library looks awesome.


    I don't understand your reasoning on the "A Doom II port would be the death of Nintendo!!!"...Nintendo's got Metroid Prime Hunters, which controls much better than the dual joystick design of the PSP, PS2, XBox, etc. And BTW. The majority of people I know with DSs are over 17 years old.
    If I hear another "Nintendo is for kids!" comment someone will be in pain :p
     
  19. Dagless macrumors Core

    Dagless

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    #19
    my DS cost me £150 with 2 full games and a demo, and it was imported (aka more than it costs normally) at the time the PSP *cough* value (?!??) pack was £300.

    an official DS battery costs £6 imported,
    an official PSP battery costs £35 imported.

    DS needs no external memory storage (which has both positive and negative aspects),
    PSPs Memory Duo costs a frikkin fortune compared to SD/MMC and co.

    meh :rolleyes:

    to be honest i can see that the PSP will attract more 'grown up' handheld gamers who want to, for some reason, play massive 3D games on a teeny tiny screen. fair play to them. but seriously i can see it has its own market, but consider someone who has never had a handheld before and wants one... what is he/she going to do? pay a bloody fortune or half that? hmm
     
  20. Timelessblur macrumors 65816

    Timelessblur

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    #20

    umm the xbox did not fail MS went in making the xbox not planning on getting out of the red on it for I think 8 years. They wanted to get in the market so yet again you are wrong. Sony and MS are both thinking long term like 8-10 years down the road. THey are taking the heavy heavy looses up frount to get in the market and to remove the power house.

    btw you PS means jack to me because you spent what 150 on the DS while my the 60 bucks I payed over 2 years ago for my GBA can still play Zero 3 (which I plan on getting later) Now if it was a DS game it might mean something but it is just a GBA game....
     
  21. combatcolin macrumors 68020

    combatcolin

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    Northants, UK
    #21
    Hi GFLPraxis, its your xBox emulating friend from the other thread!

    Man are you going for a record in posting or something? ;)

    Anyway, regarding the PSP, alarming amount of news about the build quaility, battery and the grief about the square button.

    Also that lovely big screen is going to get scrached very easy.

    I do hope that Sony have a good crack at the handheld market, its been a near monoply for Nintendo since the Lynx and Game Gear died off and while they make amazing games there bloody expensive in the UK.
     
  22. zelmo macrumors 603

    zelmo

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    #22
    True, and it is vital that Sony get many units into consumers hands as early as possible to create an installed base attractive enough for 3rd party publishers to suppport it well. Who cares if they lose money on the hardware at the outset? Sony is here for the long haul, not to make a quick buck.
    Name one console that wasn't sold at a loss when it was released. The point is to reach critical mass, with a strong installed base pushing developers to produce more, better content, and that content in turn luring new consumers to the platform. As the volume of hardware sold rises, economies of scale kick in and the hardware becomes less expensive to manufacture. This results in some combination of lower hardware retail pricing and profitable sales for Sony. Either way, the platform reaches a viable base and is a success.

    I'll be there on the 24th, with $400 in hand for the system and three games (Wipeout Pure, Tiger Woods, and either Ape Escape or Lumines).
     
  23. GFLPraxis macrumors 604

    GFLPraxis

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    #23
    From a company standpoint it is a failure because it failed to make money, and thats the purpose of business.

    It did succeed in becoming a major player, but only at a huge loss.
    Therefore, Microsoft deliberately set the XBox up to fail financially so that the XBox 2 could succeed. I suspect Sony is doing this with the PSP- the PSP will fail from a company standpoint (losing a lot of money) so the PSP2 can succeed and Nintendo can be displaced. Don't know if it'll succeed or not.

    It wasn't a DS vs PSP thing, I was just pointing that out because I saw your sig. I highly recommend Zero 3 for your GBA. I managed to get all 12 EX skills yesterday.
     
  24. GFLPraxis macrumors 604

    GFLPraxis

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    #24
    I type really, really fast...lol :D


    Definitely. I'm hoping the release of the PSP will drive DS prices down.
    No company should go without competition.
     
  25. manicdvln thread starter macrumors member

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    Dec 9, 2004
    #25

    Yes, taking losses to expand market share is a valid strategy, but when your company is in billions of dollars in debt, you change your strategy from aggressive to conservative. Yes, Sony is smart in going in the handheld business because nintendo has taken control 90% of market share, and that market share will only go down whatever the competitor's handhed may be. But sony is being arrogant, and attempting the same tricks up its sleeve without being conscious about it's financial status. I don't think Sony deliberately did these mistakes in its handheld, it's the lack of communication within the company. I seriously doubt, executives in Sony music division are very happy with PSP media upload capabilities, neither would Sony electronics division be happy that so much R&D and development costs are going to gaming division (PS3/CELL/PSP) instead of revitalizing its electronics department which is one of the biggest burdens in Sony profit. Companies like Samsung, LG, Canon are beating Sony in its own game. I didn't even mention that MGM movie, latest biggest hit was only spiderman 2, which I found ironic that they packaged it for free UMD movie with Sony PSP.

    I think the company is falling apart, it's has stretched too fast and spending more than it can earn. Let's not even start with Sony yearly loss of quality control in its products as well as illogical premium prices.
     

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