Europeans don't mind waiting for delayed hardware

PixelTrawler

Another viewpoint to consider, with the many problems sony are having in production would you really want one of the first 500,000 units...

Every console has problems with the first couple of production runs... PSP had problems with dead pixels and a sticking square button ( in asia only i think ). Theres been problems with the drives on the 360 etc.. The first iterations of the ps2 had problems too i seem to recall. I know plenty of people on their second ps2 as the older, earlier ones didnt last.

Anyone really wanting a ps3 they might be glad in the end of the couple of months delay while Sony iron out the production difficulties, of which there seems to be plenty. Its quite possible the very early adapters on asia and the US could be sending a lot of units back...

This bit is speculation on my part granted but look at Sony Hardware difficulties at present. Exploding laptop batteries left, right and centre, and the incredible rush on at the moment to get that 500,000 first ps3's for sale and ready within the next 6 weeks! Cell yields are appalling and they're having plenty of problems with the Blue laser diodes too. You would have to be concerned about build quality under that manufacturing pressure.

mcgarnicle

BlitzKrieg wrote:

I never said it wasnt, Tesco and Asda still compete. But the companies all share the same resources and the same market and know its unhealthy to shake the boat.

What has sharing resources got to do with anything, they do shake the boat and that's where the term "supermarket wars" comes from. That's why Tesco has expanded so much. Prices are about as low as they can make them in a lot of cases. Take a look at Lidl and Aldi they have seriously under cut their competitors' prices, do you think they give a damn how their activities are harming Superquinn? I don't think so.

I'm only suggesting Nintendo follow the same pattern as the others in their industry, sell your console for little or no mark up and get money from the games and before anyone points out the price difference in the games, there are reasons for that. While the Wii has cheaper games they will still be making as much profit on each one as Sony or Microsoft as a result of lower development costs for the wii... in other words Nintendo will be making just as much profit on games as Sony or MS in addition to the initial profit on the console. In a couple of years 360 and PS3 games will fall in line.

BlitzKrieg wrote:

no they wouldnt. Its bad for buisness, it would pretty much have the same affect as the console crash atari caused.

The price war was only one of many causes of the crash. You are also assuming that people will only buy a Wii if it goes cheap. Nintendo have established that the Wii is offering a different experience, it's not the same as 360 or PS3.

Oddly enough in this context I think one of the analogies of the master of stupid analogies; Hideo Kojima, actually makes sense. He compared Wii to watching tv, 360 to watching a dvd and PS3 to going to the cinema. While I don't necessarily think that the inferred difference in quality is valid I do think that they all offer unique experiences and people will want to try more than one. No matter if you can watch a movie on the tv for free, you still go to the cinema.

I know that the price of Wii won't stop me getting a PS3 or 360 but if it were cheaper I'm sure it would help convince me to buy a wii. It would not destroy the industry though as you seem to be suggesting.

The price war was between consoles of similar spec all selling at a loss, if anything this already happens with PS3 and 360 which are both making losses. I'm not suggesting Nintendo do this but if they can sell Wii for €166 in Japan and make a profit, then why can't they charge us something similar?

BlitzKrieg wrote:

'revolutionizing' the industry. Its another word for trying to expand the market, nintendo have said it themselves, they are trying to get people who normally dont play games to play games. They are not changing the industry in any fundemental way, just adding new markets, making a bigger base. There has been no actual change to the industry itself.

Well then how about the original playstation, that effectively took the market from Nintendo in a pretty ruthless fashion, hijacking games bound for Nintendo and taking popular franchises ie. final fantasy 7.

Honestly I just don't think your point makes sense, even if a cheap wii did destroy PS3 and 360, which it clearly wouldn't, Nintendo would have no problem with this. Game developers and publishers would for sure, Nintendo wouldn't. Nintendo don't care if Sony or MS fail they are not a co-op they are all out for number 1.

Retr0gamer

mcgarnicle wrote:

I'm only suggesting Nintendo follow the same pattern as the others in their industry, sell your console for little or no mark up and get money from the games and before anyone points out the price difference in the games, there are reasons for that. While the Wii has cheaper games they will still be making as much profit on each one as Sony or Microsoft as a result of lower development costs for the wii... in other words Nintendo will be making just as much profit on games as Sony or MS in addition to the initial profit on the console. In a couple of years 360 and PS3 games will fall in line.

What's so wrong with nintendo making a profit on every Wii sold. nintendo have always made a profit on the hardware they sell. the PS2 was sold at a loss and Sony weren't making a profit on the PS2 hardware and software until over 2 years after launch. As for the xbox the only month MS made a profit was on the release of Halo 2. That same year MS announced they only lost 2 billion dollars on xbox software and hardware sales which was a huge success for them. Nintendo who didn't sell nearly as many consoles were making a profit right from the start. It's just sound business practice. And don't be using the uninformed argument that the GC is the same as a Wii because they are similar and should be sold at the same price. The GC and Wii are similar just like my old P100 with PowerVR is similar to my 2Ghz machine with X800 card. They have similar architecture but I'm not playing Half-Life 2 on my P100.

As for the argument that some companies are moaning about higher development costs therefore the price of games has to go up. Pure BS. Development costs have gone up but how come a game on the next gen machine goes for 70 yoyos on the next gen console but only 45 on the PC. Devs haven't upped the cost of PC games significantly despite have the same development costs.

astrofool

The Wii to GC seems to be more like a 2ghz/256/x600 machine to a 2.2ghz/384/x700 machine.

Anyway, the cost is the R&D, the smaller packaging, the controller, and sensors, the wireless. Of course they could have brought it all out for the GC, but then the Mega CD was also a huge hit wasn't it? (+ they get the extra space of DVD's as opposed to the older mini DVD).

BKtje

I'm not defending the €70 vs €45 price tag difference but i'd say it would cost a lil extra to bring a game out on a console as u have to pay the manufacturer of the console some amount. That said €25 is an incredible difference.

I dont buy many consoles (i'll prob get the ps3 at some point as i love the ff games on a console) mainly cos i cant be bothered spending the huge amounts on what the games cost (that said i do spend large amounts on upgrading every few years. more than what a console may cost ).

