Thought this story from Next Gen was interesting since I used to work at Intel as their PC Games evangelist. Back in the day, Intel always struggled with what to do with the burgeoning console market. There was a general belief that the PC was where gaming was at, especially online gaming, and that consoles wouldn't be able to expand much beyond where they were at. Obviously that changed, and Intel became a partner with Microsoft on the original Xbox. Unfortunately (for Intel), Motorola really swept the parts-provider role in this current generation... sounds like Intel doesn't intend to allow that to happen again.

Really can't say anything more since I know a bunch of folks who have left various companies to join Intel on their new effort. I will say that it's great to see a reinvigorated Intel getting back into the game!

... with another fine steak dinner on the line.

This time around my good friend N'Gai Croal of Newsweek's "Level Up" fame is dissenting with my assertion that there's a low-end $399 PS3 SKU coming this holiday. He firmly believes Sony will return to a one-SKU strategy, priced at $499. To quote:

We pinged him back with our prediction for the remainder of 2007 after store shelves had been cleared of the 60 gigabyte PS3: one SKU, $499. Not long thereafter, Vrignaud placed a call to Level Up HQ, challenging us to a wager on the subject of Sony's pricing plans for this holiday. We initially demurred, but Vrignaud persisted, and we acquiesced; this time, we won't even be able to blame intoxicants, seeing as we accepted during business hours.

The bet is as follows: Vrignaud says that Sony will start selling a $399 PS3 by Black Friday 2007, the official start of the holiday season. We say no.

Technically, I agreed to a badly-worded bet. All N'Gai has to do to win is have me be wrong on my $399 assertion; he doesn't need to be correct about the pricing of "his" single SKU. But so be it - that's what one gets when distracted by his flowing locks.

<sigh>

If only he'd agreed to wager on them yet again! Just think of the trophy "bead" curtain one could create across the office door. (For what it's worth, I wagered a shaved head on my part; probably not as potentially utilitarian as my bead curtain, which probably drove us to the more reasonable steak dinner.)

Sony announced a PS3 "value pack" (no sarcasm intended) for Europe at E3 this year. I've seen a bit of confusion as to what that means, especially as it relates to the "price cut" (sarcasm intended). There's actually not much to this - what you're seeing here is a channel-clearing exercise.

I linked to the vaguely-attributed ThreeSpeech purposely as they include a picture of the value pack packaging. You'll note the value pack is nothing more than a box containing a bunch of other boxes; this was repackaged in Europe using existing stock, and certainly didn't come from any factories as a new SKU.

So why the channel clearing? Simply put, it's in preparation for both a real price cut and new SKUs this holiday. You already have an 80 GB SKU for $599 in the US; it's basically the high-end version, especially if you ignore the gimped back-compat functionality. The old 60 GB SKU is being cleared out for $499 as quickly as possible - as you might recall, this was the supposed "price cut" that Sony announced. In reality, once supplies are gone in the next couple of months it'll be gone forever. However, that doesn't leave Sony in a good place. A single, $599 SKU would be untenable; if they don't move significant hardware this holiday they'll basically be dead for this generation.

My prediction is that you're going to see the creation of a new, low-end SKU this holiday. It'll likely remove integrated WiFi, memory card reader, and most controversially, all backward compatibility. (Remember, there's still some back-compat hardware in even the new "software only" back compat SKUs; removing the remaining CPU is a significant cost savings.) You'll see a new WiFi dongle made available. And finally, this low-end SKU will likely come with a smaller 40 GB hard drive. The low-end price will be set at $399, with the higher-end 80 GB SKU dropping to $499.

So there you go - nothing magic about the current value SKU. It's just a classic retail technique of clearing the channel for new SKUs. Now we just need to wait a few months for the announcement - it'll have to be before Thanksgiving, so I'd expect October.

Saw an update from Compete (a company that tracks and analyzes online store searches to understand consumer demand). This time they're focusing on the Elite SKU, and asking the question of whether there's market demand for it. The whole article is interesting, so head over and take a read. But I'll pull a couple of interesting charts.

The first shows that Wii continues to be most sought after console, though its launch numbers have come down (as would be expected). It also shows that PS3 demand is declining month to month (also confirmed by the latest NPD numbers). Makes it all the more likely we'll be seeing a price cut this year. In general, all the platforms (including the 360) are holding relatively steady as we'd expect for spring months.

What's more interesting to me is a chart showing online retail demand for the Elite system as compared to different 360 SKUs/bundles. Remember, the Elite isn't even out yet, so this shows pre-order demand only - we'll need to see how that translates into real sales once available.

 

Most interesting to me is that it appears the Elite may be driving incremental shoppers to 360. To quote:

Interestingly, the Elite launch has driven incremental shoppers to the 360 brand. Looking at the aggregated** total shoppers, there has apparently been very little overlap elite shoppers and bundle or “lesser system” shoppers.
** Aggregated 360 demand measures the total number of shoppers for a 360, regardless of overlap: If someone shopped both a 360 Elite and a Bundle, they would only be counted once.

Although we'll have to see how many Elite purchasers are upgraders vs. people who have been waiting on the sidelines, the idea that the total market might be expanding is exciting. That's good for everyone, whatever platform you might care to hang your hat on!

Just a quick post to share a link to a guy who took the guts of a PS3 controller and somehow made them fit in an Xbox 360 controller. In other words, you end up with a PS3 controller with Xbox 360 controller ergonomics. Not sure why people just don't want to wait until the rumored PS3 rumble controllers come out, but it's nice to see someone who really, really likes the 360 controller.

Appears Sony finally bit the bullet and paid up to Immersion.

The cost of manufacturing the PS3 is a huge problem for Sony. When we look at best-case scenarios for the PS3 business it's quite obvious that there's nowhere near as much money to be made over the life of the program (as compared to PS2) due to those costs. Blu-Ray is a big bet to offset that, but if Blu-Ray fails, the PS3 P&L is in big trouble.

There have been plenty of exterior hints to this issue for quite some time. Non-bundling of a high-def cable is a minor example (could easily save tens of millions over life of program). Removal of hardware-enabled backward compatibility is another. And the attempt to not support rumble in the PS3 program (and have to pay royalties to Immersion) is yet another.

What we don't know is what drove the settlement. My best guess is that the case wasn't going well for Sony around back-royalties for the PS2 program. Reading the tea leaves, they could see they'd be paying up for that, and when you add in the almost universal pressure from gamers and the press to support rumble they probably figured they might as well go all the way. The interesting question is what happens next.

Sony's already getting flack for removing features (such as hardware-enabled backward compatibility) before they're even finished launching worldwide. Now we're in a situation where there's yet another feature that early adopters could be missing out on. This assumes, of course, that Sony releases a new rumbling version of the controller in the coming year - and I think it's pretty likely. Game developers have been asking for this support since day one, and as soon as it's in the PS3 SDK they'll enable it in their games. (Why not? In many cases the work is already done for the 360 version.) Consumers will buy the new controller to play with rumble support. And ironically, Sony "wins" and has a new peripheral to sell... and one that will likely cover the costs of the settlement within a few years.

All that said, I just wonder why they didn't pay up at the beginning before launching and save themselves the pain of flagellating early adopters yet again. Probably a case of believing the brand would carry them through.

