Sony will be the long term winner

I agree in general with the sentiment of the article but for somewhat different reasons. Yes, Sony has, and will continue to have a strong brand, although the embarrassment over the batteries, delays and reductions in initial shipments.

Microsoft has not squandered their lead, and they are clearly the leader now. Microsoft will be a challenge fro Sony because MS has done so many things right; they’ve learned from the original Xbox.

Japan’s importance in the gaming market is over rated. It’s a specialty market, whereas the huge European and US market share similar interests, languages and customs. Nintendo is a grate and interesting company, but not a competitor to either Sony or Microsoft.

Blue ray is a dark house and right now an albatross. Sony is trying to repeat history by using the platform to fuel the DVD market. It will work and Sony will sell a lot of PS3s just because it’s a cheap Blue ray player, this will be most effective in Japan. In the long run, maybe three years, Blue ray will be a big winner, but the content and the installed base has to catch up. 

Sony totally blew it with the PS2 and its ridiculous on-line strategy. Microsoft has the best solution and if Sony doesn’t copy it they will blow it again.

What’s the good news? 

The architecture is killer. That’s the good news and the bad news. The PS3 has longer legs than any of the other consoles and that is mostly what will make Sony win.

When the PS2 came out its games were good, but not great. That was because it was a new and novel architecture and the game developers had to learn how to exploit it. Sony lead the way to middleware and that created a huge inventory of games, and games sell consoles. 

The PS3 represents similar challenges for the game developers. But once they do, the quality of the games will be amazing. And the PS3 will just get better and better as the raw power of the Cell and Nvidia’s graphics gets fully understood and exploited. 

The bottom line is I think Microsoft will rule 2006, Sony will bring them to a draw in 2007 and in 2008 Sony will ship more than Microsoft and Nintendo combined. 

What’s the softness in this forecast? Game, games, games. Microsoft has a game development program it’s expanding, and if Sony can’t get the production of new and interesting games to market, as they did with the PS2, then it’s at best a net game. 

So keep your eyes on the game titles, and that will tell you who is going to win. 

Also, the market isn’t a win all or nothing situation. Many consumers in the middle class and above have two game consoles and a PC. The reason consumers purchase all three platforms is because of the games; however, although I expect that situation to repeat it will be to a lesser degree because the machines are more expensive this round and several of the leading games will be available on both Sony and Microsoft’s machines.

Almost every pro of the Sony PS3 is also its con. It is the most powerful system, and has the highest resolution DVD player, that makes it the most expensive system. 

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FYI - Sony issued a statement warning consumers about a likely avalanche of Internet scams and promotional offers on the PlayStation 3. The console, which is obviously going to be in short supply due to drastically reduced availability numbers, is being offered at a substantial discount on many Internet sites--without the cooperation of Sony. In order to avoid being scammed, they suggest only dealing with authorized retailers, which most people with any common sense should have figured out on their own. This presumably excludes eBay, where "guaranteed" PS3s have been listed at nearly $2,000 in some auctions.