Kaz Hirai continues to make confounding statements

[Queasy]

Originally posted by: Thraxen

Originally posted by: Queasy

Hirai took a dig at Microsoft and its Xbox 360 when asked to describe its competitive position: "You need a word that describes something that lacks longevity," he said, discussing Sony's oft-stated ten-year plan for the PS3 and suggesting its rival would "fall by the wayside in five years."

Somehow, I doubt that. I see the 360 and the PS3 running virtually neck-and-neck, occasionally swapping places, over the next five years. The 360 will continue where the Original Xbox did not because it is a platform that MS can control the costs with...which they couldn't do with the Original Xbox.

He may actually be right here. MS dropped the first XBox like a rock while, OTOH, Sony supported the PSOne and now/soon the PS2 for [surprise!] about 10 years. That infamous 10 year quote is taken out of context all the time. They didn't mean they wouldn't release a new system for 10 years, but rather that they would support the PS3 for 10 years... and their track record shows exactly that. Of course, the PS1 and PS2 had enourmous install bases that made them financially viable for that long, the PS3 doesn't look as though it will be in the same position, so we'll see how it pans out this time. I'd imagine that Sony is hoping all the people still buying PS2s will be PS3 purchasers down the road.

Except that all the conditions that existed back then that caused MS to drop the Original Xbox like a rock do not exist with the Xbox 360.

1) It was MS's first console and was a moderately successful trial run.
2) MS had no control over the costs and were still losing money on each console sold years later when they should have been making a profit.
3) MS had a big blowout with Nvidia

MS execs have already stated that they are going to support the 360 for a much longer time than the Original Xbox. So unless the bottom completely falls out of the market, I don't see MS dropping.

Even then, if MS keeps the 360 in the market for another 5 years, the 360 will have had a 9 year lifespan. How is that all that different from Sony's 10 year lifespan quote? This is just another example of Hirai's confounding rhetoric.

 

[Thraxen]

Originally posted by: Queasy
Even then, if MS keeps the 360 in the market for another 5 years, the 360 will have had a 9 year lifespan. How is that all that different from Sony's 10 year lifespan quote? This is just another example of Hirai's confounding rhetoric.

But it's not rhetoric at this point. All you've got is what-ifs and excuses in support of MS, while Sony has a proven track record of supporting their consoles. Until either proves otherwise then, IMO, Sony can say what they want about longevity.

 

[Kromis]

Originally posted by: Fardringle

Despite the PlayStation 3's quantifiable third place status in the present-gen console war, Sony Computer Entertaiment chairman Kaz Hirai says the numbers don't matter -- the PS3 still maintains "official leadership" in the industry.

This is my favorite part of the interview. Here's what he's really saying:

"I say we're the best. Since someone important (me) said we're the best, then we must be the best, regardless of the facts about profits, sales numbers, or market share."

As for Nintendo and its market-leading Wii, Hirai said he doesn't see it as competition. "They're a different world, and we operate in our world - that's the kind of way I look at things," he said.

While it's true that the PS3 and XBOX360 aren't directly competing for the same customers as the Nintendo, they are competing for dominance in the console market and are clearly lagging behind Nintendo and Microsoft. It's a lot like a basketball coach saying this after their team loses a game by 50 points:

"I know the final score says that we lost, but we really weren't competing for the same points, so we won because we got that one basket that we really wanted."

Wow, that was such a bad ass comparison!

 

[Genx87]

I actually loved this gem.

"We don't provide the 'easy to program for' console that [developers] want, because 'easy to program for' means that anybody will be able to take advantage of pretty much what the hardware can do, so then the question is what do you do for the rest of the nine-and-a-half years?"

Yeah, wouldnt want to make it easy on your developers. You know the people who produce the games that drive actual profits for your hardware. Brilliant logic and explains why exclusive deals bolted from the PS3. And what does he think all the games that developed for a platform are done in that platforms first year? What an exceptionally stupid comment about twiddling thumbs for 9.5 years if your hardware is easy to program for.

I own a PS3 and know it is a distant third place and dont expect it to every leave that spot. All I use it for now is BluRay movies.

 

[AeroEngy]

Originally posted by: Genx87
I actually loved this gem.

"We don't provide the 'easy to program for' console that [developers] want, because 'easy to program for' means that anybody will be able to take advantage of pretty much what the hardware can do, so then the question is what do you do for the rest of the nine-and-a-half years?"

