Analyst to Sony: change or lose

DFC Intelligence believes Sony's PS3 business model is "handing its competitors a golden opportunity" to take the console crown.

Late last month, San Diego-based DFC Intelligence raised more than a few eyebrows when it said that Sony could very well end up last in the next-gen gaming race, behind competitors Microsoft and Nintendo. Today, the research firm released an industry briefing, and its song remains largely the same.

DFC begins by saying that Sony is currently the "king of the video game market," but with the PlayStation 3, it is clear that Sony is "handing its competitors a golden opportunity." The firm believes that the premium PS3's $600 price tag will put off potential consumers, hurting the overall gaming market and possibly putting Sony dead last in terms of installed user base.

It's not just the launch price that DFC believes could hurt Sony. Sony CEO Ken Kutaragi has gone on record as saying that the PS3 is more like a computer than just a gaming console, and, according to DFC, could see upgrades such as a writable Blu-ray drive or improvement to the system's memory.

While this may appeal to gearheads, DFC believes it will mean the price of the PS3 won't drop at the rate of normal consoles. "By fixing its hardware standard for several years," DFC argues, "video game console systems have been able to significantly lower prices over time by not having to upgrade to the latest technology."

"We believe that under Kutaragi's techno-elite PlayStation 3 strategy, the PlayStation 3 could end up with a market share more resembling Apple products [in the PC sector] as opposed to the dominant PlayStation 2 market share."

As for the other consoles, Microsoft's Xbox 360 and Nintendo's Wii, DFC sees scenarios where both of them could become the leader in installed base.

Even though the firm doesn't see an end to the 360's woes in Japan, it sees its strength in the North American market as reason why it could be the market share leader. The Wii, on the other hand, has "the biggest opportunity" because of its low price and potential to "expand into a much more mass market audience."

"By letting Sony and Microsoft split the hardcore teenage/twenty-something video game marketplace, the Wii could end up number one in market share for the next generation," said DFC.

734 Comments

  • helluvagood

    Posted Sep 17, 2006 5:27 pm GMT

    =( ps3 way too expensive

  • sizzlemebacon2

    Posted Sep 17, 2006 1:13 pm GMT

    As soon as I left E3 I knew the Wii would most likeiy come out on top

  • XboxIsNot360

    Posted Sep 12, 2006 6:52 pm GMT

    DFC IS MOST LIKELY CORRECT ABOUT THE NEXT-GEN CONSOLE PREDICTIONS.

  • Killer4DaBizkit

    Posted Sep 12, 2006 12:01 pm GMT

    ADollins, AMEN.

  • the_ice_phoenix

    Posted Sep 8, 2006 1:29 am GMT

    Genrihhh, you do realise that about 48.83% of the gaming community disagrees with you on the PS3 and about 79.64% of the gaming community disagrees with you on the Wii?

    http://www.gamefaqs.com/poll/index.html?poll=2485
    http://www.gamefaqs.com/poll/index.html?poll=2484

  • Genrihhh

    Posted Sep 7, 2006 9:54 am GMT

    F*** DFC they don't know s*** sit and predict by looking at numbers how f*** this can do anything. I have a 360 and I will buy PS3 at launch (try to) but I defenetly won't buy Wii its made for kids. There is only few good exclusive on it. And WTF why everybody talk about prices??? In America if you pay alot you get you get a good thing. Same thing as close.

  • 3leMenT

    Posted Sep 7, 2006 12:29 am GMT

    zerodark9 1) what the hell do you mean learn how to spell, what are you 8 get a good paying job you centerlink bum, and stop drinking goon. 2) most place's still sell there games at $100, and the games THAT did go down in price at games almost from LAUNCH a year ago!

  • zerodark9

    Posted Sep 6, 2006 12:31 pm GMT

    Umm 3leMenT, 1) the games cost $60 new, 2) learn how to spell. and Syferonik, bashing the WII? Come on anyone can do that.

    ADollins, I like the way you think, that is what will kill the PS3, that and some people cant afford it. Like me for example. I work 40 hours a week and only have enough for 2 games a month. So......

