So what your saying is releasing a console for a price where you could buy a wii, a 360 and a pc for the same cost is a good idea?

Thanks. I needed a laugh.

Sony isn't so concerned about making money right now as far as the gaming division is concerned. They're more concerned with piggy backing on the playstation name and getting Blueray to be the main HD format for DVD's and all the money they will make in royalties if it does.

I disagree, there are alot of Sony fans out there that wont drop 600$, let alone 1000$ (Including me!)

Japanese consumers have the cheapest price and still wont buy, so can you imagine if it launched with a price 66% higher than it did? Sony would probably repeat the 3DO failure of the 90's.

I see what the OP is getting at but think that all that tactic would acheive is trading some profit for marketshare. The PS3 as a product is the problem and no (feesible) price point can save it. For it to dominate Sony would have simply needed to put in a bog standard gaming CPU, a beefier GPU which would have been able to show the 360 up from day 1 and a basic motherboard (the one they actually used is the single biggest culprit for the big cost of PS3). Hell I think BR would have been a welcome addition if they had cut corners on the things I've mentioned as a competitive price would have been possible from launch.

Part of me thinks that having 2 SKUs was a mistake and another part makes me think that they didn't take it far enough ...

Unlike the switch from Memory Cartridge to CD or CD to DVD, the majority of games do not require more than 1 disc and only a handfull will require more than 2; this means that the higher capacity format does not bring much of a benefit to games. What this tells me is that Sony should have either gone with a DVD player in the PS3 or taken the 2 SKU model to the next level.

Had Sony released the 60GB PS3 at $600 along side a PS3 with 1GB internal flash memory (for saved games), DVD drive, using software emulation (and so on) for $300 the total sales of PS3 systems would be dramatically higher. Many people would say that the $600 system would sell poorly because the $300 system could do practically everything it could do at a far cheaper price, but I suspect that it would sell at the same rate it currently is an only look like it is selling poorly as compared to the $300 model's sales.

However that would have held off the manufacturing of the consoles, so there still wouldn't be a huge supply at launch (at least no more than a typical launch) and without an expected large user base, many publishers would put their PS3 games on the back burner to focus on the systems that were already out. I'm not sure it would have had much of an effect besides delay the debut and lower the release cost a little.

are you totaly mad? If people say damn 600 USD that is a lot...what do you think people will say with 1000 USD?

$999 is a ridiculous price.

But: What if they'd launched with a $700 bundle of 2 controllers and Resistance? They'd have lost less money, and gamers -- the only budget-conscious people who'd drop even $600 -- would know that a $600 console + controller + game = $700 anyway.

And: What if they'd still launched the 20GB version, no bundle, at $500? This would mean that the people who would have bought at $600 but not $700 still have an option, AND it might attract bargain hunters who think they're getting a $700 item for $500. We would have seen much better sales of this SKU, and maybe even more overall PS3 buyers.

I really think that this move might have helped Sony. Maybe not saved them much money, but I think they would be in at least a somewhat better position now.

There's a lot more to the strategy than short-term profit. In fact, short-term profit isn't even a goal of Microsoft or Sony when they release a console. The goal is to make money through the life-cycle of a console.

Sony's mistake was that the PS3 was too expensive to manufacture and the technology they were developing didn't pay off. I believe they underestimated two things:

(1) The progress technology would make before the PS3's release and

(2) How long it would take to release the PS3

Technology is beyond the Cell in every way right now -- video cards can do many times more more pure math than the Cell and general purpose processors are faster than the cell. The Cell is basically a PPC970 -- the same processor Apple abandoned last year to upgrade to Intel processors -- plus the SPUs which, combined, are much slower than ATi's recent GPUs at crunching floating point numbers. It's not perfectly analogous, but for games it is close enough and CPUs and GPUs should be looked at together when considering game performance.

Sony knew things would be costly at first if they released their console with a BD drive as well, but I think they underestimated how much other components would end up costing and how fast Microsoft would be able to make their console a year earlier. They're lucky MS didn't launch along side with them -- it's likely they would've switched to faster processors making the PS3 look downright old on release.

What gets me is that it must have been obvious at Sony that they weren't going to hit a 2005 release back in late 2004 or early 2005, and later they kept saying they were going to release in March '06 until March '06 arrived. Why insist on lying to the consumer like that when it will be obvious you were (games weren't even ready for the system in November '06).