Wednesday, January 18, 2006

Sony to ship 4 - 7 million PS3 consoles in first year

Technology review site The Digital Bits have interviewed Andy Parsons, senior vice president of Pioneer Electronics, USA. Speaking about their cooperation with Sony regarding ´Blu Ray´ technology, Parsons seems to have let slip SCEI´s shipping target for the first year of the PlayStation3.
We've been hearing between 4 and 7 million units could ship. And if you look at PlayStation Portable, with UMD discs, everyone is shocked at how many titles have shipped for that platform. And they're selling as well or better than the game software. So I think Sony has proven that they can drive a new video format like this with their gaming platforms.
An interesting figure, but an even more interesting point. Can Sony be trusted to successfully introduce a new format? That is the big question and I believe we should briefly turn to the PSP in order to examine this point.

As far as the PSP is concerned, there really is a vast movie catalogue available on UMD now. However, the movie tie ratio seems high because the game tie ration is actually lower than expected. The Hollywood Reporter (via azcentral) quoted Arcadia Research video game analyst John Taylor:
It wouldn't surprise me if PSP movies end up with a 3-to-1 tie ratio on PSP. To date, the game tie ratio is around 2.5 games to every one PSP hardware unit sold, which is somewhat lower than expected - in part because of the availability of movies.
So the above should read: movies are only selling slightly worse than games. I myself have never believed that movies would sell all too well on the PSP, since there is no double value in a UMD. The console cannot connect to your TV. So, if you want to watch the same movie on your TV set, you need to buy the DVD as well.

There are other factors that make the format attractive, though. Taylor elaborates that Sony waived royalty charges in order to rally the studios´ support for the console and was wondering "whether the high price of games ($40 to $50) and low price of movies ($20 to $30) is cannibalizing Sony's game sales." A good point. The disappointing game tie ration is further related to a lack of killer apps.

However, the console has started to sell well, recently outselling the DS in Japan. wrote:
All eyes (...) are on the battle between Sony's PSP and Nintendo's DS, which saw the PlayStation Portable pulling ahead of its rival in weekly hardware sales for the first time, taking just under 31 per cent market share as opposed to just over 25 per cent for the DS.

The DS, of course, still has a huge lead in terms of overall installed base, but its sales are slowing slightly after the initial rush - while demand for the PSP remains high, with Sony's limited shipments being snapped up as soon as they arrive at retail.
This is related to DS production not meeting demands. But the reason is secondary. It´s important to note that the PSP has started to outsell the DS and it´s important to watch this development closely.

Because, and this is how we are finally getting back to the PS3, if the PSP can be perceived as a success, then developers and movie studios alike will further trust Sony with the PS3 and allocate further resources and investments. If not, they may become hesitant instead and may look into switching allegiances (movie studios may switch to the HD-DVD format, while game developers may switch to Nintendo or Microsoft).

The PSP must be a complete success before Sony can start to think about selling a shipment of 4 to 7 million units in the first year. The figure itself is hard to interpret. Shipping 4 million consoles would be too little in my opinion. 7 million sounds good. We´ll still have to wait and see, I guess.

Sources: The Digital Bits, The Hollywood Reporter (via azcentral)
Thanks to: SPOnG


Falafelkid said...

Slightly off-topic update: Kotaku have come across an SCEJ site, confirming some PS3 titles.

Six titles are named, including ´Gran Turismo´, ´The Eye of Judgement´, ´Genji 2´ and ´Everybody’s Golf 5´. Launch dates are ´to be announced´. Nothing spectacular, but news nonetheless.

Richard Pearce said...

It´s important to note that the PSP has started to outsell the DS and it´s important to watch this development closely

Of course. However, I think it's unwise as yet to look at this as anything but a temporary blip. The PSP doesn't appear to be seeing any dramatic increase in uptake, and the (relatively) poor sales for the DS in the most recent Japanese charts are quite clearly down to Nintendo's inability to meet the now overwhelming demand for the DS.

