Would a PS3 price cut do it?

[Diomedes1976]

HappySqurriel said: kber81 said: They lost most of their critical production capabilities - are you for real? There is nothing wrong with the fact they buy displays from Samsung. Everyone buys from Samsung or LG-Philips. No need to provide own technology. It's cheaper. Do you think Eizo is going to fall because they are using Samsung panels? I could be wrong, but I think his point was that "Back in the day" Sony physically manufactured every component in their electronics whereas today they buy a large portion of their components from other companies. Now, in general, this should reduce the price of electronics but in the case of the PS3 it may mean that Sony does not have enough control over the price of their components ... I personally don't know if this is true or false with the PS3, but one of the reasons that Microsoft couldn't reduce the manufacturing costs of the XBox on the scale that Nintendo could with the Gamecube (or Sony with the PS2) was that they agreed to long term contracts with component manufacturers in order to reduce the initial cost of production.

In any case Sony has still more control over the manufacturing process than MS or Nintendo .As you can see MS wants the 65nm Xenon to be produced but it hasnt been capable of forcing the manufacturer to start doing the process and it is delayed (well not exactly but you get the idea ) .Sony can reduce costs faster than the other two . I think a price drop would help it enourmously .It doesnt matter if the others reduce the price at the same time .There is one price at wich the consumers will perceive the PS3 as good value/price due to the free online and BR player even if the rivals are cheaper .At that point the PS3 will sell in the big numbers .Here in Europe Xbox had a horrible start with that big price ,then it dropped two times and then the console sold quite well .Game Cube was also helped with a price cut .Still ,most of their lifes the PS2 was more expensive and still sold ten times more .IF the consumer perceives value the machine will sell indepedent of what the rivals do .