20GB PS3 Discontinued

I never said there wasn't demand for the 20 GB version. Only that it's less than 60 GB - that Sony aren't unable to sell a $600 console as Jonny Awesome says. If the market were that price sensitive, why aren't all those people buyng 60 GB machines waiting to get 20 GB machines instead? If the 60 GBs sat on the shelves as the 20 GB were lapped up, Jonny would have a point. If it's a $500 price point that's needed, Sony would manage better at that by selling a majority of 20 GB units rather than scrap the 20 GB and sell the 60 GB unit at $500 and lose even more money per unit.

You raise an interesting point, so I'll explain: Consumers don't behave that way. There are a lot of people that WANT the 60 GB model. They don't want the nerfed 20 GB model. Some of these consumers will buy at $600. Others will wait until Sony drops price to $500. Dropping price to $500 will capture those sales.
 
Xbox1 went from $299 to $199 after only 8 month. Gamecube went from $199 to $149 after about 10 months. In Europe these pricecuts coming even faster, with Xbox cutting their price after a couple of months or so. So pricecuts within the first year are not unprecedented.

Good God! Your right. My history is apparently horrible. I will leave the pc and go cry in the bathroom. Man did I do waaaaaay too many drugs during that era.:cry:
 
Sure, but at the same time why deny the $400 customers happy to have the 20 GB model at $400? Price reductions all round would surely help sales better than keeping the same minimum price but upping the minimum spec?
 
I am prepping my hat with balsamic vinegar and mustard in order to eat it if Sony does price cut this year. Just by looking at past history one can see that it is highly unlikely that a console price cut occurs in the first year of the console's existence.
In addition to the fact your history is wrong as pointed out by others, the reasoning behind whether a console gets its price cut or not has nothing to do with that. Nothing. At all. It's just about what the actual per-unit costs are, how much R&D has to be amortized, and what the current supply-demand situation is.

Right now, those three factors all indicate that it would make sense for Sony to cut its price. The supply-demand ratio is disastrous for them, and they can't just let their fabs idle. At the same time, they won't be able to amortize their one-time costs without selling any units.

And with the introduction of 65nm chips, the savings in terms of cooling solutions that it could imply, the removal of the EE and the XDR, the massive decline in diode prices, etc... Well, I won't try to predict how low their production costs will be by the end of the year, but I think you'd be fairly crazy to believe they couldn't easily drop the price if they had to. It might not be that they want to, but given their production ramp, the might just be forced to.

Shifty: The difference in costs between the 20GB and the 60GB model has become minimal. There is no cost advantage to having a 20GB version anymore, really... They might save a few bucks on WiFi, but that's about it.
 
The 20GB version truthfully should never have existed (unless they actually planned on supporting it in retail) - there was never a significant cost savings vs the 60GB, and the 60GB carried/carries much better (albeit negative) margins. I think it was simply an ill-advised psychological tool to claim a $500 pricepoint with, but when Sony/retailers whoever claim that demand for the 20GB is 'low,' well... I laugh inside. Demand was much greater than the supply's been, that's for sure! Whenever that thing goes on sale online, it's gone in minutes. There is a subset of folk that actively wait for it, and won't spend the extra $100 for the 60GB for what they consider to be features they don't require. I myself own the 20GB (120GB) and it's primarily for that upgrade I had planned from the start that I went that route.

I'm still thinking that there's not going to be a party over at Sony this year over the cost of the console; Arun I agree with the component price reductions as being many and robust, but there's a lot of red they have to dig through before the sale of the console itself is a positive affair. And where their profit/loss ratio for the division lies within that mix will be a lot of what determines whether they feel comfortable cutting prices or not in the short-term. I for one have taken the stand until now that they probably cannot afford to cut the price before end of year and still achieve their profitability goals, but then again that's a good point on fab utilization. But then again since semi and gaming are acting more independently of each other than they have in years... frankly SCEI may simply not find that to be their concern.
 
Shifty: The difference in costs between the 20GB and the 60GB model has become minimal. There is no cost advantage to having a 20GB version anymore, really... They might save a few bucks on WiFi, but that's about it.
Everything counts in large amounts .......
 
In addition to the fact your history is wrong as pointed out by others, the reasoning behind whether a console gets its price cut or not has nothing to do with that. Nothing. At all. It's just about what the actual per-unit costs are, how much R&D has to be amortized, and what the current supply-demand situation is.

Ok,ok, I've admitted I was wrong about the history and am still wondering how I could remember (confidently so) that things were another way. I am very well aware of what are the variables in price-cutting and just thought - incorrectly - that we could see some pattern from history.