  • 3leMenT

    Posted Sep 5, 2006 4:52 pm GMT

    Syferonik** your a tool, xbox 360 is crap they have like 10 games out that cost you $120, and its been a year...... like wtf!!! i've got a xbox 360 so i know what im talking about and its not worth it...... im going to be selling my poo60 to get a Wii that will have more then 10 games at LAUCH!!!!

  • ADollins

    Posted Sep 5, 2006 12:21 pm GMT

    Now I will get flamed for this but, I don't think the PS3 is a bad system, and it could be perceved as a value for the price, a BlueRay player , and the most powerful console to date. However I think it is so far advanced most people will only use a small portion of the PS3's power, but pay a very heavy price. Most people agree $600.00 is not a butt load of money, but it is more than most people keep around as disposable income, and let's face it pre-orders will be smacked with bundles, probably bringing the price upto $900.00 - $1,200.00. That is alot of money, you could have a brand new house started, you could use that to make a down payment on a car. Remeber also to really get the most out of the Sony PS3 you need a high def TV (1,500.00) , a 5.1 surround sound system (250.00). When you factor that in the sony PS 3 is a very expensive proposition. It will hamper the growth of sony's market share for sure. People don't pay analysts alot of money to be wrong. I think the price tag will hamper the installed base for quite some time. Only the die hard fans that have the 900.00 to 4000.00 to just spend will purchase the system, however this does put sony's PS3 in a nitch market, and will in turn cause the developers to shelf or delay releases of their PS3 games. When your console is not mainstream it will not gain much 3rd party development support. The real question is will the market hype actually create enogh initial demand for the PS3 to garner the industry wide support it takes to make the PS3 number one. Another key factor that looms over sony's head is the Wii the Wii might actually bring back the novelty to the console industry, which is what is missing in todays market. I think if nintendo get's it's controller perfected, it will really change the landscape of the market. And you can forget about sony being a real market force in the rest of the world becuse $600.00 translates to about $900.00 canadian, and even more in other countries. I think even the XBOX 360 is outside of the sweet spot for the console market, I purchased the 360 becuse I have a high def theater/game room, and I wanted a console that could fully utilize it. The theater system costed me about $6,000.00 I can easily afford $600.00 but that isn't the point in my case will the PS3 be that much of a better system, with better games that I must have? If it is then I will buy a PS3, but I don't forsee this happening to late 2007, maybee even early 2008. Unfortuntaly this is the thought process that will really hamper sony on it's PS3. Yes you will have the early adopters and they will buy first, then you have the wait and see's that wan't to be sure that sony will deliver on the goods. Then you have old farts like me that think it's all about the software. If there is enough must have title's that I cannot get anywhere else then the PS3 looks really attractive, or the quality of the games are so premo that the XBOX 360 looks, and plays like a last generation then I can justify the premium price. However for those that don't make six digit incomes, I just don't see how sony will get good market penitration. Just having the most powerful processor is market hype, it's really about how good the processors, make your games play, and that is what people buy. I just don't understand how people belive that a Piece of paper stating the hardware specs, can possibly tell the quantity and quality of games that will be released on the system. I just don't by into the mentality my console spec sheet has more zero's than yours so it must be a better system. That is just baloney!

  • Syferonik

    Posted Sep 4, 2006 8:57 pm GMT

    x360 is cool a lot of very good games are commming for it ps3 is bad thats all and Wii is gay its gayness of hell

