Beta

Beta software - oh, how unfinished you are. More refined than alpha, but less stable than gold. Beta software means different things to different people, depending on who you ask. To programmers, beta means "developers only." To Google, beta means a service that is fully functional but unfinished. To gamers, beta is PC games 1.0 - Game developers frequently ship games with flaws that will be ironed out later.

I was playing Warcraft 3 online the other day. There's a cool features for custom maps - single-map campaigns with objectives outside the standard army-building format. The other day, I saw in the menu a beta version of Smash TV. Since I had played Smash TV as it was recreated in Starcraft, I jumped at the opportunity to play this game - even though it was still in beta.

I found an available player slot, where I found several other players and the game developer, who was hosting the map. I discovered a like-minded individual, who had decided that if nobody else would make a Smash TV for Warcraft 3, he would. Unfortunately, when we started the game, the developer noticed that there were no enemies to kill, thereby making victory or defeat impossible, and he realized that the game would need to be revised to fix that. The game ended, and all the players left.

Another time, I found a beta tower defense game. A tower defense game, to all you non-gamers, is a game where the object is to build attacking powers in a maze-like fashion to prevent enemy units from reaching their destination. Anyways, unlike the game of Smash TV, we unsuspecting players found the beta to be an interesting experience. Much of the game was unbalanced in the player's favor, although there were a few instances where the enemy units were too resilient. The game ended 3/4 of the way through, when one of the levels wouldn't start at all. And despite the debug commands the game dev put into the game, there was nothing to do but say good-bye and clear out.

Game developers, I salute you.

Sony PlayStation 3 Revisited

If you haven't noticed, I've been subjective about the PS3 before I started writing for this blog. When in May of 2006 Sony announced that the premium (read: only version anyone would ever consider of the ) PS3 would cost $600, I was pissed. The PS2 is a fine console and by now damn cheap, too. Sony has fumbled with the PS# since the beginning, and they've been arrogant about it to boot.

Sony assumed that people would not care about the exorbitant price tag - relying almost solely on brand name, just like I assumed - and buy the next version of a video game console. Sony's downfall came when they tried to push the PS3 as a media platform as well as a video game console. Here's the golden rule: If it plays video games, people will know it as a video game console. It plays Blu-Ray movies and MP3s? Consumers will still recognize it as a video game console. The Xbox 360? Yeah, it plays media, but if will forever be known as a video game console for consumers.

Sony pissed me off by figuring the cost of a Blu-ray disc player into the PS3, thus raising the price. Not only do I not want to spend $600 on a video game console, but I also have no interest in either of the high-def movie disc formats.

The market actually surprised me. The PS3 craze lasted only a week after the PS3's American launch, and then the whole franchise promptly imploded. When SCEA (Sony Computer Entertainment America) President Jack Tretton promised $1200 to anyone who could find a PS3 on store shelves, the writers of webcomic Penny Arcade found $13200 worth of merchandise in less than an hour. Simply put, PS3s aren't exactly flying off the shelves.

For the best market indicator, we turn to eBay. At the time of this writing, there are 1043 PS3 systems being sold - 98 Used. Two months ago, there ere 10 thousand such auctions. Many Playstation 3 consoles were selling for over $700. At this point, on the other hand, you're hard pressed to find a PS3 selling without a bundle for more than $600 - with games and controllers, $750 at most.

The scalping supply for PS3s is shrinking. Right now, there are 1886 Wii systems for sale on eBay - nine-fifths of the number of PS3s. In a month or two,practically no one will be selling PS3s as they're being sold. We will no longer see the majority of PS3s sold in mint condition. The PS3 seller will turn into a consumer who has finished using his or her console and now wishes to sell it. I'm not going to say that the PlayStation 3 has reached market saturation, but the supply curve is shifting downward; since all PS3s are the same, that means the price is declining, as well.

