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Sony PlayStation (Games) The Almighty Buck

PS3 Price Drop Won't Happen Anytime Soon 207

Posted by Zonk from the people-are-saving-up dept.
1up is reporting on comments from SCEA's Jack Tretton, who responded to the question "Will we see the PS3's price drop?" with the point blank answer of not anytime soon. Mr. Tretton responded with what has now become the Sony party line: it cost a lot to develop, and gamers are getting a lot of machine for their money. Therefore, the high price is justified if you consider what is being offered. From the article: "By way of comparison, the PS2 dropped a hundred bucks in price during the first 550 days of its lifespan -- from $299 to $199 USD. Tretton's words would seem to suggest that the PS3's price point may take significantly longer than a mere year and a half to reach the same threshold. Given that scenario, one would really hope that Sony has some kind of ace-in-the-hole for keeping our collective attention (and purchasing enthusiasm) squarely focused on the PS3."
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PS3 Price Drop Won't Happen Anytime Soon More

PS3 Price Drop Won't Happen Anytime Soon

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  • In before... (Score:3, Funny)

    by Mursk ( 928595 ) on Wednesday January 24, 2007 @03:07PM (#17742314)
    In before jokes that the PS3 won't be around that long!

  • Just Technicalities (Score:3, Interesting)

    by blueZhift ( 652272 ) on Wednesday January 24, 2007 @03:20PM (#17742454) Homepage Journal
    While it may be true that a PS3 price drop from Sony is not in the near term, what about things like rebates? Technically a rebate or other incentive, like free games with purchase, are not price drops. I think it is a safe bet that if PS3's continue to lounge about on shelves as some have reported, we'll see some kind of deal sweeteners that effectively reduce the price of ownership for consumers. Once those sales plateau, then the real price drops will come.
    • Well, much like the PSP, Sony will probably not offer too much in the way of rebates, bundles or price drops (even if they're far behind in sales) because Sony does not attempt to compete on price.
      • While I will readily admit that the DS has outsold the PSP, saying the PSP is "Far Behind" is not exactly fair.

        Sony has managed to do what no one else has since the Game Boy was introduced in 1989, make a competing Handheld. It might not hold as much market share as the DS, but its not like comparing the marketshare for the Zune versus iPod.

    • Re: (Score:3, Insightful)

      by Pojut ( 1027544 )
      See, if sony wants to sell more PS3's, they should include a sought after title, like Resistance...or, wait and then package in something that many people would LIKE to have but not necessarily want to spend 50-70 dollars on, like Ninja Gaiden Sigma.

      I know that (excluding the Wii) the "pack-in" idea went the way of the dodo a long time ago, but still...it's fantastic knowing I can (could, whatever) buy a console, take it home, and already have something to play on it without having to spend and additional 1

    • Re: (Score:2)

      by ProppaT ( 557551 )
      This is a point. Before this past holiday season, multiple vendors were offering $50 gift cards and $100 rebates on Xbox 360's and these rebates and incentives weren't endorsed by MS.

    • Re: (Score:2)

      by Fozzyuw ( 950608 )
      I think it is a safe bet that if PS3's continue to lounge about on shelves as some have reported...

      Speaking of which... I saw my first PS3 'on the shelf', so to speak. The local ShopKo had a 20GB version in-stock by way of a 'ticket' on the shelf that you bring to the register. The 60GB was not available. This was about a week ago.

      Cheers,
      Fozzy

  • News (Score:3, Insightful)

    by Itchyeyes ( 908311 ) on Wednesday January 24, 2007 @03:28PM (#17742578) Homepage
    This story isn't really news. Everyone knows that, even at $600, Sony is selling the PS3 far below cost. It's an expensive product to manufacture that includes a lot of new technologies. It will take a while for their costs to drop. If Sony were to reduce the price, it would certainly increase sales. However, increasing sales and increasing your losses at the same time is not necessarily a good thing since it obviously leads to significantly more money lost.

    There is always a fine line to walk when balancing your prices with your volumes. When every sale is essentially an investment in the future (for the company, not for the idiots who think buying a $600 console now is an investment for when there will be better games out), then that line is infinitely thinner. People can argue all they want about how smart Sony was to pick such complicated components for their console. However, that decision is in the past now and Sony has to make their future decisions regarding pricing based on the product they have.

