Sony, in response to the slow sales of the 20GB “core” version of the slow-selling Playstation 3, has discontinued that version to focus more on their 60GB flagship PS3. It appears that Sony created two versions of the PS3 in response to Microsoft’s decision to offer a “core” Xbox360, that can be upgraded with external accessories and a standard version at different price points. In response to the strong sales made from Microsoft’s business decision, Sony decided to also join the bandwagon with their two versions of the Playstation 3. However, while Microsoft made it easy to upgrade their 360 with external hard drive and wireless joypads, Sony decided to differentiate their PS3s by only providing Wi-Fi to their 60GB PS3, and did not offer any wireless upgrades for their core system.
Most consumers, realising that Wi-Fi will become a household standard within the next 5-10 years opted to pay the extra $100USD premium to get a PS3 with Wi-Fi rather than settling with a lesser model that does not appear to have strong support from Sony. Even in the initial launch of the PS3, we can see that the leading sales in the eBay gray market were often generated by sellers flipping the 60GB PS3 rather than the 20GB core model. On an interesting note, one of my friends who tried selling a 20GB PS3 actually lost money on the venture and had to sell it at cost to minimise his losses.
Soon, there were reports coming in from retailers such as Target and Best Buy, were only restocking their videogame or electronics departments with only the 60GB PS3 instead of the 20GB version. Then, the PS3 launches for the PAL markets were only limited to the 60GB version with PR-lingo claiming that their PAL markets did no show strong interest for the core model. Ultimately, the signs of the demise of the 20GB version came when even Sony’s own online store decided to discontinue the model itself.
Dave Karraker of Sony America states, “At launch, we offered two separate models of PlayStation 3 to meet the diverse needs and interests of our PlayStation fan base. Initial retail demand in North America was upwards of ninety percent in favor of the 60GB SKU, so we manufactured and shipped-in accordingly. Due to the overwhelming demand for the 60GB model from both retailers and consumers, we have ceased offering the 20GB model here in North America. In addition to the larger internal hard drive, the 60GB PlayStation 3 features added storage media slots and built-in Wi-Fi not found in the 20GB system. Based on retailer and consumer feedback, we have decided to focus our current efforts on the more popular 60GB model.”
Additionally, there were claims that the 20GB was actually more expensive to mass produce compared to the 60GB counterpart. This decision is quite interesting seeing that Microsoft decided to offer a new variant of their 360 console in response to the Playstation 3 called the 360 Elite, which is $80USD more than the standard 360 but comes in black with HDMI and a 120GB hard drive. So like the Norwegian Blue Parrot, the 20GB Playstation 3 has ceased to be, leaving Sony with no core models to compete at varying price points, which puts it at a relative disadvantage compared to Microsoft and the competitively-priced Nintendo Wii.
Speaking of the Nintendo Wii, weekly sales data from Japan indicates that this piece of hardware is outselling the Playstation 3 at a 3-to-1 ratio. It’s interesting to note that the 60GB Playstation 3 is often being sold by Japanese retailers at the same price point as the Nintendo Wii itself. One of my friends currently working in Japan was able to successfully buy a Playstation 3 for the same price as the Wii even though he had an opportunity to purchase the Wii when it was available (Japan also has shortages of the Wii and DS Lite like the rest of the world). I still can’t believe that the Playstation 3, a console powered by a Cell processor capable of analysing simulations to cure cancer and render CGI in real-time, is being crushed in the market by a modified Nintendo Gamecube with a motion-sensing remote controller. These are indeed fictitious times we are living in.
It has been said that a foreign company must be able to secure their home market before they can achieve strong success in foreign markets. This has been true for corporations such as Toyota, and Coca-Cola, who were able to successfully gain significant market share in the home market before reaching out to international consumers. For consoles, SEGA was loosing market share in Japan but performed successfully in foreign markets in Europe and North American before their domestic losses caught up to them in the early part of the millennium. A rough idea of the success of the Wii can be seen in the numerous Japanese variety shows where the Wii is often featured and used by local celebrities.
While videos of these kind showing cute Japanese celebrities duking it out using the Wii or playing other Wii games are prevalent on youtube, I was only able to find some notable videos on youtube talking about the Playstation 3.
This video done by Playstation Magazine debunks the Sony’s spin that motion sensing is incompatible with vibration, despite Nintendo using it for the Wii. The video blogger notes that a motion sensing control with vibration was produced in 1999 by a third party for the PSone and it even works with the PS2, as seen in the video.
This clip talks about the Japanese launch and the problems associated with rioting, the media hype and the emerging gray market for the Playstation 3 consoles.
Other than those notable clips, the rest of youtube results on “Playstation 3” were often fan-made trailers of games, clips of the PS3 presentations, videos bashing the Playstation 3, random videos exploring the hardware or talking about problems with the machine.
It seems like Sony is currently in a very sad state in terms of the console wars. Most of the promised features they trumpeted were nonexistant during launch and in the critical stages. Initial demand for the Playstation 3 gradually died down as consumers learned of the delays, hardware problems, gray market oversaturation and appealing alternatives such as the Wii. Then you have management at Sony making idiotic remarks such as praising the Wii or making statements that seem to piss all over the Playstation fanbase.
Rumors of manufacturing difficulties kept Playstation 3s out of stores for the first few months. Then, once the supply was met, the demand for the system dwindled. Despite early showings of great success for it’s European launch, the Playstation 3’s sales figures plummeted in the weeks following. Due to their continual mistakes, Sony has lost game exclusives, advertising rights (as backlash to their mind-numbing “This is Living” set of commercials”, and profits.
The worst evidence of Sony’s disregard for their customers is their lack of support. Since the launch of the PS3’s online service, users have urged Sony to upgrade the experience. Sony’s service only recently was updated to allow “background downloading”, yet problems remain. Fans have taken it upon themselves to sign petitions, yearning for features that they were promised by Sony.
At this point, I would like to see my $600USD investment count for something, but Sony has blown it as a videogame console. Currently, due to the lack of good games, I use the PS3 as a blu-ray player and currently rooting for Sony to win this format war, where it has a relatively better chance. So far, the markets and sales data suggest that Sony is gradually gaining a lead over HD-DVD in the next generation DVD format wars, but it needs to aggressively increase their product offerings and reduce the costs for blu-ray players and discs if they are to achieve a decisive victory over HD-DVD. It’s not exactly too late for Sony in the console wars, but they have blown their lead from mismanagement and from underestimating their competition.