BlitzKrieg

Ok...Here is basic economics 1o1: http://en.wikipedia.org/wiki/Oligopoly

That is the sort of system the games industry is currently in. You have your big 3 (sony nintendo and microsoft.) Everything they do affects the other extensively. Microsoft successful implement online gaming in consoles, both sony and nintendo adopt similar services and so on, everything each company does has a dramatic effect on the others.

The supermarket industry is coming out of it (like I said I studied this 3 years ago before the rise of lidl etc and the supermarket's were always the example used.)

And lidl etc dont undercut the competitors, they just dont pay for brand quality. Which is what the major supermarkets promote (you dont tend to find popular brands in lidl.) thats what your mostly paying for when you shop at tesco etc.

The price war was only one of many causes of the crash. You are also assuming that people will only buy a Wii if it goes cheap.

I'm not. People will buy the Wii, hell I intend to buy one. You've sort of lost me so I'm backtracking here. You were stating nintendo were making profits on each wii sold (something I might add nintendo has enjoyed since the N64) and that they should cut the prices more to give more to the consumer. I was saying nintendo wouldnt want that because it could shake the industry a bit too much and could lead to a price war that would severly damage the industry, and I dont mean in nintendo's favour, sure short term it could knock the wind out of the ps3 and 360 by undercutting them, but the real people who will suffer will be the developers who have been increasing their costs steadily over the last 8 years, a sudden price cut in the industry will cause alot of the big production companies to cut back to adapt to the change, nd you suddenly find one of the fastest growing industries has suddenly let go thousands of trained workers across the world (if not more.) No one wants that, not the consumer, not nintendo and not the developers. Hence the Wii is going for a cheaper price, but its at a strategic point where the console supports itself and keeps supply and demand in check.

The price war was only one of many causes of the crash.

I never said it was the cause, I said it would have the same effect as the atari crash, which was actually caused more by the market being flooded by cheap interchangable products that didnt appeal.

Funnily enough Nintendo formed its seal of approval system for the Nes to avoid such a danger. Something which was never adopted by much of its competitors hence sega and sony during their lifetimes were flooded with larger quantities of games of less quality.

but if they can sell Wii for €166 in Japan and make a profit, then why can't they charge us something similar?

Because Japan is a different market, computer games in Japan enjoy the same position in the Japanese market as DVDs enjoy here, there is a higher concentration of purchases meaning Nintendo can sell hardware cheaper because there is a higher margin that the money will be made back ala software sales which are much higher then say europe or America. Here in Ireland and the UK, games dont enjoy the same level of concentration, in fact a large percentage of the trading would go through second hand sales while a smaller number of games would generate the same concentrated release date sale (those games being popular franchises such as GTA and FIFA.). Why do you think the rumour of Sony putting software registration on the PS3 go down so badly in the US and Europe?

ddly enough in this context I think one of the analogies of the master of stupid analogies; Hideo Kojima, actually makes sense. He compared Wii to watching tv, 360 to watching a dvd and PS3 to going to the cinema. While I don't necessarily think that the inferred difference in quality is valid I do think that they all offer unique experiences and people will want to try more than one. No matter if you can watch a movie on the tv for free, you still go to the cinema.

I think the crux of the problem is I'm argueing the point from the developers and economic viewpoint and your looking at it like above, from a consumer viewpoint. If you were to take the above model, you would be keen to note, that just over a year ago Hollywood was crying that DVDs are killing the cinema and that the market for it is being dried up. There has been a dramatic cut in cinema time for releases and jump up on the releasing of dvds (the time between cinema release and dvd release is ever growing smaller, some dvds hit the stores as soon as 2 months after cinema release.)



Ok My post is a bit over the place cause I took this bit by bit.

But to sum up:

game industry = http://en.wikipedia.org/wiki/Oligopoly

which means the bigger splash one company makes the more of an effect it has on the other companies, if it makes too big of a splash it could lead to the market changing, which can be good for consumers, but possibly bad for buisness in the short run. What companies in Oligopoly do instead is try to create new markets, such as branded items (game franchises) deals (online gaming, online market) or attracting new markets (the Wii's policy.) as gamers this is all great because that means the creative forces behind games have more to play with, but it also means unless one of those 3 companies suffer a serious problem we wont see a drastic change in the current price policy. Regardless of innovation.

mcgarnicle

Retr0gamer wrote:

What's so wrong with nintendo making a profit on every Wii sold. nintendo have always made a profit on the hardware they sell. the PS2 was sold at a loss and Sony weren't making a profit on the PS2 hardware and software until over 2 years after launch. As for the xbox the only month MS made a profit was on the release of Halo 2. That same year MS announced they only lost 2 billion dollars on xbox software and hardware sales which was a huge success for them. Nintendo who didn't sell nearly as many consoles were making a profit right from the start. It's just sound business practice.

Did you even read what I said? The Japanese price of €166 is making a profit. I don't have a problem with them doing that but if that price is profit making then the €250 they are charging us is a total rip off and there is no other way of putting it.

Retr0gamer wrote:

And don't be using the uninformed argument that the GC is the same as a Wii because they are similar and should be sold at the same price. The GC and Wii are similar just like my old P100 with PowerVR is similar to my 2Ghz machine with X800 card. They have similar architecture but I'm not playing Half-Life 2 on my P100.

No offence but I'll take Miyamoto's word over yours. I linked to an article earlier in which he points out that in terms of development tools, both consoles are pretty much the same... hence lower prices.

Retr0gamer wrote:

As for the argument that some companies are moaning about higher development costs therefore the price of games has to go up. Pure BS. Development costs have gone up but how come a game on the next gen machine goes for 70 yoyos on the next gen console but only 45 on the PC. Devs haven't upped the cost of PC games significantly despite have the same development costs.

The dev costs have gone up, they can afford to charge 60 on a pc game, and they were 60 oblivion was not 45 on pc, but the extra licensing cost of putting it on a console takes the price up that extra bit. Not to mention the fact that you need seperate equipment for different consoles, consoles are more complicated... many reasons. Also it's not as though Nintendo aren't charging a similar licensing fee, I don't know what it is but I would imagine it's comparable.

