Sony: PlayStation 3 price drop

[Shifty Geezer]

I take folks have already seen it but as some on this site predicted, they are ( in the US at least) cutting the price down by 100USD on the 80gig sku.http://www.dailytech.com/Sony+Announces+80GB+PlayStation+3+Bundle+Confirms+Price+Cut/article7964.htm

Where on earth did you read that?!

The 80GB PlayStation 3 will occupy the $599 price point that the 60GB previously held, and will also come packed in with a full version of racing game MotorStorm. The 80GB MotorStorm bundle will begin shipping in August.

 

[NERO]

Where on earth did you read that?!

The 80GB PlayStation 3 will occupy the $599 price point that the 60GB previously held, and will also come packed in with a full version of racing game MotorStorm. The 80GB MotorStorm bundle will begin shipping in August.

Ok correction. Maybe I should read everything first
---

Wow that's pretty lame, but I see what they're doing. I didn't think they'd go for a 100USD p difference, only to differentiate 20 gigs, because it sounds ridiculous, but apparently they will justify it with a game packaged in.

 

[Gradthrawn]

Something's not right. The 60GB at $500 is a good move. The 80GB w/ Motorstorm at $600 is, IMO, inconsequential (unless they make that the flavor of the month SKU, bundling the top games). What I don't get is why they wouldn't re-introduce a 20/40GB model minus the WiFi and card reader slots for $400. Yeah, maybe people didn't want it at $500, but at $400 you're at the 360's current price which seems to be doing pretty good in the US. Maybe they'll re-introduce it for the Holliday Season?

 

[Shifty Geezer]

Something's not right. The 60GB at $500 is a good move. The 80GB w/ Motorstorm at $600 is, IMO, inconsequential.

the sensible explanation in my mind is that they just want to shift stock. If people don't want 80GBs, who cares? They'll be buying the 60 GBs! And it makes the 60GBs look better value. Standing on it's own in store for $500, uneducated Joe Public sees a big price tag. Stand it next to a $600 PS3, and Joe Public thinks 'hey, for only 25% less on one number I don't really understand, I can save a whole load of money!'

What I don't understand is why still make PS3s faster than you're selling them? There was a recent announcement that manufacturing troubles were over and Sony were up to speed, but they only need a fraction of their maximum capable output.

 

[NERO]

the sensible explanation in my mind is that they just want to shift stock.

Yeah sounds reasonable. Has there been any word on whether the 80g models are the EE-less models?

 

[Arwin]

Sony's max capacity is about 1.2 million per month. Ideally, they'd sell all they can build at that capacity this year. Combined with not being fully up to speed in the first month and slowing down a little recently because they were either switching production or just had too many PS3s in stock, I think they'll get to about 10-12 million this year if they sell them all. Considering that's what the 360 is at right now, they'll want to reach that target if they hope to keep up with the 360 in the longer run (never mind the Wii at this point).

 

[Gradthrawn]

the sensible explanation in my mind is that they just want to shift stock. If people don't want 80GBs, who cares? They'll be buying the 60 GBs! And it makes the 60GBs look better value. Standing on it's own in store for $500, uneducated Joe Public sees a big price tag. Stand it next to a $600 PS3, and Joe Public thinks 'hey, for only 25% less on one number I don't really understand, I can save a whole load of money!'

I see what you're saying, but, why drop the 20GB SKU then? If Joe Public thinks he can save a lot by buying the $500 unit now, why wouldn't he have thought the same thing when the 20GB was out? If he can't understand the GB number, there's no way he would have understood the difference between the 20GB and the 60GB.

 

[Carl B]

I see what you're saying, but, why drop the 20GB SKU then? If Joe Public thinks he can save a lot by buying the $500 unit now, why wouldn't he have thought the same thing when the 20GB was out? If he can't understand the GB number, there's no way he would have understood the difference between the 20GB and the 60GB.

They dropped the 20GB SKU simply because it was costing them too much to manufacture relative to its retail pricing. Granted, we now find ourselves in a similar situation, but certainly still one more palatable to Sony than if they had to shoulder a $400 20GB unit as well.

 

[22psi]

They dropped the 20GB SKU simply because it was costing them too much to manufacture relative to its retail pricing. Granted, we now find ourselves in a similar situation, but certainly still one more palatable to Sony than if they had to shoulder a $400 20GB unit as well.

20GB sku is still available in the US, albiet in extreme limited quantities and mostly online only.

 

[Carl B]

20GB sku is still available in the US, albiet in extreme limited quantities and mostly online only.

Well, it's available yes - but the same as discontinued electronics everywhere are still available. Plus, with this price move it'll be interesting to see what happens with those remaining stocks; will they be discounted at retail independently of Sony? I'll note at this point for background color that I myself own one of the launch 20GB (now 120GB) consoles.

 

[Arwin]

They dropped the 20GB SKU simply because it was costing them too much to manufacture relative to its retail pricing. Granted, we now find ourselves in a similar situation, but certainly still one more palatable to Sony than if they had to shoulder a $400 20GB unit as well.

You don't think that retailers had any say in this? My understanding is that demand for the 20GB unit was low (no doubt partly because the Core 360's perceived crippledness, justified or not) and retailers prefer to have just one SKU in the store anyway. It's already hard enough to deal with all the different brands of consoles, let alone different versions of the same brand. If they see that 80% of what they are selling is the 60GB unit, then it's very attractive for them to just ignore the other unit in terms of managing stock, store space and consumer information.

