Many in the media have been opining the failure of the PS3 since it's release. With record-high hardware pricing (for a "MAJOR" system) and few games in the months after launch, it's not hard to understand why. Many people, myself included, have always held that the incredible technology built into the system more than justified its cost, and would serve Sony well in the long term. We knew from the beginning that the incredible cell processor, Blu-ray disc storage, true 1080p graphics potential, HDMI video and audio output, and a mandatory hard drive, made the PS3 the most amazing piece of home entertainment hardware ever created. But the marketing machine at Microsoft went into full force as soon as the PS3 was released, decrying the high price (note that they then released a system or $479 that still didn't have hardware comparable to the PS3) and lack of game releases (how many titles were available for the 360 at launch again?). The media picked up the story and ran with it, also adding the third-party exclusives that Sony seemed to be losing. Sales of the system slowed to an anemic level as games kept getting pushed back and rumors of a price cut ran rampant. Things were not looking good for SCE.
Then, an amazing thing happened. Sony, the company known most for its boisterous statements of superiority, and longstanding policy of corporate secrecy, had an amazing and immediate change of course. Faced with a slow-selling $600 system, corporate leadership started acting with a newfound sense of humility. More impressively, they put forth a big effort to "get the word out" about upcoming games and ideas they had for the new system. They started an official blog, giving details of upcoming titles and interviews with corporate brass and game developers. They started showing off "beta" material, most notably the innovative PlayStation Home social-networking concept due in final form this fall. Suddenly, the media started to change, noting this newfound openness, and the PS3's role in leading the Blu-ray move format to a decisive victory against its HD DVD rival.
But sales were still below expectations, and it didn't appear they were likely to improve until this fall with the huge slate of titles due... and potentially a price drop. Sony again shocked everyone by not waiting out the summer to "see what happened." Starting this past Monday they officially dropped the price of the 60GB PS3 by $100 and announced a new $599 model with a larger hard drive and copy of Motorstorm. Overnight sales jumped on Amazon.com 2800%, and the PS3 system became the number one selling video game item on all of Amazon.com.
In an incredible twist of fate, just as Sony was building momentum, Microsoft's good press came to a crashing halt. In interviews with retailers, DailyTech found that store's estimated as many as 33% of XBox 360's were defective! Asking the same about PS3's, word came back that it was at or under 1%. The mass media picked this up as a consumer-interest story, and usually brought back up Microsoft's ever-lowering sales forecasts in the process. Microsoft had to respond by offering to extend the XBox 360 warranty to 3 years (just for RROD errors though) -- a move that supposedly will cost the company $1.1 billion. Perhaps due to this new expenditure, Microsoft has not dropped the price of their system in response to Sony's move.
And to top it all off, this week is the E3 conference--and by all accounts, Sony hit it out of the park! They put an end to rumors of Metal Gear Solid 4 coming to the XBox 360 -- confirming it as a PS3 exclusive. And in a surprise move, they also announced that Unreal Tournament 3 would be a timed exclusive for the PS3 -- and that Epic was reengineering the Unreal 3 engine to take advantage of the power of the PS3, so that other game developers can have a top-of-the-line development platform for the over 100 games that are already announced based on that engine. In addition they announced the acquisition of NCSoft, a developer of MMOGs (massively multiplayer online games), all of whose future titles will be PS3 exclusives. In total, they announced 200 Blu-ray disc games for the PS3 due out by the end of the year.
Even better, they showed that they are listening to their customers! The E3 press conference was chock full of games, games, and more games. Demos, trailers, you name it. Gone were the days of wild claims of system benchmarks that mean little if anything in the real world. They have taken to heart the message that gamers don't care what you say about a game or system... they want you to show them. And show them Sony did. And the results have wowed every gaming publication out there. They also showed how the input of consumers (beta-testers) for their upcoming Home release was being listened to, and improvements were being made constantly based on consumer suggestions.
With Blu-ray dominating its HD DVD rival, an amazing slate of upcoming games, and an early price drop, has the announcement of the death of the PS3 been premature? It certainly appears that way. Sales of the PSP went up 90% with a $30 price drop. Sony expects much greater returns on the $100 PS3 price drop, and rightfully so. Sony expects to ship 11 million consoles in 2007, and if they are able to make (and more importantly sell) that many, they will catch up to the XBox 360's year long headstart early next year. And from there, who knows. 120 million PS2 owners are still due for an upgrade. Unlike Microsoft's "burn it down and start fresh" strategy with their XBox line, Sony still actively supports their PS2 system, 7 years after its release. New hit games are being released for the PS2 all the time. What was the last major XBox 1 title to be released? Anyone? Anyone? Bueller? Remember that if you're thinking about buying a 360. Do you really want to buy a new system every four years because Microsoft stops licensing games for their existing platform? No? Me either.
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