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Sony: PS3 Price Cut Not A Reaction To Slow Sales
SCEE president Andrew House has said that Sony’s decision to cut the price of the PS3 was not a reaction to slow system sales.
“We are aware that consumers are watching their euros and pounds more carefully than before and it may make a price reduction have potentially even more impact. But it would not be fair to say this is a reaction to current market conditions,” he said.
Stressing the key role that the PlayStation Network will play in Sony’s ten-year plan for the PS3, House also told the Financial Times that the company plans to make more social networking features available to owners of its flagship console.
“The goal is to move from a traditional short, toy-based life cycle to a longer, consumer electronics life cycle. The network allows us to give customers a better sense of value and continuous improvement,” he said.
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When you look at this concerted PR effort - House claiming this is not a reaction to poor performance while Hirai grudgingly admits that they're going to lose money on each Slim sold after every Sony exec stated clearly throughout the year that Sony wouldn't do that - it is obvious that Sony is betting the farm on this move.
They know the shareholders are going to scream bloody murder about taking further losses on hardware to increase the install base after promising them they wouldn't do that, so taking this approach is tacit admission that this is the last card in their deck to salvage this generation.
It's quite a gamble and rides on the hope that the poor software attach rate was more a factor of most PS3 sales, to date, being attributed to consumers buying it primarily as a Blu-Ray player and that from this point forward the paradigm will shift towards gamers buying the PS3 instead. I suspect the Slim will sell more to gamers than the original PS3 SKU's did, but I'm not sure it will be enough to off-set further losses. Gamers perceptions on each of the systems are already firmly established and gamers (particularly on-line gamers) will buy the system their friends already have.
I think the problem is there's nothing the PS3 is doing that makes it really stand out against the cheaper 360, and vice versa. Sure, you have exclusives, and we can argue all day about which systems have the best. But multiplatform games are far better than they used to be and half of them are better than the 1st party titles on both consoles. What I'm saying is you can buy either console and have a great time, you can't really lose. So you have your Sony loyalists and Xbox fan boys buying their appropriate console. Everyone else who isn't a twat will probably go for the cheaper 360, as they can walk around the shop and see that they can get 90% of the same games on either system.
I think what the Wii has put in perspective is that we don't need 3 near identical consoles like last generation. We don't even need 2. I only play my PS3 when an exclusive comes out, simply because for multiplatform games I would prefer to use the 360 controller. Just personal preference but for me that is all that separates the PS3 and 360. If I preferred the PS3 controller I would buy mainly PS3 versions of the games. Each console has their little tricks and bonuses but at a core gaming level they are more or less exactly the same. So while the the 360 is cheaper than the PS3 it will most likely continue to outsell the PS3. From an average consumer position, if you can buy 2 things that do the same thing as well as the other but can get one cheaper, which one would you buy? When the PS3 starts making the 360 look dated it might be different but up to now they are largely the same graphically.
My point on the whole is that this cycle may be a long one and there will probably be another but it is pointless having systems that are near identical. Having one system that everyone makes games for always seemed like a bad idea as having competition between console makers increase innovation. Wii aside though, there isn't much innovation going on in the PS3 and 360 that radically separates them for last gen consoles, they are just turning them into PC's. I think the future is with cloud systems like OnLive. I don't know how they would do pricing but I think what would be nice is if you subscribed to a publisher. Say a fiver a month. So you could subscribe to Sony, Nintendo, Ea and Konami for 20 quid and that would give you access to all their games and you can play them as long as your subscription is running. That's more like a dream scenario, it would never happen I'm sure. I don't want to get into ownership, pre owned markets and stuff like that. Just a way of getting rid of releasing identical consoles every generation. People are a lot more accepting to gaming peripherals nowadays so you can still get your Wii remotes for Nintendo games or your I want to make Bobby Kotick rich peripherals for Activision games. Nothing much will change, will just be nice to have one hub for gaming rather than having loads of consoles under my telly. Or better still, install cloud tech inside TVs and everything is on demand through the telly. Then everyone has it.
I can't wait for internet speeds to speed up!
I would have to set myself in the Sony loyalist crowd. I been an avid fan of Sony's equipment, I have had walkmans and TV's through the years and also own some great home cinema equipment. I have to agree with you, the only real feature that differs to the 360 is blue ray and of course all that Bluetooth stuff plus the freedom to install your own hard disk and operating system should you desire.
