Stringer talks PlayStation 3 strategic price cuts

Discussion in 'Console Industry' started by B3D News, Jun 15, 2007.

  1. B3D News

    B3D News Beyond3D News
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    In the wake of the continuing streak of underperforming sales of the PlayStation 3 in the US and Japan, and average sales in Europe, Sony once again went on record to talk price strategy. This time the talk came from the top and in a pretty clear-sighted manner. Talking with the Financial Times last week, Howard Stringer, chairman and C.E.O. of Sony Corp., quite candidly addressed the price issue that exists with the product. <br /><br />Read the full news item
     
  2. -tkf-

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    Which remind me, did you guys ever post the real numbers on the Sony loses or did you just keep the "Analyst story" on the frontpage ?
     
  3. Tap In

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    good to hear some common sense coming out of HQ, finally.

    MS, take notes. :smile:
     
  4. SPM

    SPM
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    I think they need more than a $100 price cut. They need more functionality bundled in as standard - eg: preinstalled Linux PC and some Tivo PVR functionality bundled in as standard, and cheap wireless keyboard and remote options. At the current price, Sony can't sell it to kids as a pure games machine, as it is outside their budget. They will have to sell it as a family HTPC/multi-media entertainment machine which it can compete with on price. The styling may also need to change to make it more appealing as a media center. Maybe a separate Media PC/player version with full Tivo capability and bigger hard drive and more RAM, and wireless keyboard and remote as standard, but still capable of playing games would be an option - I mean if Tivo can do this with Linux, and make money out of it, I can't see why Sony can't.

    What I can't understand is why Sony doesn't do this, since Linux and Tivo type functionality is free. I guess it is down to the same Sony marketing idiots that allowed Apple to dominate with the iPod after Sony owned the market with the Walkman and successors.
     
  5. Shifty Geezer

    Shifty Geezer uber-Troll!
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    It's not free as you need harddrive storage and a TV signal input - there's additional hardware costs. You'd also needa 'real' software solution. I don't know what Linux's TiVo functionality is like, but all the open-source freebie products I've ever come across are bugged and nowhere near as polished as commercial solutions. Sony are more likely to want to add the functionality into XMB and fully contorl the quality. This'll take time to develop the software. And finally you'd have the impact on other services too. Would the PS3 have to be locked out of playing games while someone's recording TV? I wouldn't have thought so, but there's probably a few more considerations than just 'it's free, so let's put it in at negligable effort and have it all lovely.'
     
  6. Nesh

    Nesh Double Agent
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    I agree. Thats one of the things that went wrong with Sony I believe. There should be millions of kids that wanted a PS3.

    Yet its too expensive. Years ago a few months after the PS2 launched it was "reasonably" expensive for their income and it was the ultimate present for kids and grown ups alike. PS3 limits itself to grown up consumers only

    The PS3 is too pricy in parent's minds for a games console with many extra functions unfriendly towards kids, games that kids are unfamiliar with, games that people dont know about due to lack of appropriate advertising and games that are aimed towards hardcore grown ups.

    On top of that we ve got Wii, full of games that have an image appropriate for youngsters and its too cheap.

    How is Sony going to capture the interest of parents as much as Wii? Especially now that Wii is so huge in sales it is spread from mouth to mouth?

    Sony should make people and especially parents familiar with Home and LPB as well as inform people more on its other functions. If I didnt visit forums and read sites I would have known NOTHING about PS3's offerings. Consumers cant guess. Sony should inform. The current manual is atrocious. The majority of people are bored to read a manual fully. And this one is boring as hell. It doest explain in a "user friendly" way what it does and some other benefits are completely ommited.

    A BR Demonstration Disk in each package that describes in a simple and fun way the games and functions of the PS3 should be appropriate.

    Sony should follow the same route they did with the PS1's Demo1 Disk.

    It had an exciting superb intro with many PS1 games, showed some brief numbers etc. After the intro there was an interesting selection of probably around 7 playable demos and around 7 game previews, a visualization for music CDs, and 2 tech demos.

    They can do a similar thing with a BR Demo disk. First the fact that it is a BR disk offers information to the consumer itself. It plays BR.

    An intro showing in an exciting way mixed footage of games, demonstrations of functions, sixaxis, BR movies etc would be far more interesting than a manual and more successful than waiting from the consumer to guess them.