Arun Demeure said:
Right now, those three factors all indicate that it would make sense for Sony to cut its price. The supply-demand ratio is disastrous for them, and they can't just let their fabs idle. At the same time, they won't be able to amortize their one-time costs without selling any units.

And with the introduction of 65nm chips, ... The difference in costs between the 20GB and the 60GB model has become minimal. There is no cost advantage to having a 20GB version anymore, really... They might save a few bucks on WiFi, but that's about it.


The s/d is disastrous because demand is currently disastrous which could be both due to price and lack of software. The supply is going swimmingly. I agree with your tip to Shifty that the variance in costs of the 20GB and 60GB are neligible and I am of the mind that Sony will attempt to stoke demand by continuing to tout their machine as a Mercedes while waiting for the Winter software bounty. In basic market terms a price cut would seem ideal, but they have already lost a ton of money on the current units sold IMO will try to squeeze the 600USD at the end of the year. Let's hear what H. Stringer will say regarding Playstation brand in the next few months.
 
20 GB version with 65nm Cell and RSX, and cost reduced BRD drive, for $450, isn't inconceivable.

Die shrinks do not yield automatic instant savings. Normally it takes years depending on the volume produced to see significant savings. Its like starting over in a way. Not only do you need to re-spend quite a bit back into R&D of the new chips but you need to then deal, again, with the poor yields which normally acompany a new process. Forgive me if i misread but you make it sound like Sony can just pull a new sku and savings out of a hat anytime they like which absolutly isnt the case.

From a business standpoint the removal of the sku makes sense if they're suffering from sales. The savings is pretty substantial however for the consumer which makes it a cheapshot and fallacy as they do sell out pretty quick because its ~20% less in cost. Despite what some of you are saying, such as its not going anywhere, perhaps you can explain the low to no supply as well as the total lack of the unit in Europe?

All in all until they replace the unit or lower the price of their main one this is really nothing but further good news for Microsoft and Nintendo.
 
Die shrinks do not yield automatic instant savings. Normally it takes years depending on the volume produced to see significant savings. Its like starting over in a way. Not only do you need to re-spend quite a bit back into R&D of the new chips but you need to then deal, again, with the poor yields which normally acompany a new process. Forgive me if i misread but you make it sound like Sony can just pull a new sku and savings out of a hat anytime they like which absolutly isnt the case.

Usually mass production wouldn't even start unless yields are pretty good. While a dieshrink doesn't guarantee a cost reduction, it usually does. In this case, since they are not going to increase performance, yields are expected to be good and the cost reduction is expected to be immediate and substantial. Since Cell already exists at the 65nm process, all the R&D should have already been accounted for. I suspect something similar for the RSX in the near future. The southbridge chip is even better off, since it has already been reduced to 65nm and is in the Euro PS3.

So why Sony can't pull cost reductions out of a hat, they've already done most of the groundwork and should be on the verge of a major price reduction. The last variable is the expensive blue laser diode. The day they figure out how to make a cheap blue laser diode is the day Sony saves $80-100 per PS3 (give or take a few months :p).
 
The 20GB version truthfully should never have existed (unless they actually planned on supporting it in retail) - there was never a significant cost savings vs the 60GB, and the 60GB carried/carries much better (albeit negative) margins. I think it was simply an ill-advised psychological tool to claim a $500 pricepoint with, but when Sony/retailers whoever claim that demand for the 20GB is 'low,' well... I laugh inside. Demand was much greater than the supply's been, that's for sure! Whenever that thing goes on sale online, it's gone in minutes. There is a subset of folk that actively wait for it, and won't spend the extra $100 for the 60GB for what they consider to be features they don't require. I myself own the 20GB (120GB) and it's primarily for that upgrade I had planned from the start that I went that route.

I'm still thinking that there's not going to be a party over at Sony this year over the cost of the console; Arun I agree with the component price reductions as being many and robust, but there's a lot of red they have to dig through before the sale of the console itself is a positive affair. And where their profit/loss ratio for the division lies within that mix will be a lot of what determines whether they feel comfortable cutting prices or not in the short-term. I for one have taken the stand until now that they probably cannot afford to cut the price before end of year and still achieve their profitability goals, but then again that's a good point on fab utilization. But then again since semi and gaming are acting more independently of each other than they have in years... frankly SCEI may simply not find that to be their concern.


“This is based purely on consumer and retailer demand, which favored the [$599] 60GB model 10 to 1,â€￾ he said in a prepared e-mail statement"

I laughed when I saw this too xbd. It is better for their targeted profitability, but ugh.

$599.

This move will certainly help their bottom line goal, but I fear this will hurt their userbase (even further) and will likely delay MS's pricedrop (userbase) as well.

:???:
 
it seems 20GB SKU is too unprofitable and too unattractive for customers

Agree with the first part disagree with the second.