I'd give it a another few weeks and the resumption of DS shipments to Japan before calling the PSP sales lead anything but a temporary aberration.

As far as the rest of the world is concerned, I'm finding it frustratingly difficult to find meaningful figures.

Nintendo claim 13 million sold worldwide, and I expect that this figure is pretty trustworthy - I can't think of a recent announcement on hardware or software figures that has been inaccurate - but that doesn't give me much of an idea of sales by territory. It appears to be something like:

Japan - 5 million-ish
US - 5 million-ish
Europe - 3 million-ish

Anyone have any more concrete figures? I'd be especially interested in UK sales figures.

By contrast, Sony recently claimed 10 million shipped, which - quite clearly - is a reasonable achievement, but gives no real idea of how many units they've actually sold. I've seen figures of 6.5 million worldwide bandied about - and if the Japanese performance maps to the rest of the world, that would be about right - but again, concrete figures are hard to come by. I would say that, as Sony are quite clearly not trumpeting the number of units sold, it would be reasonable to assume that the real sales of the PSP are significantly below the shipped total.

The figures above, coupled with the shortages in Japan, are why I was quite surprised to note that Nintendo didn't make their rumoured DS SP announcement this week. Demand appears high, and I suspect a DS SP - provided it was technically close to the original in the way the GBA SP was - would simply drive demand and unit sales higher.

Ah, well, we'll see what happens.

Anonymous said...

I hope Sony DIES! Lets leave it with 2 systems. Sony only started as a revenge system. I REFUSE to support Revenge. FUCK SONY! Nintendo and Microsoft 4 ever! I AM THE FANBOY ZEALOT!

Anonymous said...

I think its total ignorance to say that the PSP is pulling ahead of DS in sales in Japan and that its because the DS is slowing down. I watched the DS reach just below 500 000 sales in one week in japan - which country are you watching?

Let's look at how the two are selling against eachother in a month, when there are new shipents. Theres a reason the installed base of DS is so much higher - because its just a more popular system in Japan, not because of an early rush.

Oh, and I think the sales are 7 million Japan, 4 million in NA, and just under 3 in Europe.

Anonymous said...

At Nintendo meeting on 1/18, the company told there were over 5.7 mil. DS was sold in Japan.

Arsenis said...

this is more like an opinion then news!

pi said...

PSP is really pulling ahead of NDS in sales ... just last week

... but couse retail shop add price to NDS up to twice (due to lack of NDS in market) ... and some time even more than PSP

Also rumor about new NDS too.

Matte said...

Why haven't I seen this connection before, It's so obvious. Every console Sony has released before has introduced a format that you could use to play music/video and games. So when there aren’t any big games in the beginning they sell the console as a multimedia machine. Ok, so Psone and PS2 used a format that wasn't new but it was a selling point nevertheless. Psone could play music CDs and PS2 could play DVDs. With PSP and PS3 they are trying to introduce a new format and even though they are expensive, there are a lot of people who are willing to buy it. I know that Microsoft has the same vision, but they really made a mistake when they didn't go with a HD-Drive or choose Blu-ray. They still got Mediacenter =)

Arsenis said...

i guess they are focusing in america, people here are so stupid, that they would buy it just to have the latest technology!

Anonymous said...

Falafelkid why do you keep on saying "Mate" if you are from Germany? Germans don't use Mate.

Arsenis said...

He learned English in Australia! i guess.

Benjdude said...

It might not matter how many units they ship. I think E306' is going to be like the river Styx for Sony.

Raphael said...

@ all

@ falafelkid

Hier scheint einer zu sein, der schwer anzweifelbar mehr über Nintendos Konsolen weiß als (fast) alle anderen.

Beispiel? Am Abend vor der TGS schrieb er:

"Kein Visor, aber dennoch komplett neuartig. Was hält Harry Potter in der Hand? Die Idee ist einfach und genial! Lasst euch heute Nacht verzaubern ..."

