Oli Warner About Contact Oli on Twitter Subscribe

The Maths Behind… PS3

Friday, 17 November 2006 pr ps3 rant sony

Warning: This post contains a high level of truth about the PS3. Sony fans be advised.

PS3 Equation

Before I get into this too much, it looks quite obvious which side of the fence I’m on but you’re wrong… ish. I’m not going to buy a Wii or a 360 but I’m also (definitely) not buying a PS3. I prefer PC games as, frankly, FPS (first person shooter) and RTS (real time strategy) games were meant to be played with a mouse. If there was a god, I’m sure that would have been the eleventh commandment. Anyway…

It doesn’t take a genius to work the maths on why the PlayStation 3 is selling out everywhere, something that some people (especially Sony) class as a popular product; a success story; a extremely highly desirable product.

You see, most people that aren’t plugged into tech-news sites have no idea about the shenanigans Sony has put its fans through. They see this as a totally normal (albeit slightly ludicrous at times) console launch. People are queuing, paying and getting what they’ve been waiting for. But…

Supply and Demand

There are two parts to supply and demand. To sell something well you need to start with demand and Sony has been trying to work its ass off over the last few years to keep people as confused as possible about the console. Why? In keeping the media and the fans knowing as least as possible and leaking out very small pieces of information at a time, they manage to get everyone talking and postulating over what the real news is. Regardless of it being good or bad news, this has people talking about the PS3.

Secondly, there is supply. This is the one thing that Sony can control and control it they have. There have been several stories from “leaks” from low level staff which are eventually “confirmed” by much higher sources that Sony have been having a really hard time getting all this power into the little plastic shell. Overheating and Blu-Ray diode batches going wrong have both been extremely convenient fall-back excuses for Sony.

I think (this is just a theory of a rambling man, not confirmed truth – nobody sue me into oblivion – RIP Lik-Sang) that Sony have always wanted a very small number of units hitting the ground when they release it because that’s what they’ve achieved. Less than 50% promised units in Japan. Massive cuts in the US. 4 month delays for the EU (their soon-to-be-former biggest customer).

Something they don’t teach you in lower-level economics is the way crazed people work. If something that you’ve wanted for a while is coming out in a while and you’ve been told there are very limited numbers, you’re going to go to a lot stronger measures to enable yourself to get one. There has been camping, a riot today, people getting shot (albeit with a BB gun) and all sorts of theft surrounding Sony’s PS3.

How does that translate to the mainstream media? “The PS3 is solid gold and everybody wants one”. The parents looking for ideas; the little kids too ignorant to read around; all the people with the purchasing power but no idea; all these people are going to see media like that and go “I NEED ONE NOW, JANET!”.

Clever people have seen this demand and have exploited it, with a PS3 going for $15,000 to a guy in the UK (who wouldn’t have seen one for another 3.5 months anyway, and then it would have cost ~$1000; but still quite a mark-up). This drives things even crazier. More media. More people thinking they want to buy a PS3. More demand.

Indeed it has been reported that gangs in Japan have been hiring cheap Chinese immigrants to wait in queue and buy a PS3, give it to the ringleaders, where they take it to an action site and sell each one for hundreds of thousands of dollars. Additionally, the sales figures indicated there were a massive amount more consoles sold than games… A little suspicious, no?

I would not be surprised if the same thing was happening now in the US. When gaming sites interviewer some queuers, they had very little idea about what the PS3 really was.

When you drop supply low enough, demand becomes a self-feeding monster using dirty, misconstrued PR to fool people into thinking that this console is amazingly popular.

Well done Sony. You’ve played this game well.