Originally Posted by JerryL
My gut feeling tells me that the idea of bundling the PS3 as a game player and Trojan Horse movie player was a major mistake for Sony which will cause problems for both. Elaborating: game playing is somewhat active. Movie watching is mostly passive. Im not so sure they are the same market. Im also fairly sure the additional cost of the BR technology for the machine caused delays and initial high prices- severe for the game machine market. That allowed Nintendo to get a foot hold and more important: "mindshare" as well as allowing the Xbox 360 more time. Its still a success, but I think it is not the market dominating success the PS2 was.

There`s a flipside to much of the above.

I`ve gone into this before, but games consoles don`t traditionally make profit in their first three to five years of existence. Nintendo`s machines are often the exception to this rule, but every incarnation of the Playstation has taken years to turn a profit, the original Xbox never turned a profit, and the Xbox 360 apparently breaks even according to its makers - which if true is impressive, but it`s been countered by the enormous hit Xbox 360s have taken in the reliability of units which has come at great cost to Microsoft. Bottom line, it`s always the software that brings in the money.

Did the implementation of Blu-ray delay the launch off the PS3? Unquestionably. Has it damaged the console`s success in the long term? As a gamer, I`m honestly not so sure at the moment. The console will have well surpassed 5m units sold worldwide come the anniversary of its launch in November, which given the hindrance of its premium price (coupled with lack of enticing games catalogue) really isn`t bad at all. With better games coming in the fourth quarter, including some attractive format exclusives - plus current rumour of a $399 model for Christmas - its future isn`t necessarily as bleak as some may think. The Wii is a phenomenon, but the battle for second place rages on. I think desire for the PS3 is there, but the price is naturally its biggest problem. If they can get it below $400 it will help, as it will at least put the PS3 into a directly competitive price level with the Xbox 360.

A price of $250 to $299 is typically considered the sweet spot for a games console. The Wii`s success is testament to this, as is the continued success of the Playstation 2. Many argue the greater percentage of the gaming community worldwide is not ready for a console as costly and sophisticated as the PS3. This is true, but it`s also true that a vast majority are still overwhelmed by the Xbox 360 too. This is changing (and next week`s launch of Halo3 will undoubtedly get more 360s into new homes), but it`s still pretty gradual. Consoles are, in the eyes of many, mere toys, and the majority are going to be more than content with the PS2 and Wii for some time to come because both are priced well to appeal to both older gamers, and to parents buying for their children. The 360 and PS3 however are, for the most part, still really only going to reach out to gamers in their twenties and up.

The recent drop of the PS3`s 60GB unit to $499 in order to clear remaining stock has proved to be a success. If it is true that a $399 model will surface as soon as this winter then sales will move up a gear or two. Given the size of the losses Sony might take on every PS3 sold, it`s perhaps beneficial for them (from an financial point of view) that sales have not yet caused an outright sensation. They have been working hard to lower the losses on their end - and they will always take a loss of some kind as that`s the nature of the games industry as I have explained - so if they can partner price reductions with actual reductions in manufacturing then they`ll have actually done a good job.

As far as the PS3s place in providing a Trojan Horse in the format war is concerned, I think it may still prove to be a success in a couple of ways. From a software point of view, people are playing movies on these things. Many? I doubt it. With two-million units in the US, perhaps 300,000 at most are using it to watch movies. Is that a problem for Blu-ray? I don`t think so as I think there`s only so much the Playstation could have ever realistically done to boost Blu-ray adoption and/or raise awareness of the format`s existence. I do think that in this respect the PS3 has/is serving its purpose (as far as its role in the “war” is concerned).
From a manufacturing point of view I suspect Blu-ray being inside the console is likely to be proving beneficial. More PS3s are made and shipped than dedicated players for both HD DVD and Blu-ray combined, which makes for a consistently tall order month in, month out, for the components required to make the drives. This benefits many and, in the long term, should contribute to driving costs down not just for the Playstation, but for anyone making dedicated players. In addition, with every PS3 gaming being BD-Rom based, the vast numbers in which game discs are being replicated will undoubtedly have a knock on effect to the cost for movies using replications lines too. So really, I think the PS3s part in the format war greatly depends on what people expected the PS3 to achieve for Blu-ray in the first place.