What is the impact of no PS3 price drop?

[eastmen]

well ms is saying they sold twice as many units in nov vs the ps3. So it seems like thats the result of no ps3 price cut this year

 

[Mintmaster]

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.

Console volumes are high enough that initial investment is rarely a roadblock to cost reduction. Almost everything that reduces cost per unit will be done, regardless of sales.

For example, the initial cost of shrinking dies to a new process isn't a factor, because it'll have to be done anyway. The reason console manufacturers wait compared to, say, GPU makers is that smaller processes cost more per transistor than bigger ones until the old process starts getting phased out.

Nonetheless, pricing is another matter. You may be right that a lower price will have a greater impact on sales now that we're in a recession. On the other hand, 360's value appeal may be out of reach for Sony and it could be a losing battle to try and get those customers. Remember that with a price drop you also lose lots of revenue from those that would have paid full price if there was no price drop.

 

[eastmen]

Right now bundles make the most sense for sony. Uncharted for instance is a game that has already sold through the bulk of what i twould sell at retail. So sony pays a small fee to the developer and bundles it . perhaps 5-10$ and potential shopers look in the store and see uncharted is still selling for $50 new. To some people they will feel like they saved $50 bucks. For sony they may have spent an extra $10 on the bundle but they would have spent $50 on a price drop

 

[DrJay24]

On the other hand, 360's value appeal may be out of reach for Sony and it could be a losing battle to try and get those customers. Remember that with a price drop you also lose lots of revenue from those that would have paid full price if there was no price drop.

Of course there is a large percentage of 360 buyers this season that are buying $299 Premiums along with Wi-Fi and Live subscriptions. Sony would compete at $299 very well, as they did just before the last 360 price drop at $399. The big question is when will the $299 price point be reached?

 

[Silent]

Bart Smit in Belgium and the Netherland is selling a PS3 40GB (limited stock) for 250 euro. It's not the first time that there are some stunts with the PS3. I'm thinking at the PS3 120GB with 2 dualshock controller and 6 ps3 games for 400 euro's in mediamarkt.

 

[Silent]

Sorry I can't edit my posts. But why does Sony make the PS3 price more attractive by chipping in some games ? Or am I seeing it too simplistic ?

 

[obonicus]

Sorry I can't edit my posts. But why does Sony make the PS3 price more attractive by chipping in some games ? Or am I seeing it too simplistic ?

They're doing that already. The PS3 is a lot of money, especially considering the 360 can do just about the same thing.

 

[catisfit]

Sorry I can't edit my posts. But why does Sony make the PS3 price more attractive by chipping in some games ? Or am I seeing it too simplistic ?

They are. On Play.com for example, you can pick up an 80Gb PS3 with LittleBigPlanet, Motorstorm Pacific Rift and FIFA 09 for £289.99. Link.

The 80Gb RRP is £299.99, so it's £10 less, with 3 recent game releases added.

 

[suryad]

Again...most people I know bought a PS2 because "everybody has a PS2" not because it was a Sony....or because it was a "Playstation".

Most people I know bought a PS system because it was a Sony! Even now with the Xbox 360 and all that everyone I know prefers using the PS3 over the Xbox 360. But then again it could be these people that I know have a lot of disposable income...so that maybe having something to do with it because lets face it as a console, the PS3 is definitely not cheap.

 

[user542745831]

CNN: PS3 is a “sinking ship”

http://www.videogaming247.com/2008/12/13/cnn-ps3-is-a-sinking-ship/

Washington Times: Sony doing all in its power to “hinder” PS3

http://www.videogaming247.com/2008/12/13/washington-times-sony-doing-all-in-its-power-to-hinder-ps3/

 

[liolio]

A concrete example of the impact of the ps3 price.
I wanted to buy an 360 around christmas (I may have wait to secure a jasper), I discovered than my wife has bought me a pro pack for 200euros! It's a bunch of money as she's american and she's still not allowed to work in France she went with her saving and a bad exchange rate. I'm thankful even if the 360 is likely a falcon...
May I have wanted a ps3 she simply couldn't have bought it.
Put simply the ps3 is pretty much to expansive as a present, if I wanted I may have bought it but to someone close to me is simply to expansive.
For youngster, parents are likely to think the same.

 

[midorigreenwood]

WTF!!!

this is the second time in a week that I've read in a forum post about some guy with a wife who bought him a game console for a present. (the other poster received a X360 Elite for their anniversary)

I am so freaking jealous

 

[liolio]

it might be me I spoke about it in "i don't remember which thread"
EDIT
(You're sure about the elite part?)
(get a wife if you have already one changed it
(running away laughing...)

 

[midorigreenwood]

Too expensive mate

I'm sure that she'll try to claim half of my videogame collection during divorce proceedings just to spite me

 

[midorigreenwood]

more gloom and doom.

It is theorised that the Japanese government would eventually be forced to intervene if the Yen appreciates beyond the Y90 mark but according to this article..... it is unlikely.

http://www.atimes.com/atimes/Japan/JL17Dh01.html

Japan to live with yen burden


TOKYO - Japan's concern to maintain relations with the United States, its closest ally, on an even keel means Tokyo will seek to allow its currency to continue its steady appreciation, despite the profit erosion this causes in the key exporting sector.