BlitzKrieg

I linked to an article earlier in which he points out that in terms of development tools,

In terms of development tools, those are the key words, which goes back to retrogamer's point that his p100 and 2ghz machine would use the same processes, its just the 2ghz machine has built on it more, but developers dont need to learn a whole new system.

mcgarnicle

BlitzKrieg wrote:

In terms of development tools, those are the key words, which goes back to retrogamer's point that his p100 and 2ghz machine would use the same processes, its just the 2ghz machine has built on it more, but developers dont need to learn a whole new system.

And that makes dev costs cheaper which is my whole point. I never said the wii was a fancy gamecube.

BlitzKrieg

You disagree with Retro despite having the exact same point that Miyamato had, except he used different wording.

Yet you agree with me when I say that they are both saying the same thing?

mcgarnicle

BlitzKrieg wrote:

Ok...Here is basic economics 1o1: http://en.wikipedia.org/wiki/Oligopoly

That is the sort of system the games industry is currently in. You have your big 3 (sony nintendo and microsoft.) Everything they do affects the other extensively. Microsoft successful implement online gaming in consoles, both sony and nintendo adopt similar services and so on, everything each company does has a dramatic effect on the others.

Nothing in there explains why they can't charge less for the Wii. They are the only ones not following the common model, that consoles are initially sold at a loss, so by your logic they should really change it to stabalise the market. Again I don't think Nintendo should charge at a loss, just a fairer profit.

BlitzKrieg wrote:

The supermarket industry is coming out of it (like I said I studied this 3 years ago before the rise of lidl etc and the supermarket's were always the example used.)

And lidl etc dont undercut the competitors, they just dont pay for brand quality. Which is what the major supermarkets promote (you dont tend to find popular brands in lidl.) thats what your mostly paying for when you shop at tesco etc.

They undercut prices on goods of a similar type, the names are irrelevent. It's not a simple matter of using own brand goods, the rest have that too. It's an entire new model they use where costs are kept as low as possible by using as little staff as possible and doing away with fancy shelving etc.
Surely the fact that it has already changed in 3 years shows it isn't the most reliable model. If the supermarket industry can come out of it why can't videogames?

BlitzKrieg wrote:

I'm not. People will buy the Wii, hell I intend to buy one. You've sort of lost me so I'm backtracking here. You were stating nintendo were making profits on each wii sold (something I might add nintendo has enjoyed since the N64) and that they should cut the prices more to give more to the consumer. I was saying nintendo wouldnt want that because it could shake the industry a bit too much and could lead to a price war that would severly damage the industry, and I dont mean in nintendo's favour, sure short term it could knock the wind out of the ps3 and 360 by undercutting them, but the real people who will suffer will be the developers who have been increasing their costs steadily over the last 8 years, a sudden price cut in the industry will cause alot of the big production companies to cut back to adapt to the change, nd you suddenly find one of the fastest growing industries has suddenly let go thousands of trained workers across the world (if not more.) No one wants that, not the consumer, not nintendo and not the developers. Hence the Wii is going for a cheaper price, but its at a strategic point where the console supports itself and keeps supply and demand in check.

Your point was that if Nintendo sold the wii at €166 it would tear down this oligopoly and put MS and Sony out of business and in turn destroy the developers etc. I was saying that the price of the wii isn't going to desuade the people buying a 360 or PS3, if it were going to it would have already.

I don't follow how cheaper consoles will make the developers spend less on games.

BlitzKrieg wrote:

I never said it was the cause, I said it would have the same effect as the atari crash, which was actually caused more by the market being flooded by cheap interchangable products that didnt appeal.

So what effect is that? You are saying that Nintendo charging a still profitable €166 here would destroy the market totally?

BlitzKrieg wrote:

Funnily enough Nintendo formed its seal of approval system for the Nes to avoid such a danger. Something which was never adopted by much of its competitors hence sega and sony during their lifetimes were flooded with larger quantities of games of less quality.

Actually the others did implement quality contry, what Nintendo did was limit each publisher to 5 games a year for their console and prohibited anyone else making carts, meaning publishers had to buy the carts direct from nintendo, these could not be returned therefore Nintendo took on none of the risk but plenty of the money. They eventually stopped this rather scummy carry on.

BlitzKrieg wrote:

Because Japan is a different market, computer games in Japan enjoy the same position in the Japanese market as DVDs enjoy here, there is a higher concentration of purchases meaning Nintendo can sell hardware cheaper because there is a higher margin that the money will be made back ala software sales which are much higher then say europe or America. Here in Ireland and the UK, games dont enjoy the same level of concentration, in fact a large percentage of the trading would go through second hand sales while a smaller number of games would generate the same concentrated release date sale (those games being popular franchises such as GTA and FIFA.). Why do you think the rumour of Sony putting software registration on the PS3 go down so badly in the US and Europe?

Funny I was under the impression that Japan was actually the smallest market, certainly the US is the biggest... hence Nintendo and Sony prioritising the states.

There are plenty of reasons to be bothered by software registration. I've never bought a second hand game in my life but I'd be majorly pissed off by that and I was at the time too.

BlitzKrieg wrote:

I think the crux of the problem is I'm argueing the point from the developers and economic viewpoint and your looking at it like above, from a consumer viewpoint. If you were to take the above model, you would be keen to note, that just over a year ago Hollywood was crying that DVDs are killing the cinema and that the market for it is being dried up. There has been a dramatic cut in cinema time for releases and jump up on the releasing of dvds (the time between cinema release and dvd release is ever growing smaller, some dvds hit the stores as soon as 2 months after cinema release.)

It was an analogy my point was they are similar experiences delivered via different media. One will win out, just look at sony last gen. But the thing about the games industry is that they start with a clean slate each time and all 3 will be out to win ground. There is no boat to rock at the moment.

BlitzKrieg wrote:

Ok My post is a bit over the place cause I took this bit by bit.

But to sum up:

game industry = http://en.wikipedia.org/wiki/Oligopoly

which means the bigger splash one company makes the more of an effect it has on the other companies, if it makes too big of a splash it could lead to the market changing, which can be good for consumers, but possibly bad for buisness in the short run. What companies in Oligopoly do instead is try to create new markets, such as branded items (game franchises) deals (online gaming, online market) or attracting new markets (the Wii's policy.) as gamers this is all great because that means the creative forces behind games have more to play with, but it also means unless one of those 3 companies suffer a serious problem we wont see a drastic change in the current price policy. Regardless of innovation.

