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October 12, 2006

Something that rang a bell

I know, I know, two posts in as many days. No doubt I am spoiling my readership. How are you, my reader?

Anyway, I've been thinking again about the whole marketing push whereby Sony declares the PS3 to be a computer (rather than a gaming device). It has been gnawing at me for awhile, and I couldn't really figure out why.

Then it came to me. Just like other claims Sony made about the PS2, this one I've heard before. You see, while describing the PS3 (or for that matter, the PS2) as a computer doesn't make much nevermind to you or me the consumer, since we'll basically play games on it and nothing else, the EU makes a useful distinction, to the tune of a 2.2% duty on game consoles.

Now, granted, 2.2% on any individual unit isn't a lot -- it's about $12 in the States for the "high-end" PS3, give or take. On the other hand, if you multiply that by a few million units, it starts to add up -- and in fact, there have been around 40 million PS2 units shipped to Europe over the course of the console's cycle. Let's say that adds up to around $4 per console over the cycle on average (the PS2 being quite cheaper than the PS3); 160 million dollars is nothing to sneeze at, even for a big corporation like Sony.

I was thinking a little bit about this recently because of some of Mark Rein's comments about Intel -- basically, he claimed that Intel, by using integrated chipsets incapable of running higher end graphics, exactly the kinds of high-end capability that the Unreal 3 engine depend upon.

The differences are clear, and were essential to the EU last time around: when someone buys a PS3, they're buying it to play games, so the tariff is justified. In the case of Intel, when someone buys a PC, they are most likely not buying it to play games (and certainly not the high-end games such as Epic provides) but to fulfill some generic function (probably business-oriented).

Basically, I think that in both cases, the companies are doing the right thing for their bottom lines -- Sony wins if they fight the tariff, because they charge the same price either way, and Intel wins because they can afford to shave some of their profit margin to compete against AMD in the wholesale market. This leaves me thinking that Sony is basically trying to market their way out of paying a tax, that Intel is just doing the smart thing for their market, and that Mark Rein is... well, kind of not focusing on the right things.

Honestly, I don't think that most people who buy a PC with an integrated chip are going to want to play an Unreal Engine-licensed game. Those who want to play high-end games are going to continue to pay for high-end cards -- they will buy a PC for the flexibility it provides to their home in general (Internet browsing, printing, word processing, their home finances, whatever) and buy the card if they want to play games. Everyone who owns a PC is a potential customer for Epic only in the sense that they own a PC -- not because they have, or will ever have, much interest in playing Unreal games. My folks, my grandmother, my sisters -- these are people who might be interested in games, but just not those sorts of games, and these are exactly the folks who would have an integrated chipset.

Posted by Brett Douville at October 12, 2006 02:47 AM

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