Sony "revisiting" PS3 pricing/volume strategy

I dont think PS3 is much different. Also a year hasnt even passed since the PS3 launched in US and Japan.

 

If Sony doesn't drop the prices in the next 3 months, they are going to price themselves out of contetion for good.

 

How so?

It seems for the price the PS3 is selling well. BTW, do you mean competition?

 

Yeah the price is pretty much the only reason not to get a PS3 now.
Maybe Sony will time a price cut along the release of a big 1st party title to push sales - so June maybe...
This week I will order my first HDTV finally. If next month turns out good money-wise I`ll get a PS3 eventually, but I feel no need to rush.

 

It is not selling well at all actually (maybe in EURO it's doing well though). You can't use the line "for the price it's selling well". Developers will just look at the bottom line of how many units are sold and attached ratios.

 

To my own defense it is sell way better than I thought it would. It would be seling like the Wii if it was 299 though. But that is neither here nor there.

 

I think they will be happy with the PS3 selling only pretty good if they win the so called HD format wars which they are currently doing. I think it was like 4:1 BR to HD-DVD sales last month. Regarless they need a price cut.

 

I doubt P3 is selling so well in europe. We had the reports from UK retailers making rebates to clean their inventories and have a look at the UK software charts from last week I just saw on gaf:

OP 40 ENTERTAINMENT SOFTWARE (ALL PRICES), WEEK ENDING 21 April 2007

LW TW Title Developer Label Publisher

2 1 POKEMON RANGER HAL LABORATORY INC NINTENDO NINTENDO
1 2 TMNT: TEENAGE MUTANT NINJA TURTLES UBISOFT (MONTREAL) UBISOFT UBISOFT
21 3 WII PLAY NINTENDO NINTENDO NINTENDO
- 4 HARVEST MOON DS MARVELOUS INTERACTIVE RISING STAR GAMES RISING STAR GAMES
3 5 RAYMAN 2: THE GREAT ESCAPE UBISOFT (FRANCE) UBISOFT UBISOFT
9 6 DR KAWASHIMA'S BRAIN TRAINING NINTENDO NINTENDO NINTENDO
4 7 TIGER WOODS PGA TOUR 07 EA REDWOOD SHORES EA SPORTS ELECTRONIC ARTS
10 8 PRINCE OF PERSIA: THE SANDS OF TIME UBISOFT (MONTREAL) UBISOFT UBISOFT
5 9 COMMAND & CONQUER 3: TIBERIUM WARS EA LA EA GAMES ELECTRONIC ARTS
7 10 BRIAN LARA INTERNATIONAL CRICKET 2007 CODEMASTERS CODEMASTERS CODEMASTERS
8 11 GRAND THEFT AUTO: VICE CITY STORIES ROCKSTAR LEEDS ROCKSTAR TAKE 2
13 12 VIRTUA TENNIS 3 SUMO DIGITAL SEGA SEGA
15 13 MEDAL OF HONOR: VANGUARD EA LA EA GAMES ELECTRONIC ARTS
14 14 THE SIMS 2 AMAZE ENTERTAINMENT EA GAMES ELECTRONIC ARTS
11 15 UEFA CHAMPIONS LEAGUE 2006-2007 HB STUDIOS EA SPORTS ELECTRONIC ARTS
18 16 HEROES OF MIGHT & MAGIC IV NEW WORLD COMPUTING UBISOFT UBISOFT
- 17 F.E.A.R. DAY 1 STUDIOS SIERRA VIVENDI GAMES
22 18 MOTORSTORM EVOLUTION STUDIOS SONY COMPUTER ENT. SONY COMPUTER ENT.
24 19 NEW SUPER MARIO BROS. NINTENDO NINTENDO NINTENDO
23 20 TOM CLANCY'S RAINBOW SIX 3 GOLD RED STORM RED STORM UBISOFT
- 21 42 ALL-TIME CLASSICS AGENDA NINTENDO NINTENDO
- 22 HOTEL DUSK: ROOM 215 CING NINTENDO NINTENDO
16 23 TOM CLANCY'S GHOST RECON RED STORM RED STORM UBISOFT
26 24 CRACKDOWN REALTIME WORLDS MICROSOFT MICROSOFT
32 25 FIGHT NIGHT ROUND 3 EA CHICAGO EA SPORTS ELECTRONIC ARTS
28 26 PRO EVOLUTION SOCCER 6 KONAMI DIGITAL ENTERTAINMENT KONAMI KONAMI
29 27 RAYMAN RAVING RABBIDS UBISOFT (FRANCE) UBISOFT UBISOFT
25 28 TOM CLANCY'S SPLINTER CELL UBISOFT (MONTREAL) UBISOFT UBISOFT
12 29 GUITAR HERO II HARMONIX REDOCTANE ACTIVISION
6 30 BROTHERS IN ARMS: ROAD TO HILL 30 GEARBOX SOFTWARE UBISOFT UBISOFT
17 31 THE SIMS 2: PETS MAXIS EA GAMES ELECTRONIC ARTS
27 32 RESISTANCE: FALL OF MAN INSOMNIAC SONY COMPUTER ENT. SONY COMPUTER ENT.
30 33 FIFA 07 EA CANADA EA SPORTS ELECTRONIC ARTS
39 34 TOM CLANCY'S GHOST RECON: WARFIGHTER 2 UBISOFT (FRANCE) RED STORM UBISOFT
- 35 COOKING MAMA OFFICE CREATE 505 GAMES 505 GAMES
20 36 NEED FOR SPEED: CARBON EA CANADA EA GAMES ELECTRONIC ARTS
31 37 LEGO STAR WARS II: THE ORIGINAL TRILOGY TRAVELLER'S TALES LUCASARTS LUCASARTS
34 38 CALL OF DUTY 3 TREYARCH ACTIVISION ACTIVISION
33 39 GEARS OF WAR EPIC GAMES MICROSOFT MICROSOFT
36 40 TEST DRIVE UNLIMITED MELBOURNE HOUSE ATARI ATARI