    • Re: (Score:2, Insightful)

      by El Gigante de Justic ( 994299 )

      If Sony were to reduce the price, it would certainly increase sales. However, increasing sales and increasing your losses at the same time is not necessarily a good thing since it obviously leads to significantly more money lost.

      While dropping the wholesale price they are charging retailers for the unit may increase initial losses on the PS3, each sale boosts their potential gains as they only make money through the sales of games. If more units don't start selling, there is the possibility that developers will choose to release a title on XBox360 only instead of both X360 and PS3 because the number of potential PS3 version sales (at least within the first 6-12 months of the title's launch) isn't worth the development costs.

    • "Will we see the PS3's price drop?" with the point blank answer of not anytime soon.

      Yeah, it's not like we see them around everyhere...

      Oh wait...

      • It seems to me that it's a popular criticism on /. that the PS3 is doing poorly based on the fact that it can be found on the shelves.

        The ps3 IS doing badly, relative to the Wii, but that ain't why.

        • Re: (Score:2)

          by trdrstv ( 986999 )
          It seems to me that it's a popular criticism on /. that the PS3 is doing poorly based on the fact that it can be found on the shelves.

          The ps3 IS doing badly, relative to the Wii, but that ain't why.

          Care to elaborate? The general consensus is that there are more than twice the number of Wii out int the wild than PS3, yet they are much more scarce. It appears that the Wii is in much greater demand.

        • Why shouldn't it be a criticism? The Xbox 360 sold comparable numbers during its launch period (actually, more as I recall) and at this time last year you would have had a bitch of a time finding one. As has already been noted, right now the Wii has sold [many] more units and it's still a crap shoot whether you'll find one to buy.

          The bottom line is that Sony has missed all their predictions from production numbers to sales numbers, and I think it can probably be attributed entirely to the price of the

    • Re:News (Score:4, Interesting)

      by tkrotchko ( 124118 ) * on Wednesday January 24, 2007 @06:25PM (#17745202) Homepage
      "Everyone knows that, even at $600, Sony is selling the PS3 far below cost. "

      We don't know that.

      We know about this:
            http://www.engadget.com/2006/02/18/playstation-3-c osts-900-sez-merrill-lynch-mob/ [engadget.com]

      But that assumes price points that simply don't hold up under any kind of scrutiny. Most of it appears to be uneducated guesswork. My guess is the PS3 breaks even for Sony and allows the retailed to make some profit.

      Companies like the "we are selling cheaper than it cost to make" stories because it makes some people feel like they got a real bargain. At $600 the PS3 is no bargain. They're still about $100 too high for the thing, at least compared to the competition.

  • What do you expect them to say? (Score:5, Insightful)

    by Chris Burke ( 6130 ) on Wednesday January 24, 2007 @03:36PM (#17742704) Homepage
    Based on recent behavior you may think that Sony isn't the brightest company in the world, but they certainly know enough to not divulge even a rumor of a price drop until said price drop is imminent. Nobody pre-announces price drops, because the first-order effect of doing so is to reduce your current sales. With PS3s sitting on the shelves, do you think they want to bring sales to a complete halt while people wait for the price break? There are probably enough people doing that already on the assumption that a price drop will occur; that would be everyone if they knew the price was going to drop at a specific point in time.

    Now companies do pre-announce price drops near to the actual change, in order to get people who might also be interested in the competitor to wait for their product, but in a narrow enough time window to not significantly harm their own sales at the previous price.

    So basically all this means is that Sony is definitely not dropping the price this month. In three months, if they truly aren't selling and Xbox continues to build its lead, then you'll maybe see something.
    • You're assuming that PS3s are currently selling. Everytime I go to BB and EB they have tons of ps3s sitting under the demo machine. Of couse no one is buying them or playing the demos for that matter. People are either playing guitar hero on the ps2, the wii (if they have a demo), or whatever titles the xbox360 is demoing. I just noticed today that if you buy and xbox360 now you can get a free game. So in effect their largest competitor just dropped it's price.
      • You're assuming that PS3s are currently selling. Everytime I go to BB and EB they have tons of ps3s sitting under the demo machine.

