2007 ps3 price prediction poll

[TheChefO]

What is the cheapest official ps3 price (including potential manufacture mail in rebate) you think will be on the shelf this year?

(including potentially scaled back SKUs with smaller HDD/ cut features)


inspired by:
http://forum.beyond3d.com/showthread.php?t=41882

[AlphaWolf]

$550

I don't see them dropping a full 100, they'll probably bundle something desirable and drop to $550. I really don't expect anything until november.

[TheChefO]

$550

I don't see them dropping a full 100, they'll probably bundle something desirable and drop to $550. I really don't expect anything until november.

So you don't think they will re-introduce a cheaper sku with less features to capture more holiday sales? (ex 20gb HDD)

[AlphaWolf]

So you don't think they will re-introduce a cheaper sku with less features to capture more holiday sales? (ex 20gb HDD)

They'd just be hurting themselves in the long run they have a significant amount of non moving stock already. A lower priced SKU would mean moving less of their current stock, they'd be better off eating it on a major price cut, but I think they are too stubborn to admit defeat (in terms of price point).

[TheChefO]

They'd just be hurting themselves in the long run they have a significant amount of non moving stock already. A lower priced SKU would mean moving less of their current stock, they'd be better off eating it on a major price cut, but I think they are too stubborn to admit defeat (in terms of price point).

Sure it would sting a bit financially, but so would losing marketshare as well as mindshare by keeping themselves priced out of the market so severely over the holiday period.

Not to mention I don't know exactly how much stock they have built up at this point but I imagine it isn't much more than 3 million. Also by introducing a less feature rich model, they can still sell their existing stock at the existing price. In fact, with a mail-in-rebate program, after the holidays (or whatever set period of time) they could return to their original price.

[Rangers]

$499.

[Todd33]

$400, but it's not an option.

[Skrying]

I'm going to go with $550 with two games. I just don't see Sony taking a $600M in wasted hardware costs in the rear (give or take depending on how much is in stock) nor do I think they want to continue with such a massive loss by going with a $200 price drop.

[djskribbles]

i'm guessing $499.xx USD.

how much is the 360 Elite in the states btw?

[cthellis42]

I think we may well see them try to settle in at $500 to take advantage of the holiday push and their getting a lot of good games out there to really pump sales (not to mention move the current stock). If that's the case, though, we'll probably still see an SKU at the $600 price point (larger HDD, HD cabling, some Blu-Ray and PSN enticements...) to make more (or "not lose as much") on those more excited about the games than a price reduction, and who like "more stuff."

how much is the 360 Elite in the states btw?
$480

[22psi]

$499 with 80gb hdd.

Another price drop mid 08.

[SugarCoat]

my guess will be no price drop, bundled game or game+movie combo to help push Blu-Ray, that would be the first step in my opinion and also the easiest added cost to eat as opposed to prematurely dropping the price before production costs are reduced enough. Sony isnt stupid. They know that the people that see 600 as too much quite likely see 500 or 550 as too much as well, so in order to appeal to those that will actually pay that much, bundled media would, in my opinion, seem most appealing and a logical first step to both company and consumer.

[thatdude90210]

I voted no price drop simply because I don't think Sony can afford it financially. Btw, here's a timely Next-Gen.biz article on Console price cuts (http://www.next-gen.biz/index.php?option=com_content&task=view&id=5883&Itemid=2) and their effects on sales.
The average PlayStation 2 consumer paid a hair under $200 for his console. The Xbox, at about $188 on average, fares a bit better than the GameCube with its average price of $127. Should we be surprised that the Xbox 360 and PlayStation 3 have failed to live up to sales expectations, given that their prime products -- the Xbox 360 Premium and 60Gb PlayStation 3 -- retail for two to three times the average of that consumers have been paying?

And is it any surprise that the Wii, priced at just $50 over the magic $200 barrier, is selling so well? There is ample room to argue that price isn't everything -- Nintendo's own GameCube proved that point amply -- but if a system can approach the price which moved the majority of systems in the past seven years and can offer a compelling experience at the same time, then that can post record sales month after month. The history of PlayStation 2 sales and recent trends in Wii sales seem to support that argument.

[Crossbar]

I voted no price drop simply because I don't think Sony can afford it financially. Btw, here's a timely Next-Gen.biz article on Console price cuts (http://www.next-gen.biz/index.php?option=com_content&task=view&id=5883&Itemid=2) and their effects on sales.
I think the question is: How could they afford to not drop the price and just give away market shares, they can´t depend on the PS2 forever?

No way they are going in to the holiday season at the same price point as last year ($600), that is not an option for Sony if they plan to stay competetive in the console business.

IIRC the president of Sony recently said they were considering a price drop, and he wouldn't be doing that if that wouldn't happen within a few months, because such comments may affect people having plans to buy a PS3.

I voted for $425, but I think anything in the range of $400 - $500 is possible.