Gaming may be an oligolopy but you are implying it's some sort of cartel. These companies do not work together, it is extremely aggresive. Just look at Sega's demise or the manner Sony and MS entered the market. They are not worried about rocking the boat in the slightest.

Anyway my original point was that Sony aren't bad for charging €600 for a PS3 when you consider they were making a loss on each one compared to Nintendo who are charging us €250 even though they can charge the Japanese €166 and make a profit on it.

mcgarnicle

BlitzKrieg wrote:

You disagree with Retro despite having the exact same point that Miyamato had, except he used different wording.

Yet you agree with me when I say that they are both saying the same thing?

Retro told me not to use the argument that they are the same, which he pointed out as uninformed. Miyamoto's own words "the hardware is basically a Gamecube". I know there are a lot of differences but for getting production going the tools are already in place. That is why they can throw out 11 million by years end.

I was talking to you about dev costs, retro was referring to my point about hardware production.

BlitzKrieg

They undercut prices on goods of a similar type, the names are irrelevent.

Names are relevent they attract customers, there is a large percentage of customers who are more likely to buy an product advertised and established in Ireland, like say Coca Cola or huggies toilet paper over a product which is either classified as simply cola or is half in another language, this is the crux in the competition between supermarkets like Tesco and Lidl, Lidl would be cheaper but you wont get Coca Cola and your thirsty little tykes want to drink coca cola. You may say thats stupid or what not but thats how the world works, its not undercutting the competition in price because you are not selling the same product.

It's not a simple matter of using own brand goods, the rest have that too.

That is an important element of Oligopoly the companies do not compete in price on the same products, tesco will not try and sell coca cola (the specific brand *not cola*) at half the price of asda because it wont benefit either them (cause Asda will easily match it.) instead Tesco create Tesco brand cola which they sell at really cheap prices, they gain a small increase in profit from these while still keeping customers who want Coca Cola happy.

NONE OF THESE COMPANIES WILL COMPETE IN A PRICE WAR ON THE SAME PRODUCTS, its that simple.

It's an entire new model they use where costs are kept as low as possible by using as little staff as possible and doing away with fancy shelving etc.

Again not competing on price, finding alternative sources of profit or cutting costs.

Surely the fact that it has already changed in 3 years shows it isn't the most reliable model. If the supermarket industry can come out of it why can't videogames?

The argument is that it might not be a good thing to come out of Oligopoly as it does encourage quality as a form of encouraging customers (The Marks and Spencers model.) Its an economic theory not a disease, all I am stating in its current form the games industry is fitting into the same mould, you could be very much right that they will come out of it in the next number of years. But the Beauty of oligopoly is the companies have greater control over it and might not want to come out of it unless some uncontrollable event forces them out of it.

Your point was that if Nintendo sold the wii at €166 it would tear down this oligopoly and put MS and Sony out of business and in turn destroy the developers etc.

Actually that was never really my point, I was just responding to your questions as to why it was $250, which is because its a safe number for a market like this, it puts the nintendo wii in the same price bracket as its competitors, which means it doesnt undermine the other consoles or risk itself to becoming a *discount console*

I was saying that the price of the wii isn't going to desuade the people buying a 360 or PS3, if it were going to it would have already.

Why do you think both sony and microsoft plugged this point constantly after E3, they like the idea of the Wii moving into an expanded market as either a console for non-regular gamers, or the 2nd console for gamers, both these markets are small and untapped right now. THATS OLLIGOPOLY at work, an informal agreement between competitors,

But...If it went differently, If Nintendo went for blood, pushed the Wii to a low price and try and push the other two consoles out of the fight by making it that they couldnt compete price wise they could flood the market and both sony and microsoft unable to keep a footing loose 3rd party developers, loose retail space and in the end bow out.

You say Nintendo cant do that, that its impossible, I say that before the notion of can comes up, Nintendo WONT do that, its not a healthy market choice for the industry and thats why nintendo would choose $250 as its price rather then a much cheaper alternative, because they see it as the more secure choice.

why?

with a decrease in competition, the number of retail chains, developers and technology companies involved in the gaming industry would drop on a huge scale. There would no longer be a need for such a larger number of retail stores competing because the natural competition in the industry would be gone, the need for multiplatform development would be gone and the technology that pushes the new hardware of the two bigger consoles would not be needed (and the PC market alone wouldnt sustain the extra influx.)
In the end the industry is smaller, the market would be smaller and it would be in a

I don't follow how cheaper consoles will make the developers spend less on games.

Its actually a smaller market would make developers spend less on games. Which can *in theory* be caused by a cheaper console dominating the market.

So what effect is that? You are saying that Nintendo charging a still profitable €166 here would destroy the market totally?

honest answer no I dont think it would. I'm more concerned with understanding why Nintendo chooses the higher option, and my belief is $166 is a riskier number for nintendo compared to $250 for many reasons one of which that it could upset the market in the above way (this is probably why when I original wrote this point I stuck it at the very end of my post...it doesnt merit this much discussion.)

Funny I was under the impression that Japan was actually the smallest market, certainly the US is the biggest... hence Nintendo and Sony prioritising the states.

Oh yes for hardware sales Japan is the smallest market, but in software sales its actually very profitable, In Japan if you can get a console into every home your software sales are going to be very high because Japan's software consumption is much higher (like I said, games are like DVDs in Japan.) compared to the US and Europe where while its vastly more profitable to get a console in every home, your sales from software are not assured to be as concentrated as in Japan. Think of the recent lull in software release over the summer, Japan wouldnt recieve such a lull its more concentrated and consistent.

here are plenty of reasons to be bothered by software registration. I've never bought a second hand game in my life but I'd be majorly pissed off by that and I was at the time too.

Yes you'd expect consumers to be pissed. but for retail companies to raise worrying eyebrows is a more important matter, Gamestation in the UK makes an insane amount of its profit from 2nd hand games. Of course this worried them more then it worried consumers.

