struggling to find the "sweet spot" in the video game market as its sales drop again.
Sony lags behind the Xbox 360 and Wii in this
generation's console war.
Despite Sony's Playstation 3 quarterly sales growth doubling from last year, the end result from this year's holiday sales doesn't bode well according to the Wall Street Journal.
Sony hoped the PS3 would take the number-two spot in video-game consoles, as it currently trails the Wii and Xbox 360, respectively. Instead, PlayStation 3 sales are down 19 percent from last holiday season. Contrast that to Nintendo and Microsoft, which saw the Wii double its sales and Xbox 360 sales rising by eight percent, respectively.
Sony places a lot of hope on its videogame division as its electronics business is suffering terribly due to the global economic crisis. Sony projected last spring that its games division would finally make a profit since launching the PS3 in 2006.
Earlier this month, I reported that by 2010, Sony plans to eliminate 8,000 jobs (four percent of its global work force). This is certainly the result of a tail spin of poor electronics sales.
Here's where Sony probably went wrong.
A pricey console featuring fancy components is backfiring on them as this recession continues to spiral out of control and people are less inclined to drop money on the priciest gaming console. And why should they?
An entry-level PS3 model costs at least $150 more than the Wii or the cheapest Xbox 360, right? And although the PS3 has Blu-ray functionality that isn't in the Wii or the Xbox 360, it's still a bitter pill to swallow when parents just want to buy a respectable video-game console for their kids. Besides, the cost of actual Blu-ray players are relatively inexpensive, and you still can get one with an Xbox 360 for cheaper than what it would cost you to buy a PS3. Dang!
We also know that Microsoft helped its sales of the Xbox 360 when it slashed the price this past fall and bundled games, too. Nintendo kept the Wii's price at $249 but cranked out more consoles taking care of the shortage problem.
Let's also be frank...Sony hasn't had the great exclusive titles it enjoyed with the PlayStation 2. Microsoft has its heavyweight giants Halo and Gears of War franchises. Nintendo's big money makers are mostly in-house games. While Sony used to have a stronghold of exclusives, clever Microsoft found a way to get game publishers to launch biggies simultaneous with Sony.
Lastly, the PS3 just costs way too much to make. Last week, I told you Sony found a way to take the console which once took $840 to manufacture, and make it for $448.73. Granted, it still loses money on every PS3 it sells because it retails at $399, so Sony is going to have to cut the price to help boost sales.
Let the numbers speak for themselves. Since its launch, the Wii has sold nearly 35 million units, the Xbox 360 has sold 22 million, with the PS3 trailing at 17 million. Let's get even more specific. Last month, in the US, the Wii sold 2 million, consumers bought 836,000 Xbox 360's, and only 368,000 PS3's were purchased.
While Sony's best seller last month (according to The NPD) was Call of Duty: World at War...dang again! The Xbox 360 version sold twice as much.
Source
Lights Dimming For Sony's Playstation 3