Time For Another PS3 Price Drop?

mykevermin

mykevermin

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I'm not curious *if* it's going to happen. Sony's shown, even with the PSP, that they're willing to bide their time (or, alternately, to spite themselves) with price drops.

But the 360 has been outselling the PS3 globally, even in Japan, for well over a month now. A $400 console simply can't compete with a $200-300 console.

Or, is the trend that people are simply holding out for the 160GB system? I'm suspicious of that explanation for the sales slowdown, as the 160GB ain't PS2 BC like the old 80GB system was. And, it's $500 - 250% more expensive than the cheapest 360 to boot.

The PS3 started a year behind, and didn't really gain any momentum, sales-wise, against the 360 until about 6-7 months ago. Now they've clearly lost that as well. While we know Sony is too stupid to drop the price again, is it time to drop the price on the console, or have you simply let the idea of owning the system pass you by such that you, as a non-owner, aren't considering it anymore?

(Sorry to single you out, Mana, I know you'll have a well-reasoned explanation for why they can't afford to drop the price - but the fact of the matter is that they can't afford NOT to drop it, either.) Which can't they not afford more (or is that less?) ;)
 
Sony has even stated their console is mass market price, and they are only really catering to the harder core gamer right now. That's part of the reason they aren't concerned about a price drop.

But people have to also understand that Howard Stringer is VERY upset about the PlayStation Brand losing $3 billion thanks to PS3, and he's not the type who likes to lose money or take risks. If he does not want a price drop and wants consoles to sell at a gain or small loss, it's his call (he runs Sony Corp. after all). He has said many times he wants the PlayStation division profiting, even if it means selling less consoles.

MS will take losses. Sony Corp. doesn't want to lose any more money on the PS brand. Any kind of price drop is going to cost them big UNLESS they were making a nice profit off of each console sold. Howard Stringer and others at Sony Corp. could careless about their being more PS3 consoles out there, they care more about actually making money.

It's like Sony could sell tons of HDTVs if they were dirt cheap (where they break even or lose money), but they rather price higher (to make a profit) and just sell less. That's how it goes. MS could careless if they lose more billions, Sony doesn't want to lose any more money.

Along with them losing $379 million from April 2008 to the end of September 2008:
http://www.sony.net/SonyInfo/IR/financial/fr/08q2_sony.pdf

I really don't think it's happening anytime soon.

If they have to give up 1 million consoles to stay profitable right now, I think they will. They aren't going to try to win this console war. They understand PS3 is a Premium console and has its niche. Does Apple lower their prices or try to do whatever it takes to top Windows in sales? Nope. You don't see Ferrari lowering prices to sell to more consumers, they are happy selling to a smaller audience and just making money.

Next gen Sony may try to win (I see them trying to make PS4 a lot cheaper to make along with easier to drop the costs, kind of like PS2), but right now due to the expensive nature of PS3, Sony will just try to position it as a premium platform and just have its own group. MS just badly wants the mass market, even if they have to give consoles for free. Sony understands they are priced within hardcore range right now, and that's what they are sticking to.
 
I wont read too much into the recent Japanese sales. It is up every time there is a JRPG and drop back after that.
 
[quote name='mykevermin']What was the JRPG this time? I don't recall a high profile 360 title coming out - but the price drop did happen.[/quote]
I think that the new Tales game came out recently.
 
It was Infinite Undiscovery. But it's mainly because it was from Square.

I think Sony has to drop the PS3's price by June of next year. But I see the next price drop for the PS3 being $100.
 
[quote name='KingBroly']It was Infinite Undiscovery. But it's mainly because it was from Square.

I think Sony has to drop the PS3's price by June of next year. But I see the next price drop for the PS3 being $100.[/QUOTE]Pretty much, AND the 360 received a big pricecut.

