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Old 11-15-2007, 02:19 PM
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Default Sony: PS3's Mixed Messages Can't Be Good

Sony: PS3's Mixed Messages Can't Be Good

Roger Ehrenberg

Sony's (SNE) strategy has perplexed me for some time. The company has long-time hardware and engineering excellence but it's progressively getting farther and farther away from the customer. Net result: the company is having problems creating products that enough people actually want, given the costs of producing them.

Further, I've been tremendously cynical about the whole "window into the living room" strategy as an explanation for a high price point, where a gaming console is being positioned as a multimedia player. Do gamers really want to pay for multimedia? I'm not so sure.

Anyway, a few things have prompted me to re-assess my thinking. Firstly, it looks like Sony might be willing to scale down and focus, as illustrated by its considering the sale of a part of its animation studio and digital effects company. Companies like Sony usually collect properties like these as trophies, regardless of whether or not they make sense from an ROI perspective. Because vertical integration has always been favored, as well as having a broad, horizontal set of product offerings. So Sony's willingness to reduce its commitment to these ancillary businesses is both very unexpected and extremely encouraging from an investor perspective, at least to me.

Another point I'd like to raise was tabled by my friend Tristan. We have both been watching the console wars unfold for some time, and our thinking has evolved along somewhat different paths. His angle is that Sony's PS3 strategy is all about the Blu-ray player, and that its economic model will ultimately be built around licensing revenue from the studios, not gaming revenue or console sales, as Blu-ray wins the format war against HD-DVD.

My perspective is more that if someone wants to buy a Blu-ray player they'll buy a Blu-ray player, and if Sony wants that Blu-ray player to be the PS3 then they need to seriously revamp their messaging. The pitch I get is that PS3 is a powerful, leading-edge gaming console with killer graphics, and, oh, by the way, it is also a Blu-ray player. This just isn't going to move the metal, as currently weak PS3 sales attest.

Now I'm not disputing the fact that PS3 may well be a cost-effective Blu-ray player right now, but just how many people want this player today? And if, in fact, Blu-ray does turn out to be the dominant nextgen digital video format, is PS3 going to be well-positioned to garner these sales? I'm not that confident.

Though I'm not a marketing guru, the mixed messages Sony is sending towards the PS3 can't be good. It's confusing. And further, if Blu-ray is the winner, won't lower-cost Blu-ray players come to the fore simply because they won't incorporate the components necessary for a high-end gaming console? I'm just not buying this angle. Maybe I'm just too wedded to my bearish view on PS3 as a platform, but I don't think so.

Gaming consoles are sold to gamers. Video players are sold to those who want to watch videos. And until Sony (and Microsoft (MSFT), for that matter) figure this out, there is going to be a lot of shattered dreams and unrealized expectations. And it's just not fair. Especially to those working in the gaming business and doing great stuff.


http://seekingalpha.com/article/5232...-can-t-be-good
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Old 11-15-2007, 02:42 PM
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Originally Posted by Mr. Anderson View Post
Roger Ehrenberg
AKA Rob Enderle?

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Another point I'd like to raise was tabled by my friend Tristan. We have both been watching the console wars unfold for some time, and our thinking has evolved along somewhat different paths. His angle is that Sony's PS3 strategy is all about the Blu-ray player, and that its economic model will ultimately be built around licensing revenue from the studios, not gaming revenue or console sales, as Blu-ray wins the format war against HD-DVD.
If your "friend Tristan" (lolol) knew anything, he would know that game console makers have been doing this since the SNES. Sell the razor at a loss to make money off of the blades. They can do this because they are the sole company manufacturing the units that play the media. It's something that is done all the time in the gaming world. In the CE Media Player world however, in order for a media format to gain support of the industry and have players made by major companies that do not get royalties from sales of movies on the format, these players need to be sold at a profit. Toshiba is messing this up with their predatory pricing of their players, which is NOT a common business practice for STANDALONE MOVIE PLAYERS.