Yeah, wouldnt want to make it easy on your developers. You know the people who produce the games that drive actual profits for your hardware....

I agree that had to be the stupidest thing he said.

Developers just like any other business primary goal is to make money. Why would they spend more time and money developing for PS3 when they could develop for the easier 360, cut cost, and sell to a larger install base. This is also why some of ports are poor to the PS3. Not because the PS3 has bad hardware but because it takes more time and therefore money to do it right.

 

[herkulease]

The bitch slapping between the two continues.

Aaron Greenberg's response to Kaz's statements

This sounds like an old hardware company that?s comfortable with its market position. That complacent attitude is out of touch with where the industry and consumer is today. This generation won?t be won over just hardware specs, but who can out-innovate when it comes to online and software. This is the kind of stuff that?s in our DNA, and frankly moves the console war onto our home court.

I?m confident we will outsell the PS3 throughout the entire generation by providing more innovation and building the best and broadest games library while growing our entertainment experiences on the leading online network. With a U.S. install base lead now of more than 7 million units (according to NPD), I can?t imagine any scenario where the PS3 can catch up with us. In fact, even if you doubled the current PS3 sales and Xbox 360 remained flat, they couldn?t close the gap until 2014.

I couldn't help but laugh at the "in our DNA" line.

 

[mugs]

Originally posted by: herkulease
The bitch slapping between the two continues.

Aaron Greenberg's response to Kaz's statements

This sounds like an old hardware company that?s comfortable with its market position. That complacent attitude is out of touch with where the industry and consumer is today. This generation won?t be won over just hardware specs, but who can out-innovate when it comes to online and software. This is the kind of stuff that?s in our DNA, and frankly moves the console war onto our home court.

I?m confident we will outsell the PS3 throughout the entire generation by providing more innovation and building the best and broadest games library while growing our entertainment experiences on the leading online network. With a U.S. install base lead now of more than 7 million units (according to NPD), I can?t imagine any scenario where the PS3 can catch up with us. In fact, even if you doubled the current PS3 sales and Xbox 360 remained flat, they couldn?t close the gap until 2014.

I couldn't help but laugh at the "in our DNA" line.

No it's true - when you start working at Microsoft, they make you splice in the Innovation plasmid.

 

[Thraxen]

Originally posted by: mugs
No it's true - when you start working at Microsoft, they make you splice in the Innovation plasmid.

Heh... actually, in case you don't know, it's actually a reference to those Sony "HDNA" commercials... the ones with the slogan, "High Definition. It's in our DNA".

 

[Kromis]

Originally posted by: Thraxen

Originally posted by: mugs
No it's true - when you start working at Microsoft, they make you splice in the Innovation plasmid.

Heh... actually, in case you don't know, it's actually a reference to those Sony "HDNA" commercials... the ones with the slogan, "High Definition. It's in our DNA".

That was a pretty good reference

 

[erwos]

I wonder if the "say insane stuff" disease that good old Ken had has spread to Kaz? Almost makes you wonder if they're going to boot him, too...

I'd also point out that even though Microsoft dropped the Xbox pretty quick, they at least kept decent BC on their consoles. 50% is a lot better than 0% (glares at Sony). In a way, that softens the blow somewhat.

 

[purbeast0]

Originally posted by: erwos
I wonder if the "say insane stuff" disease that good old Ken had has spread to Kaz? Almost makes you wonder if they're going to boot him, too...

I'd also point out that even though Microsoft dropped the Xbox pretty quick, they at least kept decent BC on their consoles. 50% is a lot better than 0% (glares at Sony). In a way, that softens the blow somewhat.

"with battles based on real life historic facts ... WITH GIANT ENEMY CRABS!!!"

 

[ed21x]

Originally posted by: Thraxen

Originally posted by: Queasy
Even then, if MS keeps the 360 in the market for another 5 years, the 360 will have had a 9 year lifespan. How is that all that different from Sony's 10 year lifespan quote? This is just another example of Hirai's confounding rhetoric.