Also with Japan, the situation in Japan is until tomorrow, there is NO 80GB console. It's still the 40GB selling at $100 more against the 360 60GB SKU (compared to previously running against a 20GB SKU for $50 more). I have heard in some areas in Japan, the 40GB is in limited quantities or sold out, since Sony stopped production of the 40GB back in June (meaning retailers have not gotten a shipment in for a while). Retailers in Japan are currently pushing the 80GB SKU, that comes out on October 30th with GT5P Spec III or LBP. Since people in Japan know that SKU is coming too, why buy a 40GB? Remember the week before the 360 price dropped, sales dropped to 800 consoles? PS3 sales have dropped because a new SKU is coming in (with a Dual Shock 3).

I do see Sony dropping the price sometime in April-June 2009, to $300. I believe they feel $50 cut isn't significant enough.
 
Price drops from the non-market leader position have never done anything but a temporary boost. If that is the case, they should keep the price where it is and focus on profitability through the end of the generation.

Referencing the time before a 360 drop in Japan doesnt help your case, because the 360 is still just as dead.
 
The numbers for the third quarter just came out worldwide and PS3 outsold 360 (including september when the price cut was for 360).

I think they'll drop it next year, maybe spring or summer when the manufacturing price drops more and the big releases slow down (they have killzone, infamous, RE5, and the FF:AC Blu-ray all early next year I believe)
 
[quote name='lilboo']They need to make a DECENT $400 or less bundle for me to get one for Christmas.[/quote]
What's wrong with the current one? Hell you can get the MGS4 Gun Metal Grey one for $400 now. Excellent deal.
 
I never understood why consoles don't just add games rather than cutting the price. The games don't cost them as much as the loss from a price drop...
 
[quote name='happy']The numbers for the third quarter just came out worldwide and PS3 outsold 360 (including september when the price cut was for 360).

I think they'll drop it next year, maybe spring or summer when the manufacturing price drops more and the big releases slow down (they have killzone, infamous, RE5, and the FF:AC Blu-ray all early next year I believe)[/QUOTE]

The only game/film there that will move consoles is RE5, and that's multiplatform.

My larger point is that there's money to be made on the software end of things, but it appears Sony has conceded that Microsoft will carry the lion's share of multiplatform sales, with the average being 2:1 in favor of MS, and big titles (like Rock Band 2) selling much more on the 360. They're losing out on money via software and DLC as a result.

It's a conservative move by Stringer, to be sure, as Mana points out. But that doesn't mean they're making more money (or indicrectly making more by losing less). It strikes me that the narcissism of this being a "premium console" is absurd - it's not shown very much in terms of gaming capability that makes it unique against the 360, aside from the handful of games that rely on BD capacity. But that's a Pyrrhic victory for Sony. Fans/consumers don't look at disc storage.

In other words, Sony's biding their time right now, which is an absurd move. By the time they drop the PS3 to the mass market level (or begin to approach that level), there will be a next-gen Xbox out there. Which means that, in short, by the time the PS3 will hit mass market price, it will be a last-gen console with a Blu-Ray player.

I greatly prefer my PS3 to my 360. I own very few games on the 360 anymore outside of exclusives and canon titles (GoW, Halo, Saints Row). But I'm not buying this "premium console" nonsense. When comparing the *gaming experience* across the PS3 and 360 right now, there's nothing that stands out as screaming "PREMIUM" to a consumer. Multiplatform titles are identical on both systems, with any differences being the negligible sort debated by nerds who act as if a game running at 640p instead of 720p means the imminent demise of a company.

Someone sell me on this idea that the PS3 is a "premium" console. It has Blu-Ray. Great. That's nice. Let's say I'm a typical dumbass "Joe the Plumber" kinda guy. Here I am, looking at two consoles - I see that they appear, on the surface, to be virtually identical in terms of software look and style. I see that one is $200 or $300, and the other is $400 or $500. Sell me on the $400-500 console being "premium." What would the knuckleheads over at Sony say to rationalize that their console is double the cost of the competition?

