He went on to say that "unless things go really bad, there's no way that at the end of a life cycle, our competition is going to have a higher install base."
But what is "longevity" in gaming hardware? Sony has promoted this idea for years now and it always points to the PlayStation 2 as proof that its consoles have lasting power.
December's NPD sales numbers might prove the company's point: 1.1 million PlayStation 2 units were sold in December, besting both the PSP and the PlayStation 3 for the month.
Sony has said on numerous occasions that it plans to keep the PlayStation 3 going for 10 years, and to judge the victor of the console war before that time period is up would be foolish. So far, the PlayStation 3 has just over two years under its belt. If Sony gets its wish, the console will still be in production until at least 2016--a whopping 7 years from now. And quite a bit can happen in that time.
But that doesn't answer the simple question of whether or not longevity in gaming really matters.
To find out, we need to look back at the top consoles from each generation of the modern gaming era--the Nintendo Entertainment System (NES), Super Nintendo Entertainment System (SNES), PlayStation, and PlayStation 2--and determine if they had longevity.
The NES was first released in 1983 to Japanese consumers and in 1985 in the U.S. Selling more than 61 million units, the U.S. version was finally discontinued in 1995 by Nintendo, while the Famicom, Japan's version, was in production until 2003. Its total lifespan was approximately 20 years in Japan and 10 years in the U.S.
The SNES, the follow-up to the NES and leader in what was then known as the "16-bit generation," was originally released in 1990 to Japanese customers and in 1991 to U.S. consumers. After selling 49.1 million units, Nintendo discontinued the U.S. model in 1999 and 2003 for the Japanese version. Its total lifespan was approximately eight years in the U.S. and 12 years in Japan.
The PlayStation was originally released in Japan in 1994 and in the U.S. in 1995. A hit from the beginning, the console sold 102 million units worldwide. The PlayStation's production was discontinued in 2006. Its total lifespan was approximately 12 years in Japan and 11 years in the U.S.
The PlayStation 2, Sony's wildly popular follow-up to the original PlayStation, is still in production. It was first released in 2000 and Sony has sold well over 140 million units of the console. Sony currently has no plans to discontinue the console.
Maybe Sony is on to something. The leaders in each generation since the NES have lasted approximately 10 years on store shelves before the hardware manufacturers decide to abandon production. If both the Wii and the Xbox 360 fail to last 10 years, it's possible that the PS3 could catch up to its competitors, since Sony is intent on making its own console last that long.
In an interview with CNET in 2006, Kaz Hirai said that he believes the PS3 is providing "a very good value for the consumers." And that's exactly why his company will be sticking with the PS3 for 10 years.
"We look at our products having a 10-year life cycle, which we've proven with the PlayStation," he said. "Therefore, the PlayStation 3 is going to be a console that's going to be with you again for 10 years. We're not going to ask the consumers to suddenly buy another PlayStation console in five years time, and basically have their investment go by the wayside."
Perhaps 10 years really is important to Sony, but it begs the question of why the company and all its predecessors released new iterations of their respective consoles before that 10-year period was up. Doesn't that fly in the face of its longevity claim? I don't even remember the last time I bought a new PS2 title and yet, Sony believes it's still providing value to me. It might to those 1.1 million who bought the console in December, but for someone like me who owns a PS3, the PS2 is but a memory.
And that's exactly why I believe the 10-year life cycle matters more to hardware companies than consumers. For Sony and the rest, it matters because it gives them an opportunity to recoup their investments over the long-term.
Hardware manufacturers typically launch consoles at a price that's lower than their production costs. As production costs start to decline over the life of a console, vendors start turning a profit on each console sold. In some cases, like the Nintendo Wii, that's almost instantly. In other cases, like the Xbox 360, Microsoft didn't make money on each console sold until a year after its release.
But Sony is different. Even though the PlayStation 3 has been available for over two years, it's still being sold at a loss. According to a report from iSuppli,--almost $49 more than its current sales price.
Realizing that, Sony has a vested interest in seeing its console last 10 years on store shelves--it needs to make money.
But for me, someone who buys new consoles when they're made available-- usually every four to six years--I want the best bang for my buck in that time frame. Once a console's follow-up is released, longevity means nothing to me.
Whether or not the Xbox 360 has longevity wouldn't stop me from buying it. Sure, it's nice if the company continues offering an older model, but if I knew that production would stop once its new console was released, it wouldn't stop me from wanting to own the hardware.
I know that Microsoft will support it until it releases a follow-up and I'll keep enjoying games that are made available on it until that happens. But once the Xbox 720 (or whatever it will be called) hits store shelves, I'll put my Xbox 360 in my closet and forget about it. Or, if I don't want the next version yet, I'll keep playing my Xbox 360. No harm, no foul.
Longevity or not, the Xbox 360 suits me just fine.