Anyway, on a different topic, a bunch of you have written asking what I thought of the whole Sony/Kotaku dustup. I didn't write about it because, frankly, it was just dumb. While there's a fair point about having a relationship where a company can share information with the press and have reasonable expectations about it not being shared until the time is right, that expectation just doesn't apply to information received outside of those channels. Sony should have simply "no commented" it and ignored it, even if it was 100% true. The story would have faded away, been "OMG confirmed!" next week at GDC, and in the end, Sony would have gotten an extra week of positive press coverage. Trying to shut down the story was just embarrassing, and I think Kotaku did the right thing. That said, I have to say I'm impressed by how quickly Sony backed down and basically apologized. They're learning - six months ago the company would have put their head in the sand and tried to bluff their way through. There's hope for the future.

[Edit: brainfart, and erronously had Joystiq instead of Kotaku throughout the article.]

Just saw this interesting post from Matt Pace of Compete, a company that specializes in collecting and analyzing online traffic metrics. The company collected data this holiday tracking US video game console demand, and the results are pretty interesting (if somewhat predictable).

I won't quote the entire article - it's worth a read. However, as anyone who has tried to find a Wii can attest, the platform has had significant demand, outstripping both the PS3 and the 360. The PS3's launch was reasonably strong but quickly fizzled, with the PS3 and 360 running neck and neck toward the end of January. If that trend continues, it's going to make it tough for the PS3 to catch up to the 360's headstart.

Also of interest is their analysis of cross-shoppers, or people who were initially shopping for one platform who then sought out another (likely because the first choice wasn't available). It's clear that momentum shifted from the PS3 to the 360 for buyers of those two platforms. It's also pretty obvious that the lower price point of the Wii seems to be appealing to a different audience, one who is less willing to consider shifting their purchase to a higher-priced platform.

More conclusions are available at the original post. Note that there is a typo in the URL (playstation is spelled wrong), so let me know if they fix it and the links in this post break.

Some of you might remember I pinged Bruce Dawson (one of our senior software design engineers here) earlier with some questions around 1080i and 1080p. At the time I was trying to understand where Sony was coming from with all their "TrueHD" talk, especially as the 360 had just enabled 1080p output as well.

Anyway, last week we heard the news that the PS3 had fixed scaling on 480i PS2 titles running in backwards compatibility mode. This is a good thing. But we also heard that the PS3 SDK had been updated to allow PS3 titles to scale their content, but only horizontally. This is a weird thing.

I couldn't wrap my head around all the technical implications here, so I asked Bruce for his thoughts. Since there's nothing confidential here, I thought I'd share what he sent me. He knows his stuff, so if you find something you strongly disagree with or just want to ask a question on, add a comment to the discussion. I'll ask Bruce to swing by and answer as he has the time. Bruce's thoughts follow:

I see no sign that the PS3 contains a chip that can do vertical scaling, and this new feature (horizontal scaling) is a poor substitute for a true hardware scaler. It is a step forward for owners of 1080i only HDTVs, once PS3 games support it, but it is nowhere near as good as the Xbox 360’s scaler.

This recent announcement is just for horizontal scaling, and horizontal scaling is easy. To do high quality horizontal scaling you just need to buffer up a few pixels and intelligently average between them.

Cheap horizontal scaling is even easier: you just send pixels to the video output a bit slower (or send pixels at the same rate, but read them from memory slower). It’s the sort of thing that consoles have always been able to do. This new horizontal scaling feature just sounds like they are adjusting the video output rate.

Vertical scaling, on the other hand, is much harder. You need to be able to buffer up (or sample from) two or more lines of data, and then intelligently average between them. For high quality scaling you want to be sampling from a half-dozen lines or more. The Xbox 360 can do this. I don’t know whether the PS3 can do this, but if it could I think we would have seen it by now.

This new feature means that games that have previously only supported 720p can now, sort of, be modified to support 1080. When these games detect a display that can’t support 720p they can switch to using a 960x1080 buffer. This is only 12.5% more pixels than 1280x720 so the increase in fill rate and memory consumption should be manageable. Then they can tell the PS3 to stretch this buffer to 1920x1080 at display time and voila, 1080 support.

Except, it will be pretty weak 1080 support with an odd and substandard result. The horizontal resolution will be worse than with 720p (960 across instead of 1280), and the images will be twice as blurry horizontally as vertically. 960x1080 is going to look worse than 1280x720 (although it’s certainly an improvement over having to drop back to 480i).

No, not being sarcastic - it appears there's finally some unabashedly good news for PS3 owners out there. According to Arstechnica (and many other sites), the new PS3 1.5 firmware update has resolved the jaggies issue when playing PS2 titles. Means I can finally play Okami!

In the spirit of fairness, I'll link back to an earlier post where I stated I didn't expect they'd be able to fix this issue due to the lack of a hardware scaler. Apparently they were able to clean up the scaling in software - at least for older titles. We'll see if that work can extend to PS3 native titles as well.

About the only "negativity" I'm seeing on the web around this update is that some people seem to think the output of a PS2 title running back compat on a PS3 is "softer". You can judge for yourself from the images below (with thanks to Dot50Cal from NeoGaf). Frankly, I don't see a difference - do you?

Resident Evil 4 - PS2 (running native on PS2 hardware):

Resident Evil 4 - PS3 (PS2 title running in back compat on PS3):

... and if you believe that, I have a bridge to sell you.

According to this article quoting Game Informer magazine, SCEA's Jack Tretton is stating Sony won't consier a price drop until 2008 at earliest. To quote:

When asked by US magazine Game Informer whether Sony would cut the price of PS3 as soon as they did after the PS2’s launch, Tretton replied: “No… There’s a heck of a lot more under the hood and it costs us more money to make it.” He added that “it will be a lot more difficult” to reduce the recommended price of PS3.

I'm totally with him on the fact that it'll be a lot more difficult to cost-reduce the PS3. The Blu-Ray drive isn't going to be helping things any, Cell is still expensive to make, and the hard drive (much as everyone loves to have it) just doesn't cost reduce well either. The problem for Sony is that cutting the price this early in the console generation means they accelerate the price drop curve over the life of the console. And that means hundreds of millions of dollars gone from the bottom line - which just isn't tenable for any console manufacturer.

However, I still stand by my 2007 predictions, and believe we'll see a price cut by Thanksgiving of this year. I'll even be more specific and lay out the likely path. First we'll continue to see pricing weakness ($100 rebates from EBGames if you trade in a PS2, Japanese retailers cutting 20% off the price on their own initiative are examples). By March/April, if sales aren't picking up significantly, we'll see a new PS3 bundle deal become available. Price points will remain the same, but Sony will attempt to improve the perception of value by bundling in games, Blu-Ray movies, or peripherals (or some combination of the three). If by late summer that doesn't help turn sales around, we'll begin to hear rumblings of a price drop which will hit around the Thanksgiving holiday. And I'd expect to see at least $100 cut from the price of both SKUs.

I'd hate to be in Sony's shoes right now - they're caught between two huge rocks. On one hand they need to keep selling the PS3 at as high a price as possible to have a chance to recoup costs over the life of the program. On the other hand, they can't afford to fall off the popular interest train and become irrelevent. Ugh.

Looks like a guy with all three consoles took some measurements of sound output of all the next-gen consoles with an SPL meter. The results were interesting to me as they don't have the 360 as the loudest (as conventional wisdom seems to say). I certainly wouldn't point to this as being definitive as there are all sort of things that can make taking a reading difficult. The different sizes of the enclosures for each console is a big one as reflected noise can throw off the readings. But hopefully this'll spark some more measurements out there!

Lots of links, here's one from the local Seattle Times.