Sony has managed things very badly. They've completely misjudged the market. Even the future doesn't look bright. You know why? At this very moment, Nintendo Wiis are flying off the shelves. And with those Wiis are games. And when a consumer spends hundreds of dollars on the video game system, the chance of buying an additional console is minuscule - especially when the marginal cost of that second console is over twice what you paid for the first. Couple that with a low penetration of high-def television sets - necessary to fully enjoy the PlayStation 3's capabilities, and you have yourself a quagmire. Sony is taking a hit that will stay with them for years to come.

Still no Wii

I guess I'm not the only one who wants a Wii. Right now there are 11,000 Wiis for sale on eBay. I guess I shouldn't be surprised. It's been almost two months since Nintendo released the Wii, and Nintendo still hasn't been able to meet the demand. Good Lord, Nintendo should have had the whole thing in the bag by January 1st - 4 million units sold, as promised? But Nintendo didn't deliver on shipping 4 million Wiis. They're giving waiting consumers like me time to rethink their decisions. If you're a company with the hottest game console in the world, you don't leave your consumers hanging for several months! That gives the hype time to die down, and you can't have that!

Fifty and two hundred dollars is no small price to pay. You can't spend that amount on an impulse buy. Tell consumers that they can buy a Wii and then not let them, and after a while they'll find some other use for that quarter of a thousand bucks. If you let people know that they can live without your product for an extended period of time, they will learn to live without you. I have never seen a Wiimote in person. I have never seen the console in action in person. I'm really frustrated about how badly Nintendo is going about this. Bitter? Yes. Nintendo should be doing a better job than this.

Free games (as in beer)

The free multiplayer game scene is really lacking: Sporadic, disunified, and stagnant. With no accounting incentive in the market, the incentives for developing such programs are too implicit for programming teams to find worthwhile.

Everybody wants stuff for free. Admit it, if someone gave you everything on a platter, no strings attached, I guarantee you'd take advantage of it. People love free stuff. (Some proponents of the free programs movement also believe that code should be free.) There are tons of games that have been developed to meet this demand, ranging from Runescape, to GunZ, to War Rock, and beyond. Some of the people behind these games are in it for the money; others, the achievement; others, the community. Whatever the motivation is for writing these games, there seems to be a fair amount of people willing to satisfy the demand for free stuff.

Of course, simple economics become a significant problem simply at the mention of free stuff. Programming a fully 3D, immersive, interactive world is by far an exceedingly complicated task. Programmers work for high salaries because programming is not for everyone. And there it is: What do the developers of free games get in return? Some only work on games in their spare time; others, who would like to participate, can't. The reality of the situation is that performing a difficult task for little compensation isn't feasible. Not only is it hard to support a project with donations, but resources become more scarce when there are competing projects. There are hundreds of free games! Obviously some people have to be excluded from the donation collecting process.

Therein lies a further problem, one that (not coincidentally) plagues the open source scene, as well (but to a much lesser extent): Disunity. There are so many games that it's a challenge to find talent that can do significant work. Programming in a team is like forming a band: If you don't know what to do, it's not like you're going to be able to do a lot after a few weeks of practicing. Learning how to program takes months, and programming promotes a never-ending process of learning. That is the premium that corporations like Apple and Microsoft pay for. How are you going to convince people on the Internet who you don't know to do it for free?

How does the PS3 market add up?

Namco believes that a developer must sell 500,000 copies of a game to make money. UBS believes that 30 PS3 games must be sold per PS3 for Sony to break even.

In mathematical terms, what does that mean?

Playstation 3 (60 GB) = $600 + tax
30 PS3 games = $1,800* + tax
Total = $2,400

* Assuming that each game costs $60

Sony earns $10 per PS3 game sold. That's $300 in revenue for 30 games. That almost covers losses from the 60 GB PS3, according to my oft-cited Ars Technica article.

Of course, GameStop has reported that PS3s sell with an average of 1.5 games per console.
Rounding up, Sony gets only $20 from the average PS3 user.

