Razors and Razerblads
This is originally posted by me for my blog on screwattack.com in response to the sidescroller pod cast. This is just a copy/paste.
I was just listening to Side Scrollers at work today (I usually listen on Wedbesdays) and on hard news there was a quote form Sony's VP of Marketing. It was talking about how everyone “…would love for the PS3 to be free, so they could just sell razorblades.” Craig, Dustin, and Cory sound confused about the term. Craig questioned if it is a marketing term.
Yes, razor blades are an actual team. Or rather Razors and razorblades is a strategy of marketing was (simplified version) you see something at a loss, with the intention of selling units to go with that produce at a higher profit. This was originally used with, surprise…surprise, razors. Using my local EB of even the ads that appeared as the background of screwattack.com with Gillette trying to get gamers to buy a razor blade form them, so we have to purchase their razorblades. All the razorblades have a large markup so the company makes a lot of profit.
The Senior VP of Marketing of Sony is saying he is worried about the long term stability of Sony and therefore doesn’t want to take a large loss on the sale of a PS3. Fair enough, he has shareholders that he has to answer to. The only problem with the comparison is that it is a false one.
When you purchase a razor, your final decision isn’t going to be based on color, or tight grip, or whatever. Those are all nice to have, and you may make a choice based on what you prefer, but it’s unlikely you would pay $10 form a green one with mega-ultra grip, rather then a blue one with triple grip. After you have the razor you just continue to purchase blades for it until the razor breaks. Repeat process. All the razors are the same, so as soon as you have your razor blade you should be happy until your razor’s life ends.
So with this comparison we are going to say when the speaker for Sony was speaking he was comparing the games for the PS3 as razorblades and the PS3 as the razor. And this is where the comparison fails. Were in all razors are more or less the game, games are different. The whole reason we purchase a consol is to play games on it. I really couldn’t care less which company makes a box to play games I enjoy, so long as they play it.
To have it his closer to home when this generation started I believed I was going to get a Nintendo and Sony. I’ve had Nintendo since the NES and loved RPG so PS1 and PS2 played a large role in what I played. On the contrast I don’t care for FPS or online gaming, so the Xbox didn’t appeal to me.
Then the grit dropped and Sony came out close to a year after the 360, and at a large price tag. Of course this was discouraging, but I was still waiting to see what was coming out for the PS3. Then lots of RPG came out for the 360. Eternal Sonata came out for the 360. I wanted that game, but I wasn’t going to purchase the 360 for one game. Sony got it a bit later. But there was a lack of RPG for the Sony. Then FF13 was announced to be coming out for the 360. Then finally Tales of Visperia was announced as a 360 exclusive. Then Sony had officially lost any chance of me purchasing a consol. There was not enough games I liked, let alone exclusives, for a warrant to purchase a PS3. All the razors I wanted to buy were on another razorblade. Because it wasn’t about the best razor, it was about the best razorblades.
And Sony this Razor and Razorblades issue is hurting you in the long run. Your consul is known to be problematic to program for. So if I’m a developer not only is your system a higher cost to make a game for, it has less resale potential, because less people have it. Since I’m looking at cost of items as well, I need to make my games available to 360 users as well, so I can make a profit. This in turn leads to people like me, who are late adapters jumping ship to the 360 because they have most of your games, and a much larger exclusive library. This in turn leads to less sales of your system, because I’m not owning both, and more sales of 360. This in turn makes it easier for a 360 exclusive, because of a larger market share.
Note: I in the article I could have said Wii and 360, but chose not to, as the Wii is not really a substitute to a 360 or PS3. More business terms (thought you can probably figure this one out yourself).
Now Sony has been saying they are going for a longer term strategy, saying they are going to outlast the 360. Now this will be true if for two reasons:
1 - The PS3 capabilities are far beyond the current generation of consul. This was discussed more in detail on a G1 Sunday Submission, who knows more about the technical aspects of it so I’ll just provide the link.http://screwattack.com/g1Submission/020809 (believe cannot url in a blog.)
2 - Sony’s been losing money. Not just the PS3, but the company hasn’t been doing that great. They can’t (reasonably) afford to develop another consol.
IF that is the strategy they are going by that’s fine, but with the exclusive cycle stated a couple of paragraph above, you’re burying yourself more then not. I have a friend who likes Sony and owns a PS3. Whenever he says “This system is going to last a while” it sounds like a compilation prize, rather then a selling point. Two of my other friends are “just waiting for that price drop” before they purchase it.
Sony, you do have an impressive piece of equipment there, but consumers are not buying a consol, they are buying games. Now maybe when the PS3 becomes “it” I’ll be happy to pay the money for it. And it has managed to have a few games I would like to play. Folklore, despite all the bad reviews I’ve heard, still looks good to me, and I’d like to try it. I loved playing Little Big Planet at my friend’s house, and KillZone 2 looks great. But with only 3 blades that I’m truly inserted in, as opposed to Nintendo’s 30 and Microsoft’s 50, I’m going elsewhere for my razor.
Final Notes: Sorry if the explanation was somewhere else on the forms. I did some lurking but didn’t see anything. If anything was confusing, or I lost anyone with the business terms I threw in there please post a comment or drop me a message and I’ll clarify for you.