But it's not rhetoric at this point. All you've got is what-ifs and excuses in support of MS, while Sony has a proven track record of supporting their consoles. Until either proves otherwise then, IMO, Sony can say what they want about longevity.

the difference here is that being last and not turning a profit 3 years into the console life cycle is a new situation for Sony, so you can't exactly use the past as an indicator when both the ps1 and ps2 had market dominance and was thus being sustained by 3rd party support while the ps3 is not. Even if Sony continues to 'support' the PS3, it simply doesn't have the marketshare to garner exclusives, which have been going to xbox360 lately.

Wii was able to combat this effect by being cheap, so in a way, people feel justified in buying it even when there were few 3rd party titles and most quality software came from Nintendo's massive software division.

The only way for Sony to combat this is:
1. Massive Price Cuts to increase marketshare (xbox360 effect)
2. Fork up the money for exclusive 3rd party system selling software (ff7 effect)
3. Focus on innovation and cutting out a new userbase (Wii effect)

The thing is, the ps3 may have actually been one of Sony's most awesome victories in the sense that it was instrumental in the demise of HD DVD. Sony will be profitting from issuing Blu-ray licenses for ages to come, and that alone is probably worth more than winning any console generation.

 

[DAPUNISHER]

Given the nearly 3 billion dollars shortfall they are going to post, I'm not surprised by the comments. Kaz is probably shell shocked.

 

[Aikouka]

Originally posted by: DAPUNISHER
Given the nearly 3 billion dollars shortfall they are going to post, I'm not surprised by the comments. Kaz is probably shell shocked.

To be honest, I don't suspect that the PS3 hurt Sony's profits much if at all. There's actually no mention of it in the article as it does talk about the entertainment division, but seems to focus on LCDs and TVs.

 

[erwos]

Originally posted by: ed21x
The only way for Sony to combat this is:
1. Massive Price Cuts to increase marketshare (xbox360 effect)

I agree that this would be effective - but can Sony _afford_ to do this when the yen is rising like it is, and they have massive financial problems to contend with?

2. Fork up the money for exclusive 3rd party system selling software (ff7 effect)

Fun fact: FF7 wound up on the PS1 not because Sony bought an exclusive, but because Nintendo pissed off Square by not going with CD-based storage. Extra fun fact: Square has not released ANY games to retail for the PS3 and has been subtly hating on the Cell for a while now. Can you see where this is going? Sony did a lot to drive away developers, and Microsoft did rather a lot to attract them.

Besides, Sony has had _very_ poor luck with exclusives. I'm not saying they're of poor quality. I am saying that they have not really driven console adoption like Halo 3 and Gears of War did. Games like COD:WaW sold quite well on the PS3... I'm not sure I think buckets of huge exclusives, or even one really big one, are strictly necessary for the PS3 to succeed.

3. Focus on innovation and cutting out a new userbase (Wii effect)

This is probably their best bet. I think the PS3 has a lot of potential as a jack-of-all-trades console, and it seems as if Sony has been moving in that direction (such as the photo gallery in 2.60). Increasing the console's value in ways that don't incur per-unit costs (which basically means software!) could be the answer Sony is looking for. Unfortunately, their competitors are also figuring this out, and, worse, one of those competitors is Microsoft - a company that lives and breathes software development.

 

[Queasy]

Originally posted by: Aikouka

Originally posted by: DAPUNISHER
Given the nearly 3 billion dollars shortfall they are going to post, I'm not surprised by the comments. Kaz is probably shell shocked.

To be honest, I don't suspect that the PS3 hurt Sony's profits much if at all. There's actually no mention of it in the article as it does talk about the entertainment division, but seems to focus on LCDs and TVs.

Link - Sony expects Games Division losses to increase by $337 million. There's no word on what that is an increase from.

There's conflicting reports about whether or not the layoff will affect Sony's game divisions. Some articles say yes but the EU director of Sony's games division says no.

MS is laying off too but reportedly none of those layoffs are expected to come from its entertainment division.

 

[MikeyLSU]

couple of points.

First for the wii argument...I'm curious on how the Wii 2 will do. Obviously the Wii was a HUGE hit, but will those same people be willing to upgrade or will they be fine with what they have with the regular Wii. It will be interesting to me.

Second, Sony is really killing themselves now. They need to admit they messed up. I have a PS3(prefer it over the 360 for many reasons and have owned both) but next go round, I may just end up with an XBOX just because it seems like Sony just doesn't get it.

I expect the next round to be much cheaper across the board.

 

[DAPUNISHER]

Originally posted by: MikeyLSU
couple of points.