"Ist ein Fake. Der echte Controller wird einhändig benutzbar sein und hat nur einen Button. Für spezielle Spiele wird es Aufsätze geben ..."

"Dann werdet ihr morgen früh eine nette Überraschung erleben. Eine neue, innovative dreidimensionale Spielsteuerung mit einem simpel wirkenden Stick."

Und am Abend nach der TGS:

"Denkt nicht, die Revolution wäre jetzt schon komplett. Das war heute ein wichtiges Teilstück. Weitere Innovationen werden folgen ... Überlegt mal: Welche Oberfläche würde sich denn z.b. für einen dreidimensionalen Pointerstick anbieten? Ihr werdet jubeln, denn Nintendos entgültige Revolution wird der Wahnsinn! Aber dennoch ... kein Visor!"

Ist für dich vielleicht nichts Wichtiges, scheint aber die Aussage deines Kollegen zu stützen, dass noch etwas Größeres auf uns wartet. :-)

Johnny B said...

Damn spammers.

With Sony's previous consoles, the multimedia capabilities were a major selling point that jumpstarted sales and created a 'captive audience' who were very likely to buy games. The PS3, however, as a gaming machine, is just a trojan horse for Sony's Blu-ray format. Gamers are an ideal demographic, and with such an installed base, Sony has a good chance of winnnig the format wars. So Sony's tactics haven't changed with the PS3, but for the first time, they are relying on their gaming reputation to sell a format rather than vice versa. The PSP is just following the tried and true Sony formula. At least thats how I see it.

PalmBeer said...

@ Falafelkid :

Could you perhaps share your thoughts on my theory on the last revolutionary feature:

Check comment #5 and the ones that followed.

Thanks a LOT

Pekka said...

On what palmbeer suggested as the last revolutionary feature, I doubt that it would work very well with people who are nearsighted. According to wikipedia, that is about 25-50% of the population depending on region.

Luca S. (Italy) said...

A little of topic:
But Revolution report is down?
I can't enter in the site.
Luca S.

Grandmaster B said...

It was reported that Nintendo was unable to provide more DS's until I believe the end of January.

I dont see what the big deal is and its Sony fanboys creating a fuss about it, manipulating the situation as what Sony does themsevles. A system doesnt go from 400k sales units in one week (and around 700k the 2 weeks before in total) to 43k for no reason. Not in this industry which a lot of it is hype to drive numbers.

Once more stock hits the floors you will see DS easily outselling the PSP once again. It is a pity for Nintendo as they were having such great sales momentum.

PalmBeer said...

@ Pekka

If you are right then I'm back at square one... My mind has calmed a bit over the last few days because I think I may have found the last secret of Nintendo...

However your fact about the nearsighted people doesn't support my theory... and that means I still have absolutely no idea as to what the last secret is... My mind will start to wander aimlessly again now...

I'm going insane waiting here....

Pekka said...


Breath deep, hey. In, out... :)

How I understand how those glasses work is that they flicker on-off on both eyes in sync with the flickering of the monitor. But if you're nearsighted and you need to take your glasses off to wear those goggles, you can't even see the screen at that distance.. For it to work, you'd need to somehow fit your glasses inside it or wear contact lenses..

Blizz419 said...

sorry to say it palmbeer, but you wont know the secret until nintendo announces it, though the speculation is fun, and maybe one of us will come somewhat close, i doubt anyone will be exactly on point and even less likely that correct info will come from zogdog

Anonymous said...

you can change mozlapunk's blog to

Blizz419 said...

i could care less about mozlapunk

Falafelkid said...

Hi Richard Pearce. Thanks for your comments. I regard the PSP / DS sales as a temporary blip myself. The main reason is the shortage of DS units, I am sure. However, we should apply the same measure to Nintendo that they ask us to apply to their opponents. And at the E3 press conference, Reggie compared DS sales to PSP sales at a time when the PSP was not yet available in Europe while the DS was. And he picked up on that fact and simply said: ´Not my problem!´

And don´t get me wrong. He´s totally right! Why should Nintendo take into account that Sony hasn´t released their product in Europe yet and adjust their worlwide sales figures accordingly? It was Sony´s failure to not release the system sooner. Only now the same kind of argument goes against Nintendo. Why should Sony take into account that Nintendo hasn´t managed to satisfy the demand?