 

[22psi]

What I truly don't understand is why Sony will introduce a 80GB sku at $599. Let's say MS will drop price of 360s $50-100 across the board in response this week.

In August 360 Elite will still be $399 while PS3 jumps back up to $599.

 

[scooby_dooby]

the sensible explanation in my mind is that they just want to shift stock. If people don't want 80GBs, who cares? They'll be buying the 60 GBs! And it makes the 60GBs look better value. Standing on it's own in store for $500, uneducated Joe Public sees a big price tag. Stand it next to a $600 PS3, and Joe Public thinks 'hey, for only 25% less on one number I don't really understand, I can save a whole load of money!

Not really. People look at it and say "$100 for a slightly bigger HDD and Motorstorm? That doesn't seem like a very good deal..."

It doesn't make the lower priced item look like a better value! If that were true, where were the $299 core sales, or $499 20GB PS3 sales??

The pricedrop was expected and a good move, but the introduction of the 80gb pack seems to muddy the waters. With that said, I don't think most consumers will have a problem seeing the better value of the $499 pack.

 

[rounin]

Has there been confirmation that Sony will cut out the $499 60GB SKU already?

 

[scooby_dooby]

You don't think that retailers had any say in this? My understanding is that demand for the 20GB unit was low (no doubt partly because the Core 360's perceived crippledness, justified or not) and retailers prefer to have just one SKU in the store anyway.

That was the straight PR spin of it, but I wouldn't take that at face value.

Carl's explanation is much more realistic, they were simply making more money off the premium, so they cut/limited shipments of the cheaper model.

It's almost the same thing MS is doing, but rather then cutting the pack completely, they cripple the core with their peripheral pricing, making 90% of people buy the premium so they can maximise profits.

 

[tha_con]

What I truly don't understand is why Sony will introduce a 80GB sku at $599. Let's say MS will drop price of 360s $50-100 across the board in response this week.

In August 360 Elite will still be $399 while PS3 jumps back up to $599.

Because an 80GB HDD and Motorstorm maybe cost them a few more dollars, total, than a 60GB PS3, so they can lose less on that model while packaging more. It's limited edition at that, and will probably see it's run at the end of the holiday season, or at least until Sony can afford to drop the price again, at which point it will likely get another change, bigger HDD (since HDD's usually hit a set point and don't drop much after that).

Case in point, they're trying to stop bleeding, and this can help a little bit.

 

[22psi]

Because an 80GB HDD and Motorstorm maybe cost them a few more dollars, total, than a 60GB PS3, so they can lose less on that model while packaging more. It's limited edition at that, and will probably see it's run at the end of the holiday season, or at least until Sony can afford to drop the price again, at which point it will likely get another change, bigger HDD (since HDD's usually hit a set point and don't drop much after that).

Case in point, they're trying to stop bleeding, and this can help a little bit.

Well, if they are keeping both around, I would think the majority of people will get the $499 sku as the added $100 price only gets you 20gb and motorstorm. That's not really a good value when you can get MS on sale. I understand they are trying to bleed a bit less but this is maybe confusing for the consumer. I hope they don't phase out the $499 sku.

 

[JNewt427]

What I truly don't understand is why Sony will introduce a 80GB sku at $599. Let's say MS will drop price of 360s $50-100 across the board in response this week.

In August 360 Elite will still be $399 while PS3 jumps back up to $599.

Yes this is exactly what I was thinking? Regradless of what ever happens (in the near future "E3") this will come to be sooner or later.

 

[Skrying]

Really glad to hear about the price cut.... really sad to hear about the 80GB SKU for $599. Just like the Elite I think this is a bad move and again will hurt mental price point. Is 20GB really worth $100? Sure, Motorstorm but instead of a free bundle that's just simply added into the price. 80GB to me is $50 more in value and then Motorstorm should have been the hook for the user to go ahead and jump to the top model. Instead the buyer just decides if he thinks 20GB is worth it, because they can grab Motorstorm alone for whatever retail price it is (which depending on how long it stays priced, and depending how long the 80GB is priced at $599, could over time make the 80GB value decress). I just don't think Sony really understands what they are doing with the pricing model of the PS3, its what is hurting the console most by far and yet they're screwing up even price drops...

Sigh, truly a thunder statement would have been 80GB at $499... this is weak though to be honest. I get the impression the PS3 is still costing Sony to much to give up at least one model at $599.

 

[Carl B]

You don't think that retailers had any say in this? My understanding is that demand for the 20GB unit was low (no doubt partly because the Core 360's perceived crippledness, justified or not) and retailers prefer to have just one SKU in the store anyway. It's already hard enough to deal with all the different brands of consoles, let alone different versions of the same brand. If they see that 80% of what they are selling is the 60GB unit, then it's very attractive for them to just ignore the other unit in terms of managing stock, store space and consumer information.

Yeah, I definitely think that the 20GB was a Sony-driven kill, rather than retailer driven. On several message boards there were active hunts going on to locate the unit, a unit that right from the onset was super rare - and honestly IMO from anecdotal evidence surprisingly well received. The 20GB, if nothing else, was by far the preferred form for BD buyers.

Not to mention, if it really was retailer 2-SKU fretting that led to the 20GB being killed, I'm not sure that this situation here is any better for them less than six months later.

I don't get hung up on PR statements companies make, but sometimes you can read between the lines fairly easily to see that the reasons given for a move are not the true drivers of the move.