Gaming may be an oligolopy but you are implying it's some sort of cartel.

An informal cartel, no official rules, but gentlemens terms.

These companies do not work together,

Yet they share the same resources, share the same brands and focus their competition on other elements aside from price.

it is extremely aggresive. Just look at Sega's demise

Which was a very very long demise, the mere fact that Sega was not pushed out until it had not one, not two, but three other competitors pushing at it show that the market is divided like an Oligopoly, Just like Atari wasnt pushed out fully until it had Sony to replace it, a moe interesting aspect would be the smaller companies (such as Nec) which couldnt match in scale or Neo Geo who couldnt match in support, show that it is an Oligopoly.

Anyway my original point was that Sony aren't bad for charging €600 for a PS3 when you consider they were making a loss on each one compared to Nintendo who are charging us €250 even though they can charge the Japanese €166 and make a profit on it.

True it is in theory not bad, but the argument alot of people put forward what is the PS3 doing that justifies that price. Thats the problem alot of people have. Some say Blue-ray, yet HD-DVD is out producing blu-ray with the number of films available, also HD-DVD has been tweaked so you can buy one and if you dont have a HD-DVD player it will still work as a normal DVD, Blu-Ray has got as far as the testing stage of this, HD-DVD can do it now. What makes my mind boggle is why they havnt started filling rental stores up with them using this advantage, you can perk people's interest in HD-DVD and not risk upsetting the market. Outside that, its the powerful graphics and new controller, both of which have yet to show me something unique. It took Capcom to show me something for the 360 that does this (Dead Rising and Lost Planet.) Without which I would still think the 360 is as much of a dead weight as the PS3.

Stoichkov

What an amusing thread. I love the utter arrogance of people like Rhyme and ShiverinEskimo who proclaim that those who want a ps3 are nothing but sheep. I enjoy playing games like MG, ff, dmc, nippon ichi games, dq and other such rpgs. Should I buy the 360 just to make you happy or am I destined to be a sheep and purchase a console that is far more likely to cater to my tastes? :rolleyes:

If doctors found that the ps3 cured aids and cancer, some of the fanboys here would still bitch and moan complaining that sony would be causing the closure of pharmaceutical companies and thus the loss of thousands of jobs.

uberpixie

Nintendo will charge €250+ here as

(1) They can as people are willing to pay at that price in Europe.

(2) They avoid looking like a discount, crap console to parents.(like Blitz said)
After all if it looks too cheap a parent might be less likely to take a chance on one (expensive = good quality;))

(3) Why cut the price now? Why not sell at huge profit at the start and save that price cut up for next xmas? Or gradually over time reduce the cost down to the Jap price over several smaller price cuts?

Really Nintendo are playing smart, just like all the other companies.

By ensuring they make profit on each console, they survive to fight in the next gen and make more profit, even though they have the smallest market share they still make profit and are in a comfortable position.

Very Shrewd.

They are in the business to make money after all, like all other businesses, they just happen to make Consoles and games to do it :-)

Cuddlesworth

uberpixie wrote:

Nintendo will charge €250+ here as

(1) They can as people are willing to pay at that price in Europe.

(2) They avoid looking like a discount, crap console to parents.(like Blitz said)
After all if it looks too cheap a parent might be less likely to take a chance on one (expensive = good quality;))

I hate people using the simplistic reasons for why Europe is always more exspensive. Simply put we have tax, charges and costs that Japan/US never deal with. Adding to that brands like Best Buy bulk ordering 50,000 consoles where shop's here pick up 5-10, you are going to see price differences.

Froot

ShiverinEskimo wrote:

And yet they dropped the price in Japan. Which is the one place they do seem to care about the PR aspect. Japan is Sony's bread and butter and Sony are willing to do more to satisfy these customers than elsewhere which is fair enough. But don't tell me they are selling it as cheap as possible. If Sony were selling it as cheap as possible then they would match the Japanese price worldwide.

Price discrimination, charging two separate prices in two separate markets, does not take transport costs into account. Japan is their bread and butter because its a Japanese company based in Japan and its cheaper to produce next door to your customers that halfway across the world.
The fact is Sony might not actually be making an extra few hundred quid per console in Europe compared to Japan.
I have no intention of buying a PS3 but I have to say that though they might be making more of a profit in Europe compared to Japan I do not think it is going to be massive.

If Sony matched the Japanese price worldwide they would crash like a f*cking dart.

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++

I have to laugh each time I see a new statement or news article about Sony. They either have the worlds largest most High Definition Ace up their sleeves or they are stupid. Blu Ray was released recently and Sony were unable to get there own dvd player finished on time...Only Samsung had one ready, which was apparently crap.

So why do people hold any hope for a PS3 in april from a company who release a new format on to the market but are unable to even produce their own model in time for the release date...

Ciaran500

Froot wrote:

I have no intention of buying a PS3 but I have to say that though they might be making more of a profit in Europe compared to Japan I do not think it is going to be massive.

Its unlikely they will be making a profit anywhere with the PS3. Any profit for most new consoles comes from software and accesories sales.

Froot

Thats a good point Ciaran.

A friend who works as a games journalist was saying that in his eyes the PS3 will be awesome in 2 or 3 years time when it has all the bits to go with it but straight off it will be a poor buy.

So a PS3 is prbably going to be the ultimate Christmas entertainment purchase for Christmas 2008 or later...

Sad really.

Retr0gamer

The reason that Sonys own blu-ray player wasn't ready was because they had to divert all the blue laser diodes they had to PS3 production. I really can't see Sony making a profit for another 3 years on the PS3. Theay are selling the console at a ridiculous loss already. I seems they need to sell nearly 8 games per console to make a profit. The PS2 had a ratio of less than 4 games per console sold.

ShiverinEskimo

Stoichkov wrote:

What an amusing thread. I love the utter arrogance of people like Rhyme and ShiverinEskimo who proclaim that those who want a ps3 are nothing but sheep. I enjoy playing games like MG, ff, dmc, nippon ichi games, dq and other such rpgs. Should I buy the 360 just to make you happy or am I destined to be a sheep and purchase a console that is far more likely to cater to my tastes?