[Paul_G]

I voted $500. I don't expect to see that pricedrop until at least October, in time to catch Christmas sales. Agree with those who mentioned they probably can't afford it, but I would say they can't afford not to. It's simply the lesser of two negatives, because the cost longer term from lower console sales and lower game sales will be greater than the hit taken moving to that price. The real question is, will a cut like that do the job? I personally think there would have been more demand for the 20GB model had $500 been reasonable. However this isn't about the price we think they should go to, it's the price they will go to, so yeah, $500

[one]

my guess will be no price drop, bundled game or game+movie combo to help push Blu-Ray, that would be the first step in my opinion and also the easiest added cost to eat as opposed to prematurely dropping the price before production costs are reduced enough. Sony isnt stupid. They know that the people that see 600 as too much quite likely see 500 or 550 as too much as well, so in order to appeal to those that will actually pay that much, bundled media would, in my opinion, seem most appealing and a logical first step to both company and consumer.Basically I agree but there are some factors to consider, one is the recent statement from the Sony president,
http://forum.beyond3d.com/showpost.php?p=1016139&postcount=28
the other is the 80GB model that launches in the next week in Korea. The new BD player from Sony is $499, the price slashed from previously announced $599, and the 80GB PS3 is most likely without Emotion Engine.

My guess is the 80GB model will launch in the US in later this year for $599 as a hidden price cut while the 60GB model will be cheaper for a fire sale at that point. It can be $30, $50, or some form of bundle such as GTA4 or a download ticket for Warhawk, but not $100 cut due to the minimal 20GB HDD difference.

[dnavas]

I could envision Sony reverting to multi-sku, but with something more tangible than 20G vs. 80G.

For example, a 20G Playstation and a 160G Play-Media-Station, with DVR, video input capability, and any other relatively inexpensive hardware that would help the consumer-value proposition at the high end.

Sony needs a $400 list (slightly less than that street) entry model, and I find it difficult to believe they will be the last people to figure that out. On the otherhand, there's very little evidence that they have, and with their inventory, they have every reason to keep their pricing up....

[borowki]

Basically I agree but there are some factors to consider, one is the recent statement from the Sony president,
http://forum.beyond3d.com/showpost.php?p=1016139&postcount=28
the other is the 80GB model that launches in the next week in Korea. The new BD player from Sony is $499, the price slashed from previously announced $599, and the 80GB PS3 is most likely without Emotion Engine.

A lot obviously depends on Microsoft. It'd be too tough for Sony to not respond to a price cut on the 360. Microsoft might be tempted to go another Xmas at the current price, but I think the temptation of marketshare gain is greater. GTA4 on the 360 is probably a convincing enough reason for many PS2 owners to jump ship.

My guess is the 80GB model will launch in the US in later this year for $599 as a hidden price cut while the 60GB model will be cheaper for a fire sale at that point. It can be $30, $50, or some form of bundle such as GTA4 or a download ticket for Warhawk, but not $100 cut due to the minimal 20GB HDD difference.

That's too minor a difference. It's something that drives retailers crazy.

[inefficient]

My crystal ball says:

Either $549 or $499 with $50 mail in rebate will be possible for the current 60GB model in the US by July.

By Nov they will have completely phased out the current 60GB SKU, and in its place will be 2 SKUs at $499 and $399.

A 65nm process, plus significant reductions in Bluray componets (which we have allready seen), plus removal of legacy PS2 components, and the overall streamlining of manufacturing should easily allow for a 20% drop in retail price from last year.

[Fu3lFr3nzy]

Im leaning towards the $499-549 price range aswell.

I doubt they'd go any lower and i'll be shocked if theyre going to maintain the $600 pricetag this year.

[infinity4]

PS3 without HDD for $429 ftw :twisted:

if situation gets worse like 360: 100k and ps3: 20k then i think 425 is not impossible. ;)

[Sonic]

I'm hoping for around $400 - $450 for the price of a PS3 SKU by the end of the year. It would do Sony much good in tempting people to buy their system. I do see the PS3 sales spiking this holiday season just because it's the holidays, but not the same spike I foresee for the 360 if it gets a price reduction.

[one]

I'm hoping for around $400 - $450 for the price of a PS3 SKU by the end of the year. It would do Sony much good in tempting people to buy their system. I do see the PS3 sales spiking this holiday season just because it's the holidays, but not the same spike I foresee for the 360 if it gets a price reduction.As for sales spike it's too early to tell how it will be at this time, a lot depend on games at E3. If it's underwhelming there's a good reason to cut the price, otherwise not so much because explicitly following the price range of 360 and Wii does more harm than good for Sony.

[NERO]

I say it goes down to 450USD. For a while I was defending to the death that recent console history shows price cuts only after the first 1-1.5 years. I was dead wrong, cuts typically happen within the first year. Sony is in an odd place, their overall strategy seems to imply that they want to get back in black by the end of the year, yet that flys in the face of selling PS3 units. Mr. Stringer might just say screw it, the brand is too important and needs a kick in the pants. They will likely crush HD DVD if the price goes sub 500.

[Butta]

I say $449 US... this would put them just a little lower than the 360 Elite and is a MUCH better value. I hope that Sony is smart enough to do this price drop the same week that HS, Warhawk and Home are released as this would drive sales through the roof!!!

[hey69]

499us $ / EURO

japan no change, since the price is there already very low

[AntShaw]

What I'd like to see: $399

What we will see Sony do: $549.


No WAY Sony goes lower then $549 before 2008. Only way Sony even makes any move is if MS acts and drops first. That will put to much pressure on Sony, but even at that point, I can still see them holding out until 2008 for a drop. Expensive high end equipment, is just that; EXPENSIVE!

[TheChefO]

Guys, don't forget the BR drive had a lot of fat in the initial cost that is likely to rapidly come down. Recent evidence suggests as much right now. By the end of the year, they should be able to shave $100+ off the cost. Investor/stockholder pressure and MS will be the wildcards IMO.

Personally though I see them being able to get somewhere in the $425 (+/-25) range if need be. MS will likely drop some cash off the msrp and I'm guessing it will be ~$50 based on their recent speak of profitability 1st. This pressure would demand a response IMO and I think $499 would still be too much when xb360 is $250-350 ($430).