        Oh, I'm not assuming that, as my experience is the same. Well, I know for a fact that BB sold at least one PS3 because one day they had 12 and the next they had 11... Anyway, based on sales that seem to have dropped off sharply after Christmas, Sony could already have a price drop in the works. They just aren't going to tell us until it's weeks away.

        People are either playing

  • Cheaper production costs (Score:4, Insightful)

    by archen ( 447353 ) on Wednesday January 24, 2007 @03:38PM (#17742724)
    I brought this up one time in a forum and most people just blew me off, but I still believe it to be true. Some people say they will not get a PS3. Others have a wait and see approach. And others will "wait for the price to drop" (a lot). It's only a sliver which actually bought them.

    So what's the problem here? With everyone WAITING for the ps3 to drop in price, no one is purchasing them so economies of scale will actually ramp up. Sony is probably already loath to produce units for much longer since they're already sitting on the shelves just about everywhere. Unless that killer game comes out pretty soon, the price hit for the ps3 may last longer than Sony anticipated - which would probably make the ps3 even more of a financial liability.
    • Certainly a price drop would help, but a lot of what people are waiting for are good games to come out for the system. There is certainly lots of potential with the system, with it being the home of mega-hits such as Metal Gear Solid, Final Fantasy, Gran Turismo, and so forth. However, with more exclusives getting away from Sony (such as Virtua Fighter and Grand Theft Auto), the more likely your average hardcore gamer is just going to wait until a price drop and/or the much-anticipated PS3 games to actually

  • Of course he's going to say that but... (Score:3, Insightful)

    by CPE1704TKS ( 995414 ) on Wednesday January 24, 2007 @03:40PM (#17742764)
    He doesn't want to piss off the early adopters or cause people to wait for the price drop, so obviously he's going to say "No way is there going to be a price drop." However, the reality is that the PS3 are not moving. Yes, they don't want to lose even more money on the consoles, but losing $400 as opposed to not only losing $600 but losing mindshare and losing the support of video game manufacturers that won't develop games if not enough people buy the PS3.

    Reality dictates that unless there's a miraculous sudden spike of PS3 sales they will be *forced* to drop the prices.

  • Duh, what do you expect? (Score:4, Insightful)

    by oGMo ( 379 ) on Wednesday January 24, 2007 @03:43PM (#17742780)

    Seriously, what did you expect? Look back before the PS2 price drop: mere days before, there officially wasn't going to be one. Then it happened.

    Anyone would be shooting themselves in the foot to announce a price drop, especially for a product like this, anytime early. What are you expecting? "Yeah, a year from now, it's going to be $299. Why don't you all just hold off buying one til then?" This would kill their market. Idiotic self-deluding fanboy fantasies to the contrary, this isn't going to happen; but that doesn't mean they won't drop the price a year or two from now.

    Right now they're sticking to the "this is worth a lot, you're getting a lot when you buy it" mantra, which, mathematically speaking, still holds true.

    • Re: (Score:2)

      by Pojut ( 1027544 )
      It is a lot for your money if you care about Blu-Ray or putting linux on something 5 times more powerful than what is needed to run it...otherwise, it's an overpriced ps2 with 360 graphics.
      • Considering how well the PS2 did in the previous generation, there are lots of people that enjoyed the games they got on it and have fond memories of the PS2. Not everyone has jumped onto the next-gen bandwagon and gotten a 360. The majority of the people out there will buy one system for the generation and call it quits.

        "... it's an overpriced ps2 with 360 graphics."


        So in light of what I said ... is this necessarily a bad thing?

        • Re: (Score:2)

          by Pojut ( 1027544 )
          From a gameplay/memories standpoint? Not at all. My entertainment has no price limit. I have a vast amount of very fond memories playing videogames.

          From a monetary standpoint? Yes, it is a bad thing.

    • Re: (Score:3, Insightful)

      by LehiNephi ( 695428 )
      Right now they're sticking to the "this is worth a lot, you're getting a lot when you buy it" mantra, which, mathematically speaking, still holds true.

