Sony finally, finally seems to understand something: if you make your product cheaper, you will sell more of it. It may have taken them losing their "king of gaming" crown, losing exclusive titles left and right to Microsoft, their company market value falling behind the much smaller Nintendo in Japan, still getting outsold 6 to 1 by the Wii about 9 months after launch, but they are finally at the realization. Yes, starting next week the Playstation 3 will now be a more reasonable $499.About 1 month-in, me and just about every analyst on the world gave Sony a simple fix to move more PS3s...needless to say they refused to listen and a ton of bad PR and multiple company firings later, here we are. I still don't think the cut is big enough - I'd like to see a $200 cut to REALLY get back into this race, but getting a next-gen DVD player with a high performance video games system for $499 when the Xbox 360 Elite is $479 and doesn't have the next-gen DVD player is a good deal.
Will it be enough to make a come back? Well it certainly can't hurt, but Sony needs a big game to come out for the system as well - especially with Halo 3 coming in a few short months.
Congrats on holding out this long Sony. It really did you a lot of good.
[UPDATE 7/6]: Oh that silly lovable Sony. Today their President came out and said flatly that they had no plans to cut the PS3s price! That's all well and good, except that numerous retailers have now had leaks confirming the price change.
Someone needs to inform Mr. Chubaci that we live in a world with a thing called the Internet. You can't just deny something and assume people will believe you because you are the President of a company when there are multiple pieces of evidence to the contrary.
If Sony is just saying this to try a sell a few (and I do mean few) more consoles at $599 between now and next week when the $100 price cut goes into they are evil. I repeat to all: if you are planning on buying a PS3 soon, wait until next week.
[photo by flickr user Charlie Brewer]
3 comments:
If you make your product cheaper, you will surely sell more units, but that's not the end of the story. If you sell at a loss, you'll also lose more money per unit by cutting the price. Great move, now you can declare bankruptcy! ;-D
Last November iSuppli did a teardown of the PS3 and stated that Sony was "taking a considerable loss on each PlayStation 3 sold." If true, it was too early to cut the price. Sony's costs may be lower by now thanks to better yields on the processor and the GPU and other component cost reductions, and it may be the right time for Sony to cut the retail price. It's not like they had much choice.
The Wii is not nearly as powerful as the PS3 or the Xbox 360, but I think Nintendo was smart to produce an affordable console instead of focusing on raw power and high-definition. The Wii is fun to use, and successful, it's outselling the PS3 and the 360. It's also cheap to produce, and thus the hardware is sold at a profit. Sony's and Microsoft's gamble (powerful and expensive hardware) may pay off in the long run, though. We'll see how it plays out.
@anon - I completely agree that the PS3 was actually a great deal considering the blu-ray player BUT that is 100% their fault for wrongly thinking they needed to include the player in 2006 when more than halfway through 2007, the next-gen DVD war is still raging.
Yeah the blu-ray is great for those who didn't mind paying $599 for it, but if Sony wanted to keep its utteraly dominant position in gaming they had no business releasing a 600 dollar system when Nintendo was getting a ton of buzz on a $250 one.
Having chosen to go with the blu-ray in the PS3, Sony simply should have made the price cut earlier. Yes, they would have had large loses, but they would not have gone bankrupt and quite frankly I can't see how it would be worse than it is for them right now. At least they'd be losing money on the system BUT be winning the console war AND next-gen DVD war. They'd make a ton of money on games and selling Sony Blu-rays. Instead their being outsold 6 to 1 by the Wii in their former stronghold of Japan.
PS3 is a good system, but I'll wait for its price to drop more ;)
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