Here's the math for the market buying enough games to recoup a developer's costs:
Number of copies of a game needed to sell in order to break even: 500,000
Minimum amount of money the market will spend to recoup a developer's costs: $330,000,000 *
Sony's subsequent minimum costs to make that sale happen: $400,000,000
Revenue Sony receives from the sale of 500,000 consoles: $300,000,000
Revenue accumulated by Sony from the sale of 500,000 games: $5,000,000
Sony's profits from the money consumers will spend at minimum to recoup a developer's costs: $-95,000,000

* Assuming each consumer buys one 60 GB PS3 and one game for $60

Here's the math for the market buying enough games to recoup a developer's costs and Sony's costs:
Number of copies of a game needed to sell in order to break even: 15,000,000 *
Minimum amount of money the market will spend to recoup everyone's costs: $1,200,000,000 **
Sony's subsequent minimum costs to make that sale happen: $400,000,000
Revenue Sony receives from the sale of 500,000 consoles: $300,000,000
Revenue accumulated by Sony from the sale of 15,000,000 games: $150,000,000
Sony's profits from the money consumers will spend at minimum to recoup everyone's costs: $50,000,000

* Assuming 500,000 consumers buy 30 games
** Assuming each consumer spends $2,400 for a 60 GB PS3 and 30 games

Bear in mind that the number of PS3s sold is at most 300,000. We're looking at perhaps January 2007 before 500,000 PS3s become available. The time and money that must be spent by the consumers, the developers, and Sony to reach equilibrium is enormous. At the moment, Sony's success in the market seems unfathomable. In contrast, Nintendo has already shipped over 400,000 Wiis. Considering that buying a competing console decreases a consumer's buying power, Sony's ability to reach PS3 fans decreases with every Wii sold. The question is transforming from one of how Sony will succeed to one of how Sony will recuperate its PS3 launches in its other product lines.

No love for Sony

As a fan of Digg, it's been quite obvious to me that in the past few weeks and even months that the dislike of Sony is intense. If Digg was the entire market, Sony would fail to sell more than a few PS3s. Now, I'm not claiming that there is only antipathy for Sony at Digg; Digg is representative of many gamers. I can't say that I know exactly how many gamers are angry at Sony, but there are a few reasons that I can find for this:

• Price. Sony didn't make many friends by making the 60 GB Playstation 3 a full $600. You want to alienate your fans? Charge them through the nose. This isn't disposable income, here. And increased development costs leading to $60 games don't help either. But what's even worse about pricing your product badly is when it's accompanied by


• Arrogance. The Sony execs seemed to assume that everybody would love the PS3, no matter what, simply because the first two consoles were great - and let's not forget the PS2. The PS2 is an awesome console. It was simply better than the Xbox and Gamecube, and still is a good platform, with its cheap price, large library of games available for it, and large fan base. Of course, Sony couldn't help but ride on the PS2's coattails for as long as possible; unfortunately, when it came time to develop the PS3, the execs believed so much in the brand that they forgot about


• Innovation. Seriously, what's new about the PS3? A hard drive, some shinier graphics, Blu-Ray, and a motion-sensitive controller. Oh yeah, Sony got the idea for their controller from Nintendo, and the new controller has no rumble feature. The hard drive? Sony produced a hard drive attachment for the PS2. Sony chose for the next generation to simply include one. Shinier graphics? Shouldn't we expect the graphics to be improved from the last generation? Check. For $600 per unit, I would expect the graphical capabilities of the PS3 to be better than those of the competition. No check.
  
  So it seems like the most innovation Sony has done with the PS3 is the introduction of a Blu-Ray drive. The thing is, most Americans don't have HD-compatible televisions. Microsoft kept the price of the Xbox 360 low by selling the HD-DVD drive as a separate component. Sony wants all or nothing: You get the Blu-Ray drive, or you don't buy the console. Since the BR drive costs $125 per unit, many fans are unhappy about the prospect of buying a Blu-Ray drive they don't want.

