Many rumors have been flying around the Internet lately anticipating a price drop for the PS3. One would think this couldn’t be farther from the truth with slumping sales and the PS3’s inability to match the monthly sales of its competition. Even with all this we are left with the price drop for the system being pretty much confirmed, instead of definitely confirmed.
“I think that the public would like the cost to be lower, there’s no question about that.”
And how much lower?
“That’s what we’re studying at the moment; that’s what we’re trying to refine.”
And we’ll know when?
“And the answer is, of course it will get to Christmas”
Why is Sony so reluctant to drop the price for the PS3? From the surface it looks like a clear cut decision, drop the price $200 dollars so that it’s more appealing to gamer’s wallets. Like any decision in business it’s a strategy and with every strategy there are its pluses and minuses. We pretty much have covered the plus side of the strategy of lowering dropping the cost of the PS3, so let’s cover the minuses.
One of the things Sony has to evaluate is how much of a lost can Sony they take from sales of the PS3, a tuff question to answer when Sony is already losing hundreds of dollars from the sale of every PS3. Many analyst would look at this and say not too much as Sony recently laid-off somewhere between 80 and 100 workers at Sony Computer Entertainment America. Let’s not forget about the changes in execs to please the shareholders, so long Mr. Kutaragi. On the same note let’s not forget BLU-RAY players got a price drop, so that’s bound to help offset the cost of a price drop but even so it may not offset the cost enough. The news from this standpoint doesn’t seem to get any better with the Xbox 360 picking up enough steam to out sale the PS2 for the first time last month.
Looking a little bit deeper into the minuses of a price drop for the PS3 we see Sony’s competition, Microsoft and Nintendo. One of the reasons a price is seen as a favorable factor for helping increase sales for consoles over having games is because Nintendo also has a lack of games but is selling well at a much lower price. Not to still thunder for the Wii’s success but its innovated controller design can only help but generate enough excitement to help move consoles. What about Microsoft where do they fit in this whole puzzle?
Microsoft is Sony’s direct competition with both systems boasting enough GHz to render even the most complex graphics available to date, with many giving the edge or the clear win to the PS3. The only problem with this is that to-date Sony has not mustard a clear graphic win over the Xbox 360 or shown its edge yet, so both systems look to be on equal ground at the moment with the Xbox 360 showing the edge, Gears of War. One thing we can count on for sure is that if Sony lowers the price for the PS3 it will spark a price war with the Xbox 360. Let’s not forget a $100 dollar price drop would put the Xbox 360 within $49 dollars of the Wii, this would only help Microsoft sale more consoles only increasing the margin between Sony and Microsoft install base. This is definitely something that could hurt Sony driving more of its exclusives to go multiplatform or to just hop ship all together in favor of the larger Xbox 360 install base.
When it comes down to dropping the price of the PS3 it is clear to see how this may not be the best move for Sony and why they are so reluctant on confirming one but do they really have a choice with fans clearly cheering for a price drop. In the end Sony’s best bet might be to live up to all the hype they drummed up about the PS3’s killer graphics thus turn attention away from its steep price.
