Profit losses at Sony
Due to slow sales on the PS3, Sony's profits have dropped in the third quarter. I have to ask: what did they think would happen?There are several reasons for this, which I had talked about with friends when the PS3 originally came out and that are mentioned in the article. For one, there's the price. It's double the price of the Wii, and still more expensive than the best Xbox 360. And even at that high price, they priced it under the cost of production to try to sell more. They wouldn't have had such a huge cost of production if they hadn't tried to jump start Blu-Ray discs. It took almost a decade to fully switch from VHS to DVD; why would they think that it would only take a couple years to convert to Blu-Ray, especially when HD DVDs are competing against it? On top of the high cost for the console itself, the games are ridiculously expensive as well, even for a next-generation console, once again due to their choice to go with Blu-Ray. Bad idea, Sony.
I'm sure the UMD fiasco of the PSP had something to do with it as well. The only thing the article says about PSP is that its sales have dropped as well, but several months ago many stores such as Target and Wal-Mart began drastically cutting back on, if not eliminating, their stock of UMD movies. The UMD had several things wrong with it that limited sales. Since its storage capacity was so much smaller, most of the bonus features found on DVDs had to be taken out, and to keep Sony DVD sales up, they didn't put in a TV-playback feature, so you had to always watch on the PSP. The only way to watch on a television was to buy a third-party converter, which to install required you to remove the faceplate, among other things. All those issues combined with affordable portable DVD players with TV output combined to destroy any possibility of profitable sales of UMD movies.
In the end, Sony's made some bad choices with their games systems. We'll see what happens as the novelty of the next-gen consoles wear off and they settle in for the long haul. Maybe Sony can redeem the PS3 with some excellent games, but when facing competition like Halo 3 coming this spring and all the original games coming for the Wii that will draw all the casual gamers, it will be a tough sale.
Labels: Current Events, Technology, Things of Interest
posted by Jeremy @ 9:52 AM
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