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My perspective is more that if someone wants to buy a Blu-ray player they'll buy a Blu-ray player, and if Sony wants that Blu-ray player to be the PS3 then they need to seriously revamp their messaging. The pitch I get is that PS3 is a powerful, leading-edge gaming console with killer graphics, and, oh, by the way, it is also a Blu-ray player. This just isn't going to move the metal, as currently weak PS3 sales attest.
Recent PS3 sales as well as BD sales compared to standalone players sold say you're wrong. Some SDTV owners do buy PS3s and when they realize how awesome it will look in HD it will be the catalyst for them to get an HDTV. Were it not for my Xbox 360, I would probably not own and HDTV myself. Also, right now the PS3 is now outselling the Wii in Japan.

Quote:
Gaming consoles are sold to gamers. Video players are sold to those who want to watch videos. And until Sony (and Microsoft (MSFT), for that matter) figure this out, there is going to be a lot of shattered dreams and unrealized expectations. And it's just not fair. Especially to those working in the gaming business and doing great stuff.


http://seekingalpha.com/article/5232...-can-t-be-good
It's NOT FAIR that these game console manufacturers add movie player functionality to their game consoles which have plenty of processing to handle such a task to add value to their consoles? That's some backward logic right there. HD DVD fanboy status CONFIRMED.
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Old 11-15-2007, 02:47 PM
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I often wonder where these cries were when the PS2 was the FIRST console to use DVD as it's media and had the ability to playback DVD movies....
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Old 11-15-2007, 02:48 PM
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^^^^^^^^^^^^^^^
More lip from the BD club.

I thought that this article was fairly good and wasn't biased like some of the others.

Typical Blu-boy. If it doesn't make the PS3 look like a Norman Rockwell painting, then it must be a red fan-boy. <<Rolling eyes>>
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Old 11-15-2007, 03:00 PM
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I often wonder where these cries were when the PS2 was the FIRST console to use DVD as it's media and had the ability to playback DVD movies....
I was gonna post the same thing.

PS3 is a game console. It also plays Blu-Ray movies.

The complexity is making my head explode!
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Old 11-15-2007, 03:03 PM
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[B]My perspective is more that if someone wants to buy a Blu-ray player they'll buy a Blu-ray player, and if Sony wants that Blu-ray player to be the PS3 then they need to seriously revamp their messaging.
I know what Sony should do! Renaim it the Blu-ray Station 3! Think about it, who wouldn't want a Sony BS3?
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Old 11-15-2007, 03:08 PM
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I know what Sony should do! Renaim it the Blu-ray Station 3! Think about it, who wouldn't want a Sony BS3?
Yeah, because adding high def movie playback to a gaming console is so evil and horrible.
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Old 11-15-2007, 03:13 PM
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I know what Sony should do! Renaim it the Blu-ray Station 3! Think about it, who wouldn't want a Sony BS3?
Like the 360 should be the 240 because of the fail rate?

Logan
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Old 11-15-2007, 03:53 PM
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Originally Posted by Mr. Anderson View Post
^^^^^^^^^^^^^^^
More lip from the BD club.

I thought that this article was fairly good and wasn't biased like some of the others.
Yeah the title "PS3's Mixed Messages Can't Be Good" is about as neutral as you can get.

Not "What will the PS3's mixed messages lead to?"

Not "What are the pros and cons of the PS3's mixed messages?"

Heck not even "Could the PS3's mixed messages be bad?"

Nope this article is titled "PS3's Mixed Messages Can't Be Good".

Do you REALLY see that as unbiased? Or now that I point it out are you starting to recognize that right from the start this was written by someone with an agenda. That it fit with YOUR agenda does not actually make it unbiased - though it is human nature to overattend to things that fit our worldview and tune out those that don't.

As for the article itself it seems pretty daft. We know the average gamer is 33 years old. We know the PS3 is one the highest rated, fully featured AND the lowest cost blu-ray players. It would be and IS attractive to people that just want a blu-ray player. It would be and IS attractive to people that want a blu-ray player AND a game console. The 5 million plus players sold and the 2 to 1 disc advantage in NA and much higher disc advantage everywhere else suggests that the PS3s mixed message is working very well right now. Particularly compared with the "single message" sent by the unbelievably poor sales of HD-DVD players. That Toshiba has FINALLY seen sales increase when they added the message "it's really SUPER CHEAP" suggests that mixed messages are what you need during a video format war.
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Old 11-15-2007, 04:21 PM
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I swear that people must search around for days to pull blog shit off of sites that nobody gives two shits about or has ever heard of just to satiate their raging hard on to post something biased.
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