Even though both Sony and MS are aiming for profitability, MS can't let Wii sit on the shelf at the value $250 spot all by itself and lose marketshare without responding. Regardless of what MS or Sony say, I do think there is some userbase overlap with Wii and dollars spent there are dollars which could have been spent on xb or ps products.

ps3 ~ $450-550
xb ~ $250-350
wii ~ $200 (no game)

[Skrying]

1.) If price of PS3 drops $50, Microsoft does nothing.
2.) If price of PS3 drops $100, Microsoft drops $50.
3.) If price of PS3 drops $200, Microsoft drops $100.

I think I'm going to switch and go with a PS3 price drop of $100. The cost of Blu-Ray will come down but the console is still not cheap plus Sony has a large amount of built up stock that even after the holiday I'll bet they are still riding on, those were not cheap to make and do you seriously want to each that much in the rear? How far is Sony willing to go in order to gain market share? Far but not insane far.

I think we'll see the Wii drop to $200, still with game (uh, Wii Sports was cheap to make and doesn't cost crap to put on a DVD).

So: PS3 will be $499 come October time frame, $Xbox 360 elite will be $380, Premium $299, and I really wish Core was simply gone. Wii will be $200 next spring. These are my predictions.

[zed]

no change, sony know a pricecut aint gonna boost sales that much, even a cut of $200.
theyll wait until the big games come out oct-dec + if that doesnt help hugely with sales there will be a price cut in jan or feb of $200-$300

[borowki]

Even though both Sony and MS are aiming for profitability, MS can't let Wii sit on the shelf at the value $250 spot all by itself and lose marketshare without responding. Regardless of what MS or Sony say, I do think there is some userbase overlap with Wii and dollars spent there are dollars which could have been spent on xb or ps products.

That's a good point. We know Microsoft won't spare any expense when they identify a competitor as a serious threat. It seems they're starting to get paranoid about the Wii's success. Nintendo used to dominate the industry after all.

If MS goes to war against Nintendo, things could get real ugly for Sony.

[Evildeus]

449

[Moonblade]

What is the cheapest official ps3 price (including potential manufacture mail in rebate) you think will be on the shelf this year?

(including potentially scaled back SKUs with smaller HDD/ cut features)



I'm not a financial advisor but wouldn't it be smarter to lower the price after christmas?
I'm saying this because I think people have less problems spending a lot of money (looking at strong xbox360 sales end 2006) during the holiday. The real problem comes when the PS3 still costs $600 februari/march 2008.

[TheChefO]

The real problem comes when the PS3 still costs $600 februari/march 2008.

It's a problem now.

It will be a problem until they have some crazy must-have exclusives, or everyone wins the lotto.

A pricedrop this year will do them good to keep them in the race even if it's only $100 which should be made up for by BOM reductions this year.

[woundingchaney]

Im thinking we may not see a price cut until early 2008, Sony may ride their exclusives to sell consoles through the holiday shopping season.

[infinity4]

so is it safe to say that MS and SCE rely on software whilst nintendo focuses on hardware??? to me it seems software is selling point for ms and sce whilst hardware is for nintendo.

[TheChefO]

so is it safe to say that MS and SCE rely on software whilst nintendo focuses on hardware??? to me it seems software is selling point for ms and sce whilst hardware is for nintendo.

No, both are based on hardware but Nintendo's is radically different.

Their price advantage enables them to then capitalize on the radically different experience and turn the curiosity/desire into sales.

Hopefully MS and Sony realize they can't let Wii sales go unchecked.

[Todd33]

Hopefully MS and Sony realize they can't let Wii sales go unchecked.

Why? It only matters if they are competing for the same market, is there any indication they are? I don't know one person that was a PS2/Xbox owner that now owns a Wii. Should Mercedes care if Kia is selling a lot of cars?

If Wii gather a lot of buyers in a new market it would be foolish for MS or Sony to try to be something they are not and go after it. Maybe MS or Sony can re-release their last gen machine with motion sensing? :wink:

[Heinrich4]

My guess is 54 000 yens / US$ 425/440 (ken Kutaragi wish this) for 60GB console.

[infinity4]

No, both are based on hardware but Nintendo's is radically different.

Their price advantage enables them to then capitalize on the radically different experience and turn the curiosity/desire into sales.

Hopefully MS and Sony realize they can't let Wii sales go unchecked.

the hype behind wiimote itself IS selling millions of Wiis. i have yet to see some killer apps from wii apart from Zelda and cheap h/w as well, so i guess h/w is the selling point - IMO.

for MS and SCE, they can only rely on sequels for big franchises like Halo 3, Gran Turismo and GTA IV that makes their consoles attractive. of course the h/w are behind the visuals but i am sure even if h/w specs were exactly same as xb and ps2 it would have still sold well - IMO.

[RancidLunchmeat]

Why? It only matters if they are competing for the same market, is there any indication they are? I don't know one person that was a PS2/Xbox owner that now owns a Wii. Should Mercedes care if Kia is selling a lot of cars?

If Wii gather a lot of buyers in a new market it would be foolish for MS or Sony to try to be something they are not and go after it. Maybe MS or Sony can re-release their last gen machine with motion sensing? :wink:

Another indication is that neither Sony nor MS are acting like the Wii is competing in the same market. Because despite the claims from forum users and recently Nintendo's own statements, neither Sony nor MS believe the Wii will be any sort of competition in 2-3 years which is the period that both MS and Sony believe their investments in the 360 and PS3 will pay off.

