PS3: A Question of Price Cut (very good read from gameindustrybiz)

http://www.gamesindustry.biz/content_page.php?aid=27219

Please do read the full article, it really puts everything that Sony is doing in reference to its pricing in perspective.

An excerpt from the article:

For now, the firm's strategy is to maintain the PS3 as a very high-end, expensive and pre-sumably desirable system, which is out of reach for the average consumer but provides them with a clear upgrade path at some point in future. In the meanwhile, in theory, they will continue to buy PlayStation 2 and PlayStation Portable hardware and software.

This is what David Reeves means when he says that Sony acknowledges that sales of the PS3 are not enormous, but that the company is satisfied that it is hitting its targets. Sony's targets aren't just for PS3 sales; they encompass PSP and PS2 sales, not to mention software sales for those platforms.

Right now, PS3 is, indeed, not selling in enormous numbers - but PSP and PS2, the firm's profitable platforms and by extension the most important, are ticking along nicely despite strong competition from Nintendo around their price points.

It is, of course, a terribly risky game to play - but it's the only game in town for Sony. Bal-ancing the need to maintain sales of previous generation hardware against its battle with Microsoft in the next-gen is an extraordinary high-wire to walk along. Doing too little to spur PS3 sales could erode consumer confidence and hand the next generation to Microsoft. Doing too much would ensure victory in the next-gen battle, but would leave Sony finan-cially devastated and facing disaster.

Whether this month's value adjustments strike the balance correctly remains to be seen. However, it's vital to remember, when watching Sony's movements in the market, that its position is more complex than that of its rivals. That is, of course, no excuse for misleading or disappointing consumers; but compared to Microsoft's deep pockets and single-platform strategy, Sony's situation is altogether more difficult.

When is a price cut not a price cut? When, instead, it's a careful step along a very high tight rope. Sony's next steps, in the coming six months, will be crucial - the firm is accom-plished at this stunt, but there's no safety net below.

sony is not stupid i already know it

the day ps2 sales dry out bam ps3 399 bucks

Sum it up for us of what you got out of that article.

The thing is that Sony didn't meet it's sales goals that it aimed for. It didn't even meet it's shipping goals when it first launched.

This sounds like another justification, another "ah, it's all going according to plan" idea.

That does appear to be their strategy. Judging by what they've done so far, it looks like they're trying to keep the PS3 at $600 for as long as possible.

What I don't understand is how they expect to outperform the 360 (as they say they are) without moving the price point.

That does appear to be their strategy. Judging by what they've done so far, it looks like they're trying to keep the PS3 at $600 for as long as possible.

What I don't understand is how they expect to outperform the 360 (as they say they are) without moving the price point.

sonicmj1

It's hard to say what their returns are for keeping PS2 loyalists, but the longer they keep the price point, the more it hurts their PS3 brand, and now it looks as if they don't even have a chance of catching up within 3 years in hardware sales.

That does appear to be their strategy. Judging by what they've done so far, it looks like they're trying to keep the PS3 at $600 for as long as possible.

What I don't understand is how they expect to outperform the 360 (as they say they are) without moving the price point.

sonicmj1

They are not gonna keep the PS3 at 600 dollars. They ruined that when they made the BUNDLE 600, meaing a stand alone console has to be less. What they are doing is getting rid of the PS3s with the PS2 chip, I.E. the 60gb which are more expensive to make. After those are gone they are gonna release the 80gb as a standalone for 499. And drop the price according to the competition.

Then they will drop support for the PS2 right as the get the PS3 to 3-299. It will already have a nice library of solid exclusives and since the PS3 sells consistently in all THREE regions and not heavily dependant on one region it has alot more room to grow. The 360 has a greater chance of hitting its peak sales early.

[QUOTE="sonicmj1"]

That does appear to be their strategy. Judging by what they've done so far, it looks like they're trying to keep the PS3 at $600 for as long as possible.

What I don't understand is how they expect to outperform the 360 (as they say they are) without moving the price point.

Javy03

They are not gonna keep the PS3 at 600 dollars. They ruined that when they made the BUNDLE 600, meaing a stand alone console has to be less. What they are doing is getting rid of the PS3s with the PS2 chip, I.E. the 60gb which are more expensive to make. After those are gone they are gonna release the 80gb as a standalone for 499. And drop the price according to the competition.

Then they will drop support for the PS2 right as the get the PS3 to 3-299. It will already have a nice library of solid exclusives and since the PS3 sells consistently in all THREE regions and not heavily dependant on one region it has alot more room to grow. The 360 has a greater chance of hitting its peak sales early.

exactly and why killing you ps2 cashcow with the ps3 ?

this is ps1 to ps2 all over again

Sum it up for us of what you got out of that article.

Nike_Air

i underlined the main point of the article which is like a sentence... but yeah, the point is that sony cant really lower the price of the ps3 too much because it will hurt sales of ps2 which is a major cash cow for Sony. Remember when Kutaragi said something along the lines that they didnt want to sell too much ps3's? well, it kinda makes sense now.

The thing is that Sony didn't meet it's sales goals that it aimed for. It didn't even meet it's shipping goals when it first launched.

This sounds like another justification, another "ah, it's all going according to plan" idea.

linarite

it has sold around 4mil so far, and shipped 6mil. having 2mil in stock globally, isn't really a bad thing. the recent hoo haa over the 60 gig is likely to spurr sales of the other 2 mil thats left in stock.

conclusion. sony is pretty much doing the same thing when ps2 first came out , ps1 pretty much kept sony up till ppll finally upgraded. nice thinking Sony. mazdaspeed-rx8

exactly... its amazing to see sony's strategy continuously working for them.

They already said at some point in some interview that they planned on keeping PS2 sales going, both because it's financially a good plan, and because it builds up alittle brand loyalty in people when they want to upgrade to current gen consoles.

it has sold around 4mil so far, and shipped 6mil. having 2mil in stock globally, isn't really a bad thing. the recent hoo haa over the 60 gig is likely to spurr sales of the other 2 mil thats left in stock.

Kalias

"It didn't sell bad, so it's really doing good. All according to plan." I guess the GC did pretty good, too.

[QUOTE="Kalias"]

it has sold around 4mil so far, and shipped 6mil. having 2mil in stock globally, isn't really a bad thing. the recent hoo haa over the 60 gig is likely to spurr sales of the other 2 mil thats left in stock.

linarite

"It didn't sell bad, so it's really doing good. All according to plan." I guess the GC did pretty good, too.

if they are profitable then yes, they are selling well. In terms of marketshare, the psp holds a 30% percent of the ever expanding handheld market. For its first go at a handheld..

I think Sony should just discontinue the PS3, so they could focus on the PS2 and PSP, those are their real money makers.

I think Sony should just discontinue the PS3, so they could focus on the PS2 and PSP, those are their real money makers.

ReverseCycology