Sony is just saying this so they wont scare of any buyers who want to pick up a ps3 soon.
If rumors about a PS3 pricecut is looming many people will wait till the pricecut, Sony obviously doesnt want this.
The price cut can come as soon as 6/10 months from now.
Yea throwing in the towel isn't necessarily the right proverb. Um more like shutting off the free ride or something like that. I don't know there may be no proverb for this.
Otherwise very good analysis.
| shams said: I'm saying they have given up on being "#1" - although I should have stated this more clearly. They are clearly happy with their current position, and they simply can't be too aggressive for the next 12 months. BluRay will help them as well. PS - another note: their market share WILL continue to rise, as they have the lowest install base and are selling on parity with the 360 at the moment. This will also make them happy. Unless Wii sales REALLY explode. |
Throwing in the towel ---> conceding they cannot win (in the short term). Hence their focus on the long term market.
...
MS will hold off their US price cut as long as possible. The US is their MAIN market, and where most of their revenue comes from. They aren't about to hurt this, until they have a new (cheaper) model or reason to go aggressive. Remember that the 360 has been out for a year longer than the other consoles.
They can't do another cut in Europe - that cut was needed, to stay in the game. But I do expect a cut in the US for Xmas, and I don't think Sony will follow (although you are right - their hand might be forced).
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I agree with the OP. They concede that they won't be #1, at least not for six or seven more years when the PS3 is still on the market and MS and Nintendo are moving on. They are taking a heavily defensive stance just to stay even with MS.
Cutting the price right now is financial suicide, they won't do that for a long time despite what crazzyman and other Sony fans say (There is no way in hell it's going to be 299 this christmas). They can't rely on the PS2 to pick up the slack anymore financially, it's chugging along but on it's way out.
Saying they are "happy" with the way it's going now may be true, but only in an optimistic sense. They aren't getting their ass kicked by the GBA any more. They are still bleeding money, and aren't in the dominant position that they would want, but at least they aren't a laughing stock anymore.
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Plus the weak US dollar might be another reason for Microsoft (or especially Sony) to not cut the price in the US.
throwing in the towel is what ms did with the original xbox when they slit its throat after 3-4 years on the market (dependant on region). Though not all blame can fall on them for that with the issues with nvidia.
Another such example of throwing in the towel was atari with the 5200, but that was mainly the fault of the crash.
| shams said: The financial results & follow-up statements all but confirmed this. Where Ninty are making bucket-loads of cash, and even MS have had two profitable qrts in a row - Sony have now lost a total of $3.6bn on their gaming division over the last two years. It simply had to stop - and it will. There will be NO more price cuts on the PS3 - for a good 12 months at least. Every PS3 they are selling is losing them a significant amount of money, and its no longer being offset by PS2/PSP sales (PS2 sales are significantly down, and will continue to drop). I personally think their PSP forecasts are excessive, but that is another discussion. The focus now shifts to bringing down PS3 manufacturing costs as soon as possible, while not artificially selling more PS3's than they should. A price cut would do the following: PS3 loss = $loss per console x #number sold ...after a price cut of $100... PS3 loss = ($loss per console + $100) x (#number sold * 1.5) ... Sony's aim with the PS3 (which they have stated will have a 10yr + lifetime - they ARE banking on this, quite literally) is basically to make it profitable - at the expense of additional market share. A year ago, the PS3 was on tenuous ground - and the price cut & stripped down model definitely helped them gain ground against the 360. They needed to do this, as they were at a real risk of losing the BluRay battle and the HD console battle in general. They would be pretty happy with their current market position (again compared to last year), but also that this is the wrong time to be making aggressive price moves to win more market share. The next move is MS's to make, and as long as they are turning a profit - MS is in no big rush to make this move. Profitability was always going to be critical for them as well, with pressure from the rest of MS (get profitable, or get out!). ... The other angle is software - this is the only way way that Sony can "win" this generation. And producing top-notch PS3 software is a very expensive, and time consuming thing to do. This next 12 months on the market is now a consolidation point for them - work on software, almost double their install base, bring the PS3 back to price parity - and maybe even work on the first "PS3 slimline" models. After this period, we may see a more aggressive Sony/PS3 again - pushing for more market share with a cheaper model, and some compelling software. But in the meantime... the towel has been thrown in. |
Edit:
"Throwing in the towel ---> conceding they cannot win (in the short term). Hence their focus on the long term market."
Wow, that's an interesting definition of it, they are not conceding, as I said, their console is selling well, as you yourself have said, they are gaining market share, so why do a price cut? To get a small boost? To stay in the hole?
They are not throwing in the towel, they are doing what is smart, they are saving a pricecut for two reasons:
1. When they can afford it
2. When PS3 sales start to fall
There's no point in a premature pricecut.
Edit Edit:
You do realize it is highly unlikely that the posted profit for MS is due to the 360, as you should know it contains alot of other MS products other than Xbox.
| skip said: throwing in the towel is what ms did with the original xbox when they slit its throat after 3-4 years on the market (dependant on region). Though not all blame can fall on them for that with the issues with nvidia. Another such example of throwing in the towel was atari with the 5200, but that was mainly the fault of the crash. |
I think MS did with the XBOX what they needed to.
They wanted to migrate all their customers to the 360 ASAP, I think it generally worked. They also wanted to migrate their developers and dev resources to the 360 - it was all part of the strategy of launching a year early in the market.
It did cost them money (they could have milked a lot more from the XBOX), but it helped them out in the long term. They won't be killing off the 360 as quickly as they did the XBOX, that is for sure.
It wasn't really a throwing in of the towel either, as it was more of a strategic decision - the PS2 has already won the market years before that. The XBOX (and GC) were never in the race.
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Sony is finally acting smart. Since even before they introduced the ps3, they were so full of themselves thinking there was no way people woulnt buy a machine with a playstation brand, but thankfully theywill realized by the next generation that they should not take us the customers for granted. The ps3 is too expensive for a console. they made some major mistakes which i believe killed the ps3 chances of ever being # 1.
Is the ps3 dead? far from it, but it could have been a true winner.
Next Gen
| 11/20/09 04:25 | makingmusic476 | Warning | Other (Your avatar is borderline NSFW. Please keep it for as long as possible.) |
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