First for the wii argument...I'm curious on how the Wii 2 will do. Obviously the Wii was a HUGE hit, but will those same people be willing to upgrade or will they be fine with what they have with the regular Wii. It will be interesting to me.

If it ain't broke, don't fix it. I'd ride that pony till it bucks me off. When the time comes, 3D will probably be the next step, IMhumbleO

Second, Sony is really killing themselves now. They need to admit they messed up. I have a PS3(prefer it over the 360 for many reasons and have owned both) but next go round, I may just end up with an XBOX just because it seems like Sony just doesn't get it.

Perhaps, admission of mistakes would only undermine investor confidence even further (if that is possible ) Internally is a different story. I have no idea what they are discussing behind closed doors.

I expect the next round to be much cheaper across the board.

I agree with this. Lower priced basic SKUs from the outset, would be a good move, then just charge more for the "bells and whistles" SKUs. They can always nickel and dime us to death on the extras, again.

 

[akugami]

Originally posted by: blurredvision
The demographics for the Wii and 360/PS3 are far, far apart. "Different world" seems appropriate. The sales of Wii's don't seem to cut into 360/PS3 sales and vice-versa.

EDIT: With as big as the gaming industry is these days, we need to start realizing that there's room for two different gaming markets. It's not just about one machine ruling all anymore. Once you realize it's 2009 and not 2001, then you'll understand what I'm talking about.

Actually for many households, buying a Wii means no PS3 or Xbox 360. At least not in the near future. Keep in mind that much like with expensive computers, people that read forums like AT forums are actually in the minority. Sure, we might buy all three systems but most people do not. They can only afford one system.

There are no different gaming markets. There are different demographics and market segments and niches but it's all one market. I do agree there is room for more than one games console. After all, Nintendo hasn't seen a console it can't make money on (excepting the Virtual Boy) even when it was in second or third place.

Originally posted by: Thraxen

Originally posted by: Queasy
Even then, if MS keeps the 360 in the market for another 5 years, the 360 will have had a 9 year lifespan. How is that all that different from Sony's 10 year lifespan quote? This is just another example of Hirai's confounding rhetoric.

But it's not rhetoric at this point. All you've got is what-ifs and excuses in support of MS, while Sony has a proven track record of supporting their consoles. Until either proves otherwise then, IMO, Sony can say what they want about longevity.

Yeah, well Nintendo had a 10 year life cycle with the original NES. The SNES had a 9 year life cycle before being discontinued. The original Gameboy had a 9 year life span. The PS1 was discontinued after 11 years. What do all these systems have in common? They were the #1 systems in the market when it was all said and done. Show me one second or third place console with long life spans. It hasn't happened and until it does, you can't say it will buck 20+ years of gaming trends.

Originally posted by: Aikouka

Originally posted by: DAPUNISHER
Given the nearly 3 billion dollars shortfall they are going to post, I'm not surprised by the comments. Kaz is probably shell shocked.

To be honest, I don't suspect that the PS3 hurt Sony's profits much if at all. There's actually no mention of it in the article as it does talk about the entertainment division, but seems to focus on LCDs and TVs.

Sony lost $337 million on the games division. With the cash cows that are the PSP and PS2 propping it up, it still lost $337 million. Guess why? What's worse about the PS3 is that the PS2's success has masked the costs incurred by the PS3 and the money spent subsidizing the PS3 hardware. It is likely that to date, the PS3 has cost Sony in the neighborhood of 5 billion dollars. Reports from June '08 had the PS3 costing roughly 3.3 billion at that point with 2.1 billion of it from 2007 and 1.2 of it in 2008. Round it off to about 2 billion in losses from 2008 and you'll get about $4 billion in losses incurred by subsidizing the PS3 hardware. Add in more money for the development costs and the fact that the PS3 is still losing money...doesn't look good for Sony. The PS3 hasn't been bad for Sony, it's been a catastrophe.

 

[MikeyLSU]

Originally posted by: akugami
Sony lost $337 million on the games division. With the cash cows that are the PSP and PS2 propping it up, it still lost $337 million. Guess why? What's worse about the PS3 is that the PS2's success has masked the costs incurred by the PS3 and the money spent subsidizing the PS3 hardware. It is likely that to date, the PS3 has cost Sony in the neighborhood of 5 billion dollars. Reports from June '08 had the PS3 costing roughly 3.3 billion at that point with 2.1 billion of it from 2007 and 1.2 of it in 2008. Round it off to about 2 billion in losses from 2008 and you'll get about $4 billion in losses incurred by subsidizing the PS3 hardware. Add in more money for the development costs and the fact that the PS3 is still losing money...doesn't look good for Sony. The PS3 hasn't been bad for Sony, it's been a catastrophe.

