Convinced - $399 PS3 coming in October

[shams]

rocketpig said:

Darc Requiem said:
Its not gonna happen. If it does Sony is done this generation plain and simple. Shareholders have already pitched a fit about the loses on the PS3 thus far. Removing $30 to $40 worth of hardware and dropping the price $100 will cause a shareholder revolt. Not mention any dramatic price change they throw out their can be matched by both of their competitors. The key difference is that unlike Sony they will be making a smaller per unit profit instead of losing near $200 per unit. The only thing a $399 PS3 will do is push the 360 into a mass market price one holiday season earlier. Given the superiority of the 360 lineup they'd be doing MS favor by helping them push even more units.

Exactly. MS was able to hold off for nearly two years before dropping the 360 price. Given the loss they initially took on the unit, it was necessary to have that time to get costs under control to ever hope for profitability this generation.

If Sony drops the price to $400, they'll lose heaps of money for the entire generation. It forces their hand to drop the price to $300 next year, $250 the following, etc. etc. They will never be able to get their manufacturing costs under their price point until the PS3 is nearing end of life, ensuring a big loss for the Playstation brand over the next five years.

With that said, will they do it? I don't think so but they could be desperate enough to try which plays into MS's hands quite nicely. All MS has to do is agree to take one more hit in short-term profitability to guarantee Sony a third place finish this generation. They definitely have deep enough pockets to wage this kind of war and it will be interesting to see if they go for it.

A $200/279/349 price structure on the 360, combined with Halo 3, BioShock, and Mass Effect, might even rival Wii sales this holiday season.

In any case, it will be interesting to see how it plays out over the next two months.

This isn't that different from what happened last gen...

a) MS launched the XBOX - priced way over competition

b) Dropped price a little

c) Sony dropped PS2 price

d) XBOX sales plummetted after a few months due to uncompetitive price

e) MS dropped price of XBOX significantly until it was price competitive

f) Nintendo (with the GC having the lowest price point) screamed.

...

re: shareholders - Sony just sold off part of their company. WHY would they do this, unless they needed the money? This allows them to still post a profit (when including the sale) and have cash to burn in the meantime.

MS might tinker with the 360 price - but not by much. Another $50 price cut is all they would do - if anything at all.