Analyst Weighs in on PS3

Posted by jgaudiosi :: Industry Trends

Ps3_15 PJ McNealy, videogame analyst for American Technology Research, issued a note with some thoughts on the recent PlayStation 3 launch event in San Francisco. He believes that some of videogame publishers will become aggressive with price cuts on both current generation and next generation software ahead of what will likely be a big November month for new releases. He sees these moves as an effort to move inventory and not a reflection on the game industry's health, which has been extremely well throughout the year.

McNealy believes that Sony is ready for the launch. Sony spent much of the Gamer's Day communicating that many of the loose details, such as more color on online and peripheral pricing, have been nailed down, and he thinks there is little risk to expectations at this point.

After looking at the full line-up of launch titles at the event, McNealy singled out "Resistance: Fall of Man," which is a Sony-developed title from the Insomniac Games, as the killer app. Third-party games, as expected, weren't as memorable, although many of the games looked good.

McNealy said that PS3 games look as good as Xbox 360 titles, and March quarter titles such as "Lair" are one of the few that look better. As a result, for games that come out on both PS3 and Xbox 360 this fall, McNealy believes most gamers will buy the Xbox 360 versions. Since Xbox 360 also has a larger installed base, there's a much smaller target audience for PS3 owners until next year.

In the online space, McNealy doesn't believe PlayStation Network will result in meaningful revenue for third-party publishers this year. He does believe companies like Activision will support games like "Call of Duty 3" with downloadable content within two months of launch.

The lack of any vibration or rumble in the PS3 SixAxis controller could be a positive for first-person shooter and sports games for Wii and Xbox 360, while PS3 has the added features for flying games and titles like "Tony Hawk Project 8."

With regards to development of cross-platform games, McNealy said thre are very few, if any, third-party PS3 exclusive launch window titles, and most of the developers are repurposing Xbox 360 titles and assets. However, when it comes to 2007 titles under development, the answer varies. Some publishers have been building separate game engines for PS3 versus an Xbox 360 engine, and McNealy believes that most publishers are working through these issues now. As a result, he believe that the sharing of game engines internally among development teams could prove to be key operational metric differentiators over the next five years.

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