Hope you liked my 1st post.
I was just listening to Side Scrollers at work today (I usually listen on Wedbesdays) and on hard news there was a quote form Sony's VP of Marketing. It was talking about how everyone “…would love for the PS3 to be free, so they could just sell razorblades.” Craig, Dustin, and Cory sound confused about the term. Craig questioned if it is a marketing term.
Yes, razor blades are an actual team. Or rather Razors and razorblades is a strategy of marketing was (simplified version) you see something at a loss, with the intention of selling units to go with that produce at a higher profit. This was originally used with, surprise…surprise, razors. Using my local EB of even the ads that appeared as the background of screwattack.com with Gillette trying to get gamers to buy a razor blade form them, so we have to purchase their razorblades. All the razorblades have a large markup so the company makes a lot of profit.
The Senior VP of Marketing of Sony is saying he is worried about the long term stability of Sony and therefore doesn’t want to take a large loss on the sale of a PS3. Fair enough, he has shareholders that he has to answer to. The only problem with the comparison is that it is a false one.
When you purchase a razor, your final decision isn’t going to be based on color, or tight grip, or whatever. Those are all nice to have, and you may make a choice based on what you prefer, but it’s unlikely you would pay $10 form a green one with mega-ultra grip, rather then a blue one with triple grip. After you have the razor you just continue to purchase blades for it until the razor breaks. Repeat process. All the razors are the same, so as soon as you have your razor blade you should be happy until your razor’s life ends.
So with this comparison we are going to say when the speaker for Sony was speaking he was comparing the games for the PS3 as razorblades and the PS3 as the razor. And this is where the comparison fails. Were in all razors are more or less the game, games are different. The whole reason we purchase a consol is to play games on it. I really couldn’t care less which company makes a box to play games I enjoy, so long as they play it.
To have it his closer to home when this generation started I believed I was going to get a Nintendo and Sony. I’ve had Nintendo since the NES and loved RPG so PS1 and PS2 played a large role in what I played. On the contrast I don’t care for FPS or online gaming, so the Xbox didn’t appeal to me.
Then the grit dropped and Sony came out close to a year after the 360, and at a large price tag. Of course this was discouraging, but I was still waiting to see what was coming out for the PS3. Then lots of RPG came out for the 360. Eternal Sonata came out for the 360. I wanted that game, but I wasn’t going to purchase the 360 for one game. Sony got it a bit later. But there was a lack of RPG for the Sony. Then FF13 was announced to be coming out for the 360. Then finally Tales of Visperia was announced as a 360 exclusive. Then Sony had officially lost any chance of me purchasing a consol. There was not enough games I liked, let alone exclusives, for a warrant to purchase a PS3. All the razors I wanted to buy were on another razorblade. Because it wasn’t about the best razor, it was about the best razorblades.
And Sony this Razor and Razorblades issue is hurting you in the long run. Your consul is known to be problematic to program for. So if I’m a developer not only is your system a higher cost to make a game for, it has less resale potential, because less people have it. Since I’m looking at cost of items as well, I need to make my games available to 360 users as well, so I can make a profit. This in turn leads to people like me, who are late adapters jumping ship to the 360 because they have most of your games, and a much larger exclusive library. This in turn leads to less sales of your system, because I’m not owning both, and more sales of 360. This in turn makes it easier for a 360 exclusive, because of a larger market share.
Note: I in the article I could have said Wii and 360, but chose not to, as the Wii is not really a substitute to a 360 or PS3. More business terms (thought you can probably figure this one out yourself).
Now Sony has been saying they are going for a longer term strategy, saying they are going to outlast the 360. Now this will be true if for two reasons:
1 - The PS3 capabilities are far beyond the current generation of consul. This was discussed more in detail on a G1 Sunday Submission, who knows more about the technical aspects of it so I’ll just provide the link.http://screwattack.com/g1Submission/020809 (believe cannot url in a blog.)
2 - Sony’s been losing money. Not just the PS3, but the company hasn’t been doing that great. They can’t (reasonably) afford to develop another consol.
IF that is the strategy they are going by that’s fine, but with the exclusive cycle stated a couple of paragraph above, you’re burying yourself more then not. I have a friend who likes Sony and owns a PS3. Whenever he says “This system is going to last a while” it sounds like a compilation prize, rather then a selling point. Two of my other friends are “just waiting for that price drop” before they purchase it.
Sony, you do have an impressive piece of equipment there, but consumers are not buying a consol, they are buying games. Now maybe when the PS3 becomes “it” I’ll be happy to pay the money for it. And it has managed to have a few games I would like to play. Folklore, despite all the bad reviews I’ve heard, still looks good to me, and I’d like to try it. I loved playing Little Big Planet at my friend’s house, and KillZone 2 looks great. But with only 3 blades that I’m truly inserted in, as opposed to Nintendo’s 30 and Microsoft’s 50, I’m going elsewhere for my razor.
Final Notes: Sorry if the explanation was somewhere else on the forms. I did some lurking but didn’t see anything. If anything was confusing, or I lost anyone with the business terms I threw in there please post a comment or drop me a message and I’ll clarify for you.
Hope you liked my 1st post.