No More 60GB PS3 in the US after July?

[Todd33]

The feigned drama around here is laughable.

A. Get a 60GB now if you want the near 100% BC.
B. Get a 80GB if you want 20GB in trade for worse BC.


This was coming as soon as the Korean model hit IMO.

 

[Carl B]

Mostly. That said, though I am skeptic especially when it comes to PR, I cannot say they certainly won't be able to empty their stock by the end of the month.
We all guessed they want to get rid of 60 GB in NA, but we don't really know much about their world-wide strategy especially in Japan which also includes the same SKU.

Yeah but it's selling more slowly there than here, so... not sure I would understand what sense a supply shift to Japan would make.

Who knows maybe they already shifted some of NA stock to Japan and/or they want to create temporary demand by artificial supply shortages, and/or try to make extra few bucks on 80 GB which I am positive very profitable.

I doubt the 80GB unit is profitable, let alone *very* profitable.

So, Reeves may have a solid reason to expect such a result, or just trying to create another artificial demand by simply saying "guys hurry up, you won't be able to buy it cheap anymore" , in which case he will probably look stupid in 3-4 weeks.

Reeves is SCEE - he doesn't give a sh*t. He's just trying to soothe Europeans angry that they're not receiving a cut by rationalizing the US move in a context that makes it seem not as bad.

 

[betan]

I doubt the 80GB unit is profitable, let alone *very* profitable.

I haven't seen any reasonable explanation why they cannot produce 60 GB without taking a loss.
All I see is funny claims like $200 loss per SKU with some arbitrary list.

Reeves is SCEE - he doesn't give a sh*t. He's just trying to soothe Europeans angry that they're not receiving a cut by rationalizing the US move in a context that makes it seem not as bad.

Yes likely indeed, I forgot the last E. but then again 2-week time is pretty short for such a claim
without a reason.

 

[Cryect]

How about Kaz Hirai saying the exact same thing in this video here at 1:41

http://atvs.vg.no/?id=10235

Well, again, just from a hardware perspective, the 499 dollar price adjustment that we did for the 60 GB version, for the american market, uh, we're no longer in production for that product, so uh once that product is gone from the retailer shelves, then we're back to the $599 SKU only, so it's not like we have a two price strategy here in the US market. We found out very early on, you know, consumers react mostly to just having one SKU as opposed to two.

Found over at GAF. So its not just SCEE saying this.

 

[patsu]

We are doing a Bollywood version of Singstar

Deepak, I assume the Bollywood version will come with a coconut tree for couples to dance around

 

[Carl B]

I haven't seen any reasonable explanation why they cannot produce 60 GB without taking a loss.
All I see is funny claims like $200 loss per SKU with some arbitrary list.

You also see billions of dollars in losses. That doesn't happen when your hardware is profitable. (but yes the iSuppli list is ridiculous)

Seriously, the people that think the PS3 costing more to manufacture than it does to sell is all some sort of smokescreen... what the hell?

without a reason.

Exactly.

 

[betan]

You also see billions of dollars in losses. That doesn't happen when your hardware is profitable. (but yes the iSuppli list is ridiculous)

Seriously, the people that think the PS3 costing more to manufacture than it does to sell is all some sort of smokescreen... what the hell?

I really appreciate if you can give me a reference for billions of dollars losses which don't include their game development and hardware production investment (2.5 million PS3 sitting somewhere is still a lot of money).

If we know the loss is due to PS3s sold to retailers, we can easily estimate minimum amount they are loosing per SKU. Lower bound of course but still tells a lot, especially if we compare it for example pre-PS3 earnings.

I guess there should be some analysis online, it seems so obvious .

 

[Carl B]

I guess there should be some analysis online, it seems so obvious .

It is, and you only have to search through old threads to find it. Run the numbers for the quarter ended December 31st (a quarter where every manufactured PS3 shipped), and wake up to the fact that the PS3 is expensive to make.

(not to mention, unsold inventory is counted as an asset on the balance sheet - not a liability, so that whole angle need be abandoned entirely on your part)

 

[Todd33]

It is, and you only have to search through old threads to find it. Run the numbers for the quarter ended December 31st (a quarter where every manufactured PS3 shipped), and wake up to the fact that the PS3 is expensive to make.

That's kind of old news, they have cost reductions that are in the EU/Korean design and the BD components are much cheaper. I think the current price is more interesting than the most expansive quarter, this tells us how much leverage Sony has. The 80GB at $499 is probably a much better deal than the 60GB at $599 for Sony.

 

[dobwal]

You also see billions of dollars in losses. That doesn't happen when your hardware is profitable. (but yes the iSuppli list is ridiculous)

Seriously, the people that think the PS3 costing more to manufacture than it does to sell is all some sort of smokescreen... what the hell?

Exactly.

Come on, I have got to have this wrong. Please correct me if I do.

Sony cut the 60Gb PS3 price by $100.00 dollars just to clear channels and will replace them with $599.00 80Gb PS3s?

If true, thats gots to be one the dumbest move of all console time.

How much more attractive does your 600.00 console become with the addition of 33% more storage space?

This is the equilvalent of MS selling the current Premium for $335 to clear out channels to make way for a new $399.00 27Gb models.

Whats worse is they're bascially going to kill all the momentum created by the $100.00 price drop. When they clear out the $499.00 PS3 there will be less demand for a $599.00 sku then there was prior to the price drop.

A better scenario would have been a $50.00 dollar price drop with a later introduction of a $550 dollar 80 Gb PS3. Clearing out current inventory would have been slower but any momentum created would have been maintain with a slight increase with the introduction of the new sku.

 

[StefanS]

Come on, I have got to have this wrong. Please correct me if I do.