You enjoy playing those games - and that's fair enough. But its because you are willing to pay whatever Sony want and pay it months later that the other half of the world that I consider you a sheep. Sony know that people like you will always fall in line and buy buy buy even when the product (a games console) is hitting prices of €600 and is being released three months later (at best) than the other half of the world. Until consumers wake up and worry Sony instead of just putting up with the prices and delays its never going to get any better.

mcgarnicle

BlitzKrieg wrote:

Names are relevent they attract customers, there is a large percentage of customers who are more likely to buy an product advertised and established in Ireland, like say Coca Cola or huggies toilet paper over a product which is either classified as simply cola or is half in another language, this is the crux in the competition between supermarkets like Tesco and Lidl, Lidl would be cheaper but you wont get Coca Cola and your thirsty little tykes want to drink coca cola. You may say thats stupid or what not but thats how the world works, its not undercutting the competition in price because you are not selling the same product.

Well for a start Aldi do sell a lot of name brands but that is beside the point. The reason these people are shopping at Aldi and Lidl is the low price.

Actually from what I can tell with this particular example is that the way the world works is people prefer cheap goods over named goods, that is why these shops are doing so well and taking so much business away from the others that do rely on named brands.

BlitzKrieg wrote:

That is an important element of Oligopoly the companies do not compete in price on the same products, tesco will not try and sell coca cola (the specific brand *not cola*) at half the price of asda because it wont benefit either them (cause Asda will easily match it.) instead Tesco create Tesco brand cola which they sell at really cheap prices, they gain a small increase in profit from these while still keeping customers who want Coca Cola happy.

NONE OF THESE COMPANIES WILL COMPETE IN A PRICE WAR ON THE SAME PRODUCTS, its that simple.

Yet they do and have, the simple fact is though that there is a limit to how low they can go for these items because they have to pay Coca Cola etc in the firsts place just to sell them so they obviously can't drop their prices below that point. Lidl etc don't have this problem since they make their own goods and therefore can be far more aggresive with their pricing.

This example actually goes some way to disproving your notion that a cheap wii would destroy the market. Cheap food from Aldi and Lidl has not destroyed Superquinns or tescos etc. It may have driven the likes of Iceland away but they were pretty much based on price so were simply beaten at their own game. Tesco and Aldi are selling the same products but in a different way, both are doing well. Just like if Wii sold at €166 Nintendo would do well but it would not destroy MS or Sony.

BlitzKrieg wrote:

Again not competing on price, finding alternative sources of profit or cutting costs.

No they cut costs to keep prices down.

BlitzKrieg wrote:

The argument is that it might not be a good thing to come out of Oligopoly as it does encourage quality as a form of encouraging customers (The Marks and Spencers model.) Its an economic theory not a disease, all I am stating in its current form the games industry is fitting into the same mould, you could be very much right that they will come out of it in the next number of years. But the Beauty of oligopoly is the companies have greater control over it and might not want to come out of it unless some uncontrollable event forces them out of it.

The games industry is different though. There may be 3 big players at the minute but these 3 are liable to change, as they have in the past and their market position shifts dramatically on a relatively regular basis. The market position of each is effectively reset every 5 years or so. They do not rest on their laurels as the start of each gen marks an intense grab for market share.

BlitzKrieg wrote:

Actually that was never really my point, I was just responding to your questions as to why it was $250, which is because its a safe number for a market like this, it puts the nintendo wii in the same price bracket as its competitors, which means it doesnt undermine the other consoles or risk itself to becoming a *discount console*

No my point was a response to another claim that Sony treat Europe like crap as their console will be €600 here, sold at a substantial loss. I asked is that worse than what Nintendo does by selling us the Wii for €250 at a massive profit when they can sell it in Japan at €166 while still making a profit.

BlitzKrieg wrote:

Why do you think both sony and microsoft plugged this point constantly after E3, they like the idea of the Wii moving into an expanded market as either a console for non-regular gamers, or the 2nd console for gamers, both these markets are small and untapped right now. THATS OLLIGOPOLY at work, an informal agreement between competitors,

This is the first time this industry has ever done this, Nintendo have cut their losses competing with the higher graphics etc and settled into an attempt to expand the market. This is one example, ever of this happening it does not prove it is some sort of cartel, what you seem to think an oligopoly is, in an oligopoly there is no requirement the various players work together or even co operate.

You are saying this is because Nintendo do not want to rock the boat, this is the exception not the rule. In the past companies have directly targetted the other's position, just look at Sony taking Final Fantasy 7 or more recently Microsoft taking Fifa, Pro Evo, GTA and Assassins Creed.

BlitzKrieg wrote:

But...If it went differently, If Nintendo went for blood, pushed the Wii to a low price and try and push the other two consoles out of the fight by making it that they couldnt compete price wise they could flood the market and both sony and microsoft unable to keep a footing loose 3rd party developers, loose retail space and in the end bow out.

You know this would never happen. I have explained why, in this case €166 for a Wii would not destroy MS and Sony... if it would then why won't it in Japan?

BlitzKrieg wrote:

You say Nintendo cant do that, that its impossible, I say that before the notion of can comes up, Nintendo WONT do that, its not a healthy market choice for the industry and thats why nintendo would choose $250 as its price rather then a much cheaper alternative, because they see it as the more secure choice.

They chose it because they can, it's as simple as that. They can charge that and people will pay it, there is no other reason for that price you are over complicating it.

BlitzKrieg wrote:

why?

with a decrease in competition, the number of retail chains, developers and technology companies involved in the gaming industry would drop on a huge scale. There would no longer be a need for such a larger number of retail stores competing because the natural competition in the industry would be gone, the need for multiplatform development would be gone and the technology that pushes the new hardware of the two bigger consoles would not be needed (and the PC market alone wouldnt sustain the extra influx.)
In the end the industry is smaller, the market would be smaller and it would be in a

The only competition affected would be console makers, not developers and publishers. The games market would not shrink, just wii would dominate it. There will be just as many games etc. to be made. Unless you are suggesting that people that buy the PS3 or 360 would be so put off by the low Wii price that they would just go off games entirely and not buy anything.

