Playstation 3: Hardware Info and Price
- Thread starter Farid
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Sis said:
I look at that link and I'm not willing to grant that curve will necessarily apply this time. It wasn't a world-wide launch. They launched in NA a month earlier in the Christmas cycle, and after 6 mos to get their production/packaging/distribution kinks worked out in Japan.
Let's bookmark this one for May next year and see what it looks like.
Tho I think from a perception point of view, if they are planning a price cut next spring, they'd have been better holding that low-end sku in their pocket until then. They'd have been a much bigger savior to the low-end types to have popped out a $399 model then after 6 months of nothing but $599.
DemoCoder said:
I think all the debates on this have spurred from the idea that a higher price means nothing this generation or that Sony is putting themselves at a disadvantage down the road by coming in at a high price.
A key question is that do they HAVE to charge this much or are they doing it becuase they CAN. If they must and will be at this type of cost advantage through the next 5 years well then i think thats a problem for them.
True and I believe Sony is very good about knowing when they need to do this. I just wonder how one goes from $500-$600 and sitting on the shelves, down to $300-$400 and flying off the shelves. It seems like a difficult task to me, given that I think those willing to pay in excess of $400 on a console will be saturated quite rapidly. Perhaps Sony is banking on sales due to people using it as a cheap(er) Blu-ray player.DemoCoder said:
geo said:
I see your point but i dont think they could. From a perception standpoint i think youd see a lot more people flocking to Wii and 360 if they thought the price of the PS3 WAS $600 and had no idea of the upcoming 399 SKU. "I wont be able to afford the PS3 for another 3 years anyway so i may as well get a 360..." kind of thing.
Excellent point and one I hadn't thought of. Though ironically I often felt MS was too quick to pull out the cheaper core unit as well, but perhaps Sony had them running scared on price. It'd be interesting to know whether MS would have left the core pack on the table had they known Sony's price.geo said:
Do you or do you not claim that Sony will not sell every unit they can manufacture for the first year? What's your prediction? They won't sell the initial 6 million units? They won't sell 10 million units? I'd like to see you stake your claim around something that's falsifiable. Then maybe we can revisit this thread in November and see if you were wrong or not.
Hell, depending on what your prediction is, I'd even be willing to place some $$$ betting.
Hell, depending on what your prediction is, I'd even be willing to place some $$$ betting.
Yeah, I don't believe they can get to 10 million units at $500-$600, but surely they can't get to 20 million (about the 18 month timeframe given current launch estimates and monthly output of 1 million a month). Even more so given how soft the console market seemingly is in Japan, or at least, how distracted they are with the portables. I am positive they will sell out in their launch window though.DemoCoder said:
But no, I won't put money on it nor if I'm right will I make others eat crow about it. I've had my fair share of accurate predictions and my fair share of wrong ones.
DemoCoder said:
This is true. Your argument is similar to the thread below about PS3's 2 SKU's. I made a post somewhat similar to the one you made above. The components that are going into the $600 SKU are not the reason the price is $100 more. This is a smart move by Sony. This allows them to curtail the price bleed they will experience starting in november, while not angering the fanbase that cannot afford $600 for a console. They most likely decided that $500 is the lowest price they can offer and not suffer catastrophic losses, while being the highest that the average consumer will pay. Their business strategy revolves around the market's perception of their product. The $600 model give consumers the appeal of a unique luxery product, which Sony hopes will offset the higher pricing. They hope that the $600 model will sell the most, and that the features they are "adding" (i use quotes because they, in reality, just cut down the main SKU, more of a half-empty sort of philosophy) to the basic SKU, will be worth the higher pricetag to the consumer. If, theoretically both models completely sell out, Sony will have reduced their loss due to BOM by roughly 8%, assuming that the cost added to the $600 SKU is only $20 (which may be a low-ball right now).
