Comments on: Why Sony needs to (but can't) drop the price of the PS3

iSuppli breaks down the Playstation 3 and sees cost savings for Sony. But even still, can Sony drop the price of the console to compete against cheaper alternatives?

[mista77]

I wish I could afford a ps3 right now. But after digging deep into my pocket book, I purchased a samsung blue-ray player, hdmi cord, and 2 blue-ray movies, I was well below $350. Now that is an excellent deal.
Along with the holidays came a Wii in the home. This thing is the greatest family console I have experienced in years. However, when the kids go to bed and I am itching for some high end gaming, I cannot do much with the Wii ;-(

I think sony needs to re-market themselves as an industry leader and adjust the console down around $329.96 ( some wacky wal-mart pricing ) or something close to $299 at the big box stores. End of story. No way around it. The price needs to come down. They can recoup the costs with hardware add-ons and subscriptions as others have noted with buying network modules and extra controllers.

Come on Sony, wake up! ;-)

[SteveW928]

Umm... sounds like you could have had the PS3 for what you spent total. I agree that the Wii is a different kind of unit.. and if you have small kids, I suppose it could be the better choice. But, if you spent $350 buying your Blu-ray setup... I kind of feel sorry for you. Save up the extra $50 and get the PS3 and have WAY more, as well as not having to deal with multiple units. Then save up another $50 for your HDMI cable and 2 movies. Play your upscaled DVD collection until then.

[robvme]

I did nearly the same. The other reply below does not take into account that you would not have any Blu-Ray discs or games to play under his price plan. Fact is, either you are in it for the gaming or you are in it for the HD experience. I for one, don't like multi-function devices, if one goes on the blink you lose the other. That was my primary reason for not going PS3, besides the fact that the game selection isn't that great yet.

[SteveW928]

Don Reisinger & Dave Rosenberg just have an axe to grind with Sony. They either praise Wii or M$, and write articles every day or two about how Blu-ray is failing or Sony PS3 is. Just keep an eye... that's all these two know how to write about.
You might be correct about the price point, the average consumer, and the recession. I'm sure Sony didn't take the recession into consideration when the PS3 development started. But, it clearly is a superior piece of hardware. Sony tends to think more LONG-TERM. It's something businesses are going to have to get used to if we are going to change the crisis we're in. The PS3 is designed to last for several years... and yes, to lose money until it gets consolidated in parts. The XBox and Wii are cheap (though the Wii does get credit for being a great unique idea... and fun other way of gaming). The only real loser here is M$ building the typical piece of short-term junk.
Will Sony weather the recession? I hope so. Did Sony do the PS3 right? No doubt here! No way I'd trade my PS3 for an XBox or Wii... even if someone gave me $100 with it. It's worth way more than the price difference. Maybe the average consumer doesn't get that, which would explain the sales numbers. But give Sony time... the PS3 platform is just getting going.... and the future looks very bright.

[Philips]

GameCube was also the "superior piece of hardware." Yet most developers went to PS2 camp.

When talking about "platform" (and games consoles are now platforms more than they were before) you have to include much much more things into consideration.

Game library of PS3 is falling behind of Xbox360 is precisely the result of higher cost of PS3 unit itself: due to lower losses on Xbox360, MS could manage to send some extra money to developers making their platform switching easier. Sony couldn't do it (PS2 -> PS3 migration is expensive) and they lost some developer as well as several exclusives lost their exclusivity. (What was pretty much the case on how Sony made PS2 ubiquitous and won against more mature and technically superior Nintendo GameCube)

When building and planning future platform, you have to take many things into consideration. Sony made their bet - but seem to be loosing to competition now: more expensive hardware barred them from many game deals.

[SteveW928]

@Philips - I somewhat agree with what you are saying... we'll have to see how their bet plays out. What I don't agree with is that it matters how many games each platform has. I suppose it does to people who buy based on stupid stuff like that. What matters to me is the quality of the unit and the games that are available. The PS3 has some of the best games. Whether it has the most is irrelevant. The unit is much better built and much more capable. It does a lot more than just games as well. This is kind of like saying a M$ PC has more programs available. Every Mac user knows that just BS talk. It is the quality of the system and apps that really matter, not quantity. I always respond to people to tell me this as a Mac user by asking them how many word processing apps they use. I use 1... the best one for me... I don't care if there are 5 or 500 to pick from.

[PKGuy323]

One core piece for me is that Sony DROPPED the backwards compatibility for PS1 and PS2 games in the recent builds of PS3. It was there in the beginning, but dropped in order to save some bucks.

Problem is, the store clerks still tell me it IS compatible when actually, it isn't. So, I'd be ticked to spend about $500 just to get home and find it won't play all of my ps2 titles. Frankly, there's not much in the PS3 library I want.