Ten million units sold wasn't a surprise, the holiday bump does wonders. It'll be interesting to see what sort of momentum that gives the system into next holiday. Holiday 2007 is where the great "war" will really be decided. That's when all the systems will be easy to find at retail, and the second to third generation of games (depending on system) will be showing off what they're capable of. It may come down to system exclusives, and those are getting rarer and rarer to find this generation.

I'm really looking forward to more details on the IPTV functionality being announced so we can have a real conversation about it. For now, just the potential of set top boxes being replaced by 360s that can both play games and act as a PVR has me salivating. I'm a tech geek, yes, but I'm not thrilled by the preponderence of boxes in my A/V stack. Would love to have a single box to tune digital TV, watch DVD/HD-DVD, and of course, play games. It's also interesting to think about what affect having a set top box that plays 360 games might have on traditional non-gamers. One can hope the box might act as a gateway - perhaps through Arcade - and allow people to try games who might not have otherwise. 

And five million Live subscribers? What's to say? Over half of 360s are connected and online, compared to around 10% for the original Xbox. Whether or not you're a fan of online gaming, the ability to stay connected to the community and friends is huge in my book. And as you learn more about Live Anywhere, all of those connected people will become all the more valuable to you. It's going to be a fun year!

Saw an article on Gamesindustry.biz talking about the console war - and seeing as it gave me a chance to use the word "phoney" in a Title, just had to call your attention to it! Actually, in all seriousness, I thought this was one of the first articles I've seen this holiday that summed up the current state well. Simply put: nobody knows.

Take their comments on Xbox and Microsoft as one example:

In a few years' time, if Microsoft has done well in this generation of consoles, 2006 will be seen as a pivotal year in that success, and we'll write things like "Microsoft's strategy of launching a year in advance of its rivals proved decisive, as it built up a significant head-start which convinced third-parties to weigh in behind the system." On the other hand, if Microsoft fails to build on its market share over the coming years, we'll regard 2006 as equally pivotal - except that in that case, we'll write things like "Despite giving itself a full year head-start, Microsoft failed to exploit this opportunity - and a dearth of AAA software for the Xbox 360 during 2006, including a period of over six months with no first-party releases and a Christmas with only one major title on the shelves, negated much of the company's effort in delivering its system to market early."

 Or Sony, as another:

The same applies to Sony - I can imagine, in 2010, writing about this year as being a turning point which saw the tide turn against the PlayStation brand after long delays, a high price point, and a leaking of negative attitude over the firm's well-documented arrogance and cringe-worthy marketing slip-ups from the specialist press and blogosphere into the mainstream press and public consciousness. Equally, I can imagine dismissing 2006 as a blip on the radar, a set of particularly painful teething troubles which were all but forgotten within a year of launch and did little to stop the Japanese giant from striding forward to victory.

All-in-all, it's a good reminder of that fact that we're early yet. Take a read - it's a nice change from the usual "game/system/gaffe of the year" sort of article you'll be reading over the next few weeks.

Just saw a post over on Engadget comparing the output of a PS2 game to the output of the same game on a PS3 using backwards compatibility. Shows some pretty nasty jaggies that just don't appear on the real PS2 - which is a bummer. I'd seen the same with Okami, but hadn't thought too much about it since I'm in the middle of setting up a new receiver that does HDMI switching as well as scaling, and thought I might not have gotten it dialed in right yet.

Anyway, looks like there's some work to be done on the PS3's backward compatibility (yes, I'm well aware the same can be said of the 360). I was actually hoping to play Okami through on the PS3, but I may need to pull the old system back out of the basement if they can't fix it. (Not holding my breath, though - this may be another ramification of the PS3 not having hardware scaling built-in.)

Anyway, here's a sample video showing the issue.

[YouTube:IoCD9TwLrVs]

Just hit the web. Wanted to highlight it as it's a great, non-technical summary of the current console war that really boils the current state down quite succintly (and accurately, in my opinion). Couple of quick quotes:

If you or your loved ones are even halfway-serious gamers who want to experience world-class high-definition graphics and an online gaming service populated with millions of other players, go buy the top version of Microsoft’s Xbox 360 ($399). On the other hand, if you do not really care about the latest graphics and want instead a riotously fun experience that can be shared by the entire family, including the nongamers who usually flee from a joystick, try to get your hands on Nintendo’s new Wii ($249).

And what about Sony, and the Playstation 3?

No problem. In fact, if you are anything other than a complete Sony fanboy (that’s Internet lingo for an obsessed, myopic groupie) go ahead and forget about the PlayStation 3 this year. Even if you find one, the overhyped PS3 does not deliver an entertainment experience commensurate with its cost ($599 for the top version, not including special cables to connect to a high-definition TV), and falls short of its main competition in important ways.

The big picture is that Microsoft and Sony are duking it out for dominance at the top end of the video game business while Nintendo has essentially carved out the less hard-core, more budget-sensitive swath of the market for itself. The Wii (pronounced “we”) is a mass-market entertainment device. The 360 and PS3, by contrast, are each trying to be the world’s best top-end video game system and also high-powered living room media hubs.

The big problem for Sony is that the 360 performs those functions better right now, and for less money, than the PS3. Sony may get the PS3’s act together in the future, but right now there is basically no rational reason to buy a PlayStation 3 instead of an Xbox 360.

I'm personally amazed to see mainstream press writing articles like this. Last generation it was painfully obvious many writers weren't gamers themselves, and didn't really understand the topic they were writing about. As such, you'd see a lot of regurgitation of press releases and PR speak. This time around people are obviously using and playing the systems themselves, and writing what comes of that experience. Very cool!

A few of you dropped me mail asking what I thought about the recent news that people have found ways to rip Blu-Ray and PS3 Game discs. Frankly, there's not that much to say. I was personally pretty wary about the ability of the PS3 to protect content due to its relative openess (ie, the ability to update firmware from memory cards, burned media, etc) as well as the ability to run an alternative OS such as Linux. Lots of potential security holes there, and it looks like people wasted no time in exploiting them.

Interestingly, a few folks thought I'd be happy about this (as I work for the competition), but that's simply not the case. I wrote months back about some of the problems with modchips and piracy; those issues still stand in my opinion. Sony is now going to be in an ongoing battle with hackers, updating firmware more often than they might have had to before (adding risk of issues/bugs), and quite likely losing software sales. That, in turn, can help depress industry investment in games for all platforms (as there is less income coming in to fund future development overall). This can also impact the likelihood of other forms of digital content coming to the platform - after all, what movie/music/game provider wants to see their content pirated? Today it's somewhat understandable that all PS3 Marketplace content is from Sony and/or first party. It's launch, after all. Six months from now, a lack of third party content will be a big red flag.

One can argue the cracking of the PSP helped contribute to its current decline (as well as the lack of ongoing quality games - there's just not much there). The good news is that no one has been able to execute a ripped game or play a ripped movie yet on the PS3. You may think it odd, but I'm hoping for all our sakes this doesn't happen for some time to give the entire next-generation ecosystem some time to mature. (For the record, I know it'll happen at some point as it does on all hardware platforms - we're not naive here.) But this sort of crack this early is pretty disheartening.

Amazing how a little reality throws cold water on some folks. Anyway, some folks thought the 1UP stuff wasn't of sufficient quality to draw any conclusions, so I thought I'd share a few more high-res side-by-side comparison videos gametrailers.com put together. As you'll see, PS3 and 360 are basically identical, and the Wii struggles to compete graphically (though the controller has a lot to offer - more on that later). Enjoy!

