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Analyst: PS3 Price Cut Chatter Rising
By Kris Graft
February 24, 2009
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Announcement could come in "the next couple of days," says Janco Partners.
The PS3 is in dire need of a price cut if Sony wants to fend off competition at retail, analyst Mike Hickey with Janco Partners said in a Tuesday research note.
A price cut announcement for PS3 could come even sooner than some would expect. The analyst said, "Recent channel checks indicate increased speculation for a PS3 price cut announcement from Sony in the next couple of days."
Hickey added, "We think the company needs to reduce the current price by $100 to effectively restart unit velocity at retail. ... We believe the market is expecting a PS3 price cut in April or by June (E3) at the latest...
"If Sony does not cut the price of their console, we expect the continuation of languishing PS3 hardware sales and the potential for publishers to accelerate their reallocation of resources away from the PS3 console."
The standard 80GB PS3 retails for $399. A price cut for the PS3, Hickey said, could act as a catalyst for videogame-related stock in the publishing and retail sectors.
Hickey also passed on rumors of a radical change in the PS3 hardware strategy: "We are also hearing continued speculation that Sony is working on a non-Blu-ray PS3 console, which could enable them to make the aforementioned hardware price reduction."
Such a move would fragment the PS3 user base, software library and development community, as all disc-based PS3 games on the market today are on high-capacity Blu-ray. The Blu-ray component, however, has been cited as a primary reason that the PS3 debuted as the most expensive console on the market.
Sony is meeting with publishers and retailers this week in Arizona for the company's annual Destination PlayStation event, where the firm announced a slew of new software for the PSP in particular today, including LittleBigPlanet, Assassin's Creed and Rock Band for the handheld.
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I wouldn't be surprised to see a drop to £249.99, or even down to £229.99 to drop it down to the same price as the Elite. The former is more likely though, with a continuation of Sony's heavy focus on bundling games.
I think it's fair to say that consoles are shit now. I haven't been impressed by any system this gen: one is too expensive, the other is like this problem child that keeps fucking up at every turn, while the last system only cares for your gran and co.
Please Sony don't do it! I like owning a minority console. I like it when you're on the back foot and not all arogant. Mainstream consoles suck. Expensive, exclusive ones rule. Keep it expensive
I'd say that too if I had the money to buy a PS3! =P
Like I have said before. Expect a price cut in or before Q2 this year. It will happen.
It has to. If you look at the last 4 months the PS3 has had a decrease in sales over the same time period the year prior. I think with exception to the PSP, no other console handheld or otherwise has had a drop in sales. I know Sony may be looking down the line hoping sales will increase with better software, but they may not have much of a future if sales continue to decline month-to-month. Do they take more loses now to save their system, or do they leave the price the same and potentially gamble away 3rd party publisher support because people aren't buying enough games? I can't see them continuing to get pummeled (especially in the US) and not do something about it. And a throw away pack-in isn't going to do it, or a Spider-Man themed PS3...oh wait, it already is Spider Man themed...oh snap!
Oh, I recall all those fanboys a few months back who called me crazy, 360-biased, for ever proposing that the PS3 price cut was so necessary that it would likely come by spring..."the ps3 is worth every penny and will not need a price cut to outsell 360 next year", they told me, despite my argument that it was wholly necessary to compete whatsoever, especially in light of the recession..
Oh, suck it down, you ridiculous fools. The time is coming; you shall see, I was right and you were wrong.
A $100 drop would obviously help to some degree, but I really doubt they'll drop that much. Has a console ever seen a single price drop that large (other than the ones that failed and had fire sales)? If Sony dropped the PS3 by $100, they would actually have to contend with the perception that this as a desperate effort to save a dying platform, whereas consumers are conditioned to expect $50 reductions for game consoles.
Sony's not really in a position to take further losses on the system, and they most certainly would be taking a loss if they dropped by $100. I can see them doing a $50 price drop with a game bundled (or headset) in Spring though.
Removing Blu-Ray sounds like a wacky rumor. There's no way they would segment the user base at this stage and wouldn't want to undermine the Blu-Ray format anyway.
"Has a console ever seen a single price drop that large"
Yes, Sony dropped the price of the PS3 from 500-600, to 400-500 within a year of launching.
Good point! Not sure if that's a precedent Sony is particularly pleased about or wants ingrained though when their competitors now have systems that resisted price drops longer than any previous console released (obviously talking about before the 360 first dropped in price).
I think Sony getting that wake up call that no one is going to get a second job just to buy a toy was a good thing. I think for the most part they have their head on straight after a humbling first 2 years and PS3 owners will probably have a lot more to look forward to in the future in regards to Sony's tactics and potential quality software. You're right, MS held out on a price drop for a good while due in large part to Sony's super-expensive console not quite flying off the shelves (poor ebayers...selling their consoles at a loss at launch).
Speaking of things not flying off the shelves, I read on another gaming site that most Gamestops have cancelled their KZ2 midnight launch events and have started scheduling Halo Wars midnight launch events. Ouch!
That'll be so awesome... remove the Blu-Ray drive from the PS3 and make gamers unable to play any retail PS3 games. PS3 sales will SOAR.
Unless I'm missing something... this is the dumbest piece of fail I've ever heard spewed from an analyst by far.
If they announce a price drop equivalent to a hundred dollars, then I might actually fork out for one.
[comment redacted]
Microsoft will keep the price of the Xbox 360 Elite dollar for dollar even with the PS3. This will actually hurt the PS3--especially when you consider that the PS3 doesn't even come with a high-definition cable of any kind. Xbox 360 Elite comes with Microsoft's HDMI cable, but the PS3 doesn't come with anything like that at all.
This would also motivate Microsoft to lower the price of the Xbox 360 Pro from $299 to $199, which is a special milestone in North American videogame hardware. Xbox 360 would fly off store shelves with an entire new market, while the PS3 would only see a small increase in sales.
The Xbox 360 Arcade would probably see a price drop to $149, which is also another special milestone for pricing. If this were to happen this year, during these tough economic times caused by republican "giving" of money to wealthy people instead of responsibly paying down the national debt with Clinton's revolutionary budget surplus, I think consumers with a tight budget would be very thankful that they could finally afford a next-gen system.
You're a special milestone in North American videogame fanboys.
Dude, you don't even know how this Jean-Luc Picard pic cracks me up. I had to make an account just to let you know. It's so awesome. I'm reading the fanboy post and I can sense it's coming then you drop it. Ha ha! It gets me every time. Well played, mate!
It makes it easier to see if Kim put up another hilarious comment as well. ;)
It's very nice the Elite comes with an HDMI cable... it's just that this is the third time he's mentioning it. ;)
whoops.
I think a US price point of $300 would help Sony a lot. It would also limit MS's ability to drop further. Of course, they are far enough behind now that it probably wouldn't make a lot of difference in the short term.
Brian
www.brianwoods.com
Reducing the price by $100 doesn't mean shit to us lot based in Europe.
If SCEE follow then a rrp of £179.99/149.99 would be the sweet spot for the consumer as there is no point in lowering the price by only £50/70 because that won't shift systems.
Consumers are pawning their systems at the moment (due to bad times), not purchasing them.
http://www.1up.com/do/newsStory?cId=3172968