What is the impact of no PS3 price drop?

[DrJay24]

The Sony news gets worse... source... There's no question that this cutback will affect the games division, the only question is to what extent?

It's always fun to see how every console thread degenerates into a Sony is doomed thread, I've been reading them here for two years now.

The OT is:

What is the impact of no PS3 price drop?

Sony obviously knows more about it's internal cost and sales forecast than the rest of us, they are expecting lower holiday sales and more profit at that price point. The question is when is the price cut going to be and how well are they doing on cost reduction?

Most would expect a $299 PS3 next year, Spring or Fall though? Maybe they are intentionally staggering their price cuts so they are not in a tit-for-tat price war with the 360?

 

[gongo]

You seem to have the idea that sony is all about extremly powerful and expensive hardware. This doesnt really apply to either the PS1 or PS2. The PS3 is in the situation it is now due to investment in new technologys, im sure thier plan was always to spread some of this investment accross more than one generation. I fully expect PS4 to utilize the next iteration of Cell + Bluray which could potentially allow much lower costs in terms of investment in the future.

No you are wrong. Every PLAYSTATION Kutaragi supervised over had pushed the envelope on what could be made in a CE device. Its always an exciting time to watch for the next PLAYSTATION.

 

[obonicus]

No you are wrong. Every PLAYSTATION Kutaragi supervised over had pushed the envelope on what could be made in a CE device. Its always an exciting time to watch for the next PLAYSTATION.

Stuff has happened in the interim. Namely, the Wii has shown that you can sell make lots of money on softwareand hardware.

 

[gongo]

Stuff has happened in the interim. Namely, the Wii has shown that you can sell make lots of money on softwareand hardware.

The hell i care about Wii. I like SCE to do it the Sony way. Going back to my earlier point, we know Stringer and Kaz will never have the same desire to push the hardware envelope as their predecessors, this cuts is going to put further backing to their beliefs. meh.

 

[Neb]

No you are wrong. Every PLAYSTATION Kutaragi supervised over had pushed the envelope on what could be made in a CE device. Its always an exciting time to watch for the next PLAYSTATION.

Im sorry to be the messenger but Kutaragi got "sacked" some time ago.

 

[Neb]

The hell i care about Wii. I like SCE to do it the Sony way.

Sure but Sony needs profits.

 

[Neb]

It's always fun to see how every console thread degenerates into a Sony is doomed thread, I've been reading them here for two years now.

Really I thought that was reserved for derailed PC threads?

The thing is that they right now have economical problems of greater scope. Hence the large cutbacks in different departments. Question would be if they can recover and if they can do it by lowering the PS3 prices.

 

[DrJay24]

The thing is that they right now have economical problems of greater scope. Hence the large cutbacks in different departments. Question would be if they can recover and if they can do it by lowering the PS3 prices.

In the current economic environment I would think there is a larger incentive to cutting the price. Sony is a large company, isn't the current layoff 8,000 out of 160,000?

 

[Neb]

In the current economic environment I would think there is a larger incentive to cutting the price. Sony is a large company, isn't the current layoff 8,000 out of 160,000?

Isn't it 8000 + 8000 from 2 divisions aswell as projects dropped?

 

[tirminyl]

Isn't it 8000 + 8000 from 2 divisions aswell as projects dropped?

From readings on Forbes, Bloomberg, etc., It is 8,000 permanent positions and 8,000 contractor positions totaling 16,000. They will also be shutting down plants, as well as pulling out of non-profitable businesses OR reducing investment.

I know Stringer is in process of restructuring the company and I hope it comes to fruition. Operating at a razor thin profit margin can't be good for any company. maybe by unifying all divisions they can provide a core service or product that can provide constant stable source of profit.

 

[Pozer]

Americans have been pro-Xbox since last gen. Nothing is cool about the Playstation brand in the US. MS has had the core 14-24 group locked up since Halo 1, with marketing that includes Axe body spray, MTV, Mountain Dew, etc.