Both MS and Sony have been extremely patient to this point and I see no indication that they are feeling any pressure (from the sales of the Wii or otherwise) to change their initial pricing strategies.

And let's face it, the PS3 doesn't need a price cut. It needs system-selling games.

Sure, the market for $399 consoles is smaller than $199 consoles, but MS is still milking that market. The market for $599 consoles is even less, but the PS3 hasn't exhausted that market yet (IMO), because they haven't convinced the people who are willing to pay that much that they should pay that much.

A $50 price cut does nothing, and a $100 price cut does nothing without better games. Sony would be better off getting some AAA titles online, and using a portion of the $50 or $100 price cut loss on marketing to blanket the media for the holiday season.

Essentially "relaunch" the PS3, now that availability isn't an issue once there is an amazing title or two that they can flaunt.

And if they don't have an amazing title or two that they can flaunt by the holiday season, they might as well give up.

[avaya]

Another indication is that neither Sony nor MS are acting

And let's face it, the PS3 doesn't need a price cut. It needs system-selling games.

The utility attached to a game that would earn it the moniker of "system seller" is also a function of price.

For most hardcore gamers GT5, MGS4 and FFXIII are the system sellers for the current pricing.

At a lower price other games would qualify.

The price is by far the most important factor. The floor fell under SCEI when they announced the pricing at E3 2006, up unitll that point it was looking good.

Sony needs to be under $400 this holiday. That's a huge psychological barrier that most consumers will not cross. Stringer wants his 5% margin across Group, I think he's got options linked to that performance target.

They need to be ~Euro 299-350/£299 in EU/UK and sub 40,000yen in Japan to stand any chance this holiday season. The problem they have is the current inventory, untill they sell through that, there is nothing really they can do.

[Platon]

Question being though if all these savings they are doing are also allowing for a profitable price cut? We should not forget that they have most likely been loosing quite a bit per console for quite some time and soon maybe they are breaking even on the hardware, so will they be able to cost reduce even more or have they cost reduced enough so after a $100 price cut they would still be profitable or breaking even on the hardware?...

[Crossbar]

Question being though if all these savings they are doing are also allowing for a profitable price cut? We should not forget that they have most likely been loosing quite a bit per console for quite some time and soon maybe they are breaking even on the hardware, so will they be able to cost reduce even more or have they cost reduced enough so after a $100 price cut they would still be profitable or breaking even on the hardware?...

They may also be introducing new peripherals with good margins, maybe the PS Eye. I am sure they already have pretty good margins on the extra controlers.

[Xalion]

It would be my guess that stock holders are more willing to take a loss in the first couple of years than in the later lifespan of the console. Also with prices seeming to drop on Blu Ray so quickly, their current loss margin should have shrunk dramatically. Include with this the removal of the emotion engine and I think that they are near the point where they can aim at the $450 price range.

While Microsoft has since denied the rumor that they will drop price to $199, I think all 3 companies realize that this is the sweet spot for price. It will be several years before the PS3 can reach that though. So for now, they will probably drop price to work on consolidating their userbase in order to promote game production. I can't see them waiting much longer than November to start dropping prices if they plan on taking a loss for one more year to promote future sales for games.

[TheChefO]

Why? It only matters if they are competing for the same market, is there any indication they are? I don't know one person that was a PS2/Xbox owner that now owns a Wii. Should Mercedes care if Kia is selling a lot of cars?

If Wii gather a lot of buyers in a new market it would be foolish for MS or Sony to try to be something they are not and go after it. Maybe MS or Sony can re-release their last gen machine with motion sensing? :wink:

All jokes of hardware superiority aside, the Wii is competing with ps3 and xb. It is competing for younger gamers that last gen may have had a ps2, older gamers that may or may not have had a ps2, and even some middle aged gamers that may not have wanted one initially but bought one out of curiosity. In all cases, these system purchases then compete for customer dollars.

Ps2 had all genres, tastes, and age groups covered. This gen they are attempting to do the same with a mass market library, but no mass market pricing.

This same market is currently being divided and split amoung the big three. Wii is currently the only one though which can capitalize on this market which mostly spent $200-300 on a ps2 last gen.

MS should be in a position to price match and perhaps throw in a game this year and while Sony cannot, they can assume the high end of the market while still being roughly affordable by hitting the $425 region.

Both of these moves would do well to limit Wii sales.

For those that assume MS/Sony is not threatened, I don't think either of them figured Wii would have the success it has had. Both of their initial statements reflected that. MS lately though has changed their tune by attacking Wii and their "targeted demographic".

Sony is still not in a position to be threatened by Wii as the price disparity is too large. But they are losing ps2 customers. Both to xb360, and Wii.

[RancidLunchmeat]

The utility attached to a game that would earn it the moniker of "system seller" is also a function of price.

For most hardcore gamers GT5, MGS4 and FFXIII are the system sellers for the current pricing.

At a lower price other games would qualify.

The price is by far the most important factor.

The market for a $600 console isn't saturated yet. Once FF and MGS and GT5 are released, the bottom will probably fall out of that market. At that point, Sony will require a price cut in order to spur future sales.

I'd argue that price isn't the most important factor because I believe there are still a significant portion of the population willing to pay $600 for the console if it gives them the return they want.

So the problem isn't the price. The problem is that FF, MGS, GT weren't and aren't available. The problem is compounded by Sony's arrogance "people will pay $600 for the PS3 with no games", which was a huge miscalculation.

