So I came across some other jackass with a blog who does something similar to what I do, but apparently from an amateur perspective. He may very well be a nice guy – good with kids, kisses his mother on the cheek when he goes to visit her, holds the door so that the elderly can pass through. That cheesy hitman style myspace mugshot at the top of his website doesn’t count for anything, really, but that analysis of his deserves a full and proper fisking.
Despite what he’d have us believe, Don here is not a prophet. Every analyst in the industry announced that Halo 3 would be a huge success, and would definitely be moving consoles for Microsoft. Even the MSM was featuring stories about the buzz around the Master Chief in Time, Us Weekly, and the old gray lady.
He then goes on to say that it’s video games that move consoles, not the other way around. Actually, it works both ways. Consumers tend to commit themselves to one console and stick with it, and don’t want to limit its use. They might as well have a brick next to their television as a game console they don’t use. For some people, a killer app like Halo 3 will sell them a console, but as we’ve seen in the past, mediocre titles like Lost Planet have done huge sales just because they were on a console during a dry spell where no other games were coming out. So, essentially, people bought new video games just because they wanted to use their console. There were no killer apps for the PS3, and some might argue that there still aren’t any, and that there won’t be any until mid-2008. By Don’s logic, that console shouldn’t have moved a single unit. A lot of people bought it because of brand familiarity, not because they were dying to play Ratchet and Clank 5 next year, and they went on to buy really crappy games like Lair because there was nothing else to buy. It’s funny how he points to the pre-holiday release of Halo 3 as a mistake on Microsoft’s part, and yet gives November and December to Sony despite the fact that they don’t, and never will, have anything even approaching the success of the Halo franchise coming out in the next few months.
Which brings us to this prediction: that "fad" comment about the Wii is going to bite him in the ass some day. The Wii is the widest spread console in the world, and has been universally embraced in Asia, Europe, Australia and North America. Africa gets nothing because they po’. It is family friendly, innovative, and easy to develop for – a perfect combination for a successful entertainment system. With Nintendo’s emphasis on new and exciting gameplay over graphics and realism, the Wii could easily not only continue to dominate the console war to its finish this generation, but also be the last console standing. As Sony and Microsoft release their new iterations of the Playstation and X-Box brands, it is very likely that developers and consumers will still be interested in the Wii. Granted, a recent study in Famitsu magazine indicated that sixty seven percent of Wii owners haven’t been using the console very often in the past few months, but that will completely change as Nintendo closes the gaps between its release schedules.
He then goes on to say that the 360 is going to have a rough holiday, citing the Gamestop release schedule. Wrong, wrong, wrong, wrong. Wrong, wrong, wrong, wrong. WRONG, he’s wrong. Because of the development cycle for multiplatform games, the big non-exclusive releases will very likely have much higher numbers on the 360 than they will on the PS3. Most multiplatform games are almost entirely developed using the Microsoft dev kit, because they’re easier to use, and the specs on the 360 allow for more available RAM. The cell processor on the PS3 is a nightmare to develop for, because the eight different cores are isolated from each other. So throughout the history of multiplatform games this cycle, they’ve looked and played better on the 360 than the PS3. In fact, to get a game up to equal snuff on both consoles, developers often push back the release of their PS3 version for a month or more.
Also, Reisinger is also ignoring something very important: number of consoles already sold, and what their attach rates are. As of October, Microsoft has sold nearly 12 million consoles in under two years. Sony has sold less than five million consoles in under one year. An attach rate, just to clarify, is the number of games bought by console owners – the average for PS3 owners is six a year, the average for X-Box 360 owners is fifteen a year. In other words, that post holiday software chart is going to be lighting up X-Box green.
Jumping tracks for a second, whether you keep an eye on the industry or not, you probably knew about Halo 3’s release. You might even have passed a magazine cover or flipped past an advertisement in a comic book showcasing Mass Effect. But have you ever heard of Uncharted, Haze or Tekken 6? I’m betting that the answer for less-than-hardcore gamers is, "no." But these exclusive titles are supposedly going to bail the PS3 out somehow. There’s no hype behind them and the majority of gamers aren’t looking forward to them, so how are we supposed to expect sales figures any larger for previous PS3 exclusives, like Heavenly Sword and Lair? When it gets to the point that you have to literally sell your game to two thirds of the people who own a PS3 just to be profitable and have an ok month for the company, well, that’s just not worth the effort.
As a result, third party developers are bailing already, and yes, Sony is going to have a rough holiday, a rough year, and a rough console cycle. I blame men like Hirai and Kutaragi. They stupidly thought that they could turn their business inward towards Japan and still appeal to western markets, but there aren’t enough otaku perverts in the world for that to be anything less than a suicidal business plan, especially as the industry approaches the $20 billion a year mark. Nintendo walks in both the eastern and western worlds, and they’re benefiting from that greatly, while Microsoft is focusing on the western market. That would be just as bad as what Sony is doing, but it’s a gigantic market that includes Europe, North America and Australia. Did Sony even plan to compete globally this time around? Because it seems like they’ve shot themselves in the foot, and liked it so much, they decided to do it again, and again, and again.
Every time the PS3 is predicted to retake its throne, it trips over home plate on its way to first base. They dropped the price $100, sales barely moved up. They introduce a 40 gig model for $100 less than that, barely anyone buys it. Without the price cuts, the sales on the console go down every single month. Now they’ve got three November releases that nobody cares about, inferior and delayed versions of multiplatform games, and they’ve got "strong" prospects for the holidays? I’m not saying that sales won’t go up – of course they will, they always do for this stuff around Christmas. But thinking that "Haze" is going to be Sony’s Christ child is so very stupid. To conclude, this guy doesn’t know what the Hell he’s talking about. Time will tell who is right or wrong, of course, but his assertions are so very annoying, and so typical of people who don’t know the numbers and trends of the industry, and just go by their gut feelings.
Truthiness has no place in business analysis, Don.