20GB PS3 Discontinued

[DuckThor Evil]

I certainly would *like* to believe that would happen, which is why I'm a bit cautious believing that it will. There are three items that separate the two skus, if I understand correctly: wifi, card reader, harddrive. There is some rumor that wifi and bluetooth will be combined into a single chip in the future, and the cost of 60G drives has fallen to 20. I think there is very little that would separate two skus in a PS3v2, so getting rid of one seems very reasonable.

Their BoM will certainly decline, but it remains to be seen whether it will decline *enough* to offer price cuts to consumers. While there are indications of Sony making more money than previous guidance would suggest, that is off the back of their Bravia line, not their game division.

I just don't think that they came into the market with a model in the 499$ and then figured out few months later that: Hell we can't do this it costs too much to make, let's get rid off it! :smile: I'm quite sure the cost of 60GB drive is already very close to the 20GB and overall the difference is very small when factoring in the fact that now they can only produce one model instead of two, which makes the manufacturing process simpler, simpler should equal cheaper in this case.

The fact that there is very little between the two skus and the fact that the 20GB model is already been sold at 499$ with heavier BOM than what it is today, suggests to me that a 499$ sku as the only option is well within the realm of possibilities and imo likely quite soon, but of course we'll just have to wait and see.

Another consideration is that the dollar is declining these days, so the US (at least) is already effectively getting a decrease in price.

Unless Sony gets in a price war with Microsoft, I wouldn't expect a price decline until early 2008. That doesn't mean I don't want it to happen, but I don't see the 'alignment of stars' that would make it inevitable yet.
-Dave

Currency changes don't really affect the purchasing power of a nations citizens, especially in short term, it makes a difference in foreign trade etc. but it doesn't have a impact on salaries or prices in the US or if it does, the changes will take too long to factor into these calculations. Also the dollar probably won't decline much further as it's pushing it already imo, and 1€ has been about 1.28-1.35$ for quite some time now if I'm not mistaken.

You could be right about 2008 price cut, but I think it's possible that the rather slow monthly sales might have accelerated Sonys plans to introduce a price cut, especially when we are not talking about new lower price point as the 499$ is already established price for PS3. If they can make the transition to 65nm in a orderly fashion this should be possible and possibly even worth it?

 

[standing ovation]

I totally agree with the conclusion, but I'm not so sure about the premise.

The cost of managing several SKUs is likely to become prohibitive. There are different industrial designs to worry about, different architectures to juggle, and different features to support--all of which are compounded by evolutionary and backward compatibility issues.

So I'm thinking Sony is trying lasso production costs, with retail pricing being a secondary concern.

 

[SL369]

Slightly of topic view from the other side of the world, where Sony must fight a different battle to win.

In Norway the PS3 have just launched so i doubt we get to see a price cut anytime soon, and even if we got one it wouldn't make much of an impact on the X360 sales.

Here's some Norwegian price points from Elkjøp.no, prices includes 25% sales tax and mandatory warranty of 5 years.
(Warranties are law regulated, items meant to last considerably longer than 2 years have a 5 year warranty. The High Court have decided that all electronic components have a 5 year warranty.)

Prices in Norwegian Kroner and (USD), $ 1.00 = NKr 5,98

X360 Core (+ Gears or FIFA) NKr: 1995,- ($ 333.41)
X360 Core NKr: 2195,- (Yes, it is cheaper with a game.)
Wii (+ Wii Sports) NKr: 2595,- ($ 433.69)
X360 NKr: 2895,-
X360 (+ Gears) NKr: 2995,- ($ 500.54)
X360 (+ Gears, Splinter Cell, COD3) NKr: 3395,- ($ 567.39)
Wii (+Wii Sports, Zelda, 2 controllers, 2 Nunchucks) NKr: 3995,- ($ 667.66)
PS3 60GB NKr: 5995,- ($ 1001.92)
PS3 60GB (+ 2 Sixaxis, COD3, Gundam, Resistance, Talladega Nights) NKr: 7995,- ($ 1336.17)

PS3 games cost NKr 599,- ($ 100.10) while X360 games cost NKr 549,- to NKr,- 349,- ($ 91.75 to $ 58.32). Elkjøp.no doesn't have many games, sites like playx.no have ca. 40 X360 games costing Nkr 199,- ($ 33.25) or less.