Like Nintendo had no idea the Wii would be adopted so rapidly, Sony had no idea the PS3 would be so completely shunned.

But it's about the games. And there's no way Sony can afford to drop the PS3 to $400 this holiday. That would probably add an additional two years to profitability. Sony can't afford that.

Besides, even at $400, the market is still rather small (as MS can attest to) and that's with many, many quality games. Drop the PS3 to $250 and people will buy it with its current library. $400? Not so much.

[Todd33]

All jokes of hardware superiority aside, the Wii is competing with ps3 and xb. It is competing for younger gamers that last gen may have had a ps2, older gamers that may or may not have had a ps2, and even some middle aged gamers that may not have wanted one initially but bought one out of curiosity. In all cases, these system purchases then compete for customer dollars.

Data?

For those that assume MS/Sony is not threatened, I don't think either of them figured Wii would have the success it has had. Both of their initial statements reflected that. MS lately though has changed their tune by attacking Wii and their "targeted demographic".

Changed their tune by releasing a $480 HDMI verion in black? That tune sounds like a PS3 not Wii.

Sony is still not in a position to be threatened by Wii as the price disparity is too large. But they are losing ps2 customers. Both to xb360, and Wii.

The Wii isn't selling only because of price and definitely not because of good games, it selling because it has a new control scheme along with a few games that use it. It's also riding meda buzz and we know how fickle that can be. How exactly is MS or Sony going to compete, lower the price? MS and Sony need to go after the traditional market, GoW, Halo, FF, MGS, etc. not Reader Rabbit Ping Pong or whatever.

Go read this thread, tell me if the buzz isn't wearing thin.

http://www.avsforum.com/avs-vb/showthread.php?t=858680

[RancidLunchmeat]

All jokes of hardware superiority aside, the Wii is competing with ps3 and xb. It is competing for younger gamers that last gen may have had a ps2, older gamers that may or may not have had a ps2, and even some middle aged gamers that may not have wanted one initially but bought one out of curiosity. In all cases, these system purchases then compete for customer dollars.

There's no evidence of that.

There's an equally supported argument that the Wii is competing with the PS2 and is simply capturing the market of people that bought the PS2 and Xbox at the $199 price point.

I see no evidence at all that the Wii is competing with the same market that the PS3 and 360 are competing in, which is the same market of people who purchased full price PS2 and Xboxs last generation.

And what happens to the Wii when the 360 and the PS3 finally get down to the $199 price point and actually do start competing for the same market?

That's the million dollar question.


For those that assume MS/Sony is not threatened, I don't think either of them figured Wii would have the success it has had. Both of their initial statements reflected that. MS lately though has changed their tune by attacking Wii and their "targeted demographic".

Sony is still not in a position to be threatened by Wii as the price disparity is too large. But they are losing ps2 customers. Both to xb360, and Wii.

That makes no sense, and you go around in circles. Sony isn't threatened, but they are. MS is threatened because they are actually in a better position to compete on price?

How does the fact that MS is in a better position than Sony to compete with the Wii on price make them more vulnerable to the Wii?

If MS were threatened, they'd have dropped the price already. They aren't threatened for the same reason that Sony isn't threatened and it has nothing to do with whether or not they are capable of absorbing a price cut in order to compete with the Wii.

They realize that rate of adoption doesn't infer a new market or a similar target market. It could very well just be an indicator that the Wii will saturate its market more quickly.

I fully expect Wii's sales to drop off drastically. When? I'm not quite sure, but I don't think it will slowly stop selling. I think sales will come to a crashing halt. And MS and Sony both act as if they expect the same thing. Like the Wii will hit a wall in 2008 or 2009 and that'll be the end of this cinderella story, while the 360 and PS3 are just beginning to start saturating the market that the Wii targetted from day 1.

[rbushner]

I don't see Sony as being so desperate to price drop this year.

They will get a holiday boost even at $599. Get some more games and things will look a bit better. I don't think they'll topple 360 numbers, but the right time for price drops is the slow parts of the year. Plus at this point, I don't think Sony wants to play price wars with Microsoft and I'm fairly certain Microsoft isn't going to jump on any 'real' price cuts either (unless pushed). By real I mean cutting MSRP, they might have more retail incentives (sales, etc.), but I don't see any price cut coming from any camp.

I would really like to see the price cut on both though and I can think of lots of scenarios where it would be a good thing for them to do, but I don't see it happening.

[TheChefO]

There's no evidence of that.

There's an equally supported argument that the Wii is competing with the PS2 and is simply capturing the market of people that bought the PS2 and Xbox at the $199 price point.

I see no evidence at all that the Wii is competing with the same market that the PS3 and 360 are competing in, which is the same market of people who purchased full price PS2 and Xboxs last generation.

And what happens to the Wii when the 360 and the PS3 finally get down to the $199 price point and actually do start competing for the same market?

That's the million dollar question.

Agreed. Ps2 gamers though are the same ones which would be upgrading to ps3 if the price were right. Instead they look to alternatives and find Wii and xb360. Wii could be viewed as a stopgap while waiting for ps3 to come down in price, but if affordability is nowhere in sight, these customers will either be content with Wii, or again look to xb360 as an alternative.

That makes no sense, and you go around in circles. Sony isn't threatened, but they are. MS is threatened because they are actually in a better position to compete on price?

I should have worded that differently. Sony are not in a position to address the threat of Wii.

How does the fact that MS is in a better position than Sony to compete with the Wii on price make them more vulnerable to the Wii?