Motor Storm - Target Render vs. Gameplay Comparison

Call of Duty 3 - Xbox 360 vs. PS3 vs. Wii Gameplay Comparison

Marvel: Ultimate Alliance - Xbox 360 vs. PS3 vs. Wii Gameplay Comparison

I'm hoping they do more as this is about as close to factual, unbiased information as anyone will ever be able to agree on in this industry.

Had an opportunity to spend the long weekend with a Japanese Playstation 3 (60 GB Pro SKU), and wanted to share some of my hands-on thoughts. Bit late, I know, but I've been traveling. For what it’s worth, the Japanese PS3 is basically identical to the PS3 being shipped in other regions. Most games aren’t region-locked, so it can play everything I’ve thrown at it (with the exception of original Playstation games – since those are region-locked for backwards-compatibility, I can’t use US Playstation games to test that functionality.) Blu-Ray works fine as Japan and the US are both Region 1 this time around (thank god!), and the dash can be set to English so had no problems there.

Below are some of the positive and negative aspects I found.

HARDWARE:

Console itself is a heavy, hot-running beast. Not “melt the TV” hot, but not as cool as some folks might have you believe. The heat coming off the vents was similar to the heat you feel coming from tabletop projectors. Ths box is, however, very silent – definitely beats the 360 there. It weighs a ton, and the curved surface makes it difficult to integrate into the home theater rack – almost feels as though it was designed to be on top. I still don’t like the look, but I have to admit reactions from friends are mixed – about half think it looks like old-school Bang & Olufsen equipment, and the other half see a George Foreman Grill.

Controller is better than expected. It’s very light, which threw me off at first, but it’s also quite rigid. Doesn’t flex or squeak, and as it’s based on the classic PS2 design, is comfortable to hold. The analog triggers feel very cheap, though, and the lack of rumble just sucks. The motion sensing capability still feels like a gimmick to me, and the lack of rumble is very noticeable in games like Resistance. In fact, a friend asked me for the “other controller” because he thought his was broken. Sony just needs to get over this Immersion lawsuit and pay up – they’ve definitely taken a step backwards here in my opinion.

The wireless aspect of the controller definitely needs some work. You have to bind the controller to the console using the charge cable, which seems pretty gimpy. What’s worse, if you buy another first-party controller, you don’t get another charge cable – only the controller is in the package. I don’t know if Sony is selling the cable separately, but if so, seems pretty miserly of them. I just hope I don’t lose the original cable in the meanwhile!

Guide button functionality is basic, but works. Allows you to quit games, turn off the console or controller, and see battery status. One can hope they’ll eventually add community-enabling features in the future, but for now it’s pretty bare-bones.

Blu-Ray movie playback is as expected. Using the controller to control playback is less than ideal, but it works. (The same can be said of using the Xbox 360’s controller to control movie playback.) Movie quality (over HDMI) was ok, not great. However, the only movie I had a chance to check out was The House of Flying Daggers, and it appears it’s not a great transfer. Even the “True HD” clip you can download from the online store has a lot of noise and compression artifacts. I fully expect other movies to look better, but for now I’m still more impressed with HD-DVD’s quality. One really poor decision on Sony’s part regarding movie playback on the PS3 is that they did not include an IR port. This means there won’t be any add-on remote controls made available that you can integrate into your home theater’s universal remote. That alone pretty much kills Blu-Ray’s use as a high-definition DVD player in my home as I refuse to have more than one remote out (you should see the drawer where all of the original remotes live!)

I liked the inclusion of the media card reader more than expected. As I had just returned from Asia with a bunch of pictures, I was able to pull several different card formats from different cameras and quickly show them to friends. Sure, I could have done the same on the 360 or the PC with a variety of card readers, but it was nice not having to go dig them up or plug them in. That said, when you consider these readers are also pretty much a requirement (with the lack of PC connectivity in the PS3), I’m not sure I’m all that happy about having to pay for them in the total price of the box. I did have some surprising problems trying to listen to MP3s on a CD-R, as well as listen to WMA files and view JPEGs off of a USB memory stick. The PS3 recognized the CD-R and memory stick in both cases, but claimed there were no pictures or audio files on either. I can believe the system might not want to play WMA files (for obvious political, though retarded, reasons), but MP3s and JPEGs? Really? Note that I did test both the CD-R and memory stick on a 360 and PC as well where they worked fine - so it's not a physical problem. Anyone else seen this? I really struggle to believe this can be the case, and am wondering if there's some gotcha here using a Japanese PS3 (though I can't imagine what).

Integrated WiFi was a nice bonus, and other than an incredibly painful WPA password entry experience (thanks to the obnoxious predictive text entry support - more on that in a second), worked as well as one might expect. Frankly, it was quite nice to find that the PS3 does support WPA. Although one might assume this to be a reasonable standard these days (with WEP being pretty well written-off as being insecure), the Nintendo DS doesn’t support it as of yet, and I believe the Wii has the same issue. Kudos to Sony here!

[Edit: Apparently the Wii does support WPA.]

For all of the “True HD” Ultimate High Definition hype Sony has promised, there are some significant problems. The first is that even the high-end SKU doesn’t include any sort of high-definition cable connection, either component or HDMI. I can understand not bundling an HDMI cable as there’s a perception that these are expensive (not necessarily true), and hence can be a great margin-driving peripheral for Sony to sell. But if you’re trying to push HD as a differentiator, you’d think you’d at least include component cables out of the box. Lack thereof necessitated a quick trip to Magnolia to pick up an HDMI cable (and for the record, feel free to pick these up at Radio Shack as well – it’s a digital connection, so unless the cable is completely broken you’re just not going to see a difference. Sadly, my local Radio Shack was out.)

Even worse, it appears there’s no internal hardware scaler in the PS3. As reported, it appears the PS3 is unable to output a consistent signal to your TV based upon your desired selection (ie, what your TV supports). This means that while I might want to play Resistance in 1080i, if the game doesn’t support it the console drops down to a lower-common denominator of 480p. The game then tells me that if I want to play in the best quality, I need to quit out, go to the dashboard, change the PS3’s resolution to 720p, and then relaunch the game. Oh, and when I return from the game, I’m obviously still at 720p, and not the 1080i I’d prefer to navigate the dash with. I experienced this myself and I can tell you it’s hugely frustrating. This issue also affects people who have older HDTVs that only support 480i/480p and 1080i (not 720p – this was pretty common with earlier CRT HDTVs). These folks have no way to scale the game’s output to 1080i, and are thus forced to play in 480i/p. This smells of the console being rushed to market, and I’m not holding out any hopes for any significant fix. It’s bad, and feels like something Sony would have fixed if possible. My guess is the “fix” they’re working on is going to be a bit of streamlining in the dashboard (perhaps a switch to automatically change back to 1080i/p when returning from a game), but the core issue isn’t going to be fixed. I hope I’m wrong, though, for the sake of all those folks having problems.

Note that I did not try to use the PSP with the PS3 as of yet. I also wasn’t able to try out backwards compatibility as I do not have any Japanese PS1 games around at the moment.

SOFTWARE (CONSOLE):

The dashboard is elegant, and I like the XMB interface. There are times when you can get lost for a minute, but in general it’s quite clean and easy to get around. I do wish that a few more of the functions were more intuitive – it took me a moment to figure out that Triangle was often a hidden command I could use to pull up options. I suppose that’s not that different than learning how the 360 Guide works, though.