Primarily, I'd like one for the combo of Blu-Ray and full games support, but it isn't going to happen. Bummer!

[SteveW928]

I hear you there... and I did get the model with backward compatibility (about a year ago). But, honestly, I've only used it for a total of about 1 to 2 hours in all that time. While I did love some of my PS2 games, I've found a couple PS3 titles that I love way more. I traded in most of my PS2 titles a couple months ago, as I'm just not using them any longer. I have only like 5 PS3 titles, and really only play 2 of them very much. Warhawk is SO fun, I spend like 80% of my time there, and the rest with Burnout Paradise.... once in a while Gran Turismo 5P. Little Big Planet looks incredible (though I don't have it yet) if that kind of game is more to your liking. I admit, there is a lack of creativity for the bulk of titles. How many more 1st-person shooters with different themes pasted on does one need? But, if you cut through the bulk of crud, there are some really excellent, and creative games available.... and they are WAY better than PS2 titles primarily due to the on-line capabilities. My friends and I have loads of fun playing with and against each other.

[johnqh]

Very simple solution - drop the BR support, which nobody cares, make developers to ship games on DVD, and PS3 will only cost $350 to make.

[SteveW928]

I doubt BR costs Sony much more than DVD would. BR is just a player mechanism like DVD, costing more because it is the 'latest thing.' I'm not sure I'd say no one cares about it.... though I admit that the PS3 makes DVDs look quite good on my 37" 1080p display. Maybe those with 40" + would start to see the difference more. But, I still buy all my new movies on BR.

[pjhenry1216]

Every ps3 game is on a blu-ray disc. Dropping blu-ray support is *not* a viable option.

[groink_hi]

Keep in mind that Blu-Ray included in the PS3 was the reason why Blu-Ray players as a whole had a much bigger market share than HD-DVD. The PS3 is probably the sole device responsible for Toshiba dropping HD-DVD. It is still a fact that the reason many people purchase the PS3 is dual-purpose: high-definition player and gaming unit.

Oh, I forgot something... Ron is also anti-Blu-Ray.

[SteveW928]

@groink_hi - "Oh, I forgot something... Ron is also anti-Blu-Ray."
Exactly! You hit the nail on the head. Every time I see an anti-PS3 or anti-Blu-ray story, it is usually either Don Reisinger or Dave Rosenberg. They write a story every few days on one or the other, and pretty much say the same thing every time.

The content of this article is mildly interesting but not at all surprising.

What is surprising is the shocking amount of sentences that Don Reisinger can start with a conjunction (and, but, etc.). I am not an English professor but who over at Cnet hired this guy? Did they read anything he has written in the past?

Did miss teen South Carolina proof read this for you, Don?

"But perhaps the most...", "But Andrew Rassweiler...", "But when it comes to price...", "And although Sony zealots...", "But with financial troubles...", "And as the recession deepens...", "But when a console...".

Fire yourself or go back to 5th grade English class. Seriously man you are horrible.

[groink_hi]

I don't understand... Why is it important to be #1?

I see the Sony/everyone else the same way as Apple/PCs. Apple has a far less market share in the PC market than Sony does in the game console market. Yet, Apple continues to be profitable. A Macintosh computer and the PS3 has several things in common: high quality parts, great Q&A, great UI and great interfaces (HDMI, bluetooth, USB, etc. - all built-in.)

I think everyone should just get their heads out of their *** and come to the realization that being number one is not that important for a company. Apple realizes this. So does Sony. Having a less-than 10-percent market share does not affect availability of software. With the way software is written today, it takes very little effort and funding to re-compile a game for a given platform. You can still be a profitable company by developing niche products. Maybe it is an American mentality thing - I don't know.

I think this Ron dude should refrain from commenting about IT because it is clear that he has some kind of a hatred towards Sony (and I assume Apple and probably every other company that make elite/niche products.) His understandings of Economics 101 is off when it comes to businesses and exactly what their goals are. Even his ideas about American families are so far off-base. He's saying that consumers are too cheap when they purchase gaming consoles - yet 10s of millions of expensive iPods are purchased by the exact same demographics.

[Philips]

> "Why is it important to be #1?"

It doesn't have to be #1. But Sony PS3 needs the sale numbers of Xbox360 to be profitable. Even if they break even in 2009, they would still need to close the hole left by losses PS3 made in past years.

[groink_hi]

"It doesn't have to be #1. But Sony PS3 needs the sale numbers of Xbox360 to be profitable. Even if they break even in 2009, they would still need to close the hole left by losses PS3 made in past years."

