Sony "revisiting" PS3 pricing/volume strategy

That makes a lot more sense. However I think it reasonable to expect that a cost reduction will result in a price reduction considering how MS is piling on the competitive pressure.

Cheers

 

Is the above statement inserted just to make me blow my lid?

Ok I see that now and thanks for the correction (I should read/post more carefully). "in January forecast a wider-than-expected loss at its PlayStation business for the fiscal year just ended". I am one quarter ahead of the Sony article apparently. I stared at the text and still read it as a forecast of the upcoming quarter based on the quarter that just ended. Your mention of unrealized revenue (due to lack of demand) is relevant to the last quarter and will be for the forseeable future (until holidays), and that is what I was thinking of. My crime is having a brain fart on the quarter.

 

Minimum? Are you crazy? If they could do it they would have done it already!

The thing costs almoist twice as much as it is being sold currently

 

I'm not sure if the article, and the conference call it is said to stem from, implies a direct change in pricing strategy as much as it is a change in expectations of volume only. Considering they would get killed profit-wise with a cut right now and bleed a little bit less during the holidays, I wonder if it is a warning before financials show up for Q1. IMO they are slowly lowering expectations not changing strategy (yet). What could they possibly change to that will accelerate sales before the holiday quarter?

 

Making a Bet!

In the fall, just before the triple A games come out, we'll see PS3 drop by $100 and Sony will create a new sku PS3 with a larger hardrive at current PS3 pricing.

 

Your crazy if you think the PS3 costs close to $1200 to manufacture.

 

It definitely cost $1200 to manufacture. Ask my unicorn

 

Whoa! This probably will get a thread by itself but daily tech reports UK retailers are taking action with the ps3 pricing.

http://www.dailytech.com/UK+Retailers+Cut+Price+of+PlayStation+3+to+Stir+Sales/article6978.htm

 

It was suggested somewhere or other that UK retailers were getting a markup. That'd suggest that they're eating into this to sell at cost or under, as is more usual on expensive consoles. I think Sony were lookingat £400 for PS3, and the retailers wanted a £25 per unit profit. Now they're seeing this as a detering factor, and perhaps dropping £10-15 under the break-even point is considered better business including a couple of game sales, than having the stock sit on shelves.

 

Sorry but I confused the UK pound number which is around 425 UK pounds.

Last time I checked it costed more than $800 dollars to produce. Or am I wong. And it is sold at around $600 in US?

Still $200 cut is too much

 

A price drop would be good but before that I would do a few tings to stimulate sales.
1. Most importantly work that PStore for all they can.The big heavy hitters like MGS4 and other exclusives that release on disk will come,but they take time.Until then I would get out new games for download, movies,music and Home etc ASAP. So much potential there,and yet so little seems to be getting done.
2. Do a better job of marketing their exclusive titles coming. I know more about the cool upcoming games for 360 than I do about the PS3 ones. They are their,why am I not hearing more.
3. Start releasing a lot more movies for Blue-Ray.
4. After that think about a modest price drop.

 

Um.... You do realize that twice the UK price = £850 which is roughly $1700....

So that would be even more crazy.

I seriously doubt it still costs $800 USD to produce, most of the costs have to be fixed costs due to changing manufacturing equipment, and blu-ray R+D. It should go down fast after the first say, million consoles made.

 

What I wanted to point out is that 425 UK is half than US $800 as a number which is what I confused previously in my mind when I compared prices vs cost.


Btw you have to account taxes and the increase in price imposed by retailers in EU. The actual money Sony recieves from EU may be a lot less

That remains to be seen. You have to check the general losses vs revenues either way.
There are 3 scenarios otherwise why havent they done it if they can do it and the PS3 doesnt sell well.
1)Its not advisable yet financially
2)PS3 has great sales and not lacklaster so there is no real need for a price cut yet
3)they are stupid.....are they though??

 

The manufacturing costs of the PAL ps3 won't be $800...I'm sure they've shaved off quite a lot of that. They were selling the 20gb at a $70 more of a loss than the 60gb version...so they really can afford to drop the price of the 60gb with the 20gb not in the picture.

$800 manufacture that was provided as an estimate did not really take into account the amount that would be produced. The price will be significantly lower with the more ps3's made. Also I expect the price of blu-ray to have dropped already.

Price drop will occur this winter.

 

Well as long as PS3 sales stays at the bottom per month the faster we'll see a PS3 price drop.

I'm still amaze at Sony ignorance stating that they can sell 5 million with no software with that ridiculous price tag.

 

To be fair, there were many who agreed with this sentiment... me included.
I think Sony has a very long term plan for this machine.. likely more than most people think. They do, of course, need to keep feeding it goodies to make it appetising to consumers, which will make it more appetising to the publishers. But this gen is going about the opposite of where I expected, with a Sony #1, MS #2 and Wii #3. And indeed, the Wii is certainly shaping up to be a dark horse none of the manufacturers (Nintendo included) are willing to call immediate competition. How about that!

 

SCE has no problem to empty their stocks now. I think they could lower the price later when the system will be more wide-spread.

 

The PS1 and the PS2 in Europe had 33% price cuts in their first year even when they were "wining" the console war. Sony should realize that cutting the price now is needed for future profits.

 

As posted earlier in thread, how can you say that when retailers are taking price cutting actions by themselves in the UK. PS3 hasn't even been out a full month in Europe yet (well in 1 more day it will be) so its hard to measure continued demand in Europe.

http://www.dailytech.com/UK+Retailers+Cut+Price+of+PlayStation+3+to+Stir+Sales/article6978.htm

Overall, I would say its too early to really argue either way at the moment besides noting some retailers have not seen the sales they expected.

 

But hadn't the PS1 and PS2 been out much longer if one takes to account their launch in Japan before they had their first price cut?...