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Forums - Sales - When will Sony drop PS3's Price?

CommunistHater on 23 February 2009
Non Sequor said:
dbot said:
The Yen is an issue when it comes to financial reporting because Sony needs to report financials in its "home currency", but it doesn't necessarily mean they are actually exchanging dollars/euros for yen and realizing a material loss.

I think it will be a $100 drop because the PS3 has a history of outselling the 360 when there is only $100 price difference, see 11/07 - 9/08 sales data. A $50 drop will improve sales, but the 360 will still outsell it.

 

They're paying their manufacturers in either Yen or Taiwan dollars and getting revenue in dollars. The difference on the reporting basis represents a very real disparity. It's unlikely that they will be able to just sit on the dollars and not convert them to yen.

For this year, they probably have most of the loss on exchange rates covered by currency options or other currency derivatives. For example they could buy a yen denominated put on dollars that would give them the option to exchange $x dollars for y yen when the option expires and that would allow them to effectively lock in a certain exchange rate for the year.


However, the price of an option is dependent on the current market exchange rate and the market's perception of the volatility of the exchange rate. Given current market conditions, if they bought options to guarantee them the old exchange rate, they would have to pay almost all of the difference between the current market rate and the old exchange rate.

Corporate Currency Trade is a little more complicated than that.

 



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Non Sequor on 23 February 2009
CommunistHater said:
Non Sequor said:
dbot said:
The Yen is an issue when it comes to financial reporting because Sony needs to report financials in its "home currency", but it doesn't necessarily mean they are actually exchanging dollars/euros for yen and realizing a material loss.

I think it will be a $100 drop because the PS3 has a history of outselling the 360 when there is only $100 price difference, see 11/07 - 9/08 sales data. A $50 drop will improve sales, but the 360 will still outsell it.

 

 

They're paying their manufacturers in either Yen or Taiwan dollars and getting revenue in dollars. The difference on the reporting basis represents a very real disparity. It's unlikely that they will be able to just sit on the dollars and not convert them to yen.

For this year, they probably have most of the loss on exchange rates covered by currency options or other currency derivatives. For example they could buy a yen denominated put on dollars that would give them the option to exchange $x dollars for y yen when the option expires and that would allow them to effectively lock in a certain exchange rate for the year.


However, the price of an option is dependent on the current market exchange rate and the market's perception of the volatility of the exchange rate. Given current market conditions, if they bought options to guarantee them the old exchange rate, they would have to pay almost all of the difference between the current market rate and the old exchange rate.

Corporate Currency Trade is a little more complicated than that.

 

I don't doubt that.

All's I knows is that the production is in Asia, sales are mostly in the US and Europe, and at some point some money has to move to where the costs are. That exchange rate is going to hit them at some point.



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Bullet100000 on 23 February 2009

Holidays sept. 2009



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*Al Bundy For President*

Waiting On GT7!!!

 PSN ID: Acidfacekiller

Tyrannical on 24 February 2009

Work more hours.



Yet, today, America's leaders are reenacting every folly that brought these great powers [Russia, Germany, and Japan] to ruin -- from arrogance and hubris, to assertions of global hegemony, to imperial overstretch, to trumpeting new 'crusades,' to handing out war guarantees to regions and countries where Americans have never fought before. We are piling up the kind of commitments that produced the greatest disasters of the twentieth century.
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Pristine20 on 24 February 2009
ZenfoldorVGI said:
NJ5 said:
Alterego-X said:

What everyone else said: before the holidays, $70


The price cut won't have major effect, because Microsoft can cut the prices again, and if PS3 outsells them, they will.

^ Pristine20 and I didn't :P

 

 

Yes, but I believe the two of you would say such things in order to convince the masses to buy the PS3 now, instead of waiting for the price cut.

If the probable price cut became common belief, it would kill momentum of the console moving into Killzone 2. You guys are not the only Sony fans pushing this "don't wait for a price cut, it's not coming" fiasco across the Internet.

My prediction?

50 bucks mid year, 50 more xmas.

NJ5 a sony fan? Lol

Sony's financials have been troubling and the yen hasn't done them any favors. I also think someone posted an interview where one of the sony execs talked about finally getting costs reductions to the ps3 architecture in 2010.

Frankly I'd love for them to have a price cut and sell more consoles. I, however, realize that it would be at the expense of the business which is worse. Better to come in 3rd place than to go out of business. Just ask nintendo about the GC.

As for the masses, if they can't afford a ps3, 360 is a reasonable alternative as many have proven from sales data.

 



"Dr. Tenma, according to you, lives are equal. That's why I live today. But you must have realised it by now...the only thing people are equal in is death"---Johann Liebert (MONSTER)

"WAR is a racket. It always has been.

It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives"---Maj. Gen. Smedley Butler

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Pristine20 on 24 February 2009
Tyrannical said:
Work more hours.

 

Troll much?



"Dr. Tenma, according to you, lives are equal. That's why I live today. But you must have realised it by now...the only thing people are equal in is death"---Johann Liebert (MONSTER)

"WAR is a racket. It always has been.

It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives"---Maj. Gen. Smedley Butler

NJ5 on 24 February 2009

Well I never thought I'd get called a Sony fan. I guess there's a first time for everything.

 



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TheSource on 24 February 2009

Five most likely times:

- April 2009 - New fiscal year, they'll have to sell an enormous amount of software to make up for it, but PS3 is nearly profitable in Europe so I don't think its impossible for a PS3 price cut in April somewhere

- June 2009 - E3. If PS3 becomes profitable really soon, they can build a bit of a fund to offset future losses and then cut in June.

- August 2009 - Leipzig. Same deal, but with more time to build a fund to justify future losses.

- October 2009 - TGS?...Probably a drop to prepare Japan for Final Fantasy XIII/Gran Turismo 5 in Japan

- April 2010 - New fiscal year. Economic recovery possible worldwide...helping the Yen and Sony's other businesses. PS3 attach rate should be alot higher as well.



People are difficult to govern because they have too much knowledge.

When there are more laws, there are more criminals.

- Lao Tzu

dallas on 24 February 2009

what happened to the rumors about a march/april price cut? At least these rumors were getting some big names spreading them which makes them semi-credible



dallas on 24 February 2009

oh and y'all can tell that i don't keep up enough about the games news lately heh.