Sony cut the 60Gb PS3 price by $100.00 dollars just to clear channels and will replace them with $599.00 80Gb PS3s?

If true, thats gots to be one the dumbest move of all console time.

How much more attractive does your 600.00 console become with the addition of 33% more storage space?

...
Whats worse is they're bascially going to kill all the momentum created by the $100.00 price drop. When they clear out the $499.00 PS3 there will be less demand for a $599.00 sku then there was prior to the price drop.

After clearing the inventory of the old 60 GB units the price of the 80GB model will drop to 499 USD, that's pretty much a given.

It's a move to sell the old models with the more expensive motherboard and chips by a cheaper design that will save them money despite the larger harddrive compared to the predecessor.

 

[Carl B]

Come on, I have got to have this wrong. Please correct me if I do.

Yes, you're wrong.

Read the thread.

That's kind of old news, they have cost reductions that are in the EU/Korean design and the BD components are much cheaper. I think the current price is more interesting than the most expansive quarter, this tells us how much leverage Sony has. The 80GB at $499 is probably a much better deal than the 60GB at $599 for Sony.

Probably it is. That doesn't make it profitable though, let alone *very* profitable.

 

[NERO]

I believe the clearing inventory strategy is as much for perception as it is for clearing the actual inventory. We should all agree that the 80gb (sans EE) model is cheaper to produce than the 60gb model was. I know most of us agree that Sony needs pricecuts. What they are likely doing is creating the perception that the 80gb will be a bargain once it hits the 499USD mark (likely before the holiday season). Only thing is I wonder how long will Sony keep the free game package. Will they sell a 499USD model with a game by December? I am confident of the former but not the latter.

 

[Cryect]

why do people assume there are 2 million+ US PS3s that are waiting to be sold?
I have no idea how many there are but certainly much less than that number which includes EE-less and Japanese stock as well.

Well its not 2 million but here's a better idea of the amount at around 1.23 Million left to be sold at the end of May in the US.

 

[dobwal]

I really appreciate if you can give me a reference for billions of dollars losses which don't include their game development and hardware production investment (2.5 million PS3 sitting somewhere is still a lot of money).

If we know the loss is due to PS3s sold to retailers, we can easily estimate minimum amount they are loosing per SKU. Lower bound of course but still tells a lot, especially if we compare it for example pre-PS3 earnings.

I guess there should be some analysis online, it seems so obvious .

Look up quarterly reports for Sony. They explicity state that the losses were generated from the selling the PS3 at "strategic" price points.

Current game development shouldn't eat up all the software fees and hardware sales generated by the PS2 and most of the hardware production investment was done prior to the PS3 release.

Investing in the design and production of smaller and cheaper components isn't going to eat into profits and revenue to the extent of creating anywhere near a billion in losses. The PS2 went through a plethora of redesigns through out its lifetime.

You would need a breakdown from Sony as it impossible from the current public information of to correctly determine the loss per console.

 

[Carl B]

There we go - good find Cryect. So roughly a million then. With a doubling of the sales rate - were that to even happen - that would last roughly five months.

 

[dobwal]

Yes, you're wrong.

Read the thread.

Probably it is. That doesn't make it profitable though, let alone *very* profitable.

After clearing the inventory of the old 60 GB units the price of the 80GB model will drop to 499 USD, that's pretty much a given.

It's a move to sell the old models with the more expensive motherboard and chips by a cheaper design that will save them money despite the larger harddrive compared to the predecessor.

Then where the evidence in this discussion to refute Cryect's post:

http://atvs.vg.no/?id=10235

Originally Posted by Kaz Hirai
Well, again, just from a hardware perspective, the 499 dollar price adjustment that we did for the 60 GB version, for the american market, uh, we're no longer in production for that product, so uh once that product is gone from the retailer shelves, then we're back to the $599 SKU only, so it's not like we have a two price strategy here in the US market. We found out very early on, you know, consumers react mostly to just having one SKU as opposed to two.

Is it you or me who hasn't read the thread?

 

[LogisticX]

Nice find, good to see theres still a decent supply to go around. I'm unsure when exactly I want to buy the PS3, but its good to know there's still a bit more time to decide exactly.


What's sad is that money isn't the biggest issue in my case but time itself. With Guitar Hero 3 coming to PS2, I really could just pour my gaming hours into that game.....though there are games I really want to play be it for 360, Wii or PS3... just need to find time.


EDIT: Maybe a silly question, but....what's with all the "so uh" or "uh"'s in that paragraph? Is that for real?

 

[Carl B]

Then where the evidence in this discussion to refute Cryect's post:

There's no refutation of Cryect's post. At the same time, that doesn't mean you should take what Kaz says at face value. When Chubachi denied the recent price cut we just received was coming, there were those who ignored it, and those who thought since it was an "executive quote," it was as if cast in stone.

Believe me, the 80GB will move down in price as soon as the 60GB's are a memory.

 

[tha_con]

The 60GB price cut only happened for 2 reasons. To clear out the inventory to make way for the cheaper (to make) 80GB sku, and to increase the userbase in a short period of time. By doing this, Sony can show developers "hey, we are selling units, and the user base is growing". Then, during the holidays, they'll drop the 80GB sku to $499, and the same thing may happen, people will see a 'bargain' and buy them, not millions of people, but people. I can see Sony hitting an honest to god 2 million member increase in their current US installed userbase by the end of 2007. That's not a small number, and will work wonders to convince developers that they *can* develop for PS3 without fear.

This entire snaffu is only happening to increase the userbase in a short period of time. In all honest, as 'dumb' as some of you think it is, it's actually very intelligent and sneaky.