But all is not lost! Theyre might just be something Sony can do to win back disenfranchised gamers:

• Lower the price. This one won't happen for a while - not until manufacturing costs and component costs drop. Right now, with Sony losing hundreds of dollars on each PS3 sold, Sony can't afford to drop the price without a damn good reason.


• Wait. I'm serious. Sony has either made a big mistake in the inclusion of the Blu-Ray drive, or Sony is in fact ahead of the curve. By that, I'm talking about the prospect of consumers buying HDTVs. It's possible that in a year or two, consumers might like the included BR drive, which will enhance gameplay a lot. Of course, that's still a long shot: What if Sony had taken Microsoft's route and instead opted later to release a cheaper Blu-Ray add-on? Time will tell.

But what about innovation? Sony is screwed here. Buying a video game console isn't like buying an iPod. You don't buy second or third generations of your video game console. (If you do, you're a consumer whore.) Sony is screwed on the hardware. Sony is stuck with the hardware they got. Sony would just anger everyone more if they released "Platstation 3.1 - Now with more innovation!" Sony has failed to offer a new experience with the PS3, and there's no firmware patch that can upgrade components. Right now, what Sony really needs is a patch to fix their relationship with the gaming community at large.

My quest for the Wii

Since last Sunday, I've been aiming to get a Wii. So far I have thus been fuitless, since it seems that to score one of these mythical consoles I have to undertake drastic measures. The closest I got a Wii was earlier this morning, when I stood only five feet from one of those boxed beauties.

I admit that I haven't made the most intelligent choices regarding time. In my quest for the Wii, time is key. Depending on the steps that I take, I can stand in line for a while or wait until the demand for the Wii has been sated such that I can walk into any electronic entertainment retailer and purchase one right off the shelf.

I didn't pre-order the Wii, which immediately put me into a difficult position. I hadn't decided that I truly wanted a Wii until a few days before, and after that I was too late. I comforted myself with the belief that demand for the Wii would be less than the demand for the other two consoles, since the Gamecube has and has had such a small market share in the five years that it has been on the shelf.

Boy, was I wrong.

On Sunday, I went round to K-Mart, Target, GameStop, and Sears, starting at about 10:30 A.M. Sure enough, all four stores were out of Wiis and unsure of when the consoles would be restocked.

On Tuesday I checked out Target and GameStop again, since it was doubtful a new shipment would be in on Monday, and I had read on Digg that you could walk right into a GameStop and buy a Wii. Once again, they were all out of stock. I knew at that point that there would be no point in looking for a Wii on Wednesday or Thursday, since the retailers would be saving them for Black Friday.

On Thanksgiving, I decided that waiting in line for an hour would not be worth it, so I would not try going to Best Buy at 5 A.M. or Target at 6 in the hope that so few people would be looking for Wiis that I would get one. I still have no intention of waiting in a line for more than fifteen minutes. There are so many other things I could be doing (like blogging) that just standing around would be pointless. Sooner or later, I will be able to buy a Wii. Perhaps in a month, perhaps sooner, or perhaps even later I will be contentedly shaking the Wii like a can of spray paint, for lack of a better simile.

So at 6:25 A.M. today, I got up, and at 6:50 I went to the GameStop, since I live close to one. I would have gone earlier, but I knew that it wouldn't be worth my time to stand in line for a while, so I wouldn't mind if I was too far back in the line. When I got to the store at roughly 2 minutes 'til, there was a line of 20 people. Even as I joined the line, men and women of all ages - even soccer mothers and plaid jacket fathers - stood, all talking about the Wii and how their sons or daughters wanted one. I talked briefly with the grandmother in front of me about the violence surrounding the PS3. I knew that everybody there wanted a Wii, since I had heard no reports of PS3 units being restocked in stores.

Big time, was I wrong.

