PS3 and Backwards Compatibility: What the Analysts Are Missing
Seeking Alpha writes:
"we can’t quite understand how analysts approach problems or arrive at conclusions, probably because they are mired in cranking out reports and not spending enough time thinking about the big picture. And this was never more clear than in an article that ran in yesterday’s GameDailyBIZ concerning the issue of Sony’s (SNE) PS3s lack of backwards compatibility.
The analysts’ conclusion: since much has been made over the PS3s high price point, and since stripping out this functionality saves between $30-$50 per unit, a cost reduction is clearly more important than offering this feature. Voila! Instant Wall Street group-think.
So why Sony wouldn’t make the PS3 backwards compatible? There has been tons of talk about the PS3 being priced too high. "Let’s see, it costs money to make the PS3 backwards compatible, the price of the console is too high…I’ve got it, they’re going to strip out the functionality and reduce the price. That’s surely the answer." There is only one answer for such narrow-minded thinking: the recency effect:"
