MYTH: Console makers lose money on every console sold.
Not always. Nintendo, for instance, famously insists on making a profit on its hardware sales; both the DS and the Wii are inexpensive to manufacture, and Nintendo squeaks out a modest profit on each. Some industry analysts now suspect that Microsoft is also making a small profit on its 20GB and Elite Xbox 360 models, thanks to falling component costs and steady retail prices. Sony takes the opposite approach with the PlayStation 3, losing hundreds of dollars for every unit sold. Sony hopes to eventually sell enough PS3 games to make up the difference. Unfortunately, hard numbers on console profitability are a closely guarded secret, so we'll never know for sure.
We do, however, know that older consoles are much more profitable. The PS2, for instance, has been on sale in North America since 2000, and at this point is little more than a DVD drive, a plastic chassis, and Sony's aging gaming chipset. Seven years and two redesigns later, the PS2 is cheaper to make than ever, as well as smaller and lighter to help reduce shipping costs. With a price point of (U.S) $129.99, Sony is likely pulling in forty or fifty dollars of pure profit for every PS2 sold, perhaps more.
MYTH: Backward compatibility is a crucial feature.
Not so much. Backward compatibility sounds like a must-have feature, but in reality, it's more of an added bonus. There's little hard data on exactly how many gamers use the backward compatibility found in new-gen consoles, but judging by the wishy-washy backward compatibility on the Xbox 360 and the 40GB PS3, it's likely that this feature doesn't rank particularly highly on the lists of many average gamers.
MYTH: 1080p doesn't look any better than 720p.
You wish. While it's true that 720p is the dominant HD resolution of the moment - and a fine choice for any HDTV - so-called "true" 1080p definitely looks superior, especially on TV screens measuring larger than 42 inches. With a little experience, you can easily spot the difference between a 720p set running 720p content and a 1080p set running "true" 1080p (i.e. not upscaled) content. Several editors in the GamePro office are able to tell the difference between the two resolutions from a split-second glance.
Adding to the evidence is a simple, non-scientific test we recently conducted in-house. Using a native 1080p LCD HDTV, we showed the same game (Virtua Tennis 3 on Xbox 360) running in both 720p and 1080p to a group of office workers. Beforehand, we had the test subjects fill out a simple survey: their home TV, resolution of their home TV, prior experience with HDTV's, and so forth. We found that the least experienced viewers (those with standard-def TVs at home) were mostly unable to tell the difference between 720p and 1080p. More surprisingly, most test subjects who owned HD TV sets (particularly the ones who knew what resolution their home TV was) were able to correctly identify the 1080p resolution.
The test was simple in nature and certainly not formal research, but it helped provide a bit more quantitative evidence. Yes, it's true: true 1080p is "better" than 720p. Case closed!
MYTH: The PS3 is a dud.
Nope...at least, not yet. It's been almost exactly a year since Sony launched the PlayStation 3 to massive hype and so-so sales. One year later, with the release of major Sony-produced games like Uncharted and Ratchet & Clank Future, Sony's big gamble is looking far more viable. In another promising sign, multi-platform games like Assassin's Creed and Call of Duty 4 have sold surprisingly well on the PS3...though a far cry from the Xbox 360 sales, of course.
The PS3 is struggling for two main reasons. First, and most important, the PS3 needs more marquee exclusive games like Microsoft's Mass Effect and Gears of War. Second, price will continue to be a major obstacle to the PS3's widespread acceptance, even after the much-needed drop to $999.95. In order for the PS3 to shift into high gear, it'll need to drop the price closer to $500. The longer it takes for Sony to make this jump, the more the PS3 will lag behind its rivals.
Still, at the moment, the PS3 isn't doing badly at all. Much will depend, of course, on Sony's strategies during 2008. But with Metal Gear Solid 4, Killzone 2, and Little Big Planet due for 2008-as well as lingering rumors about PS3 versions of mega hits like BioShock-Sony will make it through this console generation battered but breathing. Face it, Microsoft fanboys: the PS3 isn't going anywhere.
MYTH: The PSP has failed.
Definitely not. It's true that UMD movie sales have bombed, and PSP games aren't exactly flying off the shelves (outside of big hits like Lumines, MGS: Portable Ops, and Monster Hunter in Japan). But judging by the base barometer of a console's well-being - hardware sales - the PSP has performed remarkably well.
Sure, the PSP has sold just half as many units as Nintendo's DS: some 27 million PSPs versus 57 million DSes. But if you factor in the fact that Nintendo is the only success story in handheld gaming - a gaming style it invented and defined with the GameBoy line - and you'll see that Sony has done something no other game manufacturer could: stand as a solid competitor to Nintendo. And despite quality control problems in some PSP games, 27 million PSPs sold is nothing to sniff at. The PSP has some growing to do, but don't be fooled: it's a worthy competitor to the DS.