PS3- News about No News Yet

Dallas Chief · 01-25-2006, 11:28 AM

This just in from Business Week. An article about no news from Sony regardign the PS3. Is the upcoming battle for rights the the gaming crown or is it really about something else? Sorry, no link available yet.
Looong read...

Businesss Week
January 25, 2006
News

Sony's War Goes Beyond Games
A big announcement about the PlayStation3 may be forthcoming, but the true battle will be over high-definition DVD platforms

Could Sony be planning to surprise everyone with its PlayStation 3 plans? With the introduction of Blu-ray, and the next generation games market up or grabs, the company is getting ready for the fight of its life. Colin Campbell looks at Sony's big conundrum...

Rumor is that an announcement is due some time in the next eight weeks. Of course, a rumor in the game industry carries about as much value as an Albanian supermarket voucher. Next Generation merely reports the existence of the rumor; we're in no hurry to win Gamespot's dreaded 'Bogus' rating in its excellent Rumor report.

But we will take the opportunity to ponder this puzzler; what the hell is Sony up to? Let's speculate.

First things first
Sony's ultra-high level Destination PlayStation conference is due to take place in Florida at the end of February.

Only senior publishing and retail executives will be invited. Between games of golf and fruity fine wines, they'll be hearing some of Sony's master-plan to shape not just the future of the game industry, but the future of media consumption as a whole.

Destination PlayStation is not normally an event known for major announcements. It's probably not the place for a Big Bang. But that does not preclude a possible announcement prior to E3.

Sony could take the view that PlayStation 3 is just too big for a game-industry event, albeit the biggest one in the world. It may wish to create its own media space away from its two industry rivals.

Some industry sources are suggesting to Next Generation (and, just in case you weren't paying attention, we stress that this is a rumor) that Sony will opt for this Feb / March time-frame to make some big announcements about PlayStation 3. Potentially, this will include price and time of launch.

Another juicy rumor - wholly unconfirmed - is that Japan will not see the launch of PS3 until very late this year. Our sources were unable to make the connection about whether this means the U.S. launch will come at the same time, even later, or, just maybe, much earlier. This is where, unfortunately, we are left to speculate.

What if it's earlier?
The theory goes that Sony's play is not for the next generation games market at all. Microsoft's Xbox 360 is no more than an irritating diversion. The big play is for the high definition DVD market, and in this context, an early launch, with small hardware numbers and threadbare games software support might just be a good move.

This play potentially represents Sony's most important move in its entire history. Imagine; a royalty for Sony on every single DVD sold between 2006 and 2012 or thereabouts. No wonder Bill Gates hates Blu-ray.

The next generation DVD market is much, much bigger than the next generation games market. Owning the high definition DVD platform through Blu-Ray is Sony's number one priority for the next two years. Coming first in the next generation games market tags along for the ride.

The enemy is Toshiba
This spring, Toshiba will launch HD-DVD. Small numbers of ultra-high early adopters will be asked to pay up to $1,000 for the machine. But they will be nervous about making that commitment, if they see that Blu-ray is already available at half the price, albeit in savagely small numbers.

Here is where the first scuffles over the future of home entertainment will take place. It's important to draw first blood.

That's reason one. Reason two is Hollywood. This fall, the studios will be making a call on which formats to back. If Sony says, "We're launching PS3 at Thanksgiving with a million units," Hollywood will say, "Okay, great."

But Sony might be in a position to say, "We launched PS3 earlier this year, and they're still lining up around the block. We've sold 300,000 units, and we're now shifting 30,000 a week. We plan to sell another million over the holidays. Blu-ray is here." Many of the studios have made verbal commitments to Blu-ray, but that's a long way short of backing the platform with the high definition DVD versions of its summer movies.

Hollywood does not want a split format. It will do as much as it can to avoid this scenario. What it needs to see are numbers.

Michael Pachter, analyst at Wedbush Morgan Securities says, "A lot of people in the games media are missing the picture here. This isn't about Sony versus Microsoft. This is about Sony versus Toshiba. Everything Sony does regarding PlayStation 3 is colored by that fact."

