PlayStation 3 Initial Costs

[jvd]

This is all true -- except I imagine the plan for Sony is to announce the price right before the Xbox360 launch to complete their marketing move. If they don't announce it until after, then their little marketing ploy will be wasted and probably hurt them more than anything.

Yea however that means announcing a price 6 months to a year before release . Which i dont' ever remember sony doing

 

[randycat99]

The initial price is meaningless for a basis of any kind of conclusion about how much something really costs, when constrained supply is in effect. They could sell it for $100/$200/whatever over. If they still end up selling out their shipment, then arguably the price should have been even higher. When supplies do catch up to demand, that is when the offered price means something.

 

[jvd]

The initial price is meaningless for a basis of any kind of conclusion about how much something really costs, when constrained supply is in effect. They could sell it for $100/$200/whatever over. If they still end up selling out their shipment, then arguably the price should have been even higher. When supplies do catch up to demand, that is when the offered price means something.

your correct . However your forgeting the ps3's price impact on the xbox 360 and that is whats important .

If the ps3 is priced the same as the x360 at launch it may be enough to create hold outs . If its price a 100$ more many may just go ahead and pick up the x360 which will have the bigger game library at that point

 

[zifnab]

I don't think there's a big marketing ploy happening. It seems more like sony is preparing consumers for a higher price than the ps2 launched at. Kutaragi recently stated at the Sony Computer Entertainment PlayStation meeting in Japan that:

"I'm aware that with all these technologies, the PS3 can't be offered at a price that's targeted towards households. I think everyone can still buy it if they wanted to," said Kutaragi to a mostly Japanese crowd. "But we're aiming for consumers throughout the world. So we're going to have to do our best (in containing the price)."

Then Kutaragi issued a somewhat ominous warning. "I'm not going to reveal its price today. I'm going to only say that it'll be expensive," he stated.

http://cnet.com.au/games/ps2/soa/So...2_hits_sales_highs/0,39029672,40056080,00.htm

 

[Carl B]

The initial price is meaningless for a basis of any kind of conclusion about how much something really costs, when constrained supply is in effect. They could sell it for $100/$200/whatever over. If they still end up selling out their shipment, then arguably the price should have been even higher. When supplies do catch up to demand, that is when the offered price means something.

Well but you're looking at it from a completely different perspective though. I agree with the logic by the way, but we're talking about a loss-leading product, rather than a product who's own sales and margins are the main concern. PS3 probably will be supply constrained - at least it should be if they get the pricing right.

The talk here is that at a 'supposed' $494 to manufacture, selling at ~$300 is simply too painful for Sony.

My own thoughts on the matter are that the costs of manufacturing are a good bit lower than the $494 theory, and Sony would be 'safe' pricing as high as $349.

I don't know - we'll see soon enough now...

 

[randycat99]

Given that MS supplies will be severely constrained with their "worldwide" release, they have already shot themself in the foot by committing to "merely" $300.

However, that is all besides the point. Price is secondary when supply cannot even meet demand. If MS has only x amount of units to sell, it will still only have x amounts of units to sell regardless of what the competitor sells their console at. They cannot gain marketshare with stock that doesn't exist. Once it's sold, it's sold. If they sold it at only $300 a pc, who's really getting hurt? (so naturally, this begs the question that maybe it isn't price vs. marketshare gained that should be such a concern, rather production capacity vs. marketshare gained) [imagines jvd madly conjuring up posts citing MS's superior production capacity...]

 

[jvd]

Given that MS supplies will be severely constrained with their "worldwide" release, they have already shot themself in the foot by committing to "merely" $300.

However, that is all besides the point. Price is secondary when supply cannot even meet demand. If MS has only x amount of units to sell, it will still only have x amounts of units to sell regardless of what the competitor sells their console at. They cannot gain marketshare with stock that doesn't exist. Once it's sold, it's sold. If they sold it at only $300 a pc, who's really getting hurt?

Once again you are forgetting time diffrences . We do not know when the ps3 is launching in n.a and europe . If it launches for the holidays 06' then ms's supply problems will be all but gone . If it launches in march 2006 that is still 6 months after ms's inital launch which will mean ms will have a better supply of consoles

 

[Carl B]

I think MS' $300 move - if the case - is partly to put Sony's nose to the grindstone on the theory that Sony will be incurring a larger loss to match them on that, and partly because for whatever the reason, price cuts tend to be few and far between in the console world, reserved for strategic moments.

I think a price cut six months after launch would be poor form, but maybe not detrimental in any way. I don't know what to say other than I think public perception figures heavily into these pricing decisions, otherwise they would indeed just price at the highest point they could along the demand curve - doubtless the consoles would move at ~$360, and it's a catchy number for the console to boot.