    After the intro there should be a menu with options that describe functions of the PS3 VISUALLY and STEP BY STEP with comments separately, game previews etc.
     
  7. pipo

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    I agree. But the sound of 'price refinement' more or less rules that out IMO.
     
  8. Zaphod

    Zaphod Remember
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    I believe he wasn't talking to us (i.e. consumers). While actually cutting price may gain you sales (if your product is desirable), just talking about it will - if anything - loose you sales or delay them. Neither of which is a good near term strategy.

    So, why do it? I believe they might have started to to see a need to buck up the long term viability of the PS3 and are willing to take a short term hit to do it. He's talking to nervous 3rd party developers currently contemplating whether or not to drop or delay PS3 game SKUs. "Don't worry", he's saying "by the time your game is ready we'll have dropped price and you'll sell boadloads! Trust us. Just hang in there, you'll see..."
     
  9. Shifty Geezer

    Shifty Geezer uber-Troll!
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    Possibly, although I still hold the idea that he was just answering the question presented from a key financial sector newspaper. There have been countless such remarks and comments in the FT and WSJ since they were first printed. Otherwise they wouldn't have been very good reads with interviews rich in 'no comments'! Pretty much everything covered openly in those papers passes consumers by. That might be changing with the internet, but I still seriously doubt anything more than 5% of the current potential buying public will get wind of this interview. Most people who will hear of it are visiting gaming sites and already have a position on PS3 - they have either bought it, or are waiting for the right software, or the first price-drop, or have no interest. Perhaps some of those intending to buy in a couple of months with highly anticipated exclusive Game X will instead wait for the price drop, but it's a highly expected thing without Stringer's comments. I cant see this interview having any measurable adverse effect.
     
  10. Rangers

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    So umm, is it really a good idea to talk price cut, you are basically telling people not to buy your product but to wait instead.
     
  11. SugarCoat

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    oh yes and we all know their sales have been booming, this is going to put an end to that!
     
  12. SPM

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    Tivo is a very polished and capable hardware product using open source embedded Linux. It is one of the best PVR devices available. The code in Linux and most open source products are generally intrinsically of higher quality and less buggy than their closed source - that is why Linux servers, NAS, routers and firewalls are more reliable and secure than Windows or Mac. The problem with Linux and other open source programs isn't the code, it is the scripts, configuration, codecs, drivers, and some untested alpha or beta applications, that are cobbled together buggy and don't necessarily work properly. This is a function of the way free open source is distributed. Also lack of applications isn't a problem for Linux for this type of fixed usage PC/PVR/Media box application - Linux has plenty, but the problem is that most codecs can't be distributed freely with open source because they require licenses, and DRM must be closed source if they are based on obscurity to work (as most are). Commercial Linux solutions like Tivo are the exact opposite, because time is spent getting the scripts, configuration, codecs, drivers, and applications version choice right, codecs can be licensed and distributed with the appliance, and DRM can be incorporated in hardware like the SPEs. Sony should be able to do the same as Tivo, Cisco, Netgear, DLink, Quantum, Iomega, Adaptec, Buffalo etc. in terms of ultra stable polished products.

    As for the bigger hard drive, I was thinking of apealing to a wider market with a different version that would appeal to the many people who buy the PS3 to get a cheap, good quality BD player. Sony sells expensive media PCs. Here is a cheaper alternative which does games as well and is more reliable, stable and virus/malware free.

    As for not being able to play games while you are recording, yes that is true, but can you do that on a media PC, and would the person who buys the PS3 for use as a BD player and only plays the occasional game mind? What you are getting is a lot of additional functionality for the price of a bigger hard drive (£20 or so). 60GB on the standard PS3 also is a fair bit of space for occasional PVR use on what is mainly a games and Internet PC machine.
     
  13. one

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    As the market for Tivo-like service is already occupied by cheap Tivo models, it'd be low in the priority list for media functions in PS3.

    1. Blu-ray
    2. media broadcast/store via internet-protocol such as music store and IPTV
    3. other

    Now that Blu-ray is building up nicely, a strategic pricecut can be justified to assist the trend in the near future.

    http://www.engadget.com/2007/06/17/blockbuster-chooses-blu-ray-is-the-war-over/
     
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