Let’s face it. Sony has screwed up over the last two years. Their marketing campaigns have been almost non-existent since the PS3’s launch in November of 2006, and the sales have taken a hit because of it. As a result of this vacation the Sony marketing department has taken the general perception of the system is the one that has been created by Microsoft. “Too expensive”, “it has no games”, “there’s no one using the PlayStation Network.” I’m sure you’ve heard them all before. They’re all “reasons” why the PS3 is in last place in the “console war.” Well, one of them is true, and it’s fairly obvious which one it is.
So the question is why? Why does the PS3 need a price cut? Well, it’s quite simple really: the recession (which is code for “the upcoming complete global economic collapse”). The PS3, like all other consoles, is a luxury item. But with the PS3’s $399 price point (at it’s cheapest) it is seen as the most luxurious of the three. The PS3 is the Ferrari of the consoles, but without the reputation, because of this they’re not selling a ton of units. Therefore, the sales numbers of other products that are reliant on the PS3’s sales numbers are also suffering.
The problem is that Sony isn’t making a lot of money on the PS3. Up until the 160GB model Sony has been losing money on every system they’ve built. And now that they’re finally making some profit, they need to drop the price to stay competitive. The 80GB model is selling for $399 and the 160GB model is selling for $499.
What Sony needs to do is drop the price of both models by $100 and forget about making a profit on the console. If they keep the price at where it is now they’re not going to sell enough systems. So they need to drop the price of the console and start hoping that they’ll make the money back on software and blu-ray movies. It’s safe to assume that Sony wasn’t counting on the global recession and, while I don’t believe any of the big three (Microsoft, Nintendo and Sony) saw it coming, it has certainly hurt Sony’s monster the most.
But the article is about why they need to do it, so I should answer that question. They need to do it to stay competitive. By lowering the price of the cheapest model to $299 they’ll hopefully reach a level where people see it as worth the price. Sony’s sales were up last year until the fall when Microsoft cut the price of the Xbox 360 Arcade model to $199. Effectively tricking some 1 million people (rough estimation) into buying an Xbox 360 and stopping the PS3s momentum dead. Well with an even better line-up this year the PS3 should have a price cut ready for E3.
There have been rumors going around for the last two months (at least) that the PS3 will be seeing a price cut sometime between two weeks ago to E3. It’s my opinion that it would be best to drop the price at E3 during their big press conference. I also believe that they’re going to have to have a massive marketing campaign ready and waiting. True, the economy is dying in a ditch somewhere but if they don’t do something they’re going to be down there with it. An InFamous bundle anyone?
March 19, 2009 at 10:27 pm
“What Sony needs to do is drop the price of both models by $100 and forget about making a profit on the console.”
ARE.YOU.F*****G.SERIOUS.
Seriously…WHAT THE FLIPPING HELL?!
So they’re still losing some money on so according to you, they should drop the price and risk losing even more money? Unless Sony gets the productions costs down and start making a small profit until it builds up, they’re not cutting the price.
Of they could be waiting at the end of the fiscal year. What company announces a pricecut before it actually happens? ?????
March 19, 2009 at 10:29 pm
And another thing, we don’t work for Sony. We can wish morning, noon and night that Sony will cut the price and it still won’t happen.
They’re a company and they are concerned with making a profit. Understandably there’s an economic crisis going on but seriously…they need to work on profit.
Profit=Money in the pockets of companies.
March 19, 2009 at 10:42 pm
I don’t care what Sony does. I already own my PS3 so as long as they don’t go bankrupt they can raise the price to $1000, I don’t care. And they haven’t been making a profit since launch but they’ve dropped the price anyway, or are you still paying $700 for a PS3? If they cut the price they can move more units and more games. That’s where they’ll make their money back, in their games. It’s more important for them to get their consoles out there. And this is just what I think they should do. I have no stake in this (unless they go bankrupt).
March 20, 2009 at 6:01 pm
Sony is making a TON of money off of Blu – Ray sales. That income, combined with the income they SHOULD make from increased software sales following a hardware price cut SHOULD allow Sony to cover any money they lose from dropping the price of the PS3.
However we don’t know the whole story – it’s no secret that Sony lost a load of money with the PS3 already and it would be in their best interests to try and recoup some of that before taking another hard hammerblow on their income.
Since the PS3 is dominating the Japaneese hardware charts there’s no immediate reason for them to cut the price over there – however a price cut by at least July of this year is a MUST for America and Europe if they want to stay competitive……..the economy really picked a lousy time to go bust.
March 22, 2009 at 10:59 pm
[...] the original post here: Why the PS3 Needs a Price Cut And How They Should Do It Play Video [...]
March 25, 2009 at 8:21 pm
[...] tons of articles and rumors about a PS3 price cut (even I’ve taken a shot at it, available here) circling the internet since Microsoft dropped the price of the Xbox 360 in November. And with this [...]