| Squilliam said: Remember people, if they are taking say a $70 margin on a console if they cut the price they'd only make a $20 margin and the increase in console sales will not offset the loss in margins on the hardware. Furthermore the cheaper the price the less each gamer who was unwilling to buy at a higher price is likely to be buying full priced $60 games and instead they may be more reliant on classic hits and used titles. When was the last time a console maker posted a much greater profit when they cut the price of their console? As for a $199 PS3? Sheesh do people really want Sony to never post a profit, even if they 'plan' for 10 years these are the years where they are supposed to be making a profit in order to fund the very expensive development of a next generation PS3. |
They don't want to realistically discuss Playstation profits and losses. Many are so confused by the subject that they took the statements about the PS3 no longer selling at a loss as the PS3 being a profitable endeavor for Sony. As you stated, a loss leader can only maintain that status for the first few years of release before it turns into just a loss. It needs to make a profit on the backend of its life or the division will be in trouble. If they were to drop the price of the PS3 to $199 now, how many more years would it be before it'd start making a profit again?
And while manufacturing can be streamlined and component parts get cheaper, there is a LIMIT to how low they are going to drop during the lifetime of the console. There is a reason why PS2 price drops kept getting smaller and smaller as the system aged ($299-199, $199-$179, $179-149, etc). PS3 sales aren't slow enough to make such a desperate move as they were in early 2007 or 2009.