Sony's only hope is to take off in Japan and Europe with a big price drop next year. They can hope for decent NA sales with a price drop and KZ2, but nothing will fix the branding and anti-Sony bias they have here.

I think its more of a combination of MS has done so much right and Sony has done so much wrong. MS has taken the hardcore fps experience of PC gaming and repackaged it for the masses and thru it in the living room, leaving out the thrill of driver updates and patches. This has appealed to the +25 males and urban gamers. Sony has used up their greatest asset to fight a format war. Took every page out of the Sega Saturn playbook. (keep it expensive and complicated). They conceded the gen when they launched at $599. BluRay won but digital distro is the elephant in the room. Their fighting a 1985 style war. Still trying to win betamax. They now are rulers of a scorched empire.

Sad because time is not on their side. By the time they get the ps3 to $299 it wont matter. Nobody wants to pay that much for console none of their friends own. Pretty soon we'll start hearing about layoffs at internal studios.

 

[obonicus]

I think its more of a combination of MS has done so much right and Sony has done so much wrong. MS has taken the hardcore fps experience of PC gaming and repackaged it for the masses and thru it in the living room, leaving out the thrill of driver updates and patches. This has appealed to the +25 males and urban gamers. Sony has used up their greatest asset to fight a format war. Took every page out of the Sega Saturn playbook. (keep it expensive and complicated).

Except expensive and complicated worked really well for the PS2. This is just armchair predicting. Which is all fine and good, but we've gotten to the point where all we're doing is crying 'doooooooom'.

 

[function]

Except expensive and complicated worked really well for the PS2.

The PS2 wasn't $600 expensive and complicated, and unlike the PS3 it could be quickly dropped to mass market pricing (and was, to combat the much more powerful Xbox).

It's okay having an expensive to manufacture machine in the first year or two, so long as it gives the machine a wow factor and helps you grab some core market to start building momentum. It needs to get cheap after that though, and pretty quickly.

 

[obonicus]

The PS2 wasn't $600 expensive and complicated, and unlike the PS3 it could be quickly dropped to mass market pricing (and was, to combat the much more powerful Xbox).

Slimline came out in 2004, Xbox in 2001. I don't think it was so much a reaction to the Xbox. And I was referring to the idea that 'expensive and complicated' will always fail, as it did for the Saturn. The Saturn failed for many more reasons. Saying it and the PS3 are in the same situation is inaccurate.

Did Sony screw up this generation? Undoubtedly. I have no idea what'll happen, especially with the global financial crisis and the need to trim costs. I don't think that laying off people from SCE and the many internal studios is out of the question, certainly. But it's stupid to suggest that they're out of the race, much less to say that they should go 3rd party or just drop out entirely. I certainly believe that next-gen console-makers will try and get a piece of the Wii's demographic and will focus their efforts accordingly, but you're kidding yourself if you think MS doesn't want a piece of that pie, too. It's just how the market's moving.

Sony's DOOOOOOOM might even be true in the future, but the facts we know don't lead up to that conclusion.

 

[DuckThor Evil]

Slimline came out in 2004, Xbox in 2001. I don't think it was so much a reaction to the Xbox.

Playstation 2 dropped to 199$ on May 2002, 18 months after its' launch. Also in the UK Sony dropped to 199£ only after about 10 months of being in the market, and few months before Xbox 1 launched. Slimline was just a new hardware revision introducing further cost reductions dressed up as a new and exciting product.

 

[function]

Slimline came out in 2004, Xbox in 2001. I don't think it was so much a reaction to the Xbox.

I wasn't thinking about the slimline - from day one Sony were making the PS3 cheaper to manufacture. They shrunk chips, combined chips, put the DVD player software onboard etc etc. All this was going on long, long before the slimline. They could drop to mass market prices while MS had to lose billions to keep up.

Perhaps Sony would have dropped prices as aggressively even without competition just to drive the userbase up (I doubt it), but the point is the PS2 allowed them to do this, while the PS3 does not.

