Ars Technica rumor claims 399 40GB PS3 this year

[Rainbow Man]

The WiFi and card reader modules could also be dropped. Assuming they're still modular, that is.

Aren't they by nature USB devices? If so it should be a doddle, though question is how mcuh money could actually be saved this way. The source componenst must surely be quite cheap today.

Flash readers in particular come almost for free even bought retail these days..
Peace.

 

[Shifty Geezer]

A 40GB PS3 is another matter as it makes little sense to introduce $100 cheaper sku based primarily on a smaller HDD as going to 80 to 40Gb shouldn't save Sony anywhere near a $100 in manufacturing costs.

You misunderstand. The lower cost SKU isn't about saving money and passing those savings onto the end user. It's about introducing a new price-point that's cheaper because of lots of price savings, but trying to maximize revenues by offering a more profitable SKU as well. For us who know, we look at the...60GB model and think 'Pah! That's not worth £100 more. I'll buy the cheaper model and get the same for my money.' For the ordinary buying public, they see two models with a large price differential, and assume that the price difference is because of the increased capacity in the larger SKU. Higher priced goods aren't always priced higher the amount that their BOM is higher. Indeed I dare say that's never the case. As the price goes up, often profit margins are pushed further too. You can, as it were, sell $300 of hardware for $500, and sell $400 of hardware for $700, and sell $500 of hardware for $1000.

If Sony introduce other changes, specifically dropping the Wifi, I think they'll suffer the consequences. Wifi is pretty popular, AFAIK; certainly in the UK. I know plenty of people who have Wifi networks, and no-one who had a wired network when they were the only option. I certainly won't get a PS3 without Wifi as I want it to remain portable, and don't want the hassle and expense of running Ethernet cables around the house.

Given price reductions in the BOM, I think a $400 price drop is possible, with the HDD as just a differentiating factor. Assuming this rumour floats, which I don't think it will. The price shavings from removing features just adds complication to the assembly process at little savings. Sounds like more effort than its worth to me.

 

[RobertR1]

This compliments the news about Sony selling a stake in their finances division to fund the gaming. It seems like they do not want to be left behind severely during this holiday season by the Wii and 360 so they're willing to take a bigger loss to gain marketshare.

Seeing that the BR/HD DVD battle isn't even close to being over now, they need to focus their attention on the gaming division.

 

[Farid]

People who argue BOM and economics tied to the actual manufacturing differences between the proposed hardware configurations are not factoring an important point: Sony's will to drop the entry price for their platform.

It's not important that the hypothetical 40GB SKU doesn't cost much less to produce for SCE, what they need right now is a low-priced SJU that seem to offer less "psychological value" than the higher-end SKU. And removing low-cost features (media card reader, for instance) is a good way to do so.

It would allow Sony to introduce a lower price PS3 that offers less value to the consumer, while keeping a more featured product that seems to offer more value while having a better net margin for Sony.

In any cases, SCEA, before SCEI and SCEE, needs a cheaper PS3 on shelves this holyday. And SCEA folks are definitely pushing for it. In other words, I wouldn't be surprised at all to see a $399 PS3 model on shelves this holiday season in the US.

 

[patsu]

So this is like the revival of 20Gb PS3 ? I guess we shall see.

What this means to me personally is to quickly trade in my trusty 20Gb PS3 for a 60Gb using BestBuy's extended warranty.

 

[Tap In]

In any cases, SCEA, before SCEI and SCEE, needs a cheaper PS3 on shelves this holyday. And SCEA folks are definitely pushing for it. In other words, I wouldn't be surprised at all to see a $399 PS3 model on shelves this holiday season in the US.

agreed

this is the reason why it is not only plausible IMO, but necessary for survival in the marketplace.

 

[Heinrich4]

I think the idea is to introduce the hardware at a lower price, but still maintain a more profitable 'higher-end' version. The price to manufacture has already dropped considerably. It's quite possible PS3 is $200 per unit cheaper to make now then when it launched. By passing on those savings, Sony offer a lower entry point, but also take less profit than they do now. So by offering a cheapo 40GB version, some people who know no better will pay for $100 for only 20GB more storage. After all, if that's the major distinguishing number on the box, 50% (or 100%) more storage for only a 20% increase in price has to be worth it, right?

I agree fully to your argument, but the fact the damages of US$250 for unit still would keep high as time of ps3 20GB/60GB BOM(BOM = US$850,sell ->US$ 500/600 = US$1billion+ dollars lost) ... and same in a hypothesis "version 40GB entry level/early adopters like" of only surrounds 20% of the total of manufactured consoles no?