Don't tell me about RROD. Tell me what's special about the PS3. There is NO reason to not drop the price right now and coerce people to buy software, other than Sony lacking the balls to do it. I'm beginning to think that I don't much buy into TMK's "PS2 chipsets are expensive to include in the PS3" rationale, instead thinking that they stripped it to help keep PS2 console sales up and make money that way.

I don't doubt that they lose money or break even on the PS3 - though I've heard variations of them losing money all the way to them making $50-70 per console, so I'm not sure what to believe. The point I'm trying to make is that they're continuing to not *make money* by virtue of not pricing the console competitively, and handing the 360 multiplatform sales on a silver platter.
 
I see the PS3 as more of a Neo Geo and the 360 as the poor mans console akin to the genesis of the era. They both have great games, they both have great hardware and are fun as hell to play, but at the end, you can just do more with the PS3 storage wise, mod wise, customization wise and so forth.
 
our economy sucks too much to go for premium anyways...

both consoles are too similar...the masses dont give a poo about customization, a ton of storage or blu-ray.

with an avg blu-ray movie being $25-$20.... people would rather buy video games then movies..
 
Actually 500 is 150% more than 200, but point understood.

[quote name='mykevermin']

Or, is the trend that people are simply holding out for the 160GB system? I'm suspicious of that explanation for the sales slowdown, as the 160GB ain't PS2 BC like the old 80GB system was. And, it's $500 - 250% more expensive than the cheapest 360 to boot.

[/QUOTE]
 
IMO, they're probably hoping that this recent onslaught of quality new releases drives console sales. Sure, a price drop will always sell, but will it be a big enough bump during the holidays? If people want a ps3 over 360 this xmas, they're going to buy it. I say wait until after then during the slow season to drop price and kick up sales.

The 360 does come off as more of "just a game console" although they do have some nice media set-top box features like streaming netflix coming. Yes, ps3 has the movie store, but I'm not sure how many average consumers know about it. So MS will probably snag more customers who are looking for something that their kids can play games on.

So yeah, Sony is probably banking on the "premium" image to sell their console. They weren't afraid to price it at $600 two years ago, why drop the price so fast?
 
[quote name='bornrunnin31']IMO, they're probably hoping that this recent onslaught of quality new releases drives console sales. Sure, a price drop will always sell, but will it be a big enough bump during the holidays? If people want a ps3 over 360 this xmas, they're going to buy it. I say wait until after then during the slow season to drop price and kick up sales.

The 360 does come off as more of "just a game console" although they do have some nice media set-top box features like streaming netflix coming. Yes, ps3 has the movie store, but I'm not sure how many average consumers know about it. So MS will probably snag more customers who are looking for something that their kids can play games on.

So yeah, Sony is probably banking on the "premium" image to sell their console. They weren't afraid to price it at $600 two years ago, why drop the price so fast?[/QUOTE]This article perfectly explains it:

If you read this blog, chances are you're already familiar with Sony's "10 year mantra." PS3 is an incredible piece of tech with a lot of value built into the system. However, does your average Walmart shopper know about the things PS3 can offer? Probably not. With the $200 price difference between the cheapest Xbox 360 and PS3, Sony understands that it must do a better job at marketing its message. Julie Han, Sony corporate communications, told Gamasutra that "there's a lot we can do on the marketing front," especially about features, like PS3's video store, and its connectivity with PSP. Are these things that are spoken about beyond hardcore gaming circles? Unlikely.

"We don't talk enough" about Sony's "future-proofing" strategy, she admits. "With the recession, as people are ... on tighter budgets, they're going to be much more conscious of how they spend their money." Sony must now try and communicate to consumers directly why the PS3 is a better option for them, even if it is more expensive.

