If you don't want to read the introduction, please skip to the dotted paragraph.

Let's have a discussion, please. Take a seat. Today I'll like to talk to you about the potential of a price-drop for the PS3.

Alot of people swear up and down, left and right that a price-drop is coming 2009. Some people believe it's coming later. Either way, people can definately agree that if sony wants to continue being competitive agaist a increasingly aggressive Microsoft and a Silent but Dangerous giant like Nintendo's Wii. Sony must do something, price-drop is the most agreed upon option thoughout the internet. But is it that simple?

The Playstation Brand is in the worst shape it has ever been in.

There's no denying this fact. The Company has seen major restructuring of it's internal workings, Employees have been laid off, others are not getting raises, bonuses, and the like. Yet the company is doing is absolute best to continue operating though the storm. But that's sony as a whole, focusing my attention on the Playstation brand. You'll see that while they continue to sell respectable numbers for a 399.99 console they are week after week being outsold by both the Microsoft Xbox and the Nintendo Wii. This obviously is a undesirable situation for Sony as they've been the top of the console wars for 2 generations running and now are riding along in 3rd place.

It's been largely established that Microsoft and Nintendo both sell their consoles at either a profit to keep themselves in the green, or a break even. To keep themselves in the black. It is also largely established that Sony sells the playstation 3 at a loss. Even going so far as to keep the playstation network free of charge for consumers. I believe it's safe to say, dispite what the PR says that sony does indeed care deeply for the fun and enjoyment that it's consumers get out of the console.

• I support the PS3 as much as the next guy, but honestly. If you really look at the data and keep track of everything that happens. You'll know deep down that a PS3 pricedrop could be the final nail in a potential coffin for the playstation brand. If they sold more consoles at a even LARGER loss. The division could be cut off entirely, or worse. The company could go bankrupt. Now where would funds be to support a PS4? Where would funds be to add new and exciting things to PSN? Where would those funds be? They would be bled out.

I would rather see Sony NOT raise the price of the PS3 and in time, when PS3 begins to make a profit with every console sold return those profits to the existing consumer base in the form of value for the PS3. Better PSN improvements, R&D for PS4, increased value in what the PS3 can already offer. Imagine what PS3 can still do.

Sony is clearly aiming for the long run here, they said they are going to stick to a 10 year plan and by all means I have no doubt that they will give it their all. Whether or not they will actually achieve the 10 years they plan for is up for the future and the consumers to decide.

So should Sony drop the PS3's price for a meaningless increase to the marketshare that already belongs to the power-house known as Wii?

No!!!

very good analysis and synopsis. I completly agree with you. Except as i dont have a PS3 yet i would like to see the price drop but i am looking at a 60 GB version on craigslist and thats what ill probably do. Heres to good competition and lets hope that SONY can continue in this business and sell consoles. Because honestly WHO cares if your in 3rd place as long as you continue to move software which the PS3 has been able to do.

Just to summarize my giant wall of text.

Sony don't price-drop the current price of the console to cater to those who may not even purchase it. Run it at a profit to make sure the PlayStation experience remains great.

Make everyone pay what I payed!

Unfortunately, the OP is wrong.

"A "major" UK retailer has told game site CVG that PSP and PS3 price cuts are "definitely coming soon". Rumors have been circulating about such a price cut for some time.

"It's been on the cards for a while," the retailer is quotes as saying, "but manufacturers are not in the habit of giving exact dates so as not to effect sales."

The rumored price cut is supposed to bring the PS3 down to US$300 and is expected to be announced next week. "

http://kotaku.com/5173213/uk-retailer-ps3-psp-price-cuts-coming-soon

Sadly, whether I'm true or not doesn't reflect what's going to happen. This is simply my opinion on what sony should do, I believe that sony should hold onto it's current price so that some day soon it'll be profitable with every console sold. So that the profits are then used to benefit the existing playstation console owners.

^ Oh I agree 100%, I was just pointing out that their have already been evidence of the price drop.

I think SONY should just keep it where it is, because people are still buying it. Hell I bought one just this year and I even plan to buy another one for LAN within my house with my wife.

The only people complaining are... Well we know who they are...

The only chance of the PS3 becoming profitable in the future would be September this year, can people wait for then?

No the PS3 needs a price drop.

Sure SONY is hurting at the moment, but so is most of Japan and the rest of the world. As such SONY needs to do what it can to keep PS3 a viable console and at its current price it won't be long until it hits market saturation. A simple $50 price drop though would stimulate demand, help convince potential customers who want a PS3 but won't/can't spend $399 on the console and it'll reduce the large gap between the cost a PS3 and the cost of the Wii

"I support the PS3 as much as the next guy, but honestly. If you really look at the data and keep track of everything that happens. You'll know deep down that a PS3 pricedrop could be the final nail in a potential coffin for the playstation brand. If they sold more consoles at a even LARGER loss. The division could be cut off entirely, or worse. The company could go bankrupt. Now where would funds be to support a PS4? Where would funds be to add new and exciting things to PSN? Where would those funds be? They would be bled out."

Honestly, those problems are simple enough to solve. First of all, all Sony needs to do is issue a price drop when they can afford one. PS3 will be significantly cheaper to manufacture later this year thanks to the 45nm hardware revision coming this summer. At the very least the system should be breaking even at $399 at that point. Furthermore, lowering the cost of the system isn't necessarily a lose/lose situation for Sony. With a lower price point comes a larger market to which to sell retail and network games, Home accessories, peripherals and more. If Sony can manage to issue a huge price drop during a period where they would see the most profit from the increased software/peripherals, then they could probably minimize any increased losses by a hell of a lot. It just so happens that Q4 is the perfect opportunity for this with the releases of Uncharted 2, Ratchet & Clank Future 2, M.A.G, God of War III, and Gran Turismo 5 all happening in this period, all sending profit straight to Sony. Never before has PS3 had such a huge list of million selling 1st party games releasing during the same 6 month period. It's the prime opportunity and by the time that it's over, PS3 will be ready to have yet another hardware revision later on in the year to continue to bring the PS3 back into the black.

As far as their next system is concerned, I think Sony has really learned a lesson this generation. I sincerely doubt that Sony is going to release the PS4 at anywhere NEAR the loss they originally released the PS3 at. Honestly, I wouldn't be surprised if Sony finally took a lesson from Nintendo and released their system to make money from day one or at least close to it. That really solves Sony's problem of profitibility next gen, especially if they mostly use techonology that is already cheap and established by the PS3 such as blu-ray and the Cell processor.