I don't think it works this way. The PS3 is treated by Sony like cell phones (the service contracts make up for the loss of revenue when giving away the cell phone hardware.) The PS3 is basically a loss leader, and it will always be treated as such. The PS3 is the unit that allowed Blu-ray to win the high-def format war. The loss of revenue in the PS3 is made up with the help if the thousands of other products and services Sony offers, such as their stand-alone Blu-ray boxes and DVD recorders/players, the Sony VAIO laptops, their telecom division, their battery division, their processor division, etc. People have to remember that the PS3 does not "make" Sony. That is like saying Apple exists because of the iPod or iPhone. Many businesses sell key products at a loss, with their other products and services making up for the loss. Not everything needs to be sold for profit.

[cnetcensorssuck]

You're a moron. This "Ron dude" is saying the same things that the Wall St. Journal, Forbes, etc. are all saying. Additionally, it is important in the video game space to be number one to attract developer interest. Stop pretending that you have any clue whatsoever of what you're talking about. Fool.

[Business1980]

That is a contradictory post, the mistake by sony was that they made an expensive system without OBJECTIVELY realizing the odds of it's possible acceptance. The only systems that will remain in the market are those that focus in gaming nor multiple use, since most people would instead get a pc rather than a ps3.

[tjmm1234]

I hope people understand that SONY has always over-charged for their gear. Do people remember the amount of failed CD ROM drives in the playstatioin 2? I hope SONY goes down on this one. They had to push for the CELL because, they wanted full control, they pushed for Blue-Ray and that did not help the issue regarding price, and they failed to offer an entry level machine. An entry level machine would have made all the difference. I could get Blue-Ray when I cared, add a hard drive when I needed (No Live Experience when it came out), etc. SONY missed the boat on this version and nothing seems to change that for a long period of time. It's like Beta all over again. And, when Blue-Ray starts to take off and trully replace DVD, it will be too late again. Some other forms will replace that. You can look at this whole SONY VS MS thing as over. MS won! But, really the winner is Nintendo. They really appeal in price and unique game play. MS and SONY under-estimated that all people really want is an inexspensive machine that anyone can enjoy. The war is over.

[gerrrg]

Remember when the pundits were commenting about how brilliant Sony's move was to have locked up sales of the PS-3 because of the lower-cost access to Blu-Ray? And remember how no one thought that Blu-Ray players would dip below the $200 level this Christmas?

Well, now everything has been turned on its head, and that Blu-Ray tie-in for the PS-3 doesn't seem so brilliant anymore, as the price has plummeted for entrance into the Blu-Ray player market, but Blu-Ray disks still remain a teeny portion of the overall video market.

Even if Sony lowers the price on PS3, Nintendo has so much room for dropping prices on the Wii, there's no ability for Sony to compete or make any money in the gaming market. That's probably why Sony hasn't bothered to lower prices...there's no point to losing more money if you've already lost the market.

[BeamerMT]

I'm not big on console systems or games, but from all of my friends that are, i don't think price is THE biggest factor in the 'fall' of sony's dominance. Right now you have what, 5 or 6, different versions of the PS3, most of which cannot play PS2 games, the current revision is not backwards compatible, and the game selection after over a year, is no where near its rivals and not even close to what it should be in selection and quality. Given this, I think sony has to start gathering in the pieces of the puzzle and look at the big picture from now on.

[Philips]

Disclaimer: Wii owner.

PS3 library easily trumps Wii library.

http://www.metacritic.com/games/ps3/scores/ vs. http://www.metacritic.com/games/wii/scores/ vs. http://www.metacritic.com/games/xbox360/scores/

[Kev_Orng]

I'll buy a PS3 when the PS4 comes out.

I'll stick with PS mainly because I have a library of games for PS2 that I can keep playing. The PS2 I bought when the PS3 came out, to replace my N64 that I bought when the Gamecube came out. Is there any reason to pay full price for any of this stuff?

[Kev_Orng]

After reading some other comments, I guess the backwards compatibilty thing is no longer a factor. I guess when I go for a new machine, I'm a free agent.

[mikeychan]

To the comment critisizing different versions of the PS3, the mainstay of the hardware has remained intact, whereas Microsoft has released far more skus and hardware alterations to their lineup such as including and not including hardrives and hdmi. The PS3 was designed for now and the future.

The game library argument is becoming ridiculous, this is not 2006. Sony hasn't marketed all thier great exclusive titles enough.

[nic.disassembly]

OK NEW DEBATE!:

better portable gaming system:

the Nintendo DS (xbox 360)
OR
the iPhone (PS3)

the PSP (Nintendo Wii) doesn't count!

now go!