 

[randycat99]

Yeah, cuz there's no way splitting production capacity across 3 markets in a worldwide release could possibly exacerbate the situation. For all we know, it may take MS greater than a year to bring supply issues under control.

 

[Bobbler]

Yea however that means announcing a price 6 months to a year before release . Which i dont' ever remember sony doing

Doesn't mean they won't/can't -- They announced the price of PS1 when saturn launched (wasn't that a few months before release?).

I can easily see them trying to pull the same stunt they did with the PS1 versus saturn (or was it PS2 and Dreamcast? I can't remember now).

They have to step it up a bit because MS isn't really a pushover and doesn't really make stupid mistakes like Sega so often loved to.

The pricing comments Kutaragi made seem way too perfect as a marketing ploy to be serious.

 

[one]

PS1 & PS2 retail prices at their respective launches in Japan were both 39800 Yen, roughly $399 with the exchange rate at that time IIRC, while in the US PS1 was launched with $299 side by side with pricier Sega Saturn and PS2 just followed the 'tradition' of $299.

As PSP was launched with almost the same price in the US as in Japan despite of the months later launch (which makes sense because the silicon process didn't change in the meantime), if they can pull off the worldwide spring 2006 launch for PS3, $399 is likely though the US as the primary market may get some bonus such as a Blu-ray demo disc.

As for the manufacturing cost, considering that PS3 doesn't come with an HDD bundled, it's not unlikely that the cost of PS3 is lower than that of Xbox 360 since the manufacturing cost of a BD-ROM drive can be cheaper than buying a 20GB HDD.

 

[jvd]

As for the manufacturing cost, considering that PS3 doesn't come with an HDD bundled, it's not unlikely that the cost of PS3 is lower than that of Xbox 360 since the manufacturing cost of a BD-ROM drive can be cheaper than buying a 20GB HDD.

I highly doubt it . Even at 2.5inchs 20 gig drives are fairly cheap now . On the otherhand there is no mass produced bluray drives adn they are still pricey to create . I have yet to see anything that states otherwise .

Lets also not forget that ms also has the smaller tranistor count and cheaper ram

 

[one]

I highly doubt it . Even at 2.5inchs 20 gig drives are fairly cheap now . On the otherhand there is no mass produced bluray drives adn they are still pricey to create . I have yet to see anything that states otherwise .

Lets also not forget that ms also has the smaller tranistor count and cheaper ram

Everyone knows a BD/DVD/CD 3-in-1 optical pickup head + signal processor IC is more expensive than a DVD/CD head/IC. But no one knows how much more expensive.

 

[jvd]

yet u don't know how much the 20 gig drive is

 

[Guden Oden]

J, why are you making this into a x360-vs-PS3 discussion? And you accused me previously of favoring one side... Sheesh.

 

[one]

yet u don't know how much the 20 gig drive is

That's true, but you know you have to buy it for the price which is naturally higher than the manufacturing cost from another manufacturer that actually manufactures it.

More precisely in comparison with Xbox 360, my assumption is

(the manufacturing cost of a BD-ROM drive) < (buying a 20GB HDD) + (buying a DVD drive)

BD-ROM drive and DVD-drive are no different except for optical head and controller IC.

EDIT: Fixed > to <

 

[jvd]

That's true, but you know you have to buy it for the price which is naturally higher than the manufacturing cost from another manufacturer that actually manufactures it.

Except sony has to pay to keep the plants making thse products going . Not only that but once again they have yet to mass produce these drives . However 20 gig 2.5inch drives have been around for a very long time .

(the manufacturing cost of a BD-ROM drive) > (buying a 20GB HDD) + (buying a DVD drive)

Except the ps3 isn't just a bd-rom drive and a x360 isn't just a 20gb hdd + dvd drive .

The silicon costs of the ps3 will be higher , the pcb costs will be higher , the ram costs will be higher . So even if the hdd+ dvd = bd-rom drive there are other easons why the system is cheaper .

You have to look at the systems as a whole and I really don't see how the ps3 can be the same price.

 

[onanie]

Except sony has to pay to keep the plants making thse products going . Not only that but once again they have yet to mass produce these drives . However 20 gig 2.5inch drives have been around for a very long time .

I don't see how you can be certain that Sony does not have the capacity to mass produce Bluray drives, with economic soundness. You don't have to hate Sony that much.

 

[Tap In]

Is it at all possible that this is a marketing ploy? Could Ken be making these comments just to throw MS and media off? I mean what would happen if the PS3 was annoucnced for $299? Wouldn't it seem like one hell of a deal. Even though the tech is close to the x360, people would assume due to Ken's ramblings that they are getting a deal....snip

I really think that this is probably closer to reality.

 

[scooby_dooby]

ya i really don't see sony launching more than $350, it's just hype to keep us talking abou it, just like these same rehashed "articles" about the non-HDD version of x360.