      The problem is that it doesn't matter if "gamers are getting a lot of machine for their money". Gamers are buying a console for the games and the graphics. What's under the hood is of secondary, if any, importance. The user experience trumps it every time. A console may have amazing hardware inside, but if the games aren't there, or if the price is too

      • Re: (Score:2)

        by oGMo ( 379 )

        Gamers are buying a console for the games and the graphics. What's under the hood is of secondary, if any, importance. The user experience trumps it every time.

        Gamers buy consoles for games. Graphics are secondary; however it's a mistake to think that "what's under the hood" necessarily relates to graphics, especially in the case of the PS3. There are two main things you hear about when you talk about what's under the hood of the PS3: Blu-Ray, and the Cell. Neither of these are directly related to gr

        • Just think: with the Wii, once you get past swinging the controller around, what about the game has really changed?

          The immersion. Immensely.

        • Neither of these are directly related to graphics; both are more about the ability to have a deeper game world, whether it's larger levels, more game objects to interact with, or more accurate physics...

          No, it's just graphics. If you put graphical considerations aside, you could run an "as broad as conceivable" game on an old Dreamcast. The breadth of the world is determined by the developer -- how much work do they spend on the broad expanse, and how much on the fine detail--i.e., the graphics.

          • Re: (Score:2)

            by oGMo ( 379 )

            If you put graphical considerations aside, you could run an "as broad as conceivable" game on an old Dreamcast.

            If you think this, it shows how little you know about development, or games in general. Consider platformers: game object count and interaction level alone could stand vast improvement. If you see an object, you should be able to pick it up, smack it around, stand on it, or otherwise interact with it. Last-gen platformers didn't begin to scratch the surface here. Lots of "invisible walls,"

  • With the high price tag and the lack of games, not too many people are going to be burned by buying now.

  • I see exactly one reason for a price drop (Score:3, Interesting)

    by Megane ( 129182 ) on Wednesday January 24, 2007 @04:16PM (#17743384)

    ...within the next year or so, and it's that damn blue laser. If the supplies get much more plentiful and the price on those go down, then the price on the PS3 can go down, too.

    A re-design to remove the PS2 chipset would also result in a price drop, but that's probably not going to happen for at least a year.

    So how long did it take Sega to lower the Saturn from its initial price? If Sony takes longer than that, I think they're screwed.

  • Given that scenario, one would really hope that Sony has some kind of ace-in-the-hole for keeping our collective attention (and purchasing enthusiasm) squarely focused on the PS3.
    Don't they need to GET our attention and purchasing enthusiasm [next-gen.biz] before they can keep it?
  • Does anyone remember the NeoGeo? It was a great system around the time of the Super Nintendo. It was 24 bit as opposed to the Nintendo and the Sega at 16 bits each.. It did have a couple good games, but it was a complete flop. Why? It cost 600 bucks, and no one I know ever had one. It had a lot of power under the hood, but the price point was way too high. And now Sony is at the same price point. I have always loved my playstations, but 600 bucks is to steep just to play games, even if it does have o

    • Re: (Score:3, Informative)

      by amrust ( 686727 )
      Actually, $600 back when the Neo-Geo debuted (1990? 1991?) would be comparable to around $900 in today's dollars. So when you think about it, the PS3 is almost 33% cheaper than the Neo-Geo was, at launch. Or something like that.

      I didn't buy a Neo-Geo.

      I haven't bought a PS3...yet.

      /full disclosure
    • "It did have a couple good games, but it was a complete flop. Why? It cost 600 bucks, and no one I know ever had one. It had a lot of power under the hood, but the price point was way too high. And now Sony is at the same price point. "

      a.) $600 when the NG was out was actually a lot more money than it is today.

      b.) The games were >$140 apiece.

      c.) The Neo Geo was aimed at a niche market. The hardware, games, and prices reflected that.

      I'm not saying Sony won't fail or anything like that, I'm just pointing

    • It was 24 bit as opposed to the Nintendo and the Sega at 16 bits each.

      Wrong. It was 16 bit. It used an MC68000 processor (16 bit) and a Z-80 co-processor (8 bit). Just like the Genesis, only with a higher clock. What made it so powerful was the high-end graphics and sound chipsets.

      It did have a couple good games, but it was a complete flop. Why? It cost 600 bucks

      Worse, a new game could cost $300. Yet I wouldn't call the Neo Geo a flop. It was not popular as a home console, but is possibly the most succe

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