Thursday, February 22, 2007

All Hail the New Media!

It's classic steam vs. sail over at where Priya Ganapati writes this rosy story about Sony's PS3 prospects. Ganapati declares:

Sony's (SNE - Cramer's Take - Stockpickr - Rating) PlayStation 3 game console may finally be ready to break out.

Retail giants such as Best Buy (BBY - Cramer's Take - Stockpickr - Rating) and Target (TGT - Cramer's Take - Stockpickr - Rating) are expected to feature the PS3 console in their weekly retailer advertisements starting this week in a move that could signal Sony has sorted out production problems with the next-generation device.

Sony had faced delays in the mass production of blue laser diodes, a component of its Blu-Ray hi-definition DVD player that is part of the PS3 console, which pushed the launch of the console in Europe to March 23.

The company launched the PS3 in North America on Nov. 17, but supply of the consoles has been tight.

Now PS3 supply levels are "stabilizing," says Dave Karraker, spokesperson for Sony Computer Entertainment America.

"We are seeing more units of PS3 in stores on a regular basis and not the extreme sellouts that were there soon after the console was introduced," says Karraker. "And with supply levels stabilizing, you can expect to see increased marketing for PS3."

Best Buy featured its first ad for the PS3 on Feb. 18, while Target is slated to put one out on Feb. 25.

On the matter of Sony's supply problem, that seems to have been solved since about the first week of January, which is when major retailers began reporting that they had PS3 units sitting on their shelves. As for the question of advertising circulars, the PS3 was being advertised in Best Buy and Circuit City circulars in my Sunday paper. I remember, because at the time I noted how silly these ads were since the supply of PS3s was so tight. (I believe--but can't be certain--that the PS3 appeared in at least the Best Buy circular during the Christmas season, as well, but my memory on that count may be faulty.) Perhaps Ganapati meant that this is the first ad Best Buy has featured for the PS3 in 2007?

There is a larger question about the strage angle of this story--namely why the piece is mostly positive even though Sony's raw sales data (which Ganapati mentions later in the piece) are so bad and the company is having a senior management shake-up in Europe just weeks before the launch of the PS3. But that's less important and is really a matter of perspective. Ganapati is certainly entitled to her analysis of the situation and she may be right that the PS3 is about to break out.


Anonymous said...

You're correct about Best Buy. Best Buy has included the PS3 (console & games) in its weekly ad a couple of times both in 2006 & 2007 (I don't know about Circuit City's weekly ad)

Anonymous said...

Good to see that the PS3's tie rate has jumped 80%. Let's see an 80% increase of a tie ratio of less than one game per console sold brings the current tie ration to what 1.5 or 1.8?

Anonymous said...

I personally think PS3's problems haven't been supply based. They're not selling because: a) they're much more expensive than 360s, b) they only have one good game exclusive to the PS3, and c) because programmers are just now learning how to program for the PS3, their graphics currently aren't as good as the 360 when running the same games.

If I can play the same games with better graphics for cheaper, then why would I buy a PS3?

-- The Comish (sic)

Anonymous said...

I'm trying to understand what a "tie rate" is. The original context is dvd sales (that's all I have)and I would like to translate it into French. Could you explain me its meaning ? Thanks!!