80GB PS3 SKU coming soon?

[Titanio]

This is quite funny given what we were talking about re. HDD economics and the impact on pricing strategy in the 360 thread. Just as we were talking about that, this cropped up:

https://gullfoss2.fcc.gov/prod/oet/forms/blobs/retrieve.cgi?attachment_id=764216&native_or_pdf=pdf

CECHE01 - 80GB Hard Disk

Kinan on GAF spotted this.

I speculated in the other thread that 60GB drives may now be costing Sony no more than 20GB drives, hence why 20GB SKUs have dried up? Funnily enough, at retail, 80GB drives are now costing about what 60GB drives cost at PS3's launch last year..

So the question is - will Sony push the chain down with this new SKU (60GB instead of 20GB, 80GB instead of 60GB), or maintain the current range and add this on top? Let's hope for the former. It would be a very cheap way to effect a price drop by 'going with the flow' of HDD pricing..given how consumers now differentiate between SKUs based on HDD capacities, Sony could use that to their distinct advantage in jump-starting effective price cuts, without losing savings made on cost reductions in the rest of the system.

 

[Platon]

I do not doubt that the prices for the HDD are going down and that the 60 costs as much as the 20 and so on, but still, shouldn't Sony try and push getting the price lower of the console. Wouldn't it better to keep the 20GB and lower the price, rather then replacing the HDD and keeping the price the same?...

 

[Titanio]

I do not doubt that the prices for the HDD are going down and that the 60 costs as much as the 20 and so on, but still, shouldn't Sony try and push getting the price lower of the console. Wouldn't it better to keep the 20GB and lower the price, rather then replacing the HDD and keeping the price the same?...

Yeah, this little 'trick' does not impact the absolute cost of the lowest entry point. It does impact value though.

Most people currently think of $599 as their only option, chiefly because of availability, but a move like this might change that.

And yes, the question would be if they would leverage cost reductions elsewhere in the system to further cut the price, and actually lower the entry point. Unfortunately, they're targetting profitability on hardware by September, so I'm not sure how likely that is. Plus, if they did do that on top of what I'm suggesting, even cut by $50, you'd be looking at a rather dramatic effective price drop of $150 on the 60GB, likely in less than the space of a year. I've a feeling they might think $100 is enough..

There's so many things they could do, though. The price differences would be interesting to watch also because the gap in capacity between 80GB and 60GB is not that great, so I'm not sure if they'd put them $100 apart. Maybe they'd rip out wifi and media card readers from the 60GB model, and keep them in the 80GB, perhaps with more video-out ports.

 

[Arwin]

I do not doubt that the prices for the HDD are going down and that the 60 costs as much as the 20 and so on, but still, shouldn't Sony try and push getting the price lower of the console. Wouldn't it better to keep the 20GB and lower the price, rather then replacing the HDD and keeping the price the same?...

The point is that the price of the 20GB and 60GB is the same now, due to the 60GB being the most manufactured at this point / manufacturing costs being the same (remember, still more laptops being sold than consoles).

The 20GB HDD may end up more expensive than the 60GB version, even. Hence it makes sense to replace the HDD. But I do think that the 60GB version should then go up more than just to 80GB. I'd assume it'd go up to 120GB. If not, then they will keep the 20GB version and only upgrade the 60GB version to 80GB.

But in the light of the 360 Elite, that'd be weird. So I personally doubt a 80GB version will ever see the light of day.

 

[DJ12]

They should leave it as it is, even if they put 80gb HDDs in there, people are still going to be buying larger drives, so they may as well use the saving to reduce the price.

 

[Titanio]

They should leave it as it is, even if they put 80gb HDDs in there, people are still going to be buying larger drives, so they may as well use the saving to reduce the price.

A 60GB model at the cost of the current 20GB model would be a reduction in price..

They can't reduce the 20GB model in the same way to, say, $449 or $399 because these 'HDD economics' wouldn't allow it. They've bottomed out in price, they probably cost the same as 60GB drives. That's the limitation of a trick like this, as Platon pointed out.

They could reduce the price based on the cost-reductions elsewhere also, and break down past $499 to $449 or even $399, but then you'd suddenly be dropping your price by an awful lot. And Sony is looking to be profitable on hardware quite soon. Can they reduce the cost of the system enough such that they stem losses, and then some, in order to allow them cut another $50 off the system while still breaking even, at least? That's the question, and I'm not sure if they can do that THAT quickly. Even if they could, like I said, I'm not sure if they'd want to given how dramatic a cut it would result in. I suppose it would depend on how sales were going..

 

[Platon]

The 20GB HDD may end up more expensive than the 60GB version, even. Hence it makes sense to replace the HDD.

Sure, that is a possibility as well, I was tinking more in the lines that if the 20GB is price reduced to, but sure the way that economic waork it is not to unlikely that the 20GB might be costing more than the 60GB or atleast the same price and if that is the case then sure, why not replace it and increase atleast the value...

 

[archangelmorph]

Sure, that is a possibility as well, I was tinking more in the lines that if the 20GB is price reduced to, but sure the way that economic waork it is not to unlikely that the 20GB might be costing more than the 60GB or atleast the same price and if that is the case then sure, why not replace it and increase atleast the value...

I agree!

If it's possible for them to effectively shift the SKUs and phase out the 20GB in favour of a discounted 60GB version whilst introducing an 80GB version then that would do wonders for them IMO.. The emphasis would still be on the 60GB but now at the lowest price making it much more competitve going forward..

The only problem with this is that an 80GB SKU with the same featureset as the 60GB but with the added inclusion of only 20GB of HDD space my not speak much in terms of value..