At seven minutes past 7, the door was opened, and the line progressed into the store. My place in line was right next to the Xbox 360 display unit. I attempted to play a demo game while I waited, but the display unit only had videos to watch. Trust me, video games are a lot more fun when you actually get to play them, so I chose not to watch.

the line was very cordial. I walked out of line to grab a copy of Red Steel for some guy who asked after I checked to see if Twilight Princess was on the shelf, and when I got back to my place no one made a fuss. Ten minutes later, the Wiis were all sold out, and GameStop wasn't selling vouchers for them. So I left, glad that I didn't wait around longer to not get one.

So I am still waiting for a Wii. I mean waiting, not searching, since Christmas shopping season will mean stuffed parking lots, cramped stores, long check-out lines, and heavy traffic. I figure that my best bet in finding a Wii is the Internet (or more specifically, Amazon), but even then it looks like the rest of the world wants a Wii, too.

Sony Playstation 3 units see price drops on eBay

The price and quantity of PS3s on the free market (eBay) have both dropped since the Friday launch. Though the Kotaku story doesn't mention quantity, rest assured that fewer and fewer PS3 units are for sale on eBay at any given time. On Sunday, there were over 19,000 units for sale. By Monday, that number dropped to 12,000. The average sale price has also dropped by $800-500 to an average $1,200 or so per unit. I predicted on Sunday that PS3 fans that didn't want to pay a fortune for their coveted consoles would have to wait a month or two to find a PS3 at the retail price. Boy, I was foolishly wrong. By the end of the next week, you will see PS3s selling at $600 or an amount slightly higher. A few sellers will try to compensate by upping the shipping costs to ridiculous amounts to trick would-be buyers who aren't careful enough.

The biggest enemy of the PS3 sellers is the next restock date. No one knows for sure when that date is, but rest assured the marketplace for PS3s will change, for two reasons:

1. Decrease in market price. As the buyers who are willing to purchase Playstation 3 bundles on eBay for high prices exit the market, there's less incentive to wait in line for 14 hours and sell what you buy: There are fewer buyers competing for the same product, so there are fewer bids on PS3s. During the weekend, you could have easily seen 50 bids on one Playstation 3. On Monday, a more common number of bids was 30. Expect that number to drop in the next few days. The number of bids per system will drop slowly, as new buyers who wish to take advantage of the decreasing market price enter the market.



2. Another source for Playstation 3 units. Since the market price on eBay is dropping, many potential sellers will stay home and not enter the market. The marginal revenue of the market is slowly decreasing, meaning that each additional PS3 sold nets on average less revenue than the last one sold. Now that the market price is dipping below $1,200, some people will decide that the effort spent is not worth the money.
   
   Because second-hand sellers aren't entering the market, actual PS3 fans will have greater access to stores stocking PS3s. There is an obvious difference between spending $600 and spending $1,200. As soon as consumers become aware that PS3s are obtainable in retail chains for same-day pickup, second-hand sellers will have to drastically lower prices to compete. Eventually, the profit from selling a PS3 on eBay will reach zero. The eBay sellers will actually see losses: They not only made no profit but spent hours waiting in line and additional time shipping PS3s.

The market is gradually drying up for those who want to make a profit on eBay, but what if Sony sold PS3s for $1,200 apiece? For one thing, the demand for PS3s would be much, much lower. People looking to make a profit on eBay would have to sell for at least $2,000 to make the effort to get one worthwhile. Some consumers would just give up. Sony wouldn't be able to justify a price at $1,200. The market price only exists at that point because of the second-hand market. If twelve hundred dollars was the retail price, there would be no PS3 fans. Not only would consumers not want to pay for a console that expensive, but no video game developer would want to produce games for a platform that risky.

So it's tough luck for Sony, and it's soon going to be tough luck for the people who waited in line overnight to get their hands on a precious console. As people become aware that cheaper PS3 systems exist, consumers will flock to Target and company instead of eBay.