Music ripping/playback works well, and I really like the music visualizer – it’s a bit more peaceful than the 360’s visual chaos. Couple of friends preferred having it onscreen rather than the 360’s, though they were annoyed that they couldn’t connect to my music server via the network, and would have to rip CDs or insert memory cards to listen to tunes. (Note that this was in theory at the time - the later discovery of the CD-R and memory stick not working really had at least one friend wondering what the heck Sony was thinking here.) One disappointment is that I cannot play my own soundtrack over games or other experiences. Sort of makes sense considering the rudimentary state of the PS3 guide, but it’s definitely a weakness versus the 360 (at least to those people who use the feature).

I also really like the photo browser, especially the photo slideshow mode. You see your pictures flutter down and land on the ground as they scroll slowly by. It’s hard to describe (and I can't find a video link right now), but it's very elegant and, well... “Apple”. My friends thought it would be a great way to have pictures from a trip displayed in the background during a party. I generally agree, though I think there needs to be some additional capability allowing someone with a controller to select one of those images and zoom in on it. Rotating images is also slick as you see the image actually rotate into place instead of just appearing as it does on the 360. Minor stuff, but very nice. If only the rest of the PS3 OS had this sort of polish!

Whoever designed the predictive text entry functionality of the PS3 should be summarily drawn and quartered. It’s the same system as used on the PSP, and similar to T9 where it attempts to predict what they next character you’ll need is. However, it’s confusing as all heck and incredibly frustrating to use. Sometimes you get just one character with a single button press, sometimes you get two – and there’s just no obvious pattern. Even worse, imagine the above behavior when you’re trying to enter in a secret password that’s being blanked out with asterisks – it took me forever to enter in the WPA password. Think you can plug in a USB keyboard? Well, that’s only sort of true. Yes, you can plug it in and it’ll send text to the PS3. However, the interface appears to locked to use the predictive text entry, even if you’re using the USB keyboard. This means my trying to type “Ozymandias” comes out something like “Oz9ma4nd7i5s”. About threw the keyboard through the Plasma! (Note that this was one of the areas where being on a Japanese PS3 might have thrown me off. I could not find a way to turn off this behavior, and the documentation was obviously of no help. Does anyone know if there’s a way for a USB keyboard to work normally?)

[Edit: I've spoken to other people who have not had this problem. Unsure why I did, but wanted to clarify that it may not be a real issue, or might be something to do with this Japanese PS3.]

Sony’s focus on the PS3 being the center of the home means there isn’t any way to connect the console to a PC network. WiFi/Wired Ethernet allows you to get an IP address and connect to the internet, but you cannot find or browse file shares. This just sucks – whether Sony likes it or not, I have thousands of pictures and music tracks on servers in the basement, and I’m not going to copy them to memory cards or portable hard drives just to use my media on the PS3 (if that route even works!) And most consumers are in the same boat – they have a PC or two in the house, and their digital media is stored there. My prediction is that Sony eventually starts enabling PC connectivity – they just have to if they want to be successful in the long run. For now, you should just expect a fragmented experience.

I liked the web browser more than I thought. Ignoring the pain of entering in website URLs (via the predictive text interface I so love to despise), I found the ability to zip over to Gamefaqs.com or Gameratings.com to check on something pretty handy. YouTube and other Flash sites seemed to work as well. I also think the web browser will prove to be a boon to Sony down the road as it gives games and the console a very flexible interface that can be used to deliver menus, content, etc (just as we see it being used in the Playstation Store today).

SOFTWARE (GAMES):

I was able to check out four retail games: Marvel Ultimate Alliance, Resistance, Genji, and Call of Duty 3. Of these, Resistance was easily the best launch title – good story, fun shooter, and looked decent. It’s not a Gears of War, but to be fair, it’s a launch title. (For what it’s worth, I expected better after seeing some footage on PS3 kiosks in Japan; it appears, as is often the case, that the footage was carefully selected. Most of the game is pretty grey, probably due to limited texture memory. And there are plenty of low-poly items in the world – perfectly square bolts being one that caught my eye.) Marvel Ultimate Alliance and Call of Duty 3 were competent, but seemed pretty much identical to the 360 versions (with COD 3 having some framerate issues, but nothing unplayable). Genji surprised me as being a really good looking title – frankly, it’s one of the best-looking (if not playing) launch titles I’ve ever seen. This title alone gives me hope that future PS3 games will have potential.

I downloaded a few game demos and arcade titles as well. Motorstorm was a lot of fun and looked pretty good. It doesn’t look like the infamous E3 rendered trailer (no surprise), but the physics are pretty impressive. World geometry is pretty basic, though – if you pause and look around you see some pretty simplistic rocks. NBA 07 is hyped as being a “True HD” 1080p title – and yes, it does technically support that mode. However, the game just doesn’t look good. Sweat dripping down a face may get some people excited, but the rest of the environment is boringly basic. I suspect this game alone may deflate a lot of the 1080p hype once people see the sacrifices needed to hit this resolution on the new round of consoles. I can’t recall the names of the arcade titles, but they were what you’d expect – one was a Smash TV clone, the other was a Geometry Wars clone. Both fun, looked good, but nothing that you couldn’t see on almost any other platform. I did notice there didn’t seem to be a way to download a trial and then unlock it – you could download a demo, but if you wanted to purchase the full game, it appears you need to download the full game all over again.

SERVICES:

As expected, Sony’s online network really isn’t there yet. You can sign up and get a screenname, and associate that with an email address and password – that all works. And thankfully, it appears you can use the single login to log into games. But once you have that, there’s really not a lot of value at this point. Basic messaging is enabled, but no one I know was ever online or using it, and there’s no way to communicate across games. Games have seperate friends lists, and those lists aren't integrated into your PS3 friends list. Won't harp on any more - you can read these two posts for a lot more detail. One positive aspect that I liked, however, is that you can sign-in via your email address/password on any PS3 without having to move your account to a memory unit. This roaming is very cool, and feels more flexible than the 360’s current model.

The Playstation Store is pretty empty at the moment. Some game demos, arcade games, and trailers are available, but you run out of things to explore pretty quickly. Not a criticism here, though – 360 had the same problem at launch, and I’m sure more content will start flowing. It was disappointing that I couldn’t download any music however. Store is web-based, which should pay off in flexibility down the line. It’s easy enough to navigate, though using the controller as a mouse seemed a bit odd. I think I like the 360’s Marketplace UI better for navigating with a controller – mostly because it feels like you can “snap” to locations more deterministically.

SUMMARY:

In general, I didn’t find any real surprises. The system has some potential, and I fully expect there to be interesting games that will make it eventually worthy of purchase if you're a core gamer - but even then, I think we're probably talking next holiday before there's enough of a value proposition (as well as sufficient debugging time). We're probably waiting for a killer app and a price drop before we see these things really take off. It'll be interesting to see how well the PS3 sells when supply isn't constrained (before the price drop). As always, appreciate your thoughts!

I was in a conversation at Evil Avatar where some folks were doubting the veracity of Peter Moore's statement that Xbox 360 would ship 10 million units by the end of 2006. To quote the statement:

Peter Moore, vice president of Microsoft's entertainment and devices division which oversees Xbox, confirmed the company's expectation that Xbox 360 shipments would reach 10 million by the end of 2006, and 13 million to 15 million by the end of its 2007 fiscal year.

The primary reason is because Microsoft recently announced we'd shipped 6 million units, and people were struggling to believe the difference could be made up in just a few short months. The good news is that this is quite possible. To quote, well... myself <shrug>:

You have to remember holiday is something like 40-50% of the business... insane, I know, but that's also why so many games are targeted for Thanksgiving release - to take advantage of those sales.

