[Arwin]

This time they're swining the other way again ...

Originally Posted by TimesOnline

Sony is expected to sell up to 1.5 million of its PlayStation 3 consoles in Britain this year, putting it on track to outstrip Nintendo's cheaper Wii within 12 to 18 months of its launch.

The consumer electronics giant has made 220,000 of the £425 consoles available for the UK launch on Friday, a figure so large that retailers are reporting none of the supply problems that have plagued rival launches.

However, analysts and retailers have warned against interpreting the absence of a stock squeeze as a negative sign.

Nick Parker, an analyst with Screen Digest, said: “The lack of shortage is supply driven; what Sony has shipped will sell. We estimate that Sony will sell around 4 million units in Europe this year, with 1 to 1.5 million in the UK.”

Retailers expect a price drop, like me ... however, this article mentions that the Yen is strengthening and combined with the euro's strength this would make it easier for Sony to make a price-drop in Europe than in, say, the U.S. (the dollar sucks right now, plain and simple).

Read more here: http://business.timesonline.co.uk/to...cle1533825.ece

[NERO]

Originally Posted by Arwin

Retailers expect a price drop, like me ... however, this article mentions that the Yen is strengthening and combined with the euro's strength this would make it easier for Sony to make a price-drop in Europe than in, say, the U.S. (the dollar sucks right now, plain and simple).

Of course things are always subject to change but I was certain that Sony (one of the chiefs) announced that a price cut would not come untill 08. If JPY continues to strengthen and EUR stays the same sure Sony will pricecut - in the US.

[zidane1strife]

Originally Posted by NERO

Of course things are always subject to change but I was certain that Sony (one of the chiefs) announced that a price cut would not come untill 08. If JPY continues to strengthen and EUR stays the same sure Sony will pricecut - in the US.

Sony will make the necessary moves to stay on top, in the end they'll have to depend on luck and fate, oops I meant faith to come on top and play with purple bananas ala revolution.

[TheChefO]

Originally Posted by zidane1strife

Sony will make the necessary moves to stay on top...

Honestly, I don't think Nintendo or Microsoft are willing to sell their console businesses.

IMO

[Carl B]

I don't understand their analysis of the exchange rate situation; a stronger yen would normally hurt the income when the majority of sales are overseas. The yen has been appreciating vs the dollar recently; since I myself don't follow it as closely, any ideas as to what it's been doing vs the Euro or GBP?

The only situation in which a stronger yen would help is in reducing the cost of externally (to Japan) sourced components. No doubt this is of benefit, but I think we would need to compose a chart here tracking currency moves since launch until now across the various relevant currenices. I certainly don't think that the Euro's strength negates the loss Sony makes on each console, it simply diminishes it.

I guess I'll get to work on a chart like this, unless anyone else has the datapoints handy.

[NERO]

IMO the exchange rates mentioned are too stable to make any operational difference in Sony's strategy. Carl B's point of the strengthening JPY lowering input costs might help since they outsource some assembly but when it comes to selling the things I'm not sure. They definitely make up for some revenue in the overpriced markets (everywhere that is not the US or Japan). The folks who wrote the article mention wholesalers who are leaning toward a price drop. They should re-write and mention that wholesalers are hoping for a drop.

On a personal note, I went shopping the other day and finally witnessed what many have been saying - the PS3 not being bought. I went to a Target, Best Buy and Circuit City, none had Wiis and each had entire cages of PS3s, while the 360 did not seem to be doing all that great either (yet the Best Buy folk told me they'd been selling more in past month than PS3s).

[dobwal]

Originally Posted by Carl B

I don't understand their analysis of the exchange rate situation; a stronger yen would normally hurt the income when the majority of sales are overseas. The yen has been appreciating vs the dollar recently; since I myself don't follow it as closely, any ideas as to what it's been doing vs the Euro or GBP?

The only situation in which a stronger yen would help is in reducing the cost of externally (to Japan) sourced components. No doubt this is of benefit, but I think we would need to compose a chart here tracking currency moves since launch until now across the various relevant currenices. I certainly don't think that the Euro's strength negates the loss Sony makes on each console, it simply diminishes it.

I guess I'll get to work on a chart like this, unless anyone else has the datapoints handy.

That seems backwards to me also, since US automakers having been accusing japan of artifically keeping the value of yen down in relation to the dollar allowing companies like Toyota to offer cheaper products with higher profit margins.

1-1.5 million in the UK over the next nine months will have the PS3 either close to or actually out pacing the PS2 during its first full year on the market.

[NERO]

Originally Posted by dobwal

That seems backwards to me also, since US automakers having been accusing japan of artifically keeping the value of yen down in relation to the dollar allowing companies like Toyota to offer cheaper products with higher profit margins.

Yes. This is why I don't get this analysis. The only place where a price cut is warranted if the Yen and Euro strengthen is the US. The Yen has popped up a litte bit but it goes against what the BOJ has been trying to do for years and is a result of the problem with the Chinese markets a couple of weeks ago.

Originally Posted by dobwal

1-1.5 million in the UK over the next nine months will have the PS3 either close to or actually out pacing the PS2 during its first full year on the market.

Interesting. Do you have the global global numbers for the PS2s first year?

[dobwal]

Originally Posted by NERO

Yes. This is why I don't get this analysis. The only place where a price cut is warranted if the Yen and Euro strengthen is the US. The Yen has popped up a litte bit but it goes against what the BOJ has been trying to do for years and is a result of the problem with the Chinese markets a couple of weeks ago.



Interesting. Do you have the global global numbers for the PS2s first year?

Vgcharts keeps annual numbers for Europe. In terms of reliability, who knows how accurate they are, but they are the only numbers readily available.

[dobwal]

[QUOTE=NERO;950153]Yes. This is why I don't get this analysis. The only place where a price cut is warranted if the Yen and Euro strengthen is the US. The Yen has popped up a litte bit but it goes against what the BOJ has been trying to do for years and is a result of the problem with the Chinese markets a couple of weeks ago.
QUOTE]

Actually, the only place that could face a price cut without the negative effects of the strengthening of the yen would be japan itself.

[Carl B]

Exactly, the stronger the yen, the more Sony loses on PS3 sales in the US. One would expect a price hike before one would expect a price cut. Except... one wouldn't expect a price hike at all, so you see where a strengthening yen would cut into Sony's profits (or accentuate losses) from US PS3 sales.

EDIT: Ok here's a breakdown of some major currencies and their movement from 11/17/06 to 3/19/07 (you Euro people know how we Americans do our days/months I imagine )

On 11/17/06....

The Euro bought ~151 yen, the US $ bought ~118 yen, the British Pound bought ~223 yen, and the Chinese yuan bought ~15 yen

On 03/19/07...

The Euro bought ~156 yen, the US $ bought ~118 yen, the British Pound bought ~229 yen, and the Chinese yuan bought ~15 yen


Ok so actually, in the end for all the chop in between... it looks like currently we're in the same place for the Euro launch as we were for the US launch. What boring results!

By the way I include the yen to yuan ratio because that's the only metric in which a stronger yen would benefit Sony

[NERO]

Actually, the only place that could face a price cut without the negative effects of the strengthening of the yen would be japan itself.

Yeah and they've already done that before the Japan launch.

[wco81]

UK may be different but supposedly the average monthly wage in a lot of European countries for people in their 20s and into their early 30s is suppose to be about 1000 Euros. Not sure if that's gross or after taxes.

In any event, the PS3 price has to be a big obstacle or a big part of their target market.

Unless a lot of Brits cross the Chunnel to get theirs.

[Rangers]

Haha, PS3 to outsell Wii anytime soon? Good luck with that.