What is the impact of no PS3 price drop?

£30 in UK which equates to $47

And the console is being cut everywhere, slightly. I think they're testing the waters with the Dell cut to $339.

 

What are you on about? and how is this even slightly relevant to my post?

 

I wouldn't read too much into the Dell move Deepbrown - Dell cuts things by large amounts all the time, IMO to move inventory. They regularly offer the 360 below market for instance.

Anyway this is all off-topic for the thread, so let's move away from it. There are existing threads for which this angle is better suited.

 

How is it NOT relevant to your post? Does everything you say have to be laced with scorn?

There's more cuts than Dell - that's ONE I mentioned. It would be interesting for Sony to find out how much a sales jump they'd see with only $50 cut off, if it proves to not make a difference, they won't bother to officially cut the price. And in the UK the bundles are significant with Killzone 2 included.

So the reviews of KZ2 are good - averaging 9.4/10, More than I expected.

 

[Moved above posts over from Killzone to here]

The only other one I can think of is Amazon with their one-day sale, something that would trip my 'early warning' system more than the Dell situation in all honesty, but still indeterminate.

I'm not saying anything is an absolute - they may cut the price prior to KZ2, who knows. But I would expect a cut after KZ2 myself, just because it makes more sense.

If what we're talking about is piggybacking to sell more consoles, this is the calculus:

Of the individuals that will buy KZ2 at launch, how many of them will be buying new consoles spurred by that title alone (and the existant library)? We'll call that group A.

Now, how many people would buy a new PS3 if the price were dropped $50 or $100? We'll call that group B.

What Sony wants to make sure of, is that anyone that would be part of both Group A and B, is ushered into PS3 ownership at said higher price point. After they've exhausted that 'tier' of the demand curve with specific title incentive, that would be the time to lower the price to attract a new band that simply would not move at $400. In this business it is imperative that anyone you can induce to buy at a higher price, you take advantage of that.

Insofar as Sony uses bundles as the immediate tactic, that's a win-win, since they're not absorbing additional console loss on that, but simply reducing margin on the game. Yet to the consumer the money saved is transparent. Not sure if there are too many bundle deals in play for the US though, so that may be more Euro-centric for now.

 

I wouldn't be surprised to see an updated 160 gig bundle with Killzone 2 in it. I bet that will come in march. They will try to sell as many as they can (at least as many as mgs4 bundles) at the $500 price point and then move the prices in June to $350/450. I also think they will cut another $50 off in the fall , perhaps in nov .

This is just my opinion though. Killzone is most likely their biggest title yet on the system and could be their biggest title of the year also. I think they will take this chance to sell as many systems at the $400/$500 price point as possible. Esp if they are breaking even or making a slight profit at those price points . It will help them later on when they have to drop the price.

The 360 has no real notable exclusive releases untill halo wars and I don't even think that will be a big title. So I don't think there is a drastic need to drop price. I think Jan will be a xbox 360 month sales wise with febuary and march being a ps3 sales month. April and May a toss up and then a price drop in june if at all this half of the year

 

I've been comparing prices at amazon sites around Europe and it is pretty obvious that Sony is very aggressive in the UK right now.

LBP has been priced at £18 (about $30) since before the holidays. KZ2 can be pre-ordered for £30. Both titles are among the top ten bestsellers, right now the KZ2 is number one.
The price of the 80 GB SKU was recently cut to £269 and is number 14 at the best seller list.

No other European country has these prices and this is not just because of the weak £. If you look at the price of LBP and KZ2 in relation to other titles you don´t see the same difference in the other countries.

UK is the European country where the Microsoft has gained most ground so I think this is partly in response to that, Sony wants to keep the market warm and cheap quality titles is probably a good way to keep the interest up and the buzz going until the hardware hits more of a mass market price.

Sony also seems pretty serious about the marketing of KZ2 in the UK, I yet haven´t even seen any announcement that they will bring the KZ2 bundle here to Sweden. We are probably low priority, though we recently seemed to get a small price adjustment of the PS3 SKU from a few online stores. I think the PS3 is selling in decent amounts around here, still it´s damn expensive compared to the UK price.

 

Just noted amazon.co.uk has run out of PS3s.

I find it a bit strange. You´d expect they would get a pretty reliable stream of deliveries from Sony.

I wonder if amazon will keep the price at £269 when they get them in stock again or if it was just a temporary cut to move some inventory.

 

What the hell is your problem?