The Ministry of Finance (MoF) may refrain from selling the yen, say currency strategists, even after the currency has advanced to the highest in 13 years against the US dollar and as many of the country's biggest exporters struggle to maintain profit margins.

The yen has advanced 24% versus the US dollar this year, 32% against the euro and 60% against the pound sterling. It traded at 90.25 against the dollar and 123.40 per euro at 5:45pm in Tokyo on

Tuesday. It may reach 80 per dollar in one or two months, forecast Toru Umemoto, chief currency analyst in Tokyo at Barclays Capital.

Japan will be criticized internationally, especially by the US, the country's strongest ally, if it acts to stem the currency's gain as US automakers are still on the brink of bankruptcy, said Umemoto. The stronger yen drives up the price of cars imported to the US.

Also

http://www.bloomberg.com/apps/news?pid=20601080&sid=aIYVOPT.b5Fc&refer=asia

Sony Corp., the world’s second- biggest consumer-electronics maker, fell to the lowest in a week in Tokyo trading after Credit Suisse Group AG cut its investment rating on the company, citing a loss of competitiveness.

Sony dropped 5.9 percent to close at 1,825 yen on the Tokyo Stock Exchange, the lowest since Dec. 8. The Nikkei 225 Stock Average lost 1.1 percent.

The Tokyo-based company needs “fundamental changes” to its operational structure, in addition to job cuts announced last week, to avoid lagging further behind rivals including Apple Inc. and Nintendo Co., said Credit Suisse, which reduced its rating on Sony to “underperform” from “neutral.”

.................................................

“We believe fundamental changes to its business structure are necessary,” Koya Tabata, a Tokyo-based analyst at Credit Suisse, wrote in a report released after the close of trading yesterday. “Compared to its peers both at home and overseas, Sony has been slow to react to the current crisis.”

Tabata widened his forecast of Sony’s net loss for this fiscal year more than six fold to 150 billion yen ($1.66 billion), from a previously estimated 22.6 billion yen. Sony, the maker of Bravia liquid-crystal-display televisions, in October projected net income of 150 billion yen for the year ending March 31.

The analyst cut his full-year sales forecast to 8.1 trillion yen from a previously projected 8.9 trillion yen. That’s less than Sony’s prediction of 9 trillion yen.

The Credit Suisse analyst also cut his share-price estimate for Sony by 59 percent to 1,000 yen.

 

[ban25]

more gloom and doom.

It is theorised that the Japanese government would eventually be forced to intervene if the Yen appreciates beyond the Y90 mark but according to this article..... it is unlikely.

Argh, I'm headed there in a week. Don't tell me it's going to drop to 80, it's bad enough already!

 

[midorigreenwood]

The knives are coming out according to sources within Sony Corp

End of January will be an interesting time as Microsoft and Sony report quarterly results....... there are rumours of major job cuts from Microsoft too. (although probably not from their gaming sector)

http://business.timesonline.co.uk/tol/business/industry_sectors/technology/article5446963.ece

Sony, the embattled Japanese electronics group, is on the brink of a corporate upheaval that could see job cuts and sweeping changes to management and manufacturing processes.

Company sources have told The Times that operations across the group are braced for a series of “sacred cow-slaying” measures that they believe will abolish or fundamentally alter many of Sony's long-established business practices.

The expected restructuring - considered by many analysts to be occurring far too late - is likely to be announced early next month, with the lion's share of the changes imposed on Sony's domestic Japanese operations in the form of factory closures and the abolition of several major divisions.

The restructuring is expected to be unveiled after this month's Consumer Electronics Show in Las Vegas and comes as analysts are warning that Sony faces long years of multibillion-dollar losses unless its president, Sir Howard Stringer, is given free rein to take on the company's old guard and erase many of its legacies.

Analysts are issuing blunt warnings of an impending flood of red ink in Sony. Their calls for deep changes in the company - supported by large investors - predict an imminent “all or nothing” moment for Sir Howard and the company of which he took charge in 2005.

.......................................................

 

[22psi]

http://www.gamesindustry.biz/articles/reeves-profit-is-number-one-priority-for-2009

Speaking on the official PlayStation website, the exec noted that the company must reduce the pressure to turn a profit before concentrating on pushing games and services.

"The most important thing for us as a company in the very short term is for us to start making money," he said.

"This is a pledge that was made last March and is something that we are still very much on target to achieve. Once we have achieved this, I think it will be a very exciting time for PlayStation.

"Once we have alleviated that specific pressure, we can move forward at a rate of knots," added Reeves.

Price drop prob not likely in the next 3-5 months for the PS3. I don't blame them. Profitability is #1.

 

[eastmen]

I think there will be a price drop , but only $50 bucks instead of $100

 

[Heinrich4]

MS warning/waiting about ps3 price drop next months?

http://www.videogaming247.com/2009/01/06/greenberg-we-expect-a-ps3-price-drop/