Convinced - $399 PS3 coming in October

[shams]

I know there has already been a thread about this, but I thought this warranted another thread - as it covers another angle...

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I have been a pretty strong opponent to Sony and their strategies, and was pretty much convinced a $399 PS3 was impossible - in '07 at least.

But guess what - I have changed my mind. I'm now almost convinced that is it coming - and it is the October 12th announcement.

Reasons:

1/ Sony have just completed the IPO for the chunk of their company they are selling, and raised a heap of cash ($2bn US+?).

2/ HD-DVD has been making inroads recently (I know some people will debate this), at a time I think Sony was expecting them to already be dead. They *must* compete harder against HD-DVD.

3/ The PS3 has been taking a battering sale-wise in Japan (almost under 10k/week again), and now in the US (under 30k/week --> close to 100k/month). If they follow the current course, they will easily come third this Xmas, will easily miss their hardware fiscal forecasts - and face a serious risk of losing soo much momentum - that it may kill them completely this generation.

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As a result, Sony will do something disruptive - something unexpected, and sort-of illogical (in business terms anyway - "throwing away money"). I actually don't think they have much of a choice anymore. Not doing so risks losing everything.

They will release a $399US PS3 (maybe with a BluRay movie, maybe with game) - the except specs are sort of irrelevant. Hey, if they have *real* balls - they might even be more aggressive - $349?

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Now what is interesting is what the results of this price move will be. Here are some thoughts:

1/ The big loser will be MS. With their best Xmas lined up, and solid 360 sales - Sony in one swoop will take the focus again. MS may decide to stay course (not match/drop prices again) hoping that Halo, superior software lineup will win out. It may just do that. Otherwise, this may give MS reason to drop prices by another $50 (or $100? nah...) a week or two before Thansgiving - electrifying sales.

2/ Ninty is sort of immune - this Xmas anyway. The Wii software lineup, plus strong demand will almost certainly see hardware shortages - worldwide. So this won't really affect them. But it will cut into "market share", as rivals sell more units than expected. You have to worry though, if Ninty *is* worried about a "desperate Sony". Can the Wii really stand up to a price matched PS3?

3/ The biggest loser from this might ironically be... the PS2. Gamers looking a cheap non-Wii console (or Wii if the Wii is sold out) would be looking at a PS2 - but less so after these price cuts. So I wouldn't be surprised to see the $99 PS2 announced as well. This would really boost sales - but would potentially shorten the remaining lifespan of the console. It will also be interesting to see what this "new control peripherial" for the PS2 that Sony is talking about.

4/ This brings the "10-year" proposed lifespan of the PS3 into serious question. A price war between MS & Sony means less profits, means rapid price cuts - and can accelerate any moves towards the next-generation. I still expect you will see *some* form of next console launching in Xmas 2010 - probably from MS, but possibly from Sony. MS have shown that first-mover can have a real benefit.

5/ With this move comes risk. Sony can control the price of the PS3 - they cannot make quality software magically appear. Sony still has the weakest software lineup (by a long way), and run the risk of still being solidly beaten this Xmas. I still predict they will miss their fiscal targets by 1.5-2m - even with this price cut. Announcing some magic title (MGS4?) to be released WW this Xmas (and its possible!) could be just the tonic they need.

6/ I thought the $399 PS3 for 1st qrt '08 would have been awesome - and this takes the potential of that announcement away. So this had better work for Sony - as its their "real" trump card (for now). 

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Anyway - I know I had some more thoughts, but I have to run (to work). So this will do for starters. Please try and keep the thread flame-free everyone - healthy debate is always encouraged :)