Article : One POV on PS3's pricing and Sony's strategy.
- Thread starter Shifty Geezer
- Start date
The systems are still selling and are apparently popular enough (and cheap enough) to be purchased only to play a couple of games. My problem with the article's outlook is that IMO PS2 sales will not keep up at their current pace within a year.
I know that the "total revenue" (sales of consoles, software, and accesories) platform king is curently X360 according to NPD. Not Ps2.
But, you'd expect that as 360 is selling a lot of $60 games, where no doubt PS2 is selling more budget software at this point. Also of course, that's revenue not profit.
I'm not sure who is in the current leader but what you have provided sounds right.
The PS2 is still doing fantastically for what it is, but the article claiming that there was some sort of subtle grand plan in hedging PS3 losses with the PS2 which makes sense in retrospect and fits the current market results - but will it last past this year. I aint so sure.
It may be a grand plan to not want to ruin ps2 sales, but as Scooby put it - Not a great strategy.
You can say a similar thing for price cuts. Price cuts never truelly helped a console that wasnt doing well from the beginning but games did. If you check historical prices you will see that consoles that lived through a whole generation usually had major price cuts after they sold and established theirselves not before. The games are the major ingredient for a console's life. They are the things that justify the price, expensive or not and they are the major ingredient that made consoles sell beofre and after price cuts
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Mintmaster
Veteran
I think Sony is sort of straddling the fence with this strategy. IMO they should have gone with one of two options:
A) Release PS3 earlier without BluRay, and subsidize BluRay players if that is really a big part of their goal. XB360 would be clobbered without difficulty, as there was huge anticipation for PS3 back when XB360 was released.
B) Release PS3 later (say holiday 2007 or spring 2008) when they can make a system that truly differentiates itself from XB360. Using 65nm, a better GPU, and 1GB of RAM should do the trick. In the meantime, just ride the sales of PS2 software.
As it is, PS3 is more expensive than XB360 without having any visibly superior results to show for it, and overall I really doubt we will ever see a game and say that only PS3 could pull it off. The CPU advantage is just not that easy to "see", the graphics capabilities are similar, and the HDD doesn't do much (as MS learned the hard way). Even BluRay doesn't look like it will impact game quality by much aside from a handful of exceptions, so it's primary advantage is not game-related. Compared to XB360, the advantages Sony gave the PS3 seem to have relatively low impact and high cost, and I think Sony struck a rather unoptimal combination.
A) Release PS3 earlier without BluRay, and subsidize BluRay players if that is really a big part of their goal. XB360 would be clobbered without difficulty, as there was huge anticipation for PS3 back when XB360 was released.
B) Release PS3 later (say holiday 2007 or spring 2008) when they can make a system that truly differentiates itself from XB360. Using 65nm, a better GPU, and 1GB of RAM should do the trick. In the meantime, just ride the sales of PS2 software.
As it is, PS3 is more expensive than XB360 without having any visibly superior results to show for it, and overall I really doubt we will ever see a game and say that only PS3 could pull it off. The CPU advantage is just not that easy to "see", the graphics capabilities are similar, and the HDD doesn't do much (as MS learned the hard way). Even BluRay doesn't look like it will impact game quality by much aside from a handful of exceptions, so it's primary advantage is not game-related. Compared to XB360, the advantages Sony gave the PS3 seem to have relatively low impact and high cost, and I think Sony struck a rather unoptimal combination.
Bigger influence price or games selection?
You can't really definitively say either because it depends since there is a tipping point for both. If a system has adequate games for the majority of consumers then a price cut would probably be more influential than adding more titles. If the price is right but the system lacks games then increasing the number of games is going to be more influential.
If a system lacks both, though, I'd say start with a price cut (because that is going to have an immediate and definite impact) and then try to remedy the lack of software next.
You can't really definitively say either because it depends since there is a tipping point for both. If a system has adequate games for the majority of consumers then a price cut would probably be more influential than adding more titles. If the price is right but the system lacks games then increasing the number of games is going to be more influential.
If a system lacks both, though, I'd say start with a price cut (because that is going to have an immediate and definite impact) and then try to remedy the lack of software next.
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I actually don't think they could have released earlier. The software was clearly not ready. As it is the launch seemed rushed to me. As for the second option? Maybe. I think Sony got spooked by the prospect of both the 360 and HD DVD getting too much of a headstart, though. I think they didn't really have much choice than to launch when they did.
I do still think that excluding BR and (as you suggested) finding another way to push that format may have left them better off, though, because of the possibility of a lower price and they definitely would have had better launch availability. But time will tell....
xbox1 $300 to $200. Check the npd.
it went from 80k to ... ???
Thats a different story though. When watching historical prices you usually observe many players and for many generations to be able to jump to conclusions. But XBOX is an exception of the rule, one special player in one generation. Puting aside the much better graphics it demonstrated, its extra features (like the HDD) and a great selection of launch games such as Halo and DOA3, a price cut of 1/3 isnt just a normal price cut. Its a price cut of huge proportions. I cant recall a console manufacturer ever anouncing a price cut of such an extend in a matter of a couple of months especially after launch. And MS is the only one who could do this without worrying about the impact of losses.