I think if retailers are/were really asking for only the 60gb :)???: ), this was based on their shipments prior being heavily one sided anyway. They sell out as soon as stores get them so the suggestion that they are not in demand is laughable. Nice cover-up though.
 
Agree with the first part disagree with the second.

I think if retailers are/were really asking for only the 60gb :)???: ), this was based on their shipments prior being heavily one sided anyway. They sell out as soon as stores get them so the suggestion that they are not in demand is laughable. Nice cover-up though.

yea, I'm going to have to go with 20GIG was just to "show" a $499 price point and hardly any have been made available to retail since launch.

certainly not that they wouldn't be snatched up.

the 20 GIG and add my own HDD is/was they way I'd go. (still not at $499 though but eventually)
 
I think Sony should have made the 20GB SKU the main SKU and marketed the 60 GB SKU as the "prem/elite" SKU. By having the 20GB SKU readily available instead of non-existent, it would effectively have made the PS3 $100 cheaper.
 
Dropping the 20gb model is disappointing. Although as it was never released over here, it still makes a mindshare difference. There was a subtle but important gap that $100us helped to ease, despite lack of availability. My hope was simply that they would release the black model later. I have no need for wifi, card reader.. especially ugly silver trim (360 trim is bad enough).
Yet the way games are going, massive installs is a big problem that will just get bigger...

:???:

My main concern now is how they will introduce an 80gb model. No matter how it goes, there must be a price difference somehow. They can't go up, that would be ludicrous. Maybe they will simply introduce it at the current price, and let the market decide what existing 60gb stock is worth. In any event it will be ugly. Retailers won't like it. There has to be some other defining feature difference, and the 60gb can't simply take the 20's place featurewise.. And having fewer features, but 80gb - at the same price - would be mad.

As for price drops, Sony have already proven to be highly unpredictable in the last 12 months. Especially given the pre-launch feature change* and price drop for japan.

* come to think of it, maybe the original '20gb' model, lacking hdmi output also lacked the appropriate chippery, such as hdcp chip, digital output chips, etc? Perhaps this accounted for a more significant cost difference... It was certainly a very late change
 
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I don't see a point in having an 80 gig model. Just stick with the 60 gig as the main default and hopefully drop it down to 499 sooner or later.
 
The 20GB version truthfully should never have existed (unless they actually planned on supporting it in retail) - there was never a significant cost savings vs the 60GB, and the 60GB carried/carries much better (albeit negative) margins. I think it was simply an ill-advised psychological tool to claim a $500 pricepoint with, but when Sony/retailers whoever claim that demand for the 20GB is 'low,' well... I laugh inside. Demand was much greater than the supply's been, that's for sure!
Considering there has been no supply at all, I can agree with demand being greater, but that doesn't mean that 60GB demand is not significantly higher than 20GB.
Whenever that thing goes on sale online, it's gone in minutes. There is a subset of folk that actively wait for it, and won't spend the extra $100 for the 60GB for what they consider to be features they don't require. I myself own the 20GB (120GB) and it's primarily for that upgrade I had planned from the start that I went that route.

Same here. No store around my area had received any shipment since launch. So I bought mine online (ebgames/gamestop). At the time while both 20GB and 60GB were available for a few weeks (back order), only 60GB was a best seller item for that period. So if their bestseller list is anything honest, I say 60 GB demand is significantly higher anyway. That doesn't mean 20GB has been discontinued because of the demand. To me it seems Sony had no real intension of supplying 20GB after launch. As far as I know all 20GBs in NA were sold with blu-ray movie disc.

And while cost effectiveness may be the main issue as many people seem to think, we shouldn't ignore the fact that 20GB SKU is a joke for a company who wants to claim HD download business as well.
 
So Sony says "I'll see your stupid Elite SKU move MS..and raise you one!"

:D

Or something like that.

Yup. I'm pretty sure the guys in Redmond are doing a happy dance now... I hope Peter Moore doesn't explain this one as 'we just got another price drop'.




Maybe Sony is preparing the launch of a HDD-less model.

*runs away*

;)
 
Dropping the 20gb model is disappointing. Although as it was never released over here

This announcement is for the U.S. only, does not say anything about whether or not a 20GB version will be released in the E.U. I could well see the 20GB version (or something else they do to make the PS3 cheaper) be released in Spain and similar less well off European countries where price is a very important factor. This comparable to the status of the 20GB version in Japan, which is going to stay on the market.

The interesting bit is whether or not a similar request will be made by retailers concerning the 360 Core model in the U.S. Surely with the introduction of the Elite model, this is not at all unlikely, no matter what Microsoft is saying currently. Retailers are important.
 
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