I think that a PS3 Pricedrop by the end of this year beggining of next year would be wise. We all know PS3 has the hardware but they'll be getting alot of good software this Fall.

Heavenly Sword

Lair(This summer)

Warhawk

GTA uhm 4 or 5 never payed much attention

MGS 4

Tekken 6(Fall2007 or Spring 2008)

Not all are exclusives I know but with a lineup of usually solid sellers and new exclusives that will hopefully live up to if not exceed expectations is not a pricedrop feasible??

I don't know the correct number of PS3:s manufactured, but i would estimate, that 50% of them are sold. So, if the "expensive" (meaning that rumored 800 to manufacture) PS3:s are on the store shelves, they can't drop the price before those have been sold, it would mean big losses to stores selling the PS3 and they wouldn't like it, unless Sony would compensate it somehow. And since PS3 isn't selling good, it takes time to empty the shelves.

The $800+ manufacturers price was true at launch. Costs come down over the lifespan of a console. The 360 was losing over $100 when it launched, but was close to making a profit a year later (the Core made profit, the Premium almost). We already know that Sony made hardware modifications to lower cost for the EU launch. I see no reason to believe that the cost of the PS3 isn't now closer to $700.

If that is the case Sony can still cut $100 and not lose any more than they were at launch. This is likely the minimum level of a price cut, to bring the PS3 in line with their cheapest BR player. The success of BR forced radical price cuts for HDDVD, which forced them in the BR players; this was likely not part of Sony's plan, and so, ironically, the success of BR may be indirectly hurting the PS3 by forcing them to cut prices before they intended (there was a quote from a Sony rep early in the year saying that they weren't cutting prices this year).

Even if a price cut causes them to lose $200 or more per console (again), I have to think it is a far more viable option than letting the PS3 and the "Home Entertainment Center" strategy go down the pipes. There's little question that Sony is underperforming now, and most agree that the competition will cut prices this fall. For Sony to hold off would essentially let Microsoft and Nintendo bury them this holiday season, and pretty well knock them out of any legitimate contention this generation.

bdbdbd said: I don't know the correct number of PS3:s manufactured, but i would estimate, that 50% of them are sold. So, if the "expensive" (meaning that rumored 800 to manufacture) PS3:s are on the store shelves, they can't drop the price before those have been sold, it would mean big losses to stores selling the PS3 and they wouldn't like it, unless Sony would compensate it somehow. And since PS3 isn't selling good, it takes time to empty the shelves.

Precisely, they will undercut every retailer who has already has a big pile in their stores. And by all accounts, there has been a lot of channel stuffing going on. 

In addition, some of these cost reductions come from economy of scale. You can't continue to pump a million a month out if only 200k are selling. If you only produce 200k per month, then you won't get the volume discounts that you would at a million per month.

Relias said: I think that a PS3 Pricedrop by the end of this year beggining of next year would be wise. We all know PS3 has the hardware but they'll be getting alot of good software this Fall. Heavenly Sword Lair(This summer) Warhawk GTA uhm 4 or 5 never payed much attention MGS 4 Tekken 6(Fall2007 or Spring 2008) Not all are exclusives I know but with a lineup of usually solid sellers and new exclusives that will hopefully live up to if not exceed expectations is not a pricedrop feasible??

Heavenly Sword, Lair and Warhawk are unproven titles that are unlikely to get the blood running of most casual gamers (which was the bulk of Sony's market the past 2 generations). Historically speaking, most new titles do not ever meet their marketing hype, and even those that are all that may fail to sell well (see Eternal Darkness, Beyond Good and Evil). I don't discount the possibility that one of these titles may be the next GTA3 or DMC, but it's a bad idea to pin you hopes to them.

 MGS4 is slated for next March, well beyond the holiday window, and is therefore unlikely to help move a single console this year. And, true of not, pretty much everybody but the most die hard fanboys believe it will be coming to the 360 as well. If that's announced before Xmas 2008, then it's impact on PS3 sales may be minimal.

 Tekken 6 is slated "sometime in 2008" for US release. It may help EU sales this holiday, but fighter's are a very niche market. It's definately going to need another title or two to help.

 As for GTA4, based on the last gen we have to assume it's the 800lb gorilla. GTA3 made the PS2 the hot item in 2001/2002. It was one of the few proven console sellers,and can be again. The question is which console? Will past GTA fans remain loyal to the PS3, or will they jump to the $200 cheaper system that will also offer exclusive, downloadable content? Logically I know which they SHOULD chose, but never underestimate brand loyalty, the inability to do proper research, or the capacity of GameStop employees to misinform customers. But if gamers go for the 360 version, GTA4 may well bury the PS3 rather than save it.

the best thing sony should do is come out with an official statement. i think that there is a lot of confusion among potential buyers, many of them waiting to see if the price gets cut. sony should announce a price cut if that'll happen in the near future (2,3 months) and everyone will be happy; or say something like 'no price cut this year' and the potential buyers won't have anything to wait for so they would buy the console.

imo this whole confusion about price cut/no price cut is hurting the sales badly.