One thing I'd really like to see but we will never know is whether the PS3 won the HD battle for Sony by having Blu Ray in it.

If it did(which we will never know) how much money will they make because of that? Because it could have been a double edged sword, they lose big on the gaming because of blu ray, but win big in HD because of it also.

 

[Kabob]

Originally posted by: Baked
Would you rather he talk shit about his own company and fire everybody due to bad economy? :roll:
...
I love how you started a thread just to bash PS3 based on a Sony executive's comments. Keep up the good work.

No offense, but based soley off of Kaz's own words it looks like he's trying to legitimize an inferior product with weird logic. Not saying the PS3 is inferior, but just look at what he says, it goes against all logic.

-Harder to program for = somehow better since "not everyone" can make a game for it??
-Way behind in sales but it's a moral victory?
-360 lacks longevity? Well, other than everyone's consoles RRODing I don't think this is even close...

Originally posted by: Baked
Yes, maybe Sony should just advertise the PS3 as a time machine like the Wii so people can replay the same games over and over again, and again.

Seems like you're a bit stuck on the fact that the Wii interprets "next gen" differently than MS or Sony...instead of new processors/graphics/etc they came up with an entirely new control scheme.

Originally posted by: Baked
And it's all Sony's fault for not unloading ungodly amounts of money on developers for exclusives

Yup, it is their fault...because they don't have any money left to throw at developers since they blew all of it trying to market Blu-Ray.

I'll admit it, he's right when he says the PS3 is the best technology out there this gen, it really is an amazing machine, but that doesn't detract from the fact that it's overly difficult to program for and an attitude like he displays here of "well, it's not for just anyone, no apologies" isn't going to win over any more exclusives. Lets admit it, Konami knows damn well how much they could/will make off of porting MGS4 to the 360, they've got to weigh whether it's worth breaking contract with Sony over...

 

[Genx87]

Originally posted by: MikeyLSU

Originally posted by: akugami
Sony lost $337 million on the games division. With the cash cows that are the PSP and PS2 propping it up, it still lost $337 million. Guess why? What's worse about the PS3 is that the PS2's success has masked the costs incurred by the PS3 and the money spent subsidizing the PS3 hardware. It is likely that to date, the PS3 has cost Sony in the neighborhood of 5 billion dollars. Reports from June '08 had the PS3 costing roughly 3.3 billion at that point with 2.1 billion of it from 2007 and 1.2 of it in 2008. Round it off to about 2 billion in losses from 2008 and you'll get about $4 billion in losses incurred by subsidizing the PS3 hardware. Add in more money for the development costs and the fact that the PS3 is still losing money...doesn't look good for Sony. The PS3 hasn't been bad for Sony, it's been a catastrophe.

One thing I'd really like to see but we will never know is whether the PS3 won the HD battle for Sony by having Blu Ray in it.

If it did(which we will never know) how much money will they make because of that? Because it could have been a double edged sword, they lose big on the gaming because of blu ray, but win big in HD because of it also.

If the money comes in it will takes years to show up. Right now that market is very small. It may also never materialize like DVD due to online streaming from places like netflix.

 

[bl4ckfl4g]

Originally posted by: Genx87
Right now that market is very small. It may also never materialize like DVD due to online streaming from places like netflix.

I think this is most likely.

 

[MikeyLSU]

quite possible, but as of now, not many people are set up for that. Plus the quality is not near blu ray yet either. Most are not in HD to begin with.

Only time will tell, but I still think many like owning discs rather than always renting with on demand.

 

[mugs]

Originally posted by: bl4ckfl4g

Originally posted by: Genx87
Right now that market is very small. It may also never materialize like DVD due to online streaming from places like netflix.

I think this is most likely.

Nah. Downloads/streaming are great for rentals, but they're not going to replace Blu-Ray/DVD for purchases any time soon. Half the country doesn't have Internet connections that are fast enough, and then you have DRM that ties you to a particular subset of available devices. Blu-ray will continue to grow.