This all may be a moot point
Of course, this is all completely irrelevant if Sony isn't done actually making the PlayStation 3, or if the components cannot be brought together even to manufacture 100,000 units for launch.

If it ain't ready, it ain't ready and Sony will just have to make do.

SCEA boss Kaz Hirai has also said that he won't launch PlayStation 3 until it's backed by significant software support. But what does that mean in real terms? Ten games? Twenty games? Or six games and a dozen movies?

It's almost certain that if PlayStation 3 does launch before the fall, the software support will be pretty tiny. Nonetheless, there's no rule that says you have to launch with 20 games. In fact, if Sony launches with limited hardware numbers, there's a big advantage in launching with just half a dozen games.

Microsoft could point to its much larger portfolio of games, but, at the end of the day, the Blu-ray crowd Sony really needs in those brutal first few months won't be all that bothered about Gun or Amped III or a hockey game.

The cultural card
There are those who argue that Sony would never launch in America before Japan, for cultural reasons. They may be right. But they would never have predicted a Welshman at the head of Sony. And Sony is ultimately going to do what's right for its business.

Where is the DVD market of the future. In Japan? No. It's here in America. That's where the platform war will be won or lost.

Then there's the price. Pachter again, "Sony can lose $100 per unit for the first 20 million units, and it still makes a lot of sense. Let's say that costs $2 billion. In a few years, the royalties from high definition DVDs could be as high as $2 billion every year."

And if Sony's main concern is the high def DVD market, rather than Xbox 360, a slightly higher price might be bearable. Put it this way; if you're a games-platform-agnostic high-def TV owner in 2006, or 2007, PlayStation 3 looks like a bargain, even at $500.

But this is the bottom line
All of this is speculation. We have no idea what Sony is really up to. Sony has been super-tight-lipped about its plans. But there's a lot of received wisdom out there that ought to be challenged. Sony's real platform wars are with Toshiba; not Microsoft.

Sony has been locked tight in its trenches these past few months. Maybe it's been sitting quietly, waiting for everything to fall into place. Or maybe, its sappers have been busily digging a bloody great hole underneath all of us.