What does this leave for Sony? Low sales. Beyond the PS3 fans, of which there are admittedly a few, the brand name is really the only thing that's going to carry the PS3. Even then, it's going to be tough for parents to think about buying a $600 game console this Christmas. The Microsoft Xbox 360 and the Nintendo Wii are cheaper alternatives to what will otherwise be a not-so-subtle attempt at pushing Blu-Ray on consumers - consumers who probably aren't ready for high-def television and movie discs that cost $25 a pop. (Seriously, who would pay $25 to buy a Blu-Ray movie that would otherwise cost $15 on a DVD?) If Sony decided not to include a Blu-Ray drive, there is no doubt in my mind that demand for the Wii would drop substantially, and the Xbox 360 and PS3 would be locked in a battle for control of the market. The reviews are in, and the advantages of owning a PS3 to an Xbox have yet to emerge. In the meantime, expect the for-profit PS3 market on eBay to evaporate.

Nintendo to take advantage of Sony's limited supply?

The week before the Playstation 3 even launched, over 3,000 PS3 units (pre-orders) sold for prices near $2,000 on auction site eBay. Each 60 GB PS3 nets Sony a profit of $-240. That must suck, but Sony's not the first manufacturer to produce at a loss to gain marketshare. The only problem is that most of the people buying the PS3s have no interest in keeping them: Their only intention is to auction them off on eBay for twice the MSRP. The PS3 has experienced so much hype simply because there aren't a lot of them. Real PS3 fans either have to buy now or wait a month or two. They face a large reduction in their buying power or a very frustrating wait.

I know what you're thinking: Next I am about to tell you why Nintendo will muscle in with the Wii and steal customers from Sony. I'm not going to do that. The suggestion is unreasonable.

There's a fundamental reason that Nintendo will not pick up PS3 fans with the Wii. The two target markets are much, much different. The PS3 boasts gorgeous graphics, a new wireless controller, the possibility for huge games stored on Blu-Ray disks, and a legion of developers who know that the target audience is a group of enthusiastic adults who appreciate good action.

What about the Wii? Take a look at this Wii commercial produced by Nintendo. Notice how the actors using the Wii look like ordinary people who are really getting into the game and having a great time. The Wii is about being accessible to every body. Everybody can use their arms to produce the movements previously choreographed by button pushes. These aren't people with high definition televisions or expensive sound setups; these are people have a good time. While Sony introduced motion sensing as an added capability, Nintendo has made it so much more.

Nintendo has a big advantage over Sony in inventory. Most Target stores, for instance, received 30 to 50 apiece. Nintendo not only shipped more units than Sony to each store on their respective launch dates, but they also shipped to more stores than Sony. Nintendo will also restock stores faster than Sony. Nintendo already is shipping more Wii units for sale on Monday, November 20, only one day after launch. Nintendo clearly has more inventory to move. Nintendo could easily pick up the fans that Sony dropped. The question is whether or not that will happen, since the goals of each system are completely different.

Nintendo is about simplicity; Sony is about possibilities. Both routes have their advantages and disadvantages; for Nintendo, it's the lack of crisp graphics; for Sony, it's the price tag. The customers of each console have specific need in mind. Some people are buying both consoles, because neither system has everything. While Nintendo is striking out in an entirely new direction, Sony is continuing down the same path and improving on an already established formula; the only change in Sony's formula is the amount of money being demanded from consumers.

So, no. Nintendo isn't taking advantage of Sony's limited supply. Very few PS3 fans will be so discouraged by their situation that they will just bail on Sony. While I expect that a PS3 fans might just buy the Wii and play until retailers can carry the new Playstations for more than an a few minutes without selling out completely. The fanbase is too distinct and too established to simply jump ship.

What is still questionable to me is what will happen to the people who buy PS3s on eBay. What percentage is the buyers who have incomes that aren't impacted harshly by the amount they're spending on one console? What percentage is comprised of average guys? As the news changes, I'm left wondering more and more what the outcome of Sony's gamble will be.

