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nordlead said:
Munkeh111 said:
nordlead said:
this is beyond PR, it is real life. Everyone claims they need a price cut, but they are just on the edge of profitability. Taking a price cut would pretty much guarantee another year in the red.

Well it depends on whether the price cut comes in the form of a slim which will cut costs. With the PS3 at this price they will make money won't they? Due to stronger software sales

well, currently there is no PS3 slim, so that doesn't add to this equation. People want a price cut on the current model. If they can cut costs and pass 100% of the savings on to the user, then obviously it wouldn't cause them to go in the red.

As for making money on software, if we assume Sony makes $10/game and they take a $100 price cut, they need each user to buy ~10 games. Of course they have online content too, but so far the average is closer to 8 games per person. Also, take into account all those people who were willing to pay $400 and buy 8-10 games, and you are making less money overall. While they may make the money back in the long run, is it really worth sending yourself in the red for this year? Sony needs to prove to investors that they can make money, and I really think they are going to do that this year by not cutting the price unless they reduce costs on their end first and they can continue to forcast a profit.

I agree that there is no potential for a $100 long term price cut without the slim to cut costs. You also have to remember that most people, out of those 8 games, will likely have 2 first party games, giving closer to $30, which means those 8 games will make up the $100, but still, I think the assumption is that they lose at least $40 currently, so a $100 cut would cost them loads.

I can see the current models being sold for $300, but only as a temporary measure to clear stock for the slim, which will either be $300 or $350