Maybe they could offset this by including a HDMI cable, a PS2 USB memory card reader and possibly throwing in a memory stick duo (like the ones they bundle with the PSP) to give it that little bit extra..

Or they could possibly partner with a USB headset manufacturer and include a branded "official" one.. Alternatively they could throw in the new HD eye-toy..

I guess the possibilities are endless.. I'm just not sure how feasible any of this could be in terms of them meeting their financial targets..

 

[djskribbles]

i already have an 80GB PS3.

 

[-tkf-]

More like 80GB instead of 60GB version

 

[TheChefO]

...they're targetting profitability on hardware by September...

Where did you hear/read this?

I knew they wanted to be profitable on hardware but had no idea their target was so soon.

 

[Npl]

I`d prefer if they`d ship without HDD and let the buyer choose a model himself. Prolly adding a coupon for a rebate if you buy it with (recommended Seagate-Models) HDD and get it installed in the shop for the illiterate.
Sony wouldnt have to care about allocating HDDs, could lower the (perceived) price and consumers could choose.

 

[infinity4]

should have done this in first place IMO

 

[Titanio]

Where did you hear/read this?

I knew they wanted to be profitable on hardware but had no idea their target was so soon.

I had read that they planned to make a profit on every PS3 sold from September, but researching that further, it seems more accurate that they plan to break even on PS3 hardware between Oct and March, the second half of their fiscal year. I think other reporting may have been confusing this with their plan to make the division profitable between September and March.

should have done this in first place IMO

And make the system even more expensive? The reason they're doing this now is because of the scaling in HDD costs since launch. They couldn't have done this back then.

 

[22psi]

We're going to see a new trend here for the console gaming space that will finally follow other electronic device spaces such as portable audio players. As time goes by, more capacity is added while either keeping the prices relatively the same or slightly reduced.

 

[Diamond.G]

I`d prefer if they`d ship without HDD and let the buyer choose a model himself. Prolly adding a coupon for a rebate if you buy it with (recommended Seagate-Models) HDD and get it installed in the shop for the illiterate.
Sony wouldnt have to care about allocating HDDs, could lower the (perceived) price and consumers could choose.

What happens if you take the HDD out of the PS3? What you propse sounds strikingly similar to what MS is/has done. Discounting price rapage.

 

[TheChefO]

I had read that they planned to make a profit on every PS3 sold from September, but researching that further, it seems more accurate that they plan to break even on PS3 hardware between Oct and March, the second half of their fiscal year. I think other reporting may have been confusing this with their plan to make the division profitable between September and March.

Interesting. Thanks Titanio. :smile:


(Certainly more aggressive cost reduction than I figured)

 

[Carl B]

We're going to see a new trend here for the console gaming space that will finally follow other electronic device spaces such as portable audio players. As time goes by, more capacity is added while either keeping the prices relatively the same or slightly reduced.

I agree - what's all this talk of price reduction in this thread? In my mind, if the 60GB is costing you no more than the 20GB, what you do is offer up the 20GB system with a 60GB drive at the same price (and I guess same limited retail presence), and you up the 60GB unit to 80GB or 120 or whatever, and keep its price the same also.

Hard drives are something that will never fall below a certain threshhold in cost, so in a situation like Sony's its better to use them as perceptual gains in value rather than in price reduction efforts at retail. The other components will be the driver of that.

Anyway I do wonder when we'll see a new HDD capacity - in truth they could update it every six months, but it might cause retail confusion and leave early adopters feeling burned, so it'll be interesting to see how they play it.

Interesting. Thanks Titanio. :smile:

(Certainly more aggressive cost reduction than I figured)

Ok now, haven't I been mentioning SCE's plan to be back in the black by the end of this coming fiscal year to you like every other day for a week?

 

[Kryton]

I agree - what's all this talk of price reduction in this thread? In my mind, if the 60GB is costing you no more than the 20GB, what you do is offer up the 20GB system with a 60GB drive at the same price (and I guess same limited retail presence), and you up the 60GB unit to 80GB or 120 or whatever, and keep its price the same also.

Hard drives are something that will never fall below a certain threshhold in cost, so in a situation like Sony's its better to use them as perceptual gains in value rather than in price reduction efforts at retail. The other components will be the driver of that.

Anyway I do wonder when we'll see a new HDD capacity - in truth they could update it every six months, but it might cause retail confusion and leave early adopters feeling burned, so it'll be interesting to see how they play it.



Ok now, haven't I been mentioning SCE's plan to be back in the black by the end of this coming fiscal year to you like every other day for a week?

Do what any other company can do when they have a free distribution service: give out some content for free to early adopters (like mobile phone network owners handing out free minutes).

 

[dnavas]

Ok now, haven't I been mentioning SCE's plan to be back in the black by the end of this coming fiscal year to you like every other day for a week?

Well, I admit to having missed it, so I went out and found some more (what I hope is) interesting info as well:

http://www.technewsworld.com/story/55451.html

Sony Computer Entertainment, the gaming unit, posted a 54 billion yen ($443 million) operating loss, largely on startup costs for the PlayStation 3, according to a company release.

Tokyo-based Sony said it shipped 1.84 million PS3 machines worldwide during the quarter.

If you assume that one-time startup costs ~= profits in PS2/PSP, you're talking about $240 per PS3.

And the (public) thinking as of about a month ago is "price cut? what price cut?"
http://kotaku.com/gaming/ps3/sony-ps3-price-cut-not-likely-for-two-years-239816.php

Sony isn't likely to make any price cuts for at least another two years, said Kimberly Otzman, a spokeswoman for Sony Computer Entertainment America.

-Dave