| shams said: This has probably been banded around for a while, but I was thinking about this today and wanted to share my thoughts... ... Sony's big mistake with the PS3 was launching it at too CHEAP a price point! a) The current situation: Sony are stuck in a difficult position The PS3 is losing money, and sales aren't great. They have already put in a price cut - which would stop them from being able to price cut again soon. They lose money on each unit. The more units they sell, the more they lose. The cheaper the units are - the more they lose per unit AND the more units they sell. So overall, they lose even more (extra cost / unit x number of units sold).
b) What Sony should have done: Launch the PS3 at $999 US (maybe with 1 game + 1/2 controllers + HDMI cable?) Sony would have made a good amount of money per unit. Every unit sold MAKES them money - rather than losing it. Initial sales would have still been strong. PS fans would easily still spend $1kUS on a PS3. It doesn't matter that sales would be lower - Sony is making lots of cash, and they can ramp up production slowly as needed. Gives an impression to consumers that the PS3 is really something special - and that owning one is something special. At the current price point, it feels like a 360 - with a BluRay drive (regardless if this is almost what it is). This also gives Sony LOTS of room to move on the price point. They can drop the price at will - and regularly. And rather than finding themselves in a position where their LOSS increases each time they drop the price - they can keep their profit margin, gather lots of positive press (each time the price was dropped) and boost sales each time. This also falls more into line with their strategy of a "10 year" timeframe - and their "quality console" push. ... The main danger I can see, is few other companies would support the PS3 software-wise at this price. Sony would have to initially drive software themselves (not a bad thing - with some quality titles), but it would also give companies a couple of years to develop a "quality" PS3 title.
If Sony had taken option#2 - they would be further behind in terms of WW sales - but they would be racking up a significant profit (say 2m sold --> 500m profit, rather than 600-700m loss). ... Thoughts? Should Sony have considered this approach, rather than undercutting themselves as they have? (Consider they still have the PS2 selling well - as a low cost alternative to the PS3)
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Well my thought: HAHAHAAHAHAHAHAAAAAAAAAHAHAHHHHHAHAHAHAHAHAHAHAHAhahahahaah
hahaha
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hhe... 
That was a laugh!
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