I think that most logical would be to keep only model ps3 "euro like" 80GB without EE/ps2 "for full backwards" for all regions... even Japan... and "fighting' for reduce price as fast is possible or include more bundles -> more games+ controllers etc .

(for gamers would be wonderful if we have US$399 price soon with "features"(blu-ray drive HD,cell processor,wi-fi etc) of ps3 but this possibility before March of 2008 seems little real... but we cross fingers!)

 

[ihamoitc2005]

?

So this is like the revival of 20Gb PS3 ? I guess we shall see.

What this means to me personally is to quickly trade in my trusty 20Gb PS3 for a 60Gb using BestBuy's extended warranty.

How do you do this?

Also, I do not think they can save $100 dollars with less hard-drive, memory card reader and wifi. But, maybe they will have new manufacturing that is cheaper for more expensive components.

 

[dobwal]

You misunderstand. The lower cost SKU isn't about saving money and passing those savings onto the end user. It's about introducing a new price-point that's cheaper because of lots of price savings, but trying to maximize revenues by offering a more profitable SKU as well. For us who know, we look at the...60GB model and think 'Pah! That's not worth £100 more. I'll buy the cheaper model and get the same for my money.' For the ordinary buying public, they see two models with a large price differential, and assume that the price difference is because of the increased capacity in the larger SKU. Higher priced goods aren't always priced higher the amount that their BOM is higher. Indeed I dare say that's never the case. As the price goes up, often profit margins are pushed further too. You can, as it were, sell $300 of hardware for $500, and sell $400 of hardware for $700, and sell $500 of hardware for $1000.

If Sony introduce other changes, specifically dropping the Wifi, I think they'll suffer the consequences. Wifi is pretty popular, AFAIK; certainly in the UK. I know plenty of people who have Wifi networks, and no-one who had a wired network when they were the only option. I certainly won't get a PS3 without Wifi as I want it to remain portable, and don't want the hassle and expense of running Ethernet cables around the house.

Given price reductions in the BOM, I think a $400 price drop is possible, with the HDD as just a differentiating factor. Assuming this rumour floats, which I don't think it will. The price shavings from removing features just adds complication to the assembly process at little savings. Sounds like more effort than its worth to me.

If Sony can afford the $400 price sku with a PS3 who primary difference is a just 40Gb HDD then they can afford to sell the 80Gb PS3 for $400 and then offer a higher priced sku with 120-200 Gb HDD and a few other goodies whos costs to Sony would be a fraction of the price premium a consumer would have to pay for it.

 

[liolio]

If Sony can afford the $400 price sku with a PS3 who primary difference is a just 40Gb HDD then they can afford to sell the 80Gb PS3 for $400 and then offer a higher priced sku with 120-200 Gb HDD and a few other goodies whos costs to Sony would be a fraction of the price premium a consumer would have to pay for it.

Yes but they can also produce very few 40GB SKU and claim that their entry price is 399$ for PR reasons

 

[scooby_dooby]

agreed

this is the reason why it is not only plausible IMO, but necessary for survival in the marketplace.

Agreed as well.

This is exactly what Sony needs to do if they want to get back in this fight.

Not only do I think this is probable, I'd bet on it. (Not the 40gb part...just the $399 pricepoint)

 

[patsu]

How do you do this?

Also, I do not think they can save $100 dollars with less hard-drive, memory card reader and wifi. But, maybe they will have new manufacturing that is cheaper for more expensive components.

I bought the store warranty from BestBuy when I bought my 20Gb. It says I can exchange my PS3 anytime, but 20Gb is EOL... so I'm going to see if they will gimme a 60Gb instead.

Agreed as well.

This is exactly what Sony needs to do if they want to get back in this fight.

Not only do I think this is probable, I'd bet on it. (Not the 40gb part...just the $399 pricepoint)

I think most people doubt the 40Gb part. The US$399 move is highly anticipated.

 

[Archgamer]

In 1 year they shave off 200? The 80 gig going down 200 dollars after being introduce not to long ago will piss off early buyer.

I can see two scenarios. Plan a new model for 400 before Christmas. The existing 80 gig goes down to 500. Or bring the 80 gig to 500 until next spring and drop or introduce another model at 400 when the heavy hitters comes out. I say the ladder makes more sense.

 

[scooby_dooby]

The 80 gig going down 200 dollars after being introduce not to long ago will piss off early buyer.

So what?

This is the most ridiculous argument people make against pricedrops IMO. Why does teh company care if you piss off some small segment of people who already own your product?