I simply asked What does "£30 in UK which equates to $47.. " have to do with my post which is a reply to the ridiculous comment saying that a $50 price cut would pay for itself because everybody would buy a $60 KZ2?

How is it relevant? Why did you directly qoute my post with your post? Im wondering, because i have no idea how £30 being roughly the same as $47, has any remote relevance to my post regarding if a $50 price cut would still be profitable because KZ2 software sales (which the guy i replied to stated)

 

I'm quessing his post was supposed to be kind of continuation to your post... That one guy wrongly said that 60$ Killzone 2 retail price would cover 50$ PS3 price cut, which you stated was wrong and deepbrown just (jokingly) added that in some places Killzone 2 won't even generate that 50$ of revenue to "cover" that 50$ PS3 price drop.

 

Saw this article:

http://www.guardian.co.uk/technology/2009/feb/05/david-reeves-sony-europe-losses

So it looks like you are right. I guess Sony is content to ride out 3rd place this gen, and just focus on profitability at every step. That's fine for them, but damn it must be extremely frustrating for PS3 exclusive studios that are faced with a much smaller userbase than anticipated. Presumably this also means that price cuts will only come with revised PS3 models. He mentions mid year for a PS3 revision, so I guess that's the earliest one would expect a price cut.

 

I don't think there's anything wrong with third though, and honestly I think profitability > install base in almost any and every industry. Did Xbox beat GameCube for instance? Well GameCube made money, so IMO Nintendo won out. Now, Xbox set the stage for the 360, but 360 hasn't made money in the aggregate yet either.

Anyway when we are talking about install base though, PS3 has already passed GameCube and it will pass the original XBox in a couple of months. So I expect third this generation as PS3 to be well separated from the connotations that third last generation may have implied, even if those connoted meanings are still the prism through which the media in this industry views things.

Also I'll note how a single game can reverse fortunes; Halo 2 essentially turned the Xbox from a failed console to culturally popular overnight. I don't think Killzone 2 is such a game for PS3, but such a game may come one day. KZ2 of course I think will be a big positive though.

 

I think it's honestly in Sony's best interest to wait until November for any price drop at all. Package in big games with the system between now and November, give away from Download games, whatever.

They need to reduce their losses as much as they can, and if they are still in hot water, then reduce the price by $100 in November with some bonus stuff (like the free blu-ray movies and whatever again).

Sony needs to reduce their losses, and then push hard next holiday season, both the PS3 and Blu-Ray to maximize sales and hopefully boost up HDTV sales. The stand to gain more this way then they do desparately trying to stay competitive in the console race while taking massive losses.

 

From Sony's perspective yes form a developers perspective market share = potential sales. At least when console manufacturers sell below cost, it makes it imperative for them to recoup on the software side. As such ,financial success if predicated on that of the developers. Games sell consoles and consoles sell games.

 

Right, but most titles released these days are multi-console anyway. And the exclusives that get released are either first party, or like in the case of Insomniac, not left to founder either way. Haze is the last game I can think of that broke that mold, and I don't expect too many more of those.

 

I'm really curious to see if second-party studios like Insomniac will continue to work exclusively with Sony. Even if they can break even on that platform, nobody likes making hits only to see them fail to sell.

 

We have no idea how the business relationship is between Sony and Insomniac. Insomniac is a growing company so they seem to be doing well. Perhaps someone could dig up their annual report to see how much profit loss they made in the last years?

 

I really wouldn't worry too much about Insomniac at this point. Granted, Resistance 2 didn't perform the way they would have liked, but I hardly think they'll suffer for it.

Sony will do what they can so Insomniac at least makes a profit. Be it buying the game to bundle in other countries, or in North America, it's unlikely that Insomniac will not turn a profit somehow.

When they open their second Studio and change their work cycle to a 2-3 year project instead of a 6 month pre-development and a 12 month development cycle. Hopefully it'll open the doors for them to put out more DLC, which should help them with profitability.

 

I was at Circuit City today and despite the 30% off, there was at least 20+ copies of Resistance 2 sitting on shelves.

I didn't enjoy the first one, but I was really surprised to find that many copies on the shelves. Most of the other big PS3 titles only had 2-3 copies left. 0 Uncharted, 0 LBP, 1 Heavenly Sword, 2 Motorstorm Pacific Drift.

Does anyone know if R2 sold as well as R1?

 

R2 sold far less than R1, so far at least.