It doesn't ... poor wording on my part. Their price proximity enables MS to address the threat.

If MS were threatened, they'd have dropped the price already. They aren't threatened for the same reason that Sony isn't threatened and it has nothing to do with whether or not they are capable of absorbing a price cut in order to compete with the Wii.

If you listened to their PR prior to launch, they were very complementary of Wii. Then after record sales (A few months ago) they were basically making fun of the thing.

They realize that rate of adoption doesn't infer a new market or a similar target market. It could very well just be an indicator that the Wii will saturate its market more quickly.

I fully expect Wii's sales to drop off drastically. When? I'm not quite sure, but I don't think it will slowly stop selling. I think sales will come to a crashing halt. And MS and Sony both act as if they expect the same thing. Like the Wii will hit a wall in 2008 or 2009 and that'll be the end of this cinderella story, while the 360 and PS3 are just beginning to start saturating the market that the Wii targetted from day 1.

I think Wii sales will drop off as well, just not as drastic and not soon.

[Arwin]

At the Media Markt over here (large chain), I just saw the PS3 for Euro 555 ... used to be 599, so that's down 44 euro. I think that's your first price-cut right there.

[Paul_G]

PS3 has been doing the rounds in the UK almost from launch at £400

[RancidLunchmeat]

Agreed. Ps2 gamers though are the same ones which would be upgrading to ps3 if the price were right. Instead they look to alternatives and find Wii and xb360. Wii could be viewed as a stopgap while waiting for ps3 to come down in price, but if affordability is nowhere in sight, these customers will either be content with Wii, or again look to xb360 as an alternative.


I disagree, because I believe the PS2 gamers that are purchasing the Wii are the ones who purchased the PS2 at a similar price point. $250 isn't that far off from $199. $599 is very far off. I don't think these PS2 gamers would purchase the PS3 until it gets closer to a price point they are more comfortable with, regardless of competition or other options.

Purchasing the Wii now, won't impact PS3 sales. The 360 very well might, if the PS3 can't clearly and obviously demonstrate its superiority by the time it reaches an "affordable" price point.


If you listened to their PR prior to launch, they were very complementary of Wii. Then after record sales (A few months ago) they were basically making fun of the thing.

They never saw the Wii as a threat and wanted to make it clear that they are after a different market. At launch and still to this day, they aren't after the 'bargain hunting shopper' market.

They started complimentary, and now they are insulting. I still don't see them as taking any action that infers they believe the Wii to be a threat.

As was previously mentioned, did they reposition the Core to compete with the Wii? No, they launched an even more costly version to position themselves to better compete with the PS3 in future years.

Everything I see shows Sony and MS firmly focused on the future, firmly focused on winning the 'set top media box' battle for the living room space which is going to be sorted out 2009 or later.

And both manufacturers seem extremely content to let Nintendo rapidly saturate the market of people who are interested in the Wii in the short term. Because none of them see the Wii as competition in the long term.


I think Wii sales will drop off as well, just not as drastic and not soon.

If everybody believed the same thing, life wouldn't be very interesting.

[jonabbey]

I'd say Sony has to get PS3 down to $449 ASAP to make the PS3 fit into a different psychological 'price bin,' but that they are unlikely to do that in one fell swoop.

I'd say a $499 60 gig unit for the holidays, but I'd be much, much happier with $449.

[Crossbar]

The 28% of you who thinks the Playstation 3 will cost $600 for the rest of the year, should maybe read this (http://www.gamesindustry.biz/content_page.php?aid=25821)and I recommend watching/listening to the original videos of the two Stringer interviews here (http://video.ft.com/viewfromthetop/). Keep in mind that the christmas time frame was brought up the journalist. I also found his comment of how he found out that Japanese management was not motivated by greed quite a bit interesting.

[iceberg187]

PS3's problem is perception and as long as the media makes the public think the Wii has won, the problems only compound. In Japan, forget about it, that is Nintendo country. America? I'm on the train of thought that 3rd parties will pull the plug soon. Publishers won't fight over the 15% 3rd parties have a market share on the PS3 currently. Europe? That will take the longest to see, but sales have slowed drastically. We live in a Wii world it seems.

[Titanio]

Stringer seems to strongly hint at a price reduction by the end of the year here:

http://video.ft.com/viewfromthetop/

Transcript:

You've made a big bet on Playstation - is it going to come good?

Yes, I think..I would be the first to say to you, Nintendo Wii has been a successful enterprise and a very good business model compared to ours..

Because it's cheaper?

Yes, because it's cheaper and..

..because it's more fun, more creative?

No, no, no, fun is in the eye of the experiencer. No, no. I think PS3 is following a particular trend of 1 and 2. If you look at the history of it, it's a very similar history. It takes a long time for producers, and more time because of the cost factor, to embrace the full bandwidth of Ps3. It's only using 20% of it right now. Producers will always wait to see how it's going, and once they use the full bandwidth the games experience is stunning. And while people have not bought as many Ps3s as it looks, it is no different from PS1 and PS2 in terms of percentage of sales. And it is an experience that's dazzling, people who play it using only 20% of the bandwidth are perfectly happy playing it, and the games will get better. And most of the games are not third party games yet, they're mostly our own games. And we've got Home coming out, we've got some exciting games coming out in the summer, 20 or 30 of them. So I don't worry about that at all. I think that the public would like the cost to be lower, there’s no question about that.

How much lower can you afford to bring it down?

That’s what we’re studying at the moment, that’s what we’re trying to refine.

