scooby_dooby said:
Well the genius lies in the fact that they managed to avoid the costs associated with a next-gen optical drive, while still supporting the next gen media format, and at the same time, allowing a full upgrade path for anyone who purchased any SKU.
For MS this might be genius, for Sony sticking a 'half-decent' BD drive into PS3 is genius also.
They may well have cut costs on the immediate console but to set up a manufacturing line for another prehipheral will cost money (probably more than buying the drive off LG and sticking it in instead).
It's very smart actually.
As smart as not rushing 6 months and having to invest all the cost of setitng up such a line? Their gamble of pushing to launch has arguably already failed but, and this is easy to say, with hindsight, would waiting and supporting HD have helped? Who knows.
So it's essentially win-win, and allows them to cost reduce much faster than Sony. Now, if they capatilize on this, and use extremely agressive pricing on their core package, this could pay off big time.
Producing a new manufacturing line allows quicker cost reduction? It may allow more profit to be made on those few who do not want the movie facilities and those that do pay a premium, yes.
But this isn't the crux of the entire issue. This is. Sony isn't just a computer company like MS, it is a media company; a film producer, a music giant etc. etc. etc. They will may far more profit in being on the licensing board for BR (every player remember is money to them, as it is for MS and HD DVD)
yet they will make far more on every disk they themselves produce and ship. We all know how music industry pricing works and where the money ends up, the studios pockets, and guess who is the studio.
Agressive pricing on the core package is unlikely when you consider that this is, supposed to be, the machine that MS gets money back out of. Even if they do agressively price the core, why would I not simply buy that over the premium then if the prehipherals are cheap? Why then, if prehipherals are that expensive, do I not buy Sony who have a BD drive already built in and, rival the premium package? Sony is the one who can now roll the dice over pricing, not MS. By adjusting the PS3 price so that it comes just shy of the price of X360 core + the HD add-on (unless it eventually ends up inside, costing MS again - to ditch stock I'd assume) people will have the dilemma and, you know what the man on the street will do. Go for the cheaper one that does, to him, exactly the same as the more expensive one.
Sony has MS again though, here, even if core is agressively priced and, if they simply meet it. They already make memory sticks at a far lower price than the current MS memory sticks (and make money even at this price), they are already using Bluetooth controllers, a lot of the MS 'upgrades' in the Premium package are, supposedly, PS3 commodities. Now the reason to even buy a Premium package is reduced (PS3 is priced just above Core and can do everything the more expensive Premium can and also play movies without more cash) so, Sony can force MS into selling far more 'less-profitable' core packages (EDIT: forgot to mention that this is if MS starts pricing battles and cutting margins) than they want.
If, and this is an/the if Sony, have done some decent research and, can see that they can afford to put a loss on the raw hardware and, get returns through the games/other divisions, they can rule MS right out of this pricing game. They have the advantage of an inbuilt next-gen video format, pre-existing production of all prehipherals at a largely cut price relative to MS, and are intending to put a lot of the 'special' Premium features of the X360 into their vanilla PS3. By directly targetting the middle-ground between you're Premium and Core in the case of a price war (again pricing just below the cost of the media-add on) they can really hit MS where it hurts as, to both propective sets of customers (aside those who buy solely the plain X360, which looking at many shops - not just forums - doesn't appear to be many at all) from your high-end buyers to Joe who wants a cheap BR player and a few games, you now have a solution that satisfies both with losses recoupped on your monopoly of every media outlet and device that you support.