US Prices with Norwegian sales tax:

Wii $ 249 * 1.25 = $ 311.25
X360 Core $ 299 * 1.25 = $ 373.75
X360 $ 399 * 1.25 = $ 498.75
PS3 $ 599 * 1.25 = $ 748.75
Game $59.99 * 1.25 = $ 74.98

As you can see, excluding sales tax, the X360 is cheaper in Norway than in the US, while the PS3 is more expensive. The X360 to PS3 difference is minimum $ 500 + Gears.

So here in Norway a price cut would make little or no difference. Sony have to show better games or hope that Rich Norwegians don't compare prices.

And now some fun statistics...

Market share in Norway 2006:

PS2: 43,1 %
PC: 22,3 %
Xbox 360: 11,1 %
Nintendo DS: 9,3 %
PSP: 6,6 %
Xbox: 3,2 %
GBA: 2,2 %
Gamecube: 1,1 %
Wii: 1,1 %

 

[NERO]

Brosefs,

Note that the 20GB sku isn't completely phased out. It has been elimanated in the US, looks to likely be elimanated in Europe and still exists in Japan, where the price is (I think) approximately 375USD.

SL369,

Wow. Cheers to being in-depth The 1.1% Wii number comes as a surprise to me. Is it only due to supply or does consumer preference in cutting edge tech make Norway(ers) avoid the Wii?

 

[Shifty Geezer]

Note that the 20GB sku isn't completely phased out. It has been elimanated in the US, looks to likely be elimanated in Europe

It was never released in Europe or PAL territories (not to forget Down Under). Thus it's effectively phased out, existing only in Japan (and the rest of Asia?)

 

[NERO]

It was never released in Europe or PAL territories (not to forget Down Under). Thus it's effectively phased out, existing only in Japan (and the rest of Asia?)

D'OH!

 

[SL369]

Brosefs,

Note that the 20GB sku isn't completely phased out. It has been elimanated in the US, looks to likely be elimanated in Europe and still exists in Japan, where the price is (I think) approximately 375USD.

SL369,

Wow. Cheers to being in-depth The 1.1% Wii number comes as a surprise to me. Is it only due to supply or does consumer preference in cutting edge tech make Norway(ers) avoid the Wii?

In-depth due to neighbours birthday party, people singing/screaming Live is Life and other "Classics" to early morning.

The Wii is sold out everywhere, but Nintendo have never had a big hit in Norway due to the insane pricing of the Nintendo importer. The DS is doing OK and the Wii might be a success but all older systems have had problems due to over pricing, GBA and even GB games have cost as much or more than full priced PC and console games. Rumours have it that shops have to pay NKr 400,- for a Wii game, new PC games usually cost NKr 349 to 399 out to the consumer.

The Wii might win Norway due to the PS2's casual success, half the PS2 market is Singstar and Buzz orientated and the PS3 is a bit expensive for that market. If Nintendo makes Mario Sing and Mario Quiz they could win over Europe's PS2 casuals.

The Buzz, Singstar and Eyetoy games dominated the 2006 sales, the other Sony exclusive titles where GTA Liberty City Stories on 24, Daxter on 33 and Guitar Hero II (no longer exclusive) on 35.

3. Buzz: The Big Quiz (Nordisk Film)
4. Singstar Norsk på Norsk (Nordisk Film)
6. Buzz Junior Jungle Party (Nordisk Film)
8. Buzz: The Music Quiz (Nordisk Film)
10. Singstar Norske Hits (Nordisk Film)
11. Singstar Legends (Nordisk Film)
16. Buzz: The Sports Quiz (Nordisk Film)
23. Eye Toy: Play Sports (Nordisk Film)
27. Singstar '80s (Nordisk Film)
32. Eyetoy Play 3 (Nordisk Film)

Data from VG.no ( http://www.vg.no/pub/vgart.hbs?artid=151630 )

 

[-tkf-]

http://www.bloomberg.com/apps/news?pid=20601101&sid=apxJ8MoSy6No&refer=japan

The company is also considering introducing the model with a bigger hard disk, Fukuoka said, without providing details.

 

[NERO]

The below, pulled from tkf's link is a lil bit more telling about Sony's price and sku future. Maybe Sir Strings will waver from the 5% mark.

Executive Officer Howard Stringer targets an operating profit margin of 5 percent by March 2008, about double the current margin...

``Profit margin will probably exceed 5 percent if Sony doesn't lower the price of PlayStation 3,'' Hitoshi Kuriyama, an analyst at Merrill Lynch & Co. wrote in a report dated yesterday.