Demand for the DS is, admittedly, extremely high. And this may make us understand why the PSP is outselling the DS in Japan and whether these reasons may still be there in a month or so. But regardless of those reasons, the PSP is outselling the DS in Japan at this time (or has been some time ago) and it is important to take note of this and watch this development closely.

Hardware shortages are almost predictable when demand is so high, but now Sony has every right to say ´Not my problem!´

PalmBeer said...

@ pekka

As i understood it is possible to wear the stereoscopic glasses over regular glasses. You can change the distances to adjust how your eyes are positioned (as this is different for each person).

Thus you can also adjust the range between your head and the goggles so your regular glasses fit between.

@ Blitz 419

Sure we probably won't know for 100% sure untill May 9th 09:30. However consider this: There are some brilliant research minds working on this almost 24/7 (names like Falafelkid, Varian & Kevin spring to mind) and also several sources who claim they either have development kits (which developers SURELY have by now) or somehow know more information then the rest of us.

Now we know the technology exists right now and has done so for quite a while. We know that combined with the revmote it will create an AWESOME game experience.

We know for 99% sure it has to do something with the graphics since Nintendo claim to be able to create equally beautifull graphics (in the sense that they'll make you say WOW will ya look at that) on hardware which will costs less then half that of the competitors. Yet they've yet to show a single screenshot and all developers are under strict NDA's.

Taking all that into consideration and considering I think of myself as someone who can think logically, I truly believe the secret will either be told, leaked or guessed sometime before May 9th.

If not it doesn't and I say WOW, then I will bow down to Miyamoto and his gang for doing such an AWESOME job and renewing my faith again in Nintendo's future. The DS did a very good job.. Now it's time for them to give the final blow and be King once again..

Fifstar said...

Hi Falafelkid,

I usually appreciate your work, but this time I think you were a bit sloppy. The news you are quoting dates 21/1/2005. 05, not 06; the article mentions games like mario ds or gran turismo 4 (ps). Nevertheless, the psp outsold the ds really in the first week in Japan, as reported by gamefront.

Media create released japanese software sales today and the DS claims no less than 7 spots (including the 4 top spots).

I think the only reason why Sony could improve over the last weeks is that some people who wanted to buy a ds weren't able to do so and instead went for a psp. And while this of course is a bit unlucky for Nintendo, I don't think it's gonna hurt em. As soon as Nintendo is able to fill up the stocks, they are gonna rocket away.

Take a look at this: The DS titles in the top ten this week combine for a sale of 360264, compared to 34937 for the psp. That's 10 DS games for every psp game sold. I think that really shows which company has the momentum in Japan


Don't get me wrong, I think the handheld "war" is far from over (especially in the western world), but this news really isn't that important. And btw., no need to nail Nintendo Japan over statements by Reggie; he is likeable, but also a bigmouth.

Falafelkid said...

Hi Fifstar, I completely agree with you. I was only talking about hardware. In fact, I mentioned the poor software tie ratio of the PSP. I am fully aware of the excellent software sales Nintendo boasts.

The news article my post was in reference to was dated January 17th 2006. Two archive articles I also mentioned were dated July and January 2005, respectively. As far as the latter is concerned, you are completely right. I was meaning to link to a current article there and failed to notice it was a year old. I apologize - and thank you for pointing out that mistake.

HereticPB said...

It is nice how comments disappear on this blog.

Anyhow my post was not about starting a flame war just pointing out somethings I saw and some history about Sony.

Falafelkid said...

Hi Heretic. No comments can have disapperaed from this page other than pure spam. Please tell me which comments you think may have disappeared and I´ll have to look into it. Thanks, Andreas

Anonymous said...