PLAYSTATION 3: Brand success, or economic failure?

By all means, Sony's Playstation 3 has undergone a rocky start. Sony sold 88 thousand of the promised 100 thousand Japanese PS3 units on Sunday, November 11, when the unit went on sale. It is no coincidence that, a short time later, many very expensive Playstation 3 units appeared on eBay.

Of course, it wouldn't be a Sony launch without technical problems and issues. There is the occasional high definition picture issue, reports that some games already available on the XBox 360 have bugs and issues that make the PS3 versions slightly inferior, and some claims that backwards compatibility with PS1 and PS2 games is somewhat glitchy.

Of course, Sony will be low on supply of units meant for the American launch, games will be more expensive, a high definition television is needed to grasp the true PS3 experience, there's an extremely high cost of ownership that decreases buying power and reduces the number of PS3 games that will be sold, and the PS3 is being used as the platform for a new media format. These are fundamental issues at the heart of the question of whether Sony will succeed in its PS3 endeavor.

There are clashing theories of whether the PS3 will whip the market or succumb to competing forces within PS3 production.

Ultimately, the PS3 will succeed. It will dominate the market in 2007 and 2008, but Christmas 2006 is doubtful. This is not based on analysis of the traits of the Playstation 3 or of Sony's marketing prowess or of the fanbase of the PS3. Simply put, the Playstation 3 will dominate the market because it's a Playstation.

The truth is, possibly the most some consumers know about the Playstation 3 is that it is a Playstation. That enough evokes the association with a strong brand name; Sony has historically provided excellent console systems to the market. Nintendo doesn't have that power; they are constantly referred to as a company that manufactures video games for children.

Ask an uninformed person which is cooler - Nintendo or the Playstation - and the Playstation will win, hands down. Gamers, geeks, and nerds just don't represent the market as much as parents buying games to their kids. Think about it; most gamers are reasonably intelligent and are aware of what goes on in the gaming industry. Would there really be a Hot Coffee scandal if gamers constituted the majority of the market? No. Otherwise, Rockstar Games would shrug their shoulders and say, "Our profits are secure."

And here we have competing factors. Based on brand name, it is extremely conceivable that the PS3 will save the day for Sony. But there are a number of economic factors that might hinder the Playstation's success.

The mainstream video game consumers will be in for a shock when they go to check out that sweet new Playstation, only to find out that it costs six hundred greenbacks. What will really be a measure of Sony's success is whether or not the consumer will still accept the Playstation - even if it's the priciest net-gen console - based solely on the Playstation's reputation as the hip system that has the best games.

Chances are, even if that consumer buys the Playstation 3, Sony still loses. After you shell out $600, ow much money do you have left for games? The 60GB Playstation 3 costs twice as much as the Playstation 2 at the PS2's debut. Some consumers, clueless as to the PS3's considerably greater functionality, will accept the 20GB model as a more affordable substitute. Even then, disposable income allocated to games will be much smaller than the income allotted to games for any other next-gen console.

Sony is betting that the Playstation's image will save the PS3. The ultimate test of the PS3 is whether or not the Playstation has an image worth $500 or $600. Add to that the cost of additional games and accessories in the lifetime of the PS3, and the PS3 could cost anywhere from $700 to $1,500.

But there is one crucial piece to this puzzle that I have not talked about. What of people trying to buy the PS3 now, or the people who will try to buy it in the days following Nov 17? Consumers have a month to find out that trying to get ahold of one of these mythical consoles will cost possibly $1,000 to $2,000, or even more. That reduces buying power even more, leaving game developers out in the cold if they want to make PS3 games. The average consumer just can't shell out $2,500 for the lifetime of his her video game console. Many potential buyers will resist buying a PS3 until the price comes down.

But when PS3s are available in stores finally, the PS3 will see the ultimate test to the Playstation brand. How much is it really worth?