I think what it comes down to is brand loyalty more than anything else and right now that is what is selling the PS3. Whilst the sensible money gets spent on a 360. Don't get me wrong, I don't want to single out either machine as they are both great. Price is a huge factor and I think Sony have priced a lot of people out, wanting to appeal to a more adult audience maybe is one reason, trying to be all things to all people. Making the PS3 an entertainment platform rather than just an out and out games machine is a major part of this.
As a games machines though it's not been all plain sailing, it's taken developers ages to start producing high quality product and there are still niggling issues with various features. To tell you the truth there's been days that have made me question why I bought the PS3. Like when the BRD gave me an error 800 and had to be returned to Sony or the times when I can't host games or even connect to them online and the fact that I can't hold a private conversation without sitting inside the white room that is PSN Chat.
360 is a great machine in comparison! I think lots of people wail on it because they can't stand Microsoft dominance or maybe they just don't like how a cheaper machine can give its more expensive brethren a run for its money, but that's an argument for the fan boys to get embroiled in. Even with all the add-ons you have to buy, Wireless adapter, Live subscription and hard disk etc. you're still on to a winner.
In hind sight, last generation the PS2 has a huge head start given that Sega and Nintendo had dropped the ball with their revisions. Microsoft came late to the party and missed out on crucial sales in that all important numbers game and Sony just pulled away. That's not to say the Xbox didn't sell well, for a jumped up Pentium 3, PC in a box type affair it made a dent in the market, nobody can deny Microsoft that. I just wonder what would have happened if Sony and Microsoft had started at roughly the same time.
What we're seeing this generation is kind of reverse, Microsoft got their box out first, albeit with slight flaws and Sony have been playing catch up ever since. Wii took everyone by surprise and sold phenomenally but as the hype fades, I struggle to see it pushing the numbers that Microsoft are. Sony came late and are paying the price, that's not to say sales have been bad. Under the circumstances I'm surprised.
As you said, it offers little in the way of advanced features that aren't already in existence on the cheaper 360. The only thing I can say to Microsoft at this point is well done!! Sony have done well but I think they've been humbled a little by the popularity of other machines.
Anybody who's not a twat will do whatever the fuck they want. I don't see why they'd buy either way, most older people I know buy PS's coz they want a glorified blu-ray player. Most younger gamers and western gamers buy the Xbox because it's cheaper, the rest of us are divided. If you like Sony over Microsoft or vice versa because of some ill-formed brand identity or for deeper reasons then fair enough it doesn't make you a twat. Also I think the discrepancy in games is much larger than 90% especially if you take into account the respective consoles online stores.
Yeah, I think it does. If you call yourself a gamer yet pledge allegiance to one brand and constantly slag off the other for the sake of it makes you a twat. Most people I know have both systems, cause they are gamers, and want to play ALL games. Most have PC's too. Online titles aside, they both share most of the same games. Everything is multiplatform nowadays.
So you want more variety by having one platform?
And what ? if sony has slow sales it doesnt mean that ps sucks
just not all ppl in the world can understand this technoligical progress which was made by sony
Spinning for Sony during the PS3 product cycle must be the marketing/public relations equivalent of doing a tour in Falujah.
- "You were in PR in the late 00's? Really? Were you in the sh_t?"
- "Yeah, I was on the Sony PS3 console."
- "Wow! You really must know what hell is like!"
So the very reason everyone anticipated this price cut a year in advance (btw, I effing told you so you goddamn fanboys!) is not the reason why they cut it.
Oh, Sony is such a politician.
Okay, to be fair, Nintendo and Microsoft are just as full of shit.
@peadar: "roughly increasing the lead" over the dominant console manufacturer means Sony effed up bad, not that the PS3 has done well.
So the very reason everyone anticipated this price cut a year in advance (btw, I effing told you so you goddamn fanboys!) is not the reason why they cut it.
Oh, Sony is such a politician.
Okay, to be fair, Nintendo and Microsoft are just as full of shit.
@peadar: "only increasing the lead by 2 million" over the once-dominant console manufacturer means Sony effed up bad, not that