I mean, I can see repeated, and frequent pricedrops over the longterm having a neagtive affect, but a couple pricedrops is not going to hurt them one bit, it would actually send sales skyrocketing. So what if a handful of PS3 owners grumble...they'll still buy GT5 and FF13 regardless

 

[dobwal]

agreed

this is the reason why it is not only plausible IMO, but necessary for survival in the marketplace.

Survival for Sony isn't dependent on a $399.00 PS3 this holiday. The best price for the PS3 in Sony's eyes is the lowest price where the loss can at least be recovered through software and peripheral sales. Maybe Sony can even sell at a price point below that threshold if further cost reductions can be seen in a short period of time. But dropping price just to generate market share without taking account of bottom line is something the gaming division can't do since Stringer is harping on the the % of profits to revenue of Sony as a whole.

The playstation brand can survive even in a distant third place. The question isn't whether the playstation brand will survive but whether Sony will see a profit or a loss this generation and what can be done to push the PS brand toward profitability.

 

[NavNucST3]

In 1 year they shave off 200? The 80 gig going down 200 dollars after being introduce not to long ago will piss off early buyer.

I can see two scenarios. Plan a new model for 400 before Christmas. The existing 80 gig goes down to 500. Or bring the 80 gig to 500 until next spring and drop or introduce another model at 400 when the heavy hitters comes out. I say the ladder makes more sense.

Let me just say that my iPhone dropped in price by that same amount, in less than a year. But I agree with Scooby, so what. If I felt the value was there at X price, why should it matter to me if a day or a week later it is y price?

If there is a drop to $399, expect to see me post my PSN ID that very day!

 

[mrcorbo]

Let me just say that my iPhone dropped in price by that same amount, in less than a year. But I agree with Scooby, so what. If I felt the value was there at X price, why should it matter to me if a day or a week later it is y price?

If there is a drop to $399, expect to see me post my PSN ID that very day!

I understand the logic of this and I would have to agree, but this is unlikely to be how this would be perceived by the buying public. This is why Apple had to make some effort to try to smooth things over ($100 in store credit). A 33% drop in price on a product that's this expensive just a couple of months after its introduction is a bit too extreme IMO.

Not to mention the other perception that could come out of a move like that, which is that Sony is desperate.

I think they would need a new SKU to get to $399.

 

[Scott_Arm]

I don't see how anyone could be mad if this price drop was made. You buy something if you feel it's worth the money. Early adopters always pay significantly more. Whether the price drops in a year or a few months, it doesn't really matter. There's no such thing as being "fair" to customers in the situation of price drops. Customers know the price will come down, and if they pay more than they feel the item is worth, that's there bad. They should wait until the unit hits the price they feel it's worth, because they know it'll get there eventually.

I still don't understand how they could sell the 40gig version so cheap. The cost Sony pays to build and market a 40gig system vs an 80gig system is minimal, and they'd lose far more money for each 40gig that they sold. I'd think the pricing would be set to encourage people to buy the 80gig

 

[22psi]

If true, day one purchase. I've been waiting for this.

 

[cthellis42]

I do see them rather wanting to get a $400 SKU out there, but I share earlier comments that ran along the lines of "40 fewer gigs, and that's IT for a $100 difference?" It doesn't make much sense to start splitting production again (though I guess they are still producing the 20GB in some markets, right?) and remove the wireless device or the memory card slots, etc. And if they don't do that, just what would really be the differentiation?

I guess the 80GB could remain still bundled with Motorstorm through the holidays and have, say, some extra perks (like credit that could go to your online account when you sign up for it, so you could pick up, say, $20 worth of games and somesuch. Good idea, that, as it's extra value AND gets more people signing up right away and seeing what's on PSN.) But without the hardware differences...

The difference between a 40GB and 80GB laptop drive in large bulk couldn't be THAT huge, so frankly I share the stance that they should just use the 80GB as the baseline and drop that, and retain a more expensive SKU with a stupid-huge drive (you can get 160's in a frickin' iPod, after all) and some cool bundling at the high end. In fact, I'd almost rather still see them at the $600 level with a ridiculously cool bundle rather than feeling they have to stepping-stone about. Toss a few of the sought-after holiday titles in, a good online game (Warhawk, say, which could be pre-installed, and would also get people used to using the SIXAXIS), and whatever other bling seems nice. They can drop that one to $500 easily enough later on just by pulling out some of the bundle. While some hardware extras on the machine might be NICE, I think it makes more sense to keep the basic design the same for manufacturing simplicity and cost reduction, and make it up with ephemeral extras.

Also, throw a frickin' HDMI cable or something in there, 'kay? Sheesh...