Price drops in BRD in effect in Sony BRD player - price drop for PS3?

[Zaphod]

Who cares about market segmentation?

Everyone.

MS has three console SKUs, two HD SKUs, three controller SKUs, etc. How does it hurt them?

Obviously it doesn't. Unlike the situation you're stipulating (and the situation Sony got out of in the US) their SKUs appear to be complimentary. I.e. a sale of the lower end model doesn't compromise profitability compared to the higher end one.

 

[Rangers]

The Korean model has the EU cost reductions, bigger HD and it's only $550. If they can sell more for less, then clearly they can sell less for less.

Who cares about market segmentation? MS has three console SKUs, two HD SKUs, three controller SKUs, etc. How does it hurt them?

You're reaching Todd.

I guess you could be right though, if Sony takes drastic measures.

But I'd guess you get the current SKU at 499 this fall and that's it.

The reason I believe this is, I cant put a ton of sources on it or anything, but my gut feeling is Sony is hemorrhaging more money than you think on the console. As such a lower end SKU would just cost them more losses than they're willing to take. OTOH, they of course have to do some kind of price cut and costs are coming down, so you'll see the PS3 drop to $499.

BTW, I do believe multiple sku's have hurt MS. Just not enough to overcome all their other advantages (versus PS3).

Best thing for MS would be, core pack only, and simply sell the various HDD's as accessories. Simple, yet effective.

 

[JardeL]

If Sony would dropped PS3's price b4 standalone players it could result " Sony dropped the price because PS3 not selling , Sony doomed " etc . ... But if Sony drops price of the standalones first , most of us think " oh , Blu-Ray costs went down and that effected the PS3's price" as in this thread ...

I did not respond like this when I first read topic , but I don't think this is unreasonable ...

If Sony comes with a price drop announcement in E3 , I'll not be surprised ...

 

[Todd33]

You're reaching Todd.

Of course I am! I am putting out a prediction, if I'm right (by accident) I can gloat, if I'm wrong no one will remember

BTW, I do believe multiple sku's have hurt MS. Just not enough to overcome all their other advantages (versus PS3).

Best thing for MS would be, core pack only, and simply sell the various HDD's as accessories. Simple, yet effective.

I agree. Buy any 2.5" HD and snap it into a $40 MS HD holder and sell nothing but cores with wireless controllers. Maybe even use USB/SD/CF for saving games/patches.

 

[Zaphod]

I agree. Buy any 2.5" HD and snap it into a $40 MS HD holder

Purely speaking from a 'techy' consumer standpoint that would be wickedly cool...

However, as they can't rely on the console being hooked up to a fast broadband connection, they'd have to distribute some sort of 'primer' DVD to set up the drives along with the enclosure accessory. I'm certain MS has weighed the logistics and security costs of such an approach as well as the loss of profit from the HD accessory against any price reduction advantage of the base unit. Additionally, the mass market isn't about to accept the DIY nature of this.

In conclusion: IMO, not going to happen.

 

[Gradthrawn]

You realize that Sony's already sitting on at least 1.5 million consoles? They'll be happy to sell that many in the holiday season...

Lets be very generous here and say the PS3 will average 400k per month worldwide until november 2007. Sony has more or less said that the PS3 production rate is 1mill\month. This means that there are roughly 3-4 million unsold consoles sitting in wearhouses\store-shelves today.

Ummm...
Sony currently has something like 3 million manufactured units sitting on warehouses and store shelves, also their production capacity is huge compared to the demand ATM. There is NO WAY that Sony will run into shortages this holiday season unless it's artificially created by them and it's safe to say that ain't going to happen. Now I don't know what sort of sales numbers you were speculating, but imo they have to be wrong, especially when you mentioned 600$. Now if they drop it to 399$ or 299$:smile: then shortages might happen.

edit: well Ostepop beat me to it didn't he...

No, I wasn't aware that they had such a large stock stored somewhere. Although, over the course of an hour it seems to have gone up by several million. From 1.5 million (Laa-Yosh) to 3 million (Dr. Evil) and then to 4 million (Ostep)! With a production capacity of 2.5 million units an hour, you guys are right, there's no way they're going to be production limited. Seriously though, that does change things significantly. Regardless of the actual numbers, there does appear to be significant stock that will could put demand as the limiting factor. Actual production volume, current stock, and sales figures would be helpful. Really, sales info would be the most valuable. But sales data seems to be extremely elusive outside of Japan (~40k a month).