TOP 40 ENTERTAINMENT SOFTWARE (FULL PRICE), WEEK ENDING 21 April 2007

LW TW Title Developer Label Publisher

2 1 POKEMON RANGER HAL LABORATORY INC NINTENDO NINTENDO
1 2 TMNT: TEENAGE MUTANT NINJA TURTLES UBISOFT (MONTREAL) UBISOFT UBISOFT
35 3 HARVEST MOON DS MARVELOUS INTERACTIVE RISING STAR GAMES RISING STAR GAMES
3 4 TIGER WOODS PGA TOUR 07 EA REDWOOD SHORES EA SPORTS ELECTRONIC ARTS
4 5 COMMAND & CONQUER 3: TIBERIUM WARS EA LA EA GAMES ELECTRONIC ARTS
5 6 BRIAN LARA INTERNATIONAL CRICKET 2007 CODEMASTERS CODEMASTERS CODEMASTERS
8 7 VIRTUA TENNIS 3 SUMO DIGITAL SEGA SEGA
9 8 MEDAL OF HONOR: VANGUARD EA LA EA GAMES ELECTRONIC ARTS
6 9 UEFA CHAMPIONS LEAGUE 2006-2007 HB STUDIOS EA SPORTS ELECTRONIC ARTS
12 10 MOTORSTORM EVOLUTION STUDIOS SONY COMPUTER ENT. SONY COMPUTER ENT.
13 11 NEW SUPER MARIO BROS. NINTENDO NINTENDO NINTENDO
- 12 HOTEL DUSK: ROOM 215 CING NINTENDO NINTENDO
14 13 CRACKDOWN REALTIME WORLDS MICROSOFT MICROSOFT
16 14 PRO EVOLUTION SOCCER 6 KONAMI DIGITAL ENTERTAINMENT KONAMI KONAMI
- 15 F.E.A.R. DAY 1 STUDIOS SIERRA VIVENDI GAMES
7 16 GUITAR HERO II HARMONIX REDOCTANE ACTIVISION
10 17 THE SIMS 2: PETS MAXIS EA GAMES ELECTRONIC ARTS
15 18 RESISTANCE: FALL OF MAN INSOMNIAC SONY COMPUTER ENT. SONY COMPUTER ENT.
18 19 FIFA 07 EA CANADA EA SPORTS ELECTRONIC ARTS
24 20 TOM CLANCY'S GHOST RECON: WARFIGHTER 2 UBISOFT (FRANCE) RED STORM UBISOFT
11 21 NEED FOR SPEED: CARBON EA CANADA EA GAMES ELECTRONIC ARTS
20 22 CALL OF DUTY 3 TREYARCH ACTIVISION ACTIVISION
19 23 GEARS OF WAR EPIC GAMES MICROSOFT MICROSOFT
21 24 TEST DRIVE UNLIMITED MELBOURNE HOUSE ATARI ATARI
26 25 SONIC AND THE SECRET RINGS SONIC TEAM SEGA SEGA
23 26 THE LEGEND OF ZELDA: TWILIGHT PRINCESS NINTENDO NINTENDO NINTENDO
28 27 TAMAGOTCHI CONNEXION: CORNER SHOP 2 NANA ON SHA NAMCO BANDAI GAMES ATARI
- 28 DIDDY KONG RACING DS RARE NINTENDO NINTENDO
32 29 FOOTBALL MANAGER 2007 SPORTS INTERACTIVE SEGA SEGA
27 30 RAYMAN RAVING RABBIDS UBISOFT (FRANCE) UBISOFT UBISOFT
40 31 THE ELDER SCROLLS IV: OBLIVION BETHESDA 2K GAMES TAKE 2
31 32 ANIMAL CROSSING: WILD WORLD NINTENDO NINTENDO NINTENDO
34 33 NINTENDOGS: LAB & FRIENDS NINTENDO NINTENDO NINTENDO
22 34 THE SIMS 2: SEASONS MAXIS EA GAMES ELECTRONIC ARTS
- 35 TOM CLANCY'S RAINBOW SIX: VEGAS UBISOFT (MONTREAL) RED STORM UBISOFT
- 36 PIPPA FUNNELL DS LEXIS NUMERIQUE UBISOFT UBISOFT
36 37 NINTENDOGS: DALMATIAN & FRIENDS NINTENDO NINTENDO NINTENDO
30 38 WWE SMACKDOWN VS RAW 2007 YUKE'S THQ THQ
25 39 SPECTROBES JUPITER DISNEY INTERACTIVE STUDIOS DISNEY INTERACTIVE STUDIOS
37 40 MARIO KART DS NINTENDO NINTENDO NINTENDO



