DuckThor Evil
Legend
I think the 80GB model will drop to 499$ relatively soon. It has to, or the pricing strategy is not "passive" it's diabolical.
Sony: PlayStation 3 price drop
- Thread starter Titanio
- Start date
They just wanted to get rid of the 60GB and what better way then to give the impression that it's a limited deal, especially with the backward compatability stuff. Then they can lower the price of the 80GB version, and then later they can do another price drop. All these things keep the PS3 in the media's attention.
If they don't of course you could get the reverse effect.
If they don't of course you could get the reverse effect.
Yeah, I cannot see them exiting the year with no PS3 model at $499. And even then, it is hard to fathom no price drop -- or if you want to be technical, not reducing the minimum price of entry. Value added or not, $499 is a ton for a console. Regardless of what, the B3D community thinks, the general reception to Sony's price point/value strategy hasn't been strong (much weaker than PS2 demand, weaker than Wii demand, and about par with 360 demand which many argued was poor).
You wonder: How long will Sony have no $499 unit? How will consumers react the the 80GB price drop? And, inevitably, what will be the fallout from the media?
I think a drop pre-Christmas (or Thanksgiving even) is inevitable, and hopefully a substantial drop at that. $150, £100 would do wonders. Yet I have little hope. Sony seem to be happy with, at best, mediocre sales. What i can't fathom though is if the price to manufacturer has dropped so much, as we think it has, why aren't they turning into userbase rather than lower losses? Userbase is way more important this early in the product life-span than the financial report for the division.
I think they'll drop the price on the 80GB once they're sure the majority of the 60GB are cleared from retailers. I doubt Sony is really happy with their sales.
I agree that establishing marketshare is important at this stage. The strategy is well-known in marketing literature and is usually done by lowering the cost of the "player", but it is not the only way. There are other attractive/aggresive schemes but I would not speculate without proofs (Sony may not be on the same page as me).
Typically, a company wants to take the profitability route because it is hard to out last Microsoft if dragged into a price war... or they take the "no loss" route and then deliver unique values.
Given Sony's convergence pitch, it is also not strong enough to draw users in (Their offerings are still not as consolidated/simple as they need to at this point). Not sure what else Phil and Sony partners have in the pipeline.
They can either take the marketshare loss (in US) this Christmas, suffer the consequences and regroup for 2008 (It won't be pretty), or bite the bullet. Both approaches are likely for Sony. It seems that the Sony execs are conducting business as usual, collecting data points and have not decided on reacting yet.
Im not so sure. And the 60gb is FAR FROM CLEAR from retailers. Maybe Sony warehouse, not retailers. I do my weekly check and my 3 Best Buys this week had over 35 in stock each.
As far as price cuts, I think so many of you are delusional. The cheapest we will see the 80gb is going to be the current $499. For others to think another $100+ is coming off, before this holiday, wishful thinking.
Don't get me wrong, it would be fantastic for the customer, but think about what you are proposing.
I agree. It'll be a while before the 60gb is gone. Probably the Christmas rush will do it. I also think anything over $100 cut is crazy talk. There's no way they can cut the price that much. They'll just end up looking desperate and lose a lot of money in the process. They still have to project a confident brand image and a huge price cut signals panic to their investors and fan base.
Sorry, but how does a huge price cut damage sales? LAIR and Folklore were advertised for £15 instead of £40 at Amazon. Did that make shoppers worry that the games were terrible and Sony were trying to sell them cheap, so steered clear?
People already know what PS3 is. Those interested know the price. The moment the price drops, they'll pick it up. They won't run away worrying that something weird is going on. As long as the software is there, the consumers will be there.
Also, $100 drop may be okay for the US, but it'd be fairly insignificant overseas. Given the inflated price of the PS3 over here, a £100 drop would make sense, and that equates to a $200 price drop. Perhaps overoptimistic, so split the difference and go with £75 from £425 to £350, and that'll be $150 off. From a sales POV, Sony really want to reach ~£300 as a major stepping stone. If they're only going to have one drop, it'll need to be a biggie. If they stop at £375 for another year, they'll just fall way, way behind.
People already know what PS3 is. Those interested know the price. The moment the price drops, they'll pick it up. They won't run away worrying that something weird is going on. As long as the software is there, the consumers will be there.
Also, $100 drop may be okay for the US, but it'd be fairly insignificant overseas. Given the inflated price of the PS3 over here, a £100 drop would make sense, and that equates to a $200 price drop. Perhaps overoptimistic, so split the difference and go with £75 from £425 to £350, and that'll be $150 off. From a sales POV, Sony really want to reach ~£300 as a major stepping stone. If they're only going to have one drop, it'll need to be a biggie. If they stop at £375 for another year, they'll just fall way, way behind.
I hope you're right, for Sony's sake! Plus a key factor here for the idea of a large price-drop is a combination of large BRD cost drops and die shrinks, as you mention 65nm. Assuming these savings drop some $200 from the BOM, as seems plausible, it's more sensible to me for Sony to convert most of that saving into install-base.