 

[Cheezdoodles]

Actual production volume, current stock, and sales figures would be helpful. Really, sales info would be the most valuable. But sales data seems to be extremely elusive outside of Japan (~40k a month).

We have NPD threads in the general console forum section, which covers USA. Production numbers is something one just reads off from official PR annoucements, or their finance records. Sony did confirm 5 million PS3 produced up to March. At that time, PS3 had only launched in JPN and USA, meaning 3million consoles from that period alone, on shelves and wearhouses.

Assuming monthly production numbers are atleast on par if not better, there are tons of PS3 sitting in wearhouses somewere.

(This is NPD numbers, just do a search, they are followed on this board with a "passion")

2007 PS3 sales in the USA
Januar 244 000
Februar 127 000
March 130 000
April 82 000

Average 2007 so far: 145 500 which is a number still seriously inflated from launch hype.

 

[one]

http://www.channelnewsasia.com/stories/entertainment/view/280561/1/.html

Sony may cut price of PlayStation 3: report
Posted: 06 June 2007 1438 hrs

TOKYO: Sony Corp. may cut the price of the PlayStation 3 which is facing fierce competition from Nintendo's Wii, the president of the electronics giant indicated in an interview published Wednesday.

Sony "does not rule out the possibility of lowering the price" of the PS3, Sony president Ryoji Chubachi told the daily Yomiuri Shimbun.

He said the company would make a full assessment of the competitive situation in the home video game market.

The source for this AFP report is
http://www.yomiuri.co.jp/net/news/20070606nt0b.htm

One thing that is not in the AFP report is

Chubachi said "we began some cost reduction by measures such as manufacturing main (PS3) parts at the central Sony Electronics division."

 

[Shifty Geezer]

The whole 'we won't rule out...' and 'we've no plans to...' statements are always misunderstood in my opinion. They are comments without worth. All options are open and considered in business, and the responses to such questions are just PR playing it safe. There's no point asking execs about price cuts as they'll neither deny nor confirm. It'll happen when it does, without advertising the fact.

 

[MDX]

The whole 'we won't rule out...' and 'we've no plans to...' statements are always misunderstood in my opinion. They are comments without worth. All options are open and considered in business, and the responses to such questions are just PR playing it safe. There's no point asking execs about price cuts as they'll neither deny nor confirm. It'll happen when it does, without advertising the fact.

Sony is really in a damd-if-dey-do-damd-if-dey-dont situation
The question is, will they try to sell the machine without a loss or decide to cut the price and continue to sell at a loss?

I just dont get why Sony decided to put so much experimental or unproven tech in one machine- they just put all their eggs in one basket and the doggone thing just fell.

 

[Shifty Geezer]

Sony is really in a damd-if-dey-do-damd-if-dey-dont situation
The question is, will they try to sell the machine without a loss or decide to cut the price and continue to sell at a loss?

Sell at a loss is the only sensible choice IMO. The returns they'll get long term far outweigh the losses they'll experience from early hardware sales. These loss-leading units will lead to more game and content sales, and content sales could be considerable. They are also essential to creating momentum to sell lots of consoles when the costs are much lower and price is cheaper. If by the time the hardware is cheap enough for a $200 machine, the user base never got large enough to attract developers, the platform is doomed to a niche no matter the price.

I just dont get why Sony decided to put so much experimental or unproven tech in one machine- they just put all their eggs in one basket and the doggone thing just fell.

There were some big decisions made. They obviously had faith in the brand, feature-set, and potential all-in-one entertainment solution market. They may also have expected fast price drops, appreciating the high cost of BRD would drop considerably, and 65 nm was just on the horizon. In fact they were expecting 65nm from the beginning, or at least hoping for it. That may have saved $100 from day 1. I can see sense in the choices, even if they end up being the wrong ones. But until we see the price drops that do appear, when and how much, we can't say for certain the doggone thing just fell A slow beginning doesn't absolutely set the trend for the following 5+ years.