2007 ps3 price prediction poll

[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?

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?

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 and I recommend watching/listening to the original videos of the two Stringer interviews here. 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

 

[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.