In spite of Microsoft's price drop, Sony has no plans to follow suit just yet. In fact, they're rather confident about the upcoming holiday season. "We're really confident that consumers are making choices driven by value," she says, "and we know PS3 offers that value across the board, with the built-in Blu-ray player the broadest and deepest software lineup in the industry, with LittleBigPlanet, Resistance 2, Motorstorm [Pacific Rift]... we're quite confident our holiday sales will be good."
Click to expand...
http://www.ps3fanboy.com/2008/09/05/sony-admits-lackluster-marketing-of-ps3-value-message/

The article is very truthful IMO, because PS3 is definitely a very good value for the money and is definitely worth its pricetag for what you get (I mean compared to the 360 PRO, you are getting blu-ray, WiFi, larger HDD, and free online. Yes you gotta buy headset and HDMI cable, but they can be pretty cheap). Sony pricing the PS3 at $100 cheaper would be WAY too cheap. Pricing it $50 cheaper might be a tad too cheap IMO (although it would be fine also), it really wouldn't help a lot with sales (for some, $300 is the max they'll pay).

I remember when Wada (Square Enix President) once said:
Sony isn't explaining what kind of games they have for what kind of consumer. We know, we know ... it's hard to really dissect all the things the PS3 can do and target certain markets for each feature.

Wada feels the PS3's price cuts will bring an improvement in sales, but he thinks the console is too cheap for what you get. He claims his phone is more expensive than the PS3, but nobody complains about that. He goes on again to tell Sony to better position their console -- get the right message out instead of focusing on the price.
Click to expand...
He is right about that, some phones are more expensive than a PS3, and you don't get as much for the price.
 
[quote name='The Mana Knight']MS will take losses. Sony Corp. doesn't want to lose any more money on the PS brand. Any kind of price drop is going to cost them big UNLESS they were making a nice profit off of each console sold. Howard Stringer and others at Sony Corp. could careless about their being more PS3 consoles out there, they care more about actually making money.[/quote]
But Microsoft isn't taking losses. Last quarter, Microsoft's gaming division posted a $178 million profit while Sony lost $379 million. At the moment, with the strong Yen and weak Dollar, this is going to be a very deep hole for Sony to climb out of.

mykevermin is right. Microsoft will likely have it's next machine out in 2010 or 2011 and, despite Sony's fabled 10 year plan, the PS3 will be old news by then.

I can't help but think Blu-ray really cost Sony the war this generation. I'm sure the higher price tag (due to Blu-ray) deterred more customers than the Blu-ray drive enticed.

Personally, I hope Sony turns it around, but it seems like its going to be very difficult.
 
I don't think they necessarily need a price drop but I still don't understand how MS can come with a holiday bundle every year (without raising the console price) and Sony can't follow suit. Seriously, how hard would it be to throw a couple of launch games or a game/BR movie into the mix?
 
Well, for $100 over the price of the was-40-now-80GB PS3, you can have 80 more GB and a copy of Uncharted.

I'll be honest: if I were a consumer I'd be all over the Sam's Club 360 Holiday bundle w/ Guitar Hero III. That is one fuckin' hot sex bundle right there (despite the "JUST SHUT UP AND TAKE IT!" nature of including Kung Fu Panda): http://www.xbox360fanboy.com/2008/10/24/sams-club-bundles-full-guitar-hero-3-with-xbox-360-pro/

And it's $50 less than the cheapest PS3.
 
That's exactly my point. Throw in a couple of games to "justify" the $100+ price difference.

[quote name='niceguyshawne']I don't think they necessarily need a price drop but I still don't understand how MS can come with a holiday bundle every year (without raising the console price) and Sony can't follow suit. Seriously, how hard would it be to throw a couple of launch games or a game/BR movie into the mix?[/quote]
 
[quote name='CheapyD']I can't help but think Blu-ray really cost Sony the war this generation. I'm sure the higher price tag (due to Blu-ray) deterred more customers than the Blu-ray drive enticed.[/QUOTE]Actually Cheapy, you'd be surprised, Blu-ray is far from being what makes PS3 expensive. Around the launch time frame, blu-ray was ~$100 more to use, but then prices of blu-ray diodes dropped significantly to a point they really do not cost much more to implement. I know for a fact blu-ray isn't all that much like it use to be after looking at a chart, that compared Blu-ray disc diode prices, and initially the diode was $100, and the newer ones were just a few $$.