Will you come up with an answer by Christmas?

Yeah, yes of course.

Before it's pointed out, he's obviously mistaken on the third party games comment, but the nub of this is his comment on price..

[Shifty Geezer]

Only 20% of PS3's bandwidth huh? I guess that saves on server costs, but surely at a limit of how much stuff people can download. When the full 1 Gb/s bandwidth is enabled, profits must surely increase 5 fold :yep2:

[rbushner]

Stringer is a moron. He fits all the stereotypes of a fatcat CEO of a large corporation, out of touch with his customers, products and employees. There is no good reason to EVER hint of a price drop. It's only going to cut off the legs of your current sales.

If word like this starts spreading too far PS3 may go sub 50k before they get a chance to pricedrop.

But hey, I appreciate it, I'm holding off now, it will save me some money. I'd sooner save a hundred bucks (or more) than have the right prediction.

[RancidLunchmeat]

Why? Stringer hinting at a price drop in time for the holidays isn't going to stop the 80,000 people who are buying one every month from doing so.

Those 80k want one now and don't want to wait. They know the PS3 will have a price drop eventually, they don't want to wait 6 months, or 12 months, or however long.

[rbushner]

Stringer hinting at a price drop in time for the holidays isn't going to stop the 80,000 people who are buying one every month from doing so.

It's stopping me.

Those 80k want one now and don't want to wait.

And you know this how? Sorry, I'm not buying that. If people couldn't wait, they'd already have one. This is about a price drop coming in a couple of months. Most people are willing to put that into saving a hundred bucks. As the poll shows, alot of people were not expecting a drop this year.

Edit: After reading Dave Baumann's post in another thread, I can see a positive benefit to Stringer's statement. But I still don't like him. :smile:

[Shifty Geezer]

There is no good reason to EVER hint of a price drop. It's only going to cut off the legs of your current sales.It's an interview with the Financial Times! The whole thing is about money and profits and markets. Part of running a business is managing costs and demand, and in business media reporting you're going to have open statements on what you'll be doing. This isn't the ifrst time I've heard an executive officer talk about future plans. Furthermore no-one but a chump will be looking at PS3 and it's sales and expecting it to stay at that price for any length of time! The sorts of people who are likely to hear about this interview will be people who are already watching the sales figures of PS3 and cringing (or celebrating, depending which side of the fence they sit) and posting on forums "Sony need a price cut or they're doomed!"

One thing I did notice watching the interview is that Stringer considered the PS3 a games machine. He didn't once comment on non-gaming features. That hints at a discrepency between different arms of Sony and their view of the machine.

[Vic]

The market for a $600 console isn't saturated yet. Once FF and MGS and GT5 are released, the bottom will probably fall out of that market. At that point, Sony will require a price cut in order to spur future sales.

I'd argue that price isn't the most important factor because I believe there are still a significant portion of the population willing to pay $600 for the console if it gives them the return they want.

So the problem isn't the price. The problem is that FF, MGS, GT weren't and aren't available. The problem is compounded by Sony's arrogance "people will pay $600 for the PS3 with no games", which was a huge miscalculation.

Like Nintendo had no idea the Wii would be adopted so rapidly, Sony had no idea the PS3 would be so completely shunned.

But it's about the games. And there's no way Sony can afford to drop the PS3 to $400 this holiday. That would probably add an additional two years to profitability. Sony can't afford that.

Besides, even at $400, the market is still rather small (as MS can attest to) and that's with many, many quality games. Drop the PS3 to $250 and people will buy it with its current library. $400? Not so much.


I was making this point earlier in the week and got shot down for it. With regards to Europe, I think there are still a fair number of gamers that will buy the PS3 at its current price once some big games are released. I agree its unrealistic to think that Sony will reduce the price to $400 in the US this year. $450 is the best case scenario, with $500 the most likely price. Having said that, you say that the 360 is struggling at $400 because the market is low at that price, but for me (at least in Europe) the 360 sales are slowing down because the Xbox doesnt have the brand recognition of Playstation, the blanket coverage of the Wii, and it still doesnt have a wide-range of AAA games that cover several genres. Think of its biggest games, and most people think of Gears, Lost Planet, Dead Rising, Shadowrun, Splinter Cell and Ghost Recon with Halo to come. Of course there are other games out there, but most of the best games on the system are action/shoot-em-ups.

Having said that, Sony does need to introduce a price-cut. It wouldnt surprise me if they wait until just after Warhawk, Heavenly Sword and Unchartered are released, perhaps around September/October.

[scooby_dooby]

Another indication is that neither Sony nor MS are acting like the Wii is competing in the same market.

What would Sony do anyways? They're in no position to react to the Wii right now. MS has certainly changed their tact since the Wii has taken off, I doubt you'll hear Peter Moore talking about a Wii60 too much in the future.

I agree with your overall outlook, that both companies are looking further down the road the the Wii is, but the above point in particular doesn't mean much.

[scooby_dooby]

The market for a $600 console isn't saturated yet. Once FF and MGS and GT5 are released, the bottom will probably fall out of that market. At that point, Sony will require a price cut in order to spur future sales..

There will be no $600 console by the time these games are released, first if all. Those are all likely 2008 titles.

Secondly, the bottom already has fallen out. Sony is doing a WW total of somewhere around 180k/month, that's pretty brutal. I guess it still has a heartbeat...but it's pretty much dead. You might get some bumps, here and there, but there will be no major upswing IMO.