What was particularly useful in this thread was that someone pointed to NPD data that shows this trend very clearly. Since I don't know what permissions are associated with publishing this data, I'll simply point you toward it. But you'll see that the holiday sales spike is very real in this industry, and it's the reason I believe we'll easily ship 10 million units of Xbox 360 by the end of the year.

The interesting question is whether having a ten million unit lead will matter. My guess is that it will - there will be plenty of folks who can't find a PS3 or Wii this holiday who will want to take something home to put under the tree. And common sense says sometime in the future (no, I'm not making any specific predictions or sharing confidential information), the Xbox 360 will drop in price. No matter when that happens, manufacturing scale and cost reductions will place 360 in a much better place financially to do so versus PS3. They may or may not choose to match, but the pressure will be on, and will be quite painful. All that's to say I look forward to the day when I can buy a PS3 for less than $600.

Ok. I'll stop kicking the puppy now.

I was talking to Bruce Dawson, one of our senior software design engineers here, about some questions I had around 1080i and 1080p. Frankly, I was particularly curious about why Sony has continued harping on 1080p as being "TrueHD", especially since the 360 has enabled 1080p output as well (coming soon to homes near you!) I was trying to figure out if I was just missing something, and his emailed answer was particularly clear and helpful to me, and since there's nothing confidential here I thought I'd share it with you.

The really interesting statistic that popped for me is how much less time a game console has to render a 1920x1080 scene versus a 1280x720 scene. (Remember this is on the same console, whichever one you like. This is not a comparison of different console's rendering capabilities to each other.) Simply put, for a 1080i/p game the console has 55% less time per pixel to render any special effects, anti-aliasing, illumination, etc. than for a 720p game. Yes, even Resistance has fallen off the bandwagon and admitted they can't hit 1080i/p as previously claimed. (It also helps explain why Gran Turismo HD is so underwhelming.)

Anyway, Bruce's text is below. Hope it helps clarify a few things for you!

Many developers, gamers, and journalists are confused by 1080p. They think that 1080p is somehow more challenging for game developers than 1080i, and they forget that 1080 (i or p) requires significant tradeoffs compared to 720p. Some facts to remember:

• 2.25x: that’s how many more pixels there are in 1920x1080 compared to 1280x720
• 55.5%: that’s how much less time you have to spend on each pixel when rendering 1920x1080 compared to 1280x720—the point being that at higher resolutions you have more pixels, but they necessarily can’t look as good
• 1.0x: that’s how much harder it is for a game engine to render a game in 1080p as compared to 1080i—the number of pixels is identical so the cost is identical
  There is no such thing as a 1080p frame buffer. The frame buffer is 1080 pixels tall (and presumably 1920 wide) regardless of whether it is ultimately sent to the TV as an interlaced or as a progressive signal.
• 1280x720 with 4x AA will generally look better than 1920x1080 with no anti-aliasing (there are more total samples).

A few elaborations:

Any game could be made to run at 1920x1080. However, it is a tradeoff. It means that you can show more detail (although you need larger textures and models to really get this benefit) but it means that you have much less time to run complex pixel shaders. Most games can’t justify running at higher than 1280x720—it would actually make them look worse because of the compromises they will have to make in other areas.

1080p is a higher bandwidth connection from the frame buffer to the TV than 1080i. However the frame buffer itself is identical. 1080p will look better than 1080i—interlaced flicker is not a good thing—but it makes precisely zero difference to the game developer. Just as most Xbox 1 games let users choose 480i or 480p, because it was no extra work, 1080p versus 1080i is no extra work. It’s just different settings on the display chip.

Inevitably somebody will ask about field rendering. Since interlaced formats display the even lines on one refresh pass and then the odd lines on the next refresh pass, can’t games just render half of the lines each time? Probably not, and even if you could you wouldn’t want to. You probably can’t do field rendering because it requires that you maintain a rock solid 60 fps. If you ever miss a frame it will look horrible, as the odd lines are displayed in place of the even, or vice-versa. This is a significant challenge when rendering extremely complex worlds with over 1 million pixels per field (2 million pixels per frame) and is probably not worth it. And, even if you can, you shouldn’t. The biggest problem with interlaced is flicker, and field rendering makes it worse, because it disables the ‘flicker fixer’ hardware that intelligently blends adjacent lines. Field rendering has been done in the past, but it was always a compromise solution.

Couple of you wrote asking what I thought of the recent announcement by Insomniac that their PS3 title Resistance: Fall of Man would use 22 GB of a Blu-ray disc's capacity. I also had someone point me to a recent CNET interview with Kaz Hirai in which he said the following:

Given the differences in pricing, which is fairly significant between Microsoft's Xbox 360 and the PlayStation 3, are there any chances of a PlayStation 3 down the line that doesn't have Blu-ray built in?

Hirai: The PlayStation 3 uses the Blu-ray as its storage medium for both games and for movies as well. We wanted to take advantage of the storage capacity that Blu-ray offers in terms of motion pictures and other content, but most importantly, for games as well. Our decision to include the Blu-ray player from day one in all of our PlayStation 3s was the right decision and, quite honestly, the only decision we can make.

Look at the massive amounts of data that's required to provide a truly immersive gaming experience in true HD. If you only have a DVD ROM drive, which can only go up to about 9GB or so, you're going to end up with a game that's going to have two or possibly even three discs. And then you're going to have to ask consumers to swap discs out or cache all the game onto the hard drive which I think is an inconvenience--not to mention the fact that you're going to fill up a 20GB hard drive very quickly with some of these games. So trying to go without a Blu-ray drive in the PlayStation 3 really is a nonstarter.

I've already written some thoughts about Blu-ray's capacity being irrelevant for games in this generation. In that article I stated that while I believed we'd see games released on larger discs, I didn't believe the content on those discs would directly impact the game itself (versus having "making of" or other random bonus material).

Appears this is the case with Resistance. A recent interview with the developer in the Unofficial Playstation Magazine stated that the 22 GB "game" size was made up of localized content. In other words, instead of having an English version of the game, a French version, a Japanese version, and so on on separate discs, all of that localized content is simply being bundled on one disc. While that makes things a bit easier for the developer, the disc capacity isn't being used in any meaningful way to improve the game. And frankly, I believe time will show (after the game is released and people start poking around the file system) that there isn't any reason the title couldn't have shipped on a DVD-9.

As to Hirai's quote on next-gen games needing 2-3 discs, the simplest answer I can give is to just look around. There appear to be plenty of next-generation games out today that are doing just fine on one disc... I'm really not sure what game store he's been shopping at. And this holiday when you're able to compare next-gen titles side-by-side on multiple platforms, I suspect you'll quickly find the vast majority are on one disc, and that the game content is identical.

I thought the the poke about "caching the game to the hard drive" was a bit odd as well. At GDC Europe last year Sony mentioned in their presentation that the PS3 Blu-ray drive would have sustained peak transfer rates of 36 MBit/s (4.5 MB/s) at 1x speed. Since then it appears that the drive has been upgraded to a 2x drive, which would enable transfer rates of 9 MB/s. Assuming a full 50 GB Blu-ray disc, at this speed you'd need just over 90 minutes to read the entire disc through memory. Of course, you can't fit all of that data into system memory at the same time, so you'll either be streaming a great deal (hard even with faster optical drives) and/or caching data to the hard drive. There's a reason the PS3 is so expensive - once Sony committed to Blu-ray as a corporate strategy, they were also forced to bundle the hard drive in every box to help mitigate slow disc data transfer rates. PS3 games need that hard drive to load in any reasonable time - just look at the PSP for an example of the effects of a slow optical drive on game loading times.

