http://www.reuters.com/article/reutersEdge/idUST34278820070702

Sega: Sony likely needs substantial PS3 price cut

TOKYO (Reuters) - An executive of Sega Sammy Holdings' (6460.T: Quote, Profile, Research) game unit said Sony Corp. (6758.T: Quote, Profile, Research) will likely need to substantially cut the prices of its game console PlayStation 3 by the end of the year to stir up slow demand.

Nintendo Co. Ltd.'s (7974.OS: Quote, Profile, Research) Wii outsold the PS3 by a ratio of over six to one in June in Japan, according to game magazine publisher Enterbrain, solidifying its leading position.

"Name brand, price and software are what count," Sega Corp. corporate director Masanao Maeda told Reuters in an interview on Monday.

"Since it's getting difficult to make software availability a differentiating factor, superior marketing and pricing strategy will be the key for Sony."

Sega Corp. is the game unit of Sega Sammy.

Sony, which has dominated the $30 billion global game industry over the past decade with its PlayStation and PlayStation 2, saw a slow start for the PS3 due mainly to its high prices and lack of attractive software titles.

Its basic model with a 20-gigabyte hard disk drives sells for 49,980 yen ($406) in Japan, twice the price of the Wii.

($1=123.07 Yen)

The question should be who doesn't yet know the PS3 needs a price cut? I think even Sony knows, but can't admit it yet, for PR reasons.

Maybe they just want to wait untik after a good quarter, so the shareholders won't be quite as upset over what will likely result in a short-term loss of revenue.

Eh the PS3 has already dropped far with the price in Japan in stores, and still isn't selling. So the price tag isn't the real issue, the type of games and probably the machine it self makes it being a complete turn off.

The Japanese seem to be more price-sensitive; 400 USD may be just at or beyond the upper limit. I'd say it's one-third pricing, two-thirds lack of RPGs - Elder Scrolls isn't exactly the type of RPG popular in Japan, and FolkSoul was just released. As odd as it sounds, if you're a Japanese RPG enthusiast the 360 is a better console at the moment. 

Third Party pressure will aid in a PS3 price cut. Although as many have stated before. It will look bad on Sony if they cut prices too quickly.

They firstly need to get a decent selection of games out for the system and hope that they start selling the system better than at present.

Then they will come in with a price cut. IMHO, they need to do the cut this year and it needs to be a decent cut in order to make a difference.

Others reckon that the price cut won't happen until well into next year.

They could quite easily have a great Xmas this year if they manage to get a good selection of games out b4 Xmas and cut the price significantly.

Or maybe the Japanese simply don't care very much about the console. Honestly, the PS3 is out of spare lives in Japan: it's lowered its price (Which was already lower than the US price), Japan has a solid HDTV adoption rate (Japan has the highest in the world), it's had major Japan-centric title released (Gundam Musou and now Folk Soul), and it faces much weaker competition from the 360 in Japan than it does in the US/Europe (where both the 360 AND the Wii are beating it), and yet the system just can't gain any traction.

At some point you have to stop looking for excuses and simply say that the system isn't doing well in Japan. The launch gate has closed, all of the maneuvering has been tried, but the PS3 just keeps falling farther and farther behind. 

You can't just disregard the price of the system as being it's problem....of course it's a huge problem of the PS3.

The PS3 although cheap in Japan at around $400 is still double the cost of the Wii which is around $200.

The price isn't an excuse...it's primarily the reason IMHO.  And this is why Nintendo are running away with all the gold.  The PS3 isn't just expensive...it's ridiculously expensive in all 3 markets.  Although if a PS3 was priced around $400 in the UK...they WOULD be sold out, seeing as that makes in come in at not much over £200...it is currently double this in the UK. 

The problem is at $400, the PS3 is probably already being sold at a big loss. I just don't think they can tolerate another multi-billion loss. Sony stock is already starting to waver. If goes back into the 40s, no way are they going to eat big losses.

I don't think it's price in Japan anymore.  I think at this point the Japanese have been shown to be apathetic towards the system under any circumstances.  They have:  HD TVs + $400 Price + Holiday (Golden Week) + Gundam Musou and the sales didn't budge an inch.  I think it's become basically dead weight at least until FFXIII, and that could be delayed till Xmas 08 in Japan and 09 for us.