BlitzKrieg wrote:

Its actually a smaller market would make developers spend less on games. Which can *in theory* be caused by a cheaper console dominating the market.

The market would not be smaller though, it would be the same size except everyone would own a wii. They would still need games for it.

The idea that a slightly cheaper wii could actually have this effect is so ridiculous that I can't believe I am arguing it.

BlitzKrieg wrote:

honest answer no I dont think it would. I'm more concerned with understanding why Nintendo chooses the higher option, and my belief is $166 is a riskier number for nintendo compared to $250 for many reasons one of which that it could upset the market in the above way (this is probably why when I original wrote this point I stuck it at the very end of my post...it doesnt merit this much discussion.)

You don't even agree with your own point? Then I will bring up my original question, is it fair to class Sony as scum for selling the PS3 here at the loss making price of €600 when Nintendo are charging us €250 even though they can make a profit in Japan selling it at €166.

I'm not saying Nintendo are scum for charging €250, I can understand why they are doing it... but to label Sony as such for making a loss is absolutely retarded.

BlitzKrieg wrote:

Oh yes for hardware sales Japan is the smallest market, but in software sales its actually very profitable, In Japan if you can get a console into every home your software sales are going to be very high because Japan's software consumption is much higher (like I said, games are like DVDs in Japan.) compared to the US and Europe where while its vastly more profitable to get a console in every home, your sales from software are not assured to be as concentrated as in Japan. Think of the recent lull in software release over the summer, Japan wouldnt recieve such a lull its more concentrated and consistent.

I'm sure it is a profitable market, I never said it wasn't. Your point was that it was a lot more profitable than the US or European markets, I don't see how.

The only reason for the lull is that the companies here realise that they will sell more games around Christmas, it is not a matter of there being no market the rest of the year, they just know they can maximise profit if they release in the Christmas period. As far as I know Japan does not have a comparable season where people buy more games than usual so their release schedule is more balanced.

BlitzKrieg wrote:

Yes you'd expect consumers to be pissed. but for retail companies to raise worrying eyebrows is a more important matter, Gamestation in the UK makes an insane amount of its profit from 2nd hand games.

Of course this worried them. That was the whole idea, Sony wanted the money Game etc. were getting for second hand sales. To be honest I can understand this, Game makes ridiculous profits on second hand games and Sony don't get a penny from it, hardly fair. Still I'd hate to see games being registered to a single console.

BlitzKrieg wrote:

An informal cartel, no official rules, but gentlemens terms.

No it's not. Once the market settles it may give the false impression that is such but at the start of each generation the gloves come off.

BlitzKrieg wrote:

Yet they share the same resources, share the same brands and focus their competition on other elements aside from price.

No they don't. The initial push is for things other than price as usually the price is the same. MS though have been trumetting the unexpected gap in price between 360 and PS3 as have Nintendo. Once the gen gets going the competition between consoles degenerates rather quickly into a simple price war.

BlitzKrieg wrote:

Which was a very very long demise, the mere fact that Sega was not pushed out until it had not one, not two, but three other competitors pushing at it show that the market is divided like an Oligopoly, Just like Atari wasnt pushed out fully until it had Sony to replace it, a moe interesting aspect would be the smaller companies (such as Nec) which couldnt match in scale or Neo Geo who couldnt match in support, show that it is an Oligopoly.

Not that long in fairness, two failed consoles. Sega was effectively finished before Xbox showed up, Atari was a non player in the 16 bit era. I've never heard a person throw their hands up for Atari in the Snes vs Megadrive debates. It was a two horse race.

BlitzKrieg wrote:

True it is in theory not bad, but the argument alot of people put forward what is the PS3 doing that justifies that price. Thats the problem alot of people have. Some say Blue-ray, yet HD-DVD is out producing blu-ray with the number of films available, also HD-DVD has been tweaked so you can buy one and if you dont have a HD-DVD player it will still work as a normal DVD, Blu-Ray has got as far as the testing stage of this, HD-DVD can do it now. What makes my mind boggle is why they havnt started filling rental stores up with them using this advantage, you can perk people's interest in HD-DVD and not risk upsetting the market. Outside that, its the powerful graphics and new controller, both of which have yet to show me something unique. It took Capcom to show me something for the 360 that does this (Dead Rising and Lost Planet.) Without which I would still think the 360 is as much of a dead weight as the PS3.

That argument is irrelevent, if you don't want Blu ray then don't buy a PS3. That has nothing to do with the value of the console, if you don't want something it is obviously too expensive for you whatever the cost. The fact is there is a blu ray in the PS3 and as such €600 is not that bad at all. Wii on the other hand costs about €100 to make, it is not worth €250 on its own. I know the games etc add to the value but as a piece of machinery it is not worth that.

mcgarnicle

ShiverinEskimo wrote:

You enjoy playing those games - and that's fair enough. But its because you are willing to pay whatever Sony want and pay it months later that the other half of the world that I consider you a sheep. Sony know that people like you will always fall in line and buy buy buy even when the product (a games console) is hitting prices of €600 and is being released three months later (at best) than the other half of the world. Until consumers wake up and worry Sony instead of just putting up with the prices and delays its never going to get any better.

What is your problem with the Sony price? You don't want it then fair enough but to someone that wants a blu ray player etc it is good value.

Which console represents good value to you and why?

mcgarnicle

uberpixie wrote:

Nintendo will charge €250+ here as

(1) They can as people are willing to pay at that price in Europe.

(2) They avoid looking like a discount, crap console to parents.(like Blitz said)
After all if it looks too cheap a parent might be less likely to take a chance on one (expensive = good quality;))

(3) Why cut the price now? Why not sell at huge profit at the start and save that price cut up for next xmas? Or gradually over time reduce the cost down to the Jap price over several smaller price cuts?

Really Nintendo are playing smart, just like all the other companies.

By ensuring they make profit on each console, they survive to fight in the next gen and make more profit, even though they have the smallest market share they still make profit and are in a comfortable position.

Very Shrewd.