The console does not cost $800 to make anymore.  Widespread use of the Cell processor has cut it's cost down, and the Blu-Ray player (as in the diode) is MUCH cheaper now, something along the lines of $200 before and $30 now.  Before you ask, Google it yourself, I don't feel like it.

Hmmm, why is everybody so sure, it cost 850$ to produce a PS3 (or did at startup?). All i can find in the internet are estimates that goes from 499-900$. How much is a ps3 in Japan? 399$? I think those may be sold at a loss of 200$. Sorry folks, nobody except sony knows how much this thing cost to produce exactly. But at Startup, they had a lot of Problems to produce these things (Wasn't that why it was delayed in Europe?). Thats maybe why it has such a high price tag in Europe/US?

And nobody knows how fast the production cost are falling, coused by falling production cost of the "blue ray player". It is most likley that thing will drop realy fast, because so much are produced right now. Hell, for all we know, its possible sony already got even for it (in the US and Europe). The hell, the first "Stand Alone Blue Ray Player" cost about $1000, and know we are at what? 400-500$?

--> http://news.digitaltrends.com/news/story/13168/sony_cuts_second-gen_blu-ray_player_prices

And somehow, Sony seems to win the "Format war", lot of news say, there more blue ray movies sold, then HD-DVDs (And thats the thing that counts). That truly wouldn't be the case without the PS3 (Blue Ray Player are more expensive that HD-DVD Players, and no much Blue Ray Standalone are sold).

The Heck, i think, right before X-Mass, the price of the PS3 will drop, about 100$ (100$) in one way ore another (Bundles).

But the Price not the only problem the PS3 is having. The games cost about 10-15 €/$ more than on other plattforms (And that consider customers too!). The WII is stealing "Casual" and "Hardcore"* gamers as buyers. And the XBOX360 is a harder competitor than the XBox was (despite the "Ring of Death").

Well, just my 2 cents


*Oh yeah is see it comming, the WII can not compete with the PS3 Graphicwise, and thats a "big deal" for Hardcore Gamers. Well, might be true, but Hardcore gamers have a gaming pc. They also bought a ps2 for the "casual normal consol games" but a lot of this people will get a WII this generation. Why? Coused by Price, Controls. And I don't think they are willing to Pay 600$ more just to have better graphics on a Sports game. A lot of people here seem to forget that much people have a PC. And that things beats the PS3 and the XBox graphicswise. These guys don't buy console just because it has the better graphics, only because some games are ment to be played on consoles, not PC. All i seen so far on PS3/XBox360 is maybe a little better than HL2 (Graphicwise) an the hell, that game is 2 years old, and runs on my 2 year old system in HD (1600X1200) without any problem.

FishyJoe said: bdbdbd said: I don't know the correct number of PS3:s manufactured, but i would estimate, that 50% of them are sold. So, if the "expensive" (meaning that rumored 800 to manufacture) PS3:s are on the store shelves, they can't drop the price before those have been sold, it would mean big losses to stores selling the PS3 and they wouldn't like it, unless Sony would compensate it somehow. And since PS3 isn't selling good, it takes time to empty the shelves. Precisely, they will undercut every retailer who has already has a big pile in their stores. And by all accounts, there has been a lot of channel stuffing going on.  In addition, some of these cost reductions come from economy of scale. You can't continue to pump a million a month out if only 200k are selling. If you only produce 200k per month, then you won't get the volume discounts that you would at a million per month.

And Sony can't blackmail retailers anymore with anything, like they did with the PSP. In worst case scenario Sony loses a lot of retailers, which is a big part in possible success. For example, in Finland PSP is doing pretty good, when compared to average, because you can find it basically anywhere. Every electronics store sells PSP and you can find it even from those stores, which sell cheap shit in a cheap price (couldn't recall what you call them). But DS, is more harder to find. All supermarkets and electronics stores don't sell them, and as far as i know, DS and PSP are pretty even in Finland (still you can see more people with DS:s).

libellule said: well, 1/Sony dont care if classic BlueRay player don't sell a lot since, I presume, most of the BlueRay player are not made by sony. Sony just want to increase PS3 sales which is their most important blueray player. 2/ Console have cost maybe 800$ but now I m pretty sure she costs less than 700$. Of course this doesn't mean that a price cut is easy to do since 700$ still> 600$

The manufacturing cost was a little over 900 dollars when the PS3 was first released. Prices DO drop, but I doubt they're rolling them off for 700 a unit at the moment.