Many, many people fall for luxery bran appeal, and not always on a wholly concious level. Don't underestimate marketing strategy; there is a reason that companies devote such huge amounts of money and R&D on the asthetics and research on target audience. Note: ipod Note: Sony Bravia. Just in case anyone feels like I'm making a personal attack against those who fall for these strategies: I bought a 4gb Ipod Nano (white of course
) for $250, when I could've bought either a 30gb Ipod for $50 more, or a competitor's product for either more storage at the same price or equal storage for significantly cheaper. Just don't think that you are beyond the reach of these tricks. You aren't. It is the same reason people will go for Sony Qualia or Pioneer Elite TV's versus much cheaper (sometimes 3-4x cheaper than already high-end displays...10-15k) displays that offer all but indistinguishable visual quality. Users will find the objectivelly small differences in performance and use them as justification for the price difference. Another great feature of luxery items is the "unique" factor. Purchasers are satisfied to have something which distinguishes them from the masses. Somewhat quixotically, many of these luxery items are produced in such mass that a huge portion of the market than can get that item (even it is a stretch on the wallet).
If I was making the decisions I would launch only the top model for a price of $999 with an announced price drop of $50 per month until it reaches a price of $599. With some creative marketing it would be possible to spin such a launch into a win win situation. Imagine a few years down the line the impression of picking up a PS3 for $300 with the knowledge that not long a go it cost $1000.
DemoCoder said:
Perfect example. Bose is guilty of this as well, moreso because their $1-5k product range sucks sonically. But damn those lifestyle cubes look hot.
I would even say expensive LOOKING, though it is true the hand-carved would used on some of the top-end speakers probably does cost a chunk of change. I wonder how much BOM on those products is compared to consumer cost.
expletive said:
i think thats a stupid question...how many times has it been said that the PS3 is costly to produce? Dont even bother trying to insinuate its some brilliant scheme. I can promise you Sony is still taking a considerable loss even at that price. And to those that think the price wont make the big difference, in all honesty i think they may of just handed microsoft a very good chance to outsell them this round. Price makes every bit of difference, and they cant even touch the premium models let alone basic. This is especially going to hurt if MS price cuts this fall as analysts expect they will. Can you imagine what $299 and $219 Xbox360s will look like vs the 499 and 599 playstation models to buyers? I've been waiting a little bit longer to buy a console, and i really dont mind spending a good amount on hardware, but for what im getting per dollar, Sony just lost me completly. I mean $600; really? Dump the HDD and live off memory cards and addon peripheral sales if you have too, but at those prices you slaughter your chances not only of competition but you lose alot of your early adoption. Not that it matters anyway since supply will problably be limited. This also gives HD-DVD format a decent chance as well. Had it launched at $300 or even $400 i would totally switch everything i just said in a heart beat, but wow.
after 1 year cost of materials (assuming steady yields) should drop ~20% and the savings historically are passed on to the buyers. Sony doesnt have the cash to do a major cut at a major loss. They'll reduce the price what they can when they can.
Even if they outsold Sony in US and Europe by a 2:1 margin, they'll lose big in Japan, putting the overall percentages with MS with 66% of the market, assuming a sale to MS takes away a sale from Sony. This would not be a loss for Sony. It would still represent something like 60 million units worlwide after 5 years, with game and movie revenue, they'd still make a profit on a userbase like that.
I frankly don't see MS dropping the price. Microsoft is still losing money on every Xbox360 sold, and they have a huge head start in the market and high demand for their console. There is not reason to drop the price right now. If anything, they'll cut costs and keep the price the same to cut down the bleeding.
The only reason to drop the price would be if they suffer a lack of demand. Maybe in Japan, but the US? I don't see it.
I frankly don't see MS dropping the price. Microsoft is still losing money on every Xbox360 sold, and they have a huge head start in the market and high demand for their console. There is not reason to drop the price right now. If anything, they'll cut costs and keep the price the same to cut down the bleeding.
The only reason to drop the price would be if they suffer a lack of demand. Maybe in Japan, but the US? I don't see it.
scooby_dooby
Legend
DemoCoder said:
Ya, tell that to the Sony stockholders. Explain to them how going from 60% market leader, to 30% is 'not a loss'
Serenity Painted Death
Regular
scooby_dooby said:
Because that isn't going to happen?