Especially in Japan and USA, where sales are paltry. EU figures are still somewhat speculation, it seems to be doing decent wqhen we extrapolate numbers, but we don't really know how the sales have been in the last couple of months.

[Todd33]

There will be no $600 console by the time these games are released, first if all.

Especially in Japan and USA, where sales are paltry. .

It's already under $500 in Japan. There are some big Japanese type games coming out soon, like Folklore, so IMO it is inevitable that sales will pick up quickly there were there is no real next gen competition.

[Vic]

When there are no games being released, is it any suprise that sales are falling?

PS2 had no competition when it was released, and I think people are also underestimating its effect on PS3. Sure its cheap, but it has a huge catalogue, that PS3 doesnt come close to matching. Simply reducing PS3's price isnt enough.

[rbushner]

PS2 had no competition when it was released

Dreamcast?

PS2 had competition, it just got nullified by PS2's hype and consumer mindpower coupled with Sega's inability to balance a checkbook.

Currently Wii has the hype and consumer mindpower.

[TheChefO]

Dreamcast?

PS2 had competition, it just got nullified by PS2's hype and consumer mindpower coupled with Sega's inability to balance a checkbook.

Currently Wii has the hype and consumer mindpower.

yep.

Glad to see the sheep mentality was nullified by the high price and widespread internet use.

[tha_con]

My prediction:

60GB PS3 drops to $499.

Crazy?

80GB PS3 released in US, JPN, and eventually EU regions. $599. Will not ship as many as 60GB, however, the cost for Sony between the two is minimal, and it will help potentially recoup their losses, or minimize them.

[Gradthrawn]

My prediction:

60GB PS3 drops to $499.

Crazy?

80GB PS3 released in US, JPN, and eventually EU regions. $599. Will not ship as many as 60GB, however, the cost for Sony between the two is minimal, and it will help potentially recoup their losses, or minimize them.

That's a heck of a premium for 20GB of additional space in a console with a user replaceable hard drive. Even with the original 2-tiered structure, the upper model added 40GBs, WiFi, and card readers for $100 more. There has to be something more than that. Adding some cables (HDMI and/or component) and a headset could be a nice way to improve perceived value for the "premium" model without drastically increasing their cost.

Making the current 60GB the base model, and selling it for $400, while using an 80+GB equipped model bundled with HD cables and a Bluetooth headset as the premium model for $500 could go a long ways, I think. Not sure how feasible that is, however. Perhaps that would be something more for Christmas 08 than 07.

[scooby_dooby]

When there are no games being released, is it any suprise that sales are falling?
Not any more. But, at one point is was quite surprising to see demand shrink so rapidly. Sales aren't 'falling', they're damn near anemic @ 80k/month in the us. 360 sold twice that much during it's first year, it didn't have a huge game libary, and nowhere near the brand equity Sony had.

I fully expected Sony to be sold out until march/april, and sell their initial 6million units as planned.

Soon, it became clear that the $600 market is just not there. It's not lack of games, it's the pricepoint. That's all there is to it.

I'd venture to guess, that at a lower pricepoint, Sony would've sold heir initial 6million consoles as soon as they could make em, regardless of the games available.

[TheChefO]

I'd venture to guess, that at a lower pricepoint, Sony would've sold heir initial 6million consoles as soon as they could make em, regardless of the games available.

Indeed.

It seems Ken was wrong and people had better things to do than get another job to afford a ps3.

[SugarCoat]

It's already under $500 in Japan. There are some big Japanese type games coming out soon, like Folklore, so IMO it is inevitable that sales will pick up quickly there were there is no real next gen competition.

Japan alone will hardly sustain Sony. Dont forget the 20gb is not offered or even discontinued in a lot of countries. They also lost a lot of initial sales by not offering that more basic model for 20% less which im sure they had a good reason to not release to other regions, the losses they're taking on the hardware are problably horrendous.

[TheChefO]

Well, one down.

I still think there is an opportunity to hit the $425 range ($400-450) with a feature reduced model this year.

I think the current price move was the right one and will hopefully help them pick up steam here.

[Skrying]

Well, one down.

I still think there is an opportunity to hit the $425 range ($400-450) with a feature reduced model this year.

I think the current price move was the right one and will hopefully help them pick up steam here.

No way will it go lower than $500 this year, cleary (IMO) they're still really hurting on the cost per unit and therefore the introduction of a 80GB model to curve this loss even if slightly. Hell, they're even charging for the game they're "bundling" with the system. Unless you honestly believe that extra 20GB cost them $100. To be honest the 80GB is probably the same price or just ever so slightly more than the 60GB due to scale, the 80GB is most likely the most common laptop hard drive sold right now.

[Rockster]

I can't image the new SKU costs them more than a couple bucks for disc replication of the game and larger hard drive. It's an attempt to create a better perceived value. The $499 60GB SKU was probably more financially painful for them to move it through the channel. Makes me wonder how many are out there.

[Skrying]

I can't image the new SKU costs them more than a couple bucks for disc replication of the game and larger hard drive. It's an attempt to create a better perceived value. The $499 60GB SKU was probably more financially painful for them to move it through the channel. Makes me wonder how many are out there.

If it was to create better perceived value then it was a major screw it, it does the complete opposite.

[ManuVlad3.0]

I bet in another price cut before this fall. Maybe $50,00.

[Arwin]

I bet in another price cut before this fall. Maybe $50,00.

There better be, as I voted for 425 months ago (thouh assuming that 399 would be the most likely price going into this Christmas season in that scenario, but it wasn't an option in the poll)