I don't know that it would damage sells. I'm just talking about a brand image that's carefully been built over the last decade+ as the market leader in gaming. Sony can't appear as if they are worried or if they are chasing. Brand image is important to these people that spend billions of dollars on marketing and advertising. And pulling a dramatic price cut on a system that is underperforming and already selling at a loss can't be a good signal to investors. I don't think any of that is really crazy. Maybe a price cut would be bigger in Europe because of different economics, but I wouldn't think Sony could cut more than $100 USD in NA.
scooby_dooby
Legend
Honestly, dropping a games console to $400 USD is not going have an effect on their brand image.
These guy's have launched at $299 in the past, and $400 is still alot of money to play video games.
Dropping to $400 would do nothing but stimulate a huge surge of sales for holidays, and begin to get Sony back on track to where they need to be.
I think the negative impact on price-drops only happens on doomed hardware, like Gizmondo. In such cases the system is selling so the company drops the price. But it still don't sell, so they drop the price. That basically signals to the world that there's no market for this product and the company are trying to make one on price alone. "I don't know what it is or what it does, but it only costs $5, so it's got to be worth having!" The end result is those watching the product quickly turn from mild curiosity to trying the name the date the device goes under.
The initial starting price of PS3 sets it up as an expensive, luxury item which is still the quality brand Sony wants. Price drops aren't going to change that hardware or image, as it were. I mean, PS2 now isn't considered anything special unlike when it launched. I wouldn't say the brand is damaged though. It's more...transformed, from an expensive luxury to a widespread social entertainment. Just like DVDs. Once upon a time the DVD player was an expensive luxury. Now every man and his dog has one, and they can be bought for 4 box tops from Kellogg's cereals. That doesn't affect DVD as a brand in a negative way. It may have lost any sense of awe, but it's replaced it with a popularity, and that's what these content based markets are all about. I guess if Sony want PS3 to be viewed as something like an Austin Martin/Rolls Royce for its entire life, only to be owned by the well-to-do and admired from afar by the rest of us paupers, then they don't want to drop the price...
The initial starting price of PS3 sets it up as an expensive, luxury item which is still the quality brand Sony wants. Price drops aren't going to change that hardware or image, as it were. I mean, PS2 now isn't considered anything special unlike when it launched. I wouldn't say the brand is damaged though. It's more...transformed, from an expensive luxury to a widespread social entertainment. Just like DVDs. Once upon a time the DVD player was an expensive luxury. Now every man and his dog has one, and they can be bought for 4 box tops from Kellogg's cereals. That doesn't affect DVD as a brand in a negative way. It may have lost any sense of awe, but it's replaced it with a popularity, and that's what these content based markets are all about. I guess if Sony want PS3 to be viewed as something like an Austin Martin/Rolls Royce for its entire life, only to be owned by the well-to-do and admired from afar by the rest of us paupers, then they don't want to drop the price...
DuckThor Evil
Legend
You know they launched with 499$, even if the 20GB was available in limited quantities. Dropping the 80GB model to 499$ is not a real price cut. If they lower the point of entry to 399$ before holidays then we can talk about 100$ price cut. The 20GB or the 60GB model at their manufacturing date most likely cost Sony more money to make than the 80GB model. Dropping the 80GB to 499$ should be a non issue for Sony and 399$ for holidays should be well within reach. I'm not saying it will happen, but I won't be surprised either way.
I agree that dropping to 400$ would probably be the best move, as I think it would make PS3 sell good amounts, but what if it doesn't? The game library for this holiday season is not as good as X360's, atleast I honestly think so. Wii is selling like hotcakes no matter what software it has, so there is a possible PR nightmare associated with a price cut, IF it does little to spur sales. I personally feel that the Playstation brand is strong enough to push the units even from a weaker software position, but I wouldn't be surprised if Sony would sit on this current situation for a while and only start the serious push when they have the game arsenal to quarantee excellent numbers.
Last edited by a moderator:
We are still talking about a machine launched less then a year ago, some parts 6 months ago, getting a $200 price drop in that short of time.
Why even have the price that high in the first place? Why not take more of a loss to get more units out, instead of now trying to fight an uphill battle NO MATTER what price they lower to. 360 will always be cheaper. The 360 library continues to RELEASE games, and some of very high quality.
While the PS3 isn't going anywhere, and it's a nice device, its not geared for a casual user, which is where all the money is. IF we see the PS3 ever get to $200 or lower, then we have a new ballgame, but whats that 2-3 years away?
Even at a $400 pricepoint this holiday, what games are people going to be buying for it. That's the biggest hurdle at this point.
People don't like to buy for what their device might offer in the future, but what it can do now. Part of the sluggish start to the HDDVD/BR battle.
djskribbles
Legend
no one said they have been. the article one posted said they cleared their warehouses.
i don't see why its so far fetched. it would be much smarter for Sony to increase their userbase at the risk of losing money. they could easily just drop motorstorm from the bundle and sell it for, say, $50 less. i think it would help them a lot if they drop the price lower than 499 before the holidays, especially if MS has another pricedrop.
Similar threads
- Locked