One last thing to think about. Put yourself in the shoes of a game developer faced with loading game assets into memory from a slow optical drive. You're going to have to be clever and find ways to try and make sure the data is laid out on the disc where it's most quickly accessible. You might do things like burn chunks of data to the disc in multiple locations to cut down on seek times, or duplicate assets such as level textures in each level's package so they can be read serially on level load. In other words, you might start storing data inefficiently and duplicatively to better conform to the drive's poor speed characteristics. It's not too hard to see how a game could quickly balloon in size while not adding any actual value or gameplay.

I received an email from “HcC” earlier last week with an interesting topic: console modding. To quote:

“I also wanted to ask your thoughts on piracy and the xbox modding community. How you think it impacts the way games are made, if you think it does, or anything of the sort. It's just a topic I wouldn't expect to see on your blog and would love to know your opinion. Do you think it will change the success of the xbox 360 in a positive or negative way if it is modded beyond the current firmware runaround.”

It’s a great question, and I’m happy to share some of my thoughts and opinions on the topic.

For the uninitiated, a mod chip is simply a device that circumvents some of the protections placed on a video game console. A “modded” console is then one that can run unauthorized content or games and potentially enable new functionality. Modchips (and “softmods” or software exploits) have been around since the beginning of consoles, and have a small but vocal minority who tend to argue vociferously about why they have a “right” to use them. These modchip defenders tend to use one of three arguments to justify their use:

• the ability to copy and play pirated games
• the ability to play import games
• the ability to add new functionality (such as running homebrew software)

Let’s take these on one at a time.

First, the ability to pirate games. I mean, really – what can you say here? We already had a conversation about piracy earlier, and at the end of the day every game not legally purchased is simply stealing money from the creators. Some people attempt to justify piracy by pointing to the perceived high price of their hobby and/or games, but the argument just doesn’t hold up. You don’t steal a Ferrari that you’d love to drive simply because you can’t afford it, right? Same thing.

The desire to play import games is at least a reason I can rationally understand, but cannot condone. Sure, there are games you might want to play that are either released earlier or, quite possibly, not released at all in your region. But sometimes companies have good reasons to either not release a title into a region or release it at different dates. It may be because of the time and cost of localization, marketing plans, ad buys, cultural considerations, or perhaps even because of the impact of piracy in the region. Whatever the case, it’s safe to assume the publisher has thought about it. The good news is that most publishers are developing with multiple platforms, regions, and languages in mind up front, so this is becoming less and less of an argument. (After all, it’s in the publisher’s best interest to sell as many copies as possible, right?)

Finally, let’s talk about the desire to add new functionality to the console. Some folks want to enable new functionality on consoles beyond what was delivered by the manufacturer. Sometimes the desire is to add new hardware capability (say a larger hard drive); other times it’s to add new functionality such as PVR support, web browsing, or to run homebrew applications of whatever sort might be imagined.

This is the one aspect of modding I’ve always struggled with the most myself, but at the end of the day I just can’t condone it. Here’s why.

The console business is a razor/razor blade model. Hardware (the console) is subsidized (meaning Microsoft sells it at below cost) to make it easier for consumers to get it into their homes. The business then makes this up by selling you additional hardware (peripherals), software (games), and services (Xbox Live). The success of this razor/razor blade model is tracked by analysts as the “attach rate,” or how many of these add-ons an average person might have per console. (The most common metric you’ll see tracked is the game attach rate to a console, but some analysts also track the attach rate of peripherals and Xbox Live.)

Over time you buy games (and other peripherals and services). The revenue generated from those purchases helps to make the business a profitable one (which is the reason you see a healthy game industry, and continual investment in new features, games, and hardware). Some folks point to the fact that they bought the hardware and believe they should be able to do anything they wish with it. Unfortunately, this argument ignores the fact that they’re buying that hardware at below cost, and it’s the razor/razor blade model that makes it even possible to buy at that price. The other solution would be to sell the hardware at a price that covers cost and also includes a profit margin so that selling the console alone (with no game/peripheral/service sales) could be a stand-alone business. Problem is A) this model already exists (it’s called a PC), and B) selling a console at PC prices (especially with the capabilities the console has in it) would simply be too expensive and no one would buy it. At the end of the day, the cost difference needs to be made up somewhere, and that’s why we need to you buy those razor blades.
 
The interesting thing to me is that I think the idea of homebrew/user-created content is looked at with much interest at Microsoft (we are a software company after all), but the challenges caused by the impact to our business model make it very difficult to enable. Interesting tidbit: a friend of mine at Microsoft once demonstrated a modded PSP to Bill Gates and showed off all of the interesting things that enabled. According to my friend Bill was intrigued and asked the audience what we might be able to do to encourage this sort of thing without damaging the business. I love that our top executives think this way – the challenge, of course, is that modchips allow much more than just homebrew software, and so it’s a tough problem to sort out.

To sum up, I think the reason we see a lot of industry angst around modchips is the piracy it enables, and the damage it causes to attach rate (which in turn breaks the fundamental model all consoles are built on). A lower attach rate is bad for the industry as a whole as it impacts game, hardware, and service sales for the entire industry (not just Microsoft). While I imagine there may be a few folks who really do just want to run custom applications on their console and have no intent to pirate games, we have yet to find a way to separate legitimate use from illegitimate. It’s disappointing, but there you go.

I do hope my opinions on the subject help you understand how many in this industry view the subject. At the end of the day piracy is a tough problem that affects us all. I do hope that it one day it won’t be as much of an issue, but I fear that time is still far away.

Been a few rumors on the web about a potential Xbox 360 price drop. John Porcaro over at Gamerscoreblog did a short post to debunk those rumors. Even if I didn't have immediate faith in the accuracy of what John's saying (which I do), common sense tells me the same thing. It's just too early for a price cut, especially in world where console manufacturers lose money on hardware. (Can you point to any other successful console launch where the price was cut less than a year after launch?) I suspect most of you know this, but the console business is a razor and razor blades model where companies take a loss on the cost of the hardware and make it up on software royalties and other revenue streams. I sure hope we'll drop the price one day, but I'd take John's lead on this right now and not hold your breath for this holiday.

P.S. - Please don't point to that accursed Acts of Gord link again. It's wrong. Period. Although I'll admit it's always intrigued me to see how quickly a random website can become a source of "definitive proof". That said, I appreciate that they've finally added a comment at the bottom of the article:

"Edit - 12/17/01 - Nick Maragos over at "Gaming Intelligence Agency"  sent me this link http://www.thegia.com/news/0108/n23r.html that has this in it:

In more general matters, Mr. Main admitted that the GameCube's pricing would not initially follow Nintendo's rule of turning a profit on every console sold. "We expect to incur a small loss on the GameCube hardware initially, and you're right that it hasn't been our habit in the past but we expect it to turn okay early next year."

So it appears that now Nintendo has joined the ranks of console manufacturers that outsource their machine production and takes losses."

Indeed.

I posted a bit earlier on the good news for Sony regarding the PS3 beginning manufacturing. In the same vein, it appears Gamesindustry.biz just sent out their weekly email news update with some balanced commentary on what this means for Sony. I thought it was a really good perspective and so I wanted to share some excerpts. Note that I'd usually link to the full article but can't find it on their website; if anyone has an URL I'm happy to include it as well.