  • 08011989

    Posted Sep 4, 2006 4:57 am GMT

    cheaper = more extra money _____________________________________
    more extra money = more games ....... + lollies + snacks + drinks etc. >=] __
    ___________________________________________________________
    let PS3 = a __________________________________________________
    let X360 = b __________________________________________________
    let Wii = c ____________________________________________________
    ___________________________________________________________
    a = b + c ____________________________________________________
    b = a - c ________________________________________________________________ c = a - b __________________________________________________________
    (roughly) ________________________________________________________
    _________________________________________________________________
    dont understand? __________________________________________________
    eg. (we go for the most expensive console) remember its onli an example.__
    $600 ____________________________________________________________
    ~~~PS3 + online _________________________________________________
    or __________________________________________________________
    ~~~X360 + 3 games ___________________________________________
    or _________________________________________________________
    ~~~Wii + online + 7 games ______________________________________
    eg. (we go for the lowest expensive console) remember its onli an example.
    $250 _____
    ~~~PS3 + online + (-$350 in debt)
    or
    ~~~X360 + (-$150 in debt)
    or
    ~~~Wii + online ________________________________________________________________________ its simple mathmatics~~~~

  • aka_aj03

    Posted Sep 3, 2006 10:03 pm GMT

    Xbox 360 and Wii all Hail to Sony
    Long live Sony, long live Sony

    long live PS3

  • JoetheMoe

    Posted Sep 3, 2006 6:52 pm GMT

    i'd rather get a wii and keep my 360 for the price of the ps3.

  • spawn_reedemer1

    Posted Sep 2, 2006 4:30 pm GMT

    PS3 is going to win just face the facts and lightningamer what are you talking about sony isnt the cocky one mircosoft is thats why you hear all those microsoft fanboys say that ps3 is ganna lose and its ganna suck

  • B-bad

    Posted Aug 28, 2006 5:07 pm GMT

    You know what's really sad Sony has given their competitors a big chance to knock them out and still they get the most attention and look strong. This is really funny when they have dropped the ball and look like they are set to fall.

  • lightningamer

    Posted Aug 28, 2006 1:13 pm GMT

    You know what get's me mad about sony? They're cockey. Their system is costing several hundred more dollars for what? Blu-ray? Also I read on another site sony stated that "So, if it becomes a bit higher than fifty-nine bucks to purchase a game for the ps3 don't ding me, but, again, as I said, I don't expect it to be a hundred bucks." So this holiday season im not going to buy a ps3 im going to get a 360 and a wii instead.

  • mattxavier

    Posted Aug 26, 2006 7:49 pm GMT

    Considering the outrageous prices people payed for the Xbox 360, I don't see why people won't still rush for the PS3. The high price will not deter people from buying it.

  • quicksilverzxc

    Posted Aug 26, 2006 5:34 pm GMT

    The gamcube lost because it had no online and 3rd party support sucked, unlike the Wii. Regardless, Nintendo made the most profit off of their console sales.

    Jrett, the PS3 will have a supply problem come Xmas. At the rate they are making them, only 3 million will be availible come spring. You fanboys will all buy them and Sony will have the same PR problem/hype that Msoft did. Since Sony has stated that they are taking a financial loss on every PS3, the price will not drop worth anything until quite a few years pass and only perhaps sooner if HD-DVD flops and Sony can make Blueray drives much cheaper.

    Also, I own a computer and I'm using it right now. I recently bought it at just over $700 (for the desktop unit) and it can run HL2 flawlessly, plus it can do 100x as many things as the PS3 on Linux ever will.

  • auras_jc

    Posted Aug 17, 2006 4:37 am GMT

    So... why is the GameCube a looser despite it's low low price ?

  • activematx

    Posted Aug 16, 2006 7:01 pm GMT

    Jret, I like your theory. I havent heard it before, and I think its a good idea. You should major in marketing man. Good stuff

  • CharmedLife

    Posted Aug 16, 2006 7:29 am GMT

    If I wanted a computer, I would buy a computer.

  • ag55555

    Posted Aug 14, 2006 11:51 am GMT

    ps3 will always be the best ,the console is not important its the games that are and when u look at the ps3 games their the best because:
    1. they have movie quality stories and music unlike other consoles,
    2. gameplay is always the best
    3. ofcourse the metal gear series is on it
    4. and u have final fantasies too.

    so sony has won another battle

  • tinytim10

    Posted Aug 14, 2006 9:59 am GMT

    pshhh i think ps3 is over priced go 360

  • jrett

    Posted Aug 12, 2006 2:42 pm GMT

    here's my theory on the ps3 and it's pricing.
    Now, Sony has announced the price for launch, and they saw the difficult time MS had with their launch shortages.