[MegaDeth859]

OK, just one second; I love and own all three consoles because I WANT TO, in case anybody is wondering. The X-Box 360 Elite=$399 (no blu-ray player, no wi-fi, smaller Hard Drive, pay for online play). The Wi=$299 after all the extra bull**** you have to buy to play it as intended (no blu-ray or DVD, no Hard Drive, crappy graphics and sub-par games--except for a few) or PlayStation 3=$399 (Blu-ray--which if you haven't seen it, don't talk sh*t about it, great games, no EXTRA fee to play online, wi-fi and bluetooth built in). I'm sorry, but I don't understand what any of you are discussing here with the overpricing!!!! DO THE MATH PEOPLE!

[Kev_Orng]

By my math, you've spent more than $1100 on video game consoles.

Yowza.

I bought my PS2 for $100 new, and I love it. I've put the other $1000 towards other things I want. Like groceires and stuff

[7aji88]

Since the PS3 made Sony win the format war against HD-DVD, doesn't that mean that the PS3 makes Sony some money because of the BR royalties? just thinking :) and I don't have either PS3 or XBOX360

[mikehill33]

Sony blew it by not offering a VASTLY improved overall experience for this console.

From recycling the controller design, to not being efficient in the physical design, with the bloated price tag it is no wonder they failed.

Sony had a bit too much pride, as shown in their lack of interest in an online arena (Xbox Live clearly a winner, here).

The PS3 is like the Dallas Cowboys, the sum of the parts just dont add up to a winner.

I am a huge Sony fan, PS1 & 2 all day long, but the PS3 just didn't cut it for me.

Sticking to the 360 and everything that comes with it.

[Ms.Google]

The problem with the PS3 will always will be the price. Sony doesn't seem to get it that people are not going to play $600 in the beginning for a system that doesn't have any good games or all of the other features that they do now.

With any new gadget people who want it would get it. But now that the thrill is gone people are to worry more about money than what they can get out of the system.

The Wii is the most popular console because of the cost, not really for the games that they offer online or by a company.

[Lerianis]

I hate to point this out, but game companies have NEVER made money on the consoles, to be blunt. What have they made money on? The games, the peripherals, etc. Never the systems themselves.
Once the game companies realize this, and realize that it is OKAY to sell a console at a loss as long as you are going to be able to make it up in game sales...... the industry as a whole will move forward more quickly.

[deridmetari]

When incredible, though semi-niche games such as Valkyria Chronicles fail to do commercially well despite fans of the genre wanting it, and even critics hyping it.... this puts off the majority of developers who
would otherwise consider creating games/exclusives for a platform. Cross platform games by nature are designed to look/feel similar across platforms, noone wants to be accused by fanboys of one system or another of taking "sides" and making their game better on one platform vs another.

Combine this with Sony's high fees for prospective developers, and high royalty rates... and you have a system that will not ( and does not) get much in the way of developer support or exclusives.

Sony bet everything on two concepts, 1 being that developers would somehow pony up the dough to hop on board the PS3 bandwagon if they had made money on the PS2. ( Hasn't happened ) And the second being that nothing else mattered as long as they used PS3 as a level to wint the HD format wars, that getting royalties from every Blu Ray disc produced would be a win in the long term. Well, the second concept may yet prove correct at some point... but as of yet there are no signs of it, the vast majority of people do not care about Blu Ray... and we are also seeing the new wave of the future on services like itunes- HD Dark Knight digital DL anyone?

Bottom line is Sony has set themselves up to fail with the console, and probably only won a Phyrric victory in the HD disc format wars.

[pinecone69]

I think that is a very sharp observation and I agree.
If you look at Sony's company culture, it is all about making the most money possible
by treating the consumer like uneducated cattle, even though the machine itself is top notch.

The screen shots are very high quality. BluRay looks stunning.
But I don't need that in a video game to enjoy it. And for most movies I don't care about
the high resolution, even on a 60 inch 1080 screen.

[robvme]

"Atul Goyal, analyst with CLSA Asia-Pacific Markets, argues that Sony's gaming business is among the top loss-making businesses for the company, along with LCD TVs and the mobile handset business, and it continues to worsen. What is more shocking, Goyal says, is an apparent lack of communication even within Sony's gaming business.

In October, Sony Computer Entertainment of America head Jack Tretton told Thomson Reuters that the PS3 was selling faster than expected and would reach full-year sales targets even if the global economic crisis hurts holiday sales. "We are tracking at 100% up over last year ... about 30% ahead of where we should be," Tretton said in the interview.

However, nearly two weeks later, Kazuo Hirai, president of Sony's game unit, told Bloomberg TV that "I don't think we can meet [our PS3 sales target] easily, but I think we don't have to give it up at this point."

"Interestingly, this statement came out barely two weeks after Jack Tretton, SCE US head said that PS3 sales are 30% better than expected," Goyal wrote in a research note. "We are not sure what the executives intend with these confusing reports or whether there is just no communication between them!"

Sony and Sony Computer Entertainment were not immediately available for comment for this story."

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