Actually, the main cost factor of the PS3 high price tag was main motherboard. Around launch, JUST the main motherboard cost $500 (if I could find the article that analyzed the PS3 production cost, that was the main factor). Even if PS3 had a DVD drive and a lot of other things cut, it would have still had to cost $500-$600 (Sony just initially took an extra $100 loss for blu-ray early on, since they knew it was going to drop). Right now adding blu-ray only cost a few $$$, but the main reason PS3 cost a lot is the price of the Cell + RSX. The Cell is a costly CPU, and it's the main reason PS3 is expensive. Unfortunately, Sony cannot remove the Cell. Out of the $3 Billion Sony lost on PS3, I could roughly say just under $1 Billion was due to blu-ray, but most of the rest was due to Cell and PS2 hardware/partial software BC in early models (that was also expensive to implement).

That's what I keep trying to tell people, even if PS3 used a DVD player, the price of the console would barely be any different than now on the price. The cost of the Cell and RSX is what makes it expensive overall (mostly Cell).

The main reasons a 20GB PS3 (using that as an example) was more expensive than a PS3 at launch was:
-RSX + Cell Combo (more expensive than the 360 CPU and GPU for sure).
-PS2 Hardware components (many feel this may be cheap to add, but since PS3 uses more power than PS2 so components have to withstand more heat, more expensive components had to be used that were actually estimated to cost more than it does to make a PS2). It helps the 360 that is has ZERO Xbox hardware to handle its BC. I guarantee if it did, 360 would have cost $75-$100 more expensive at launch.
-Blu-ray diode

The 40GB and new 80GB model uses the newer blu-ray disc diode and removed PS2 BC completely (which also made the main PS3 motherboard much smaller, needing much less components, etc.) Blu-ray diodes dropped in price significantly (an estimated $100 to $8, maybe even more now). The Cell shrunk from 90nm to 65nm (RSX was still 90nm), but the Cell + RSX is still costly (but at least brought PS3 production cost to a point it actually cost just $400 to make a 40GB, compared to $800 to make a 20GB at launch and $840 to make a 60GB.

SCEE, SCEJ, and SCEA even said they rather bundle games with hardware than drop the price for now. Mostly because a game cost just a few dollars to bundle (only cost of disc and packaging) and will add more value (while dropping the price can mean if Sony drops the price by $50 and sells 2 million consoles, they just lost $100 million).
[quote name='CheapyD']mykevermin is right. Microsoft will likely have it's next machine out in 2010[/QUOTE]Sony will probably have their next machine out by 2011. I actually believe the 10 year plan because Sony release PS3 in 2006, and they still have PS2 running (and it has been over 8 years). Sony released PS2 in 2001, and PS1 launched at the very end of 1994 in Japan (if I remember correctly). There were still PS1 releases well in 2003 (although not many). Sony will most likely bring out PS4 in 2011, but they will continue to support PS3 until probably 2015. That is their 10 year plan. Their 10 year plan isn't about only sticking to 1 console for 10 years, it's about keeping a console around for 10 years releasing games for it still.
 
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[quote name='CheapyD']mykevermin is right. Microsoft will likely have it's next machine out in 2010 or 2011 and, despite Sony's fabled 10 year plan, the PS3 will be old news by then.[/quote]

The more I see of Sony these days I'm starting to believe that they believe in the 10 year plan. On one hand you could say the PS3 will be old hat when the new MS console come out around 2011. The other way of looking at it, is that Sony will have a ~$200 console that plays blu rays and has tons of good games out. Sure MS will have hardcores flock to their new machine, but I'm guessing Sony's banking on the long haul.

EDIT: Also The PS3 was rushed to release. I don't think the'll do it again. I think if it was up to Sony there would be a 1/2 year hand over period from one console to the next. Look at it right now! It's been 2 years and the PS3 still hasn't really taken the reigns yet.
 