    Now consider this. Sony wants to have a smoother launch than MS did, so they announce a high price point.
    This will naturally result in less units sold that if the price was cheaper. This has a two pronged effect.

    1) It will allow them to better meet demand without suffering as much in shortages, while allowing the die hard fans to get thier hands on a system at launch.
    2) It will allow Sony to ramp up production to better meet the demand, and when production rises enough in relation to sales, they can then anounce a price drop.

    My theory is that within the first 6 - 9 months, or whenever production catches up with or exceeds demand, Sony will announce a nice big fat price drop, which will then appeal to the casual gaming market and allow sony to gain some market share.

    That would be my $0.02.

    Anyone else see this as a very probable approach?

  • arafay1

    Posted Aug 12, 2006 10:19 am GMT

    Every body knows ps3 will win... so why argue

  • urluckyday

    Posted Aug 11, 2006 11:11 am GMT

    I really do like when people are so right like in this article...go Nintendo and Microsoft...

  • bigelf72

    Posted Aug 10, 2006 7:37 pm GMT

    SCREW CONSOLES!!
    PC'S FTW

  • Autolycus

    Posted Aug 8, 2006 8:23 am GMT

    lol denial is funny to watch

  • daozxtrme

    Posted Aug 7, 2006 10:43 pm GMT

    SONY FOREVER!!!!!! The PS3 Will Prevail!!!!

  • MiltoxBeyond

    Posted Aug 6, 2006 8:48 pm GMT

    LOL! I didn't get ripped off for the 360. I bought one for 300. Sold it in South America for 500 and bought a new premium for 400...

    I'll sell it when it gets old for a nice profit again

  • ryokinshin6x3

    Posted Aug 2, 2006 12:16 pm GMT

    unfortunatly i jus tend to get watever comes first, except for the DC, anyways as long as the ps3 can capture a lot of the market its far from failling

  • t3KK3n_4ever

    Posted Aug 1, 2006 12:50 am GMT

    sony is stealing everybody,wii is much much cheaper +i think it's better

  • daftfan

    Posted Jul 31, 2006 9:33 pm GMT

    i'm gambling for PS3, so kick asses Sony. Microsoft will bite the dust.

  • Areon7

    Posted Jul 31, 2006 9:09 pm GMT

    well because im poor, im getting a wii first. what can i say i like nintendo. but i want the ps3 the most, im going to college so i really won't have any money for the ps3. when msg4 comes out though its going to be hard to resist.

  • lrsp

    Posted Jul 31, 2006 8:00 pm GMT

    Go PS3!

  • rwnummelin

    Posted Jul 31, 2006 7:04 pm GMT

    I don't get it. PS3 this and that all the time! Price etc, etc... It won't sell jadajada..

    If I want a PS3 I buy one, end of story! It's got the best games and full backwards compatibility. Perfect for me, but maby not everyone.

    I have some things to say to those of you who think BD is crap:

    1. It didn't take more that a year from the PS1 launch until the CD-ROM had to little storage capacity.

    2. The PS2 got several games on 2 DVDs.

    3. What makes you think the DVD is enough for a next-gen console with HD-resolutions?

    One last thing: I can't believe my ears when I hear about microsoft's new 360 plans... You who bought the fist one have been framed!

    NOW they're gona make a new type of CPU (smaller arcitecture) and perhaps built-in HD-DVD. Will the next games for 360 come on HD-DVD? You think you're smart buying the HD-DVD expansion, but what happened to the cheap 360??

    Think about it...

  • FullSurface

    Posted Jul 30, 2006 4:02 pm GMT

    Im #3 on preorder list and i have the PS3 fully paid off with MGS4 so all who think SONY will lose wake up, They've won every year and with MGS4 they will win again. And to those who are complainig bout the price tag go buy a Nintendo wii and shut the h3ll up.