I cant imagine Sony or anyone else to be able to do a similar price cut especially in such a small period after launch.
Price cuts normally come gradually.
PS3 needs desperately great titles. The PS3 isnt losing ground just because of the price. People used to say before that that they will eventually get it someday for sure. What changed this now is uncertaintly because of fear of loosing exclusives which originally justified the price for many (including me) plus the increasing trend of 360 exclusives the PS3 might never get
For example apart of a few 1st and 2nd party games, games such as Tekken, DMC, FF, MGS etc are titles that have a tight relationship with the PS. Millions of PS owners since the PS days grew up with the Playstation and its certain games. They partially made PS what it was and unique.
No other game can replace the experience, the relationship gamers had with a certain selection of games on the PS and ONLY on the PS. PS3 is STILL getting DMC4, it didnt lose it, but at the same time 360 is getting it as well. DMC was one of the total titles that made the PS3 in the minds of so many gamers a unique choice. Since certain events create uncertainty and there is fear now that Tekken6, FF, MGS etc might be getting a multiplatform treatment the experience isnt unique to the PS3 anymore.
360 gets the PS 10-year-old experience plus its own exclusive content. You feel that the PS3 needs a price cut because NOW that it may be losing exclusive offerings it is forced to do it to balance the value of the lost unique experience and a new price.
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quest55720
Regular
That article was worth some good laughs. The PS3 is priced like it is because sony has no other choice because of the blue ray player. There is no way sony would tank the PS3 to try and get an extra year out of the PS2. Sony maybe brash but they know that most consoles do not get over a horrible start to be market leader. I think sony execs are in shock because they thought the PS3 would sell millions just because of the name on it even at 599USD.
They didnt say they would tank the PS3 to get an extra year out of the PS2 in that article have they?
quest55720
Regular
PRice and price alone right now is killing PS3 sales. The PS2 sold like gang busters with 0 decent games. Resistance is better then the first 6 months of the PS2 but the PS2 also cost 1/2 as much. If instead of sony anouncing 599 at E3 last year they priced it at 399 sony would be wiping the floor with MS right now. Sony would not be losing exclusives because the PS3 would be the selling like gang busters. The high price of the PS3 is keeping people from buying it in NA they double the price of admission in 1 generation. I don't care what games you have people of NA are not going to spend 599 dollars on a console outside a few hard core gamers.
quest55720
Regular
Well the price is the reason the PS3 is tanking and they said it is priced like that to not hurt the PS2 sales.
PS2 was selling like hotcakes because people also had expectations of the games it would get. They "knew" (notice the " ") they were going to get for sure the next Tekken, FF, MGS, GT, Resident Evil, RR, Wipeout, Ace Combat, Abes Odyssee etc and in general sequels to most if not to all the best PS1 games on the PS2 and most likely exclusive.
And again I can bring you the example of the GC. Cheaper than the three by a huge difference and more powerful than the PS2 and just as powerful as the XBOX.
PS3 doesnt guarantee many of these titles will remain exclusive just as before. The excitement is simply not there.
The article doenst use direct statements from Sony to back that up. It is mostly the writer's interpretation on Sony's strategy which even his doesnt outright state, that but can be implied according to each person's perception
This
may mean so much more than price deliberately being high in order not to kill the PS2.
edit: also check my first post
http://forum.beyond3d.com/showpost.php?p=952888&postcount=15
Which means there is a measurement of how many sales they might gain by a bareable for them price cut compared to needed PS2 revenues to cover up losses from the PS3
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quest55720
Regular
The PS2 was never priced poorly in NA so price never hurt it like the PS3. The PS2 was the same as the PS1 so price was not an issue. If the PS2 would of been 599 and the gamecube as 199 then you bet sales would of been different. Price matters till you get to a certain point then game library takes over. There are no games out there that are going to sell a 599 dollar machine in NA. Sony is not the first to try this just the most recent.
As soon as I saw the specs of the PS3 and compared that too it's competitors it was obvious that Sony built this to last and it's not crazy to believe that they are thinking much more long term. If the PS2 with it's relative specs to it's last gen competitors can stay relevant and strong this long,obviously the PS3 can as well with the right software. So I could understand Sony not being in such a rush.
quest55720
Regular
The reason for the PS2 long staying power is not system specs but killer game library that comes with a 70% market share. The xbox was much more foward looking but did not have any staying power because of the game library. The PS3 can have all the tech it wants in it but if it does not have that killer game library it will not have staying power. By pricing the PS3 so high and killing sales at the start they have killed almost any chance to have that 70% market share and staying power of the past. Instead of catching MS each month sony continues to lose ground they will have to make up at some point if they want to be market leader.