But when I see wii play so high I can guess shipments to europe increased lately.

 

For the price it might be selling well, but I never heard a developer have a following argument:

- "Sytem A sold 4 million units and sytem B has 455... which one should we focus our efforts on? "
- "But system B costs ONE MILLION DOLLARS! And they still sold almost 500 of those. How awesome is that?"
- "Good point! Let's make all our games system B exclisive!"

 

You're exaggerating.

When Graw came out for the Xbox 360, with the much smaller install base it had then, could you justify that from a business POV? Dead Rising?
What about the time(s) when these titles started development?

The platform will grow. It has happened before (see above) and it will happen again. There's maybe not a place for "optimism" in business decisions, but when you look at the reduced competition and high exposure you can get on a less crowded market, the opportunities to cash in early and uncontested, it doesn't seem all that retarded to put a little energy into a smaller, but growing platform.

Compared to the Xbox 360 it all comes back down to the one-year headstart. If what you're saying is you don't believe the library will develop to the same extent as the Xbox 360 library, that's one thing, but saying it would be foolish of publishers to make games for the PS3 is pretty wrong.

 

I think he's just saying the price is for all intents and purposes, irrelevant, as it doesn't influence publishing decisions. What matters is total units installed.

In other words, there's no such thing as 'selling well for it's price' at least in the eyes of a publisher or prospective developer.

You're right on with the big fish in a small pond strategy, many companies use it, but I don't think that was the point in question.

I agree Geeforcer is exagerating though, less than one year into it's life it's way to early for PS3 to be 'out of contention', that'll just never happen, and is really an alarmist pov. The price may cause to the 360's game library to continue to expand faster than the PS3's, but that's still a relatively short term reality.

 

That and the fact there are next to no good exclusive games out yet.

 

Well there are some I`d like to play personally, but I know other people have different preferences.
I agree that the variety is too limited now.

 

I would say it is slowly turning into a long term reality. Every month PS3 software sales tank is another month closer to Sony losing the last of its 3rd party exclusives. Once all the 3rd party exclusives are gone then price become a even bigger factor and that hurts Sony even more. Look at last months NPD a freaking 90 dollar half ass PS2 port sold a ton more on the 360 in 4-5 days than the PS3s first post launch AAA game. The strength of the PS brand has always been exclusives and I am curious how Sony will adapt because Sony is down to 2 major exclusives they need a new strategy to sell machines.

 

Yes, I am exaggerating, obviously - hence the ONE MILLION DOLLARS. My point is simple though: developers don't have complicated equations relating price and sales - they look at units shipped. I am not suggesting that this means no third-party games for PS3, but only that there is a relationship between resources focused on development for any given platform and system's relative sales to the completion. With X360 and Wii having a much larger installment base, that's where you'd expect third party developers to focus on, barring incentives from Sony.

 

It's not JUST about the library though. Short-term reality has a funny way of creating perceptions which in turn become long-term reality. If low sales create a perception that the platform is falling behind, it will create an atmosphere of failure that will make people less likely to purchase it in the future. In other words, I suggest that there is a feedback loop where low current sales discourage future sales.

 

I don't really have any valid data, so it just things that I have always taken for granted and therfore might be more than wrong, but I was always under the assumption that the PS1 and PS2 had been well over a year after the launch in Japan when they recieved their first price cuts...

 

http://www.absolute-playstation.com/api_faqs/faq20.htm

After 18 months the Playstation 1 price in Japan was reduced to the half of it's launch price. It's first price cut in Japan was around the USA launch but I don't know the exact date.

In the PS2's case is true that it didn't had a price cut in the first year after the Japanese launch but this happened in UK:

http://en.wikipedia.org/wiki/PlayStation_2

 

Actually, both your links support what I said. I am not talking about region specific launches and price cuts, but rather how long it took for the machine to get a price cut in whatever region from the first day it was available at what ever region that might be (usually Japan). If I am not mistaken, from your first link, PS1 launched in Dec94 and got its first price cut May96 in the US and Europe that is 17 months after it was launched. Similarly, the PS2 launced March 2000 and got its first price cut and it seems to be a minor one in June01, if Sony continues with this strategy the price cut should come sometime in 2008, but then again that does not take into account sales trends and what not...

 

Which means its more of people`s irrational judgement´s fault rather than Sony`s fault.