The article starts as follows:

"Depending on who you choose to believe, the production process for PlayStation 3 is either running smoothly with plenty of redundancy built into the plan to ensure that sufficient units are ready for the market in November - or is the greatest nightmare in Sony's history as an electronics manufacturer, with low yields threatening to make the company's expensive albatross about as rare as rocking horse faeces come Christmas.

The two points of view - and let's not pretend that either of them is actually a fact at this point in time - don't reconcile terribly well with one another. Media reports supporting both of them are well distributed around the Internet; on the one hand, we have comments from IBM a few months ago indicating that yields of the Cell processor were great, whereas a directly contradictory article more recently cited an anonymous source saying that yields were far lower than expected. Some sources have reported that PS3 chipsets are already being shipped; others seem to believe that they won't ship until late August. And so on, and so forth.

In other words, nobody outside of Sony and its closest manufacturing partners actually knows what on earth is going on with the PS3 right now - but one very strong pointer in favour of the "everything on track" camp came this week from Chinese manufacturing firm Asustek, one of the companies which has been contracted to build the console."

All-in-all I think this is a fair assessment. There's a distinct lack of knowledge around the reality of Sony's manufacturing plans, and the rumors out there could point either way. While I have definite opinions on certain rumors (and attempt to bolster those opinions with a clear analysis of how and why I'm reading the tea leaves as I am), on something like this there's really not too much to say at this point. Sony needs to be manufacturing now if they want to make their November street date. If they indeed are, that's all goodness for them. If not, it's a problem. We'll find out for sure in the coming months.

On a general sidenote, while I don't shy away from pointing out inconsistences in Sony's (or others) messaging, strategy, and tactics, it is important to remember that there are very few facts out there that we can all point to. This is why it's important to be clear on what's a theory, what's factual, and what supporting evidence you're using to bolster your argument(s). Remember, at the end of the day it's all opinion until proven one way or another. I'd love to see discussions on this site using more support material when possible.

Anyway, to sum up on a positive note:

"Manufacturing units well in advance and engaging with retail to discuss pre-order schemes isn't the kind of thing we'd have expected from "old" Sony - these actions, if true, are the actions of a company that has learned some very hard lessons from its own mistakes (with PSP and PS2) and indeed from the mistakes of its rivals (such as Xbox 360's under-supplied launch last winter). Of course, none of this changes the fact that PS3 will still have to compete with a lower-priced Xbox 360 with a wider catalogue of games, and with Nintendo's fascinating and bargain priced Wii - but if the firm can sort out the problems which have traditionally dogged Sony hardware launches, this Christmas' retail battle suddenly becomes much more interesting."

And again, it's a fair point. We used to say "never count out Nintendo" because they tend to be very good at coming up with original, innovative concepts that somehow reignite that old gaming magic. Although I'm down on a lot of what Sony has done with the Playstation 3 (E3 renders, changing system specs, pricing, etc.), I think I need to state for the record that I personally am not counting Sony out of the game. This holiday will be key, but if Sony can ship 4-6 million units as promised and have at least 1-2 "must have" titles, they'll remain in the game in my opinion.

Some positive news for Sony for once (if the reports prove true). Next Generation reports that a factory in China has begun production of the Playstation 3 with a goal of delivering as many as 200,000 units a month (with more manufacturers coming online in August.) Timing feels right - they need to start now if they're to have a hope of having suffficient units to launch this November.  Still, if you want one for Christmas be sure to put in a pre-order as soon as they're available. There's no doubt that every unit Sony can produce this year will be sold.

Remember my earlier post dissecting an alleged PS3 Rude Q&A? There’s just something about a finely honed - yet evasive - turn of phrase that sets the Spidey-sense tingling, and I’m getting that feeling all over again around the rumor of the Playstation 3’s main CPU speed being downgraded.

First a bit of history. Back in June Kotaku posted an IM conversation with an alleged PS3 developer. That developer stated that CELL yields were low, and that the already reduced 3.2 GHz CPU speed (from a promised 3.5 GHz) could end up being as low as 2.8 GHz. (He also stated that there would likely be an external power supply, which I 100% believe to be the case.) Anyway, at the time I found the conversation a fascinating read because it struck me as very credible.

I don’t know how much you know about the CPU manufacturing process, but a good summary can be found here. The key aspect I want to highlight is that any new manufacturing process has a ramp-up period where a lot of sub-par or dud units are made. This is why new CPUs from AMD, Intel, and IBM are always more expensive and hard to find early on. It’s simply a matter of supply and demand, and the supply tends to be a lot less early on because yields haven’t been perfected yet. Every silicon manufacturer faces this issue, and IBM (and hence Sony) also faced this issue when manufacturing the CELL processor. The majority of CPUs off the line were likely subpar or duds, and fewer than desired would run at the target speed. (What that target speed was is a matter of debate, but if you look back over the last few years of Sony announcements the CELL was originally targeted to run at 4 GHz+, dropped to 3.5 GHz, and then dropped to 3.2 GHz.) Because of this, it’s extremely likely early Sony development kits didn’t run at full speed. Any game developer will tell you that this is very common in console development, so it’s not necessarily a negative. The key is to accurately tell developers what the final silicon would run at so they can target their games appropriately. Anyway, to wrap up this little bit of history, Gamesradar also picked up on the rumor a few days later, and the web’s message boards were set aflame.

Several days later Sony’s PR team swung into action, and stated the following:

"Developers have been working with PS3 dev kits for anywhere between eight and 12 months, and to suggest that we'd now take the decision to downgrade the hardware at such a late stage, is, well, ridiculous.”

Remember my spidey-sense? Read the above statement carefully, and notice the finely-crafted wording. In particular, notice that the response specifically discusses PS3 dev kits, and doesn’t mention final retail hardware – this is key, as we’ll see later. Summarized, it states that the suggestion Sony would “downgrade the hardware [PS3 dev kits] at such a late stage” is ridiculous.

Fair enough. While not necessarily “ridiculous,” it would be an immense PR blow to drop the system’s speed at this late point. That said, think back to the conversation we just had about CPU yields, and how it’s extremely likely early PS3 dev kits were running at a slower speed. What if that slower speed were, say, 2.8 GHz? And what if Sony had intended to upgrade the CPU but found it couldn’t due to poor yields? Then the fine bit of word-mongering above suddenly makes a ton of sense. Sony never technically downgraded the development kits because they were always at this speed… but the end result is a effective downgrade to the final, shipping, retail systems because this is what developers have to target their games to. And once the console ships at a certain clock-speed, it’s fixed for the life of the console – there are no do-overs.

I think I’ve made my disappointment about game journalism abundantly clear, and unfortunately, it appears none of the press picked up on this verbal dodging. In fact, it appears many sites just ran with the Sony party line and promptly forgot about it.

So where does this leave us? Simply put, I believe the primary CPU in the Playstation 3 (the PPE, or PowerPC-based CPU) currently runs at 2.8 GHz in game development kits, and that final retail consoles will also reflect that lowered speed. It’s my hope that some of the gaming press might use their contacts and ask developers the very specific question of how fast the CELL runs – my guess it’s slower than we all might hope. We'll find out in the end, even if it's in Fall when the box will (supposedly) ship. But it would sure be interesting to find out beforehand.

Oh, and the final quote of interest?

“Worse still is the suggestion that we couldn't fit all the technical components into a plastic box."

I think you fit everything into a plastic box, Sir… but then it melted. ;)

[Edit: digg this article if you found it interesting!]