| HappySqurriel said: I'm of the opinion that Sony probably will not cut the price again in 2008 because they will want to turn a profit (or at least minimize losses) on their hardware before they reduce their price agan; but Pachter's prediction isn't impossible. Sony could be in a very tough position next year and I'm not too sure I would discount the possibility of them doing something desperate. |
Of course they want to turn a profit. But what's literally more important than turning a profit is providing a credible plan for turning a profit. Sony recently told investors that FY09 will be profitable for the PS3 (after their huge losses recently posted). They can project profitability and secretly plan for a price cut and know they can't price cut.
There are two issues here.
1) the long term strategy for the company
2) The short-term demands of Sony's (growingly) western investors.
Companies will routinely use excuses to explain their failure to maintain profitability -- 'aggressive competition required price cuts' and 'sales were lower than anticipated', even if they expected those things. Surely Sony expected a price cut for a while.
Hell, MS blew the whistle on Sony's $399 model back in July!
So while Sony needs to maintain a semblence of appeasing the investors, they need to focus on their long term strategy. And their long term strategy requires, among other things, maintaining third party support and mindshare. Sony has been hemmoraging mindshare since the 360 was released, and even more since the PS3 was released. Another price cut could go a long way to mitigate that problem.
The third party problem is closer to irreversable for a given system. It becomes a negative feedback loop -- once the PS3 gets less support, there are fewer reasons to buy it and less reason to support it. A few huge releases can't fix this problem simply because *everyone* has huge releases these days and costs are simply too high for people to buy systems for games en masse ($60 games, $300+ systems, etc).
If sales continue their trend through the holidays and further drop after the holidays, I assure you that Sony will produce another price drop *somehow*, even if they have to lose hundreds of millions more.