They are in the business to make money after all, like all other businesses, they just happen to make Consoles and games to do it :-)

Yes how shrewd, higher price = more money. They really should write a book so us mere mortals can comprehend their shrewd practices

Stoichkov

ShiverinEskimo wrote:

You enjoy playing those games - and that's fair enough. But its because you are willing to pay whatever Sony want and pay it months later that the other half of the world that I consider you a sheep. Sony know that people like you will always fall in line and buy buy buy even when the product (a games console) is hitting prices of €600 and is being released three months later (at best) than the other half of the world. Until consumers wake up and worry Sony instead of just putting up with the prices and delays its never going to get any better.

Don't get me wrong, I won't be getting a launch ps3 because of reliability concerns rather than price. I don't see how I'd be a sheep if I was willing to pay €600. Do you know my level of income, do you decide what I find a reasonable price for something I'll get a great deal of enjoyment from? I could buy a 360 for €400 but I'd get far less enjoyment from it. Basic economics dictates that you should buy what gives you the greatest level of satisfaction(utils) per euro. For me, baring a disaster in Japan, will be the ps3.

If anyone has become a sheep, it is you. You have become one of the bleating group of people who will moan about sony regardless of whether they deserve it or not. As hugely successful companies like Nintendo and MS will tell you, success breeds mindless 'haters'.

BlitzKrieg

Then I will bring up my original question, is it fair to class Sony as scum for selling the PS3 here at the loss making price of €600 when Nintendo are charging us €250 even though they can make a profit in Japan selling it at €166.

True, lets let the whole olligopoly argument slide away (cause its going in circles. and I hate economics in school anyway.) My opinion of people calling Sony scum for their *treatment* of europe is to let it run, let the mob throw their vegtables and cry bloody murder. Why? Because for all intents and purpopses Sony is the leading company in the company and they should learn to keep on their toes, and while small grumbles and complaints that tricked during the psone and ps2 eras would fall on deaf ears, Outcries of scum and ridicule that has beeen thrown around before the PS3 launch should have an effect on the company's policy to its customers.

Regardless of what kind of industy you are in, when your top dog your expected to represent the industry as a whole and as such any problems that are common in all companies will still land at your feet first (McDonalds, Coca Cola, health problems.). If you have problems unique to you after that, then its even more grief.

Its simple fact, Sony is big fish in a small pond its what everyone will go after.

before the internet Sega *fans* would do the same to nintendo. You even saw it in films like Terminator 2:

John Conor: All those kids with their 'nintendos'

Its simple underdog support that happens everywhere. Accept it and move on.

I'm sure it is a profitable market, I never said it wasn't. Your point was that it was a lot more profitable than the US or European markets, I don't see how.

As this argument is different to the Olligopoly one I'd like to continue it.

People have pointed out here on this very thread. The consoles themselves do not make profit. Retrogamer even pointed out that the PS3 needs to sell 8 games with launch to make a profit.

Now in Japan, while they can not physically buy as many consoles as either Europe or America, they can and have bought more games on a regular basis.

So if your a console company, and you have a choice of pushing your console in a market where.

A) You sell a console (at a loss) to a customer who will then on average buy a *NEW* game once every fortnight. But you will have over 5 million customers

or

You sell the same console at a loss in a market where the customer on average buys 2 *new* games a week but you will have less then 3 million customers.


Also in market B there will be a larger number of releases due to the small local companies producing popular low budget games.

While in market A the number of releases will vary at times of the year and will only barely match market b in a 3 month period from Novemeber-January. While in June-August the number of releases will actually be very scarce.

Of course your going to push to stabalize yourself in market B. Because not only will you start making a profit sooner but it will generate productivity for your console.

Now the beauty of market A (which Microsoft are hoping) is that it has potential of becoming like market B except through services like Live, MMO's and live arcade generating the same consistent funds.

That argument is irrelevent, if you don't want Blu ray then don't buy a PS3. That has nothing to do with the value of the console, if you don't want something it is obviously too expensive for you whatever the cost. The fact is there is a blu ray in the PS3 and as such €600 is not that bad at all. Wii on the other hand costs about €100 to make, it is not worth €250 on its own. I know the games etc add to the value but as a piece of machinery it is not worth that.

your turn to explain the logic behind this?

sprinkles

tuxy wrote:

still he has a good point, it probably does not affect the number of units sold in europe

Yeah but his point is why bother being nice to the Europeans when they are gulable to buy anything with a PS logo on it.


I'm giving serious thought to boycotting Sony....

monument

Everyone is missing the point here - Sony said it so it must be true.

BloodBath

Then I will bring up my original question, is it fair to class Sony as scum for selling the PS3 here at the loss making price of €600 when Nintendo are charging us €250 even though they can make a profit in Japan selling it at €166.

Stop posting this crap please. The cost differences between selling in Europe and Japan have already been mentioned. The profit they are making here and in Japan on the consoles will roughly be the same. No japanese electronics sell for the same price here as they do in Japan. Higher taxes, shipping costs ect all bump the price up significantly.

uberpixie

mcgarnicle wrote:

Yes how shrewd, higher price = more money. They really should write a book so us mere mortals can comprehend their shrewd practices

No the shrewd part is:

Relasing a console based on older tech, that is easily manufactured and can be sold at a very cheap price that you can still make a profit at.

Because the Wii is based on older tech they only have had to pump in a fraction of the cost of R+D Vs making a whole new console based on new tech.

Nintendo have said they are on track to releasing 11 million consoles by launch. They should be able to sell that amount.

Nintendo will prob have turned in a profit a year after release after they have covered their R+D costs and marketing.

Now look at the PS3. €600 a pop for the dacent one. Sony are only on track to having 500,000 at release.

They are also making a big loss on each console. Top that off with a huge R+D bill and all the marketing......

How many million PS3s will Sony have to sell on top of how many games will each person have to buy for their PS3 before Sony make a profit?

Nintendo have ensured their survival long term, made their money back and make profit on top in about a year all with the minimum of effort.

Nintendo can also afford a few tasty price cuts in the future ,because they are selling at a profit initially, to attract new customers.

Sony will have to break their own balls for 2-3 years, pump out millions of PS3s and sell millions of games before they can make the same money.

What part of Nitendo being shrewd do you not understand?

You are right, perhaps Nintendo should write a book and sell it to Sony and make even more profit :-)