And I was referring to the idea that 'expensive and complicated' will always fail, as it did for the Saturn. The Saturn failed for many more reasons. Saying it and the PS3 are in the same situation is inaccurate.

If an expensive console in a multi-console market wants to remain expensive it needs to have something unique to offer, something that's reflected in the games it offers. Even then it'll be relatively niche, like the Neo Geo.

But it's stupid to suggest that they're out of the race, much less to say that they should go 3rd party or just drop out entirely.

They're pretty much out of the race this generation, at least if you're judging the race on market share and profits. No reason they can't be back to profitability and a nice chunk of the market next gen though. Sony could return with a cheap to manufacture device by as early as 2010 that would have a temporary lead in graphics (like the PS2 had), could inherit Home, full backwards compatibility and also be a top of the line BluRay player. Bung in a "me-too" motion controller and there's a good chance of success (maybe even without one).

A bit like the GC->Wii transition (but with new Nvidia GPU on smaller, faster bus). It's something I'm sure Sony are considering.

Sony's DOOOOOOOM might even be true in the future, but the facts we know don't lead up to that conclusion.

Sony's not doomed, they just got a slap in the face from the reality of the console market, a bit like MS and Sega did.

 

[obonicus]

They're pretty much out of the race this generation, at least if you're judging the race on market share and profits.

Well, I'm judging them the way the GC fell out of the race. No 3rd party support, few first party releases. Naturally, with yesterday's news no one knows what's going to happen, they could cancel a whole lot of what's in the pipeline. But as it stands Sony's still running.

 

[obonicus]

That seems fallacious; GameCube sold a hair under (maybe) what the XBOX sold how is that falling out of the race? It would be interesting to go back in time to see what the people who are proclaiming "we" are screaming "Sony is doomed" said about the GameCube. If this is how you judged GameCube why did your metrics change for SONY?

Who said they did? I'm talking about games and you're talking about # of sold consoles. Look at these two lists. They managed to keep developers on their consoles. The Xbox wasn't thriving, but it wasn't dead until MS pulled the plug. The GC never had its plug pulled, but its releases were a lot more sparse. Sony still has 3rd party support and a steady stream of first-party titles. I don't think this will change, unless MS manages to build a much greater lead -- and I don't think we're seeing that, either. (We may start seeing crappier and crappier PS3 ports, though.)

IF SONY is profitable with PS3 it will be a success, so far, they have lost a large percentage of their market share not just amongst gamers but amongst third parties as well. On the plus side keeping the same or similar architecture will definitely give them a leg up in the following generation. Personally I believe they need to get their act together and find their focus these sporadic overlapping and disparate services do not send a sign of cohesion (I'm sure my buddy patsu would agree with me :smile but they can use this opportunity as MSFT did to deploy something moderately successful and then build upon that for the future ala LIVE::XBOX to LIVE::360

Certainly. I think Sony is still suffering from the right hand not knowing what the left hand is doing, and I suspect that Stringer's efforts to consolidate leadership hasn't been entirely successful (yet).

 

[Cheezdoodles]

In the current economic environment I would think there is a larger incentive to cutting the price.

Lol based on what?

In the current economic environment Sony, like most companies struggle with financing, your not going to sort those problems out by cutting the PS3 price and increasing your losses.

If anything, there is an incentive NOT to cut the price

 

[DrJay24]

Lol based on what?

In the current economic environment Sony, like most companies struggle with financing, your not going to sort those problems out by cutting the PS3 price and increasing your losses.

If anything, there is an incentive NOT to cut the price

Then maybe they should raise the prices, right?

The incentive is the group willing to pay $300 might be twice as large as the $400 one, so if they can spend $X to cost reduce to $300, then they may make $3X in additional profit.

By "current economic environment" I meant the consumers and how much they are willing to spend on tech toys, I thought that was clear.

But I'm not a self proclaimed expert in everything.