    Solid Snake
    Semper Fi

  • copjunk

    Posted Jul 30, 2006 1:48 pm GMT

    ps3 pre-order site, iv got 6 already muhahaha -
    http://www.direct4games.com/layout1.jsp?page=prod&prod=267131&s1=99

  • Hamza1212

    Posted Jul 30, 2006 8:49 am GMT

    when can i put a deposit or perordrer the ps3???? ANSWER PLEEEZ

  • Hamza1212

    Posted Jul 30, 2006 8:48 am GMT

    enough about complaints on the ps3.....eny one know when the ps3 will be able to be preordered

  • o_l_l

    Posted Jul 30, 2006 2:34 am GMT

    junk56 you say everyone is judging 360 games before they are released, tell me thats all ps3 boys are doing about mgs4, we have mgs4 so we dont need another console because this is the best game ever no chance is it. then you go on about the blu ray disks how good these are gonna be can hold lots of data too be honest normal sized disks are fine by me. I am still gonna purchase a ps3 but not for blu ray and not for mgs4.

  • Mandibles

    Posted Jul 29, 2006 5:56 pm GMT

    jeff 2374 ur a freakin idiot the ps3 will fail huh...omgggg....ok all u tards that think the ps3 will fail are stupid.......and please stop whining bout the price AND GET A JOBBB!! PPL.....get off ur fat a** and mow lawns er something...i have a job and have 1000 big ones to burn i am gettin a ps3 thats all i got to say

  • voltage22

    Posted Jul 29, 2006 4:51 pm GMT

    PS3 Ps3pgm p09huh0r5uy90-ui09- ji tprkhgrgkrpgktogkohgopjohjtioyiogjityumlgjgc.jlkjfg;phjgilhukhjyh.bhjtthuithgm vbkflfgjrdigmslglkruglkghihgifthytuyh,clxdfdivnjghiu,bhjgihguhgc,bbghbgtuihbhdc,fh vifhgfuughgftghvttghtughutyghrtgynrtugyrgf,rysygrujcfdkgfngyfunfugyumgguiytgld.fvcodfmvghfngghfghh,hjgihguiguihgfnhggbyguihyghygnhnghnghghnghghgiuhmjgthtkhjlrkthjmfg hnjhmglijh.b ,hlkgjlhjglkjnfg.vdrlktvkjgflumbfkn ytkn kgjhgkmhkgnfkhjkfg,xmlhjkgljnblxgxd;lfdlkgjdfkgkhfgbjkfjgfghfvhfhjbkfdhkflhjfkhjkdfjhfjhflkgjfhjlhkjgjfksl;ada;sxl,fbk, l;,bbbbb,gdflgdfkgdflkfndndvb kjhybymkfl;dfjvgjkn,fo;ljgftlkh ngflk;hjgfdilougvmslfjvbo bn'dfkljjfklgdglgb?

  • junk56

    Posted Jul 29, 2006 3:16 pm GMT

    [This message was deleted at the request of a moderator or administrator]

  • Wayword2000

    Posted Jul 29, 2006 12:50 pm GMT

    Darn.

  • Mandibles

    Posted Jul 29, 2006 12:18 pm GMT

    unlike some other ppl im not poor i have A JOB so 600 big ones aint a problem geez ppl complainin bout the price JUST GET A JOB...i think the ps3 will rock...rock on ps3 fanboys rock on keep on postin...

  • Ant_17

    Posted Jul 29, 2006 10:38 am GMT

    no comment,only that i will get a ps3

  • Jkzack

    Posted Jul 28, 2006 10:31 pm GMT

    Xbox sold ZERO! in uk and japan and korea and china, all asia!
    And europe, africa! austrailia!! , And South america!!!
    Because there is no such thing as Tackle football!!! There.
    Now the ps3 is talking.........

  • o_l_l

    Posted Jul 28, 2006 2:30 pm GMT

    No chance will the wii be a flop, its got great games lined up and its new control system looks cool. One thing ps3 doesnt beat 360 in is games imo. basically thats all the psp's are used for because the games are poor so it cant be classed as a games system.

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