01-25-2006, 11:28 AM
Dallas Chief Veteran Join Date: Apr 2002 Location: Jupiter, FL. Casino cash: $-1174727	PS3- News about No News Yet This just in from Business Week. An article about no news from Sony regardign the PS3. Is the upcoming battle for rights the the gaming crown or is it really about something else? Sorry, no link available yet. Looong read... Businesss Week January 25, 2006 News Sony's War Goes Beyond Games A big announcement about the PlayStation3 may be forthcoming, but the true battle will be over high-definition DVD platforms Could Sony be planning to surprise everyone with its PlayStation 3 plans? With the introduction of Blu-ray, and the next generation games market up or grabs, the company is getting ready for the fight of its life. Colin Campbell looks at Sony's big conundrum... Rumor is that an announcement is due some time in the next eight weeks. Of course, a rumor in the game industry carries about as much value as an Albanian supermarket voucher. Next Generation merely reports the existence of the rumor; we're in no hurry to win Gamespot's dreaded 'Bogus' rating in its excellent Rumor report. But we will take the opportunity to ponder this puzzler; what the hell is Sony up to? Let's speculate. First things first Sony's ultra-high level Destination PlayStation conference is due to take place in Florida at the end of February. Only senior publishing and retail executives will be invited. Between games of golf and fruity fine wines, they'll be hearing some of Sony's master-plan to shape not just the future of the game industry, but the future of media consumption as a whole. Destination PlayStation is not normally an event known for major announcements. It's probably not the place for a Big Bang. But that does not preclude a possible announcement prior to E3. Sony could take the view that PlayStation 3 is just too big for a game-industry event, albeit the biggest one in the world. It may wish to create its own media space away from its two industry rivals. Some industry sources are suggesting to Next Generation (and, just in case you weren't paying attention, we stress that this is a rumor) that Sony will opt for this Feb / March time-frame to make some big announcements about PlayStation 3. Potentially, this will include price and time of launch. Another juicy rumor - wholly unconfirmed - is that Japan will not see the launch of PS3 until very late this year. Our sources were unable to make the connection about whether this means the U.S. launch will come at the same time, even later, or, just maybe, much earlier. This is where, unfortunately, we are left to speculate. What if it's earlier? The theory goes that Sony's play is not for the next generation games market at all. Microsoft's Xbox 360 is no more than an irritating diversion. The big play is for the high definition DVD market, and in this context, an early launch, with small hardware numbers and threadbare games software support might just be a good move. This play potentially represents Sony's most important move in its entire history. Imagine; a royalty for Sony on every single DVD sold between 2006 and 2012 or thereabouts. No wonder Bill Gates hates Blu-ray. The next generation DVD market is much, much bigger than the next generation games market. Owning the high definition DVD platform through Blu-Ray is Sony's number one priority for the next two years. Coming first in the next generation games market tags along for the ride. The enemy is Toshiba This spring, Toshiba will launch HD-DVD. Small numbers of ultra-high early adopters will be asked to pay up to $1,000 for the machine. But they will be nervous about making that commitment, if they see that Blu-ray is already available at half the price, albeit in savagely small numbers. Here is where the first scuffles over the future of home entertainment will take place. It's important to draw first blood. That's reason one. Reason two is Hollywood. This fall, the studios will be making a call on which formats to back. If Sony says, "We're launching PS3 at Thanksgiving with a million units," Hollywood will say, "Okay, great." But Sony might be in a position to say, "We launched PS3 earlier this year, and they're still lining up around the block. We've sold 300,000 units, and we're now shifting 30,000 a week. We plan to sell another million over the holidays. Blu-ray is here." Many of the studios have made verbal commitments to Blu-ray, but that's a long way short of backing the platform with the high definition DVD versions of its summer movies. Hollywood does not want a split format. It will do as much as it can to avoid this scenario. What it needs to see are numbers. Michael Pachter, analyst at Wedbush Morgan Securities says, "A lot of people in the games media are missing the picture here. This isn't about Sony versus Microsoft. This is about Sony versus Toshiba. Everything Sony does regarding PlayStation 3 is colored by that fact." This all may be a moot point Of course, this is all completely irrelevant if Sony isn't done actually making the PlayStation 3, or if the components cannot be brought together even to manufacture 100,000 units for launch. If it ain't ready, it ain't ready and Sony will just have to make do. SCEA boss Kaz Hirai has also said that he won't launch PlayStation 3 until it's backed by significant software support. But what does that mean in real terms? Ten games? Twenty games? Or six games and a dozen movies? It's almost certain that if PlayStation 3 does launch before the fall, the software support will be pretty tiny. Nonetheless, there's no rule that says you have to launch with 20 games. In fact, if Sony launches with limited hardware numbers, there's a big advantage in launching with just half a dozen games. Microsoft could point to its much larger portfolio of games, but, at the end of the day, the Blu-ray crowd Sony really needs in those brutal first few months won't be all that bothered about Gun or Amped III or a hockey game. The cultural card There are those who argue that Sony would never launch in America before Japan, for cultural reasons. They may be right. But they would never have predicted a Welshman at the head of Sony. And Sony is ultimately going to do what's right for its business. Where is the DVD market of the future. In Japan? No. It's here in America. That's where the platform war will be won or lost. Then there's the price. Pachter again, "Sony can lose $100 per unit for the first 20 million units, and it still makes a lot of sense. Let's say that costs $2 billion. In a few years, the royalties from high definition DVDs could be as high as $2 billion every year." And if Sony's main concern is the high def DVD market, rather than Xbox 360, a slightly higher price might be bearable. Put it this way; if you're a games-platform-agnostic high-def TV owner in 2006, or 2007, PlayStation 3 looks like a bargain, even at $500. But this is the bottom line All of this is speculation. We have no idea what Sony is really up to. Sony has been super-tight-lipped about its plans. But there's a lot of received wisdom out there that ought to be challenged. Sony's real platform wars are with Toshiba; not Microsoft. Sony has been locked tight in its trenches these past few months. Maybe it's been sitting quietly, waiting for everything to fall into place. Or maybe, its sappers have been busily digging a bloody great hole underneath all of us.
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