[quote name='StrandedBrit']The more I see of Sony these days I'm starting to believe that they believe in the 10 year plan. On one hand you could say the PS3 will be old hat when the new MS console come out around 2011. The other way of looking at it, is that Sony will have a ~$200 console that plays blu rays and has tons of good games out. Sure MS will have hardcores flock to their new machine, but I'm guessing Sony's banking on the long haul.[/QUOTE]That too. That's one reason why Sony plans to keep their console around. Yes PS2 may be more dated now, but it's still selling quite well due to lower price (and it hasn't even reached $99.99 yet). There will still be people out their looking for a blu-ray player and something that plays games, and the PS3 will be affordable. Many analysts themselves, don't expect PS3 to have its largest gains until later in 2009, 2010, and so on (as HDTVs become more standard and PS3 becomes cheaper).

What I can see happening is once MS sees Sony starting to really gain on them (as PS3 really gets cheaper, I see pricecuts helping Sony way more than MS), they will most likely release a console in 2010 to hopefully re-gain interests (I see 360 doing well in 2009, but I see it falling a bit in 2010 personally). However, their new console will probably be anywhere from $300 to $400 at launch. While it may be more powerful, PS3 will already be cheaper, have a really wide selection of games available at a low price, and Sony will still be giving it massive support. While I believe many hardcore 360 fans will jump on the next Xbox at launch no doubt, it will take time again to gain mass market appeal, something PS3 will get around the time. By the time Sony releases PS4, although I feel its initial price will be lower next time around, it will not meet mass market appeal for a bit (PS3 will be there).
 
I really think it would have been better for Sony's "value proposition" to have never included PS2 BC, SACD, etc. in the first place. It creates the impression that Microsoft is steadily improving their hardware over time, while Sony is doing the opposite.
 
[quote name='The Mana Knight'] He is right about that, some phones are more expensive than a PS3, and you don't get as much for the price.[/quote]

there's many expensive phones out there... by many different makers and models.

What we have here is a console that niched itself to be expensive.

Price of the PS3 has been noted on main components and it's the fault of sony to produce something that expensive. They have to sallow the pill they made.

I don't think Sony can afford to go cheap, they need to stick and hold with their prices else the PS4 will be made and it'll be worse.

This reminds me of 3DO http://en.wikipedia.org/wiki/3DO_Interactive_Multiplayer
 
The extended lives of the PS1 and PS2 were only because they had lead marketshare.
NES and SNES also had long lifespans, whereas their competitors did not. 1st parties cut their stake in a losing war early, and 3rd parties arguably earlier: They want to have software ready for the NEXT cycle, instead of releasing software on a dying system.

If they release a PS4 along the traditional console cycle model, then there is no way PS3 will see releases to same effect that PS1/2 have.

Furthermore, HDTV penetration apparently has little to do with buying a HD console, as the highest region for HDTV penetration (Japan) illustrates.
 
[quote name='Strell']Let's get to the real matter at hand - it is definitely time for a PS2 price drop.[/QUOTE]

Why do that when you can bundle with a game and movie and charge $20 more?

I almost bit on the PS2 Batman bundle deal at Amazon until I realized that the $129 they had it for SHOULD have been the MSRP in the first place.

It is like Sony doesn't want my money.
 
I know it's an unpopular view but I do believe that cheaper BR players (the $200 or < variety) are not helping; certainly they not the main culprit in the lagging sales but I think they are starting to be an increasing mitigating factor. BR functionality is not why I bought my 60, but it is the reason I never sold it when I became disinterested in it.

Now as I anticipate buying a dedicated player for my other room (with a standard IR remote, for the love of god) I look at my PS3 with forlorn eyes, already thinking about what might have been (and wondering what a 60GB and Wii will fetch on eBay).

Still, I hold out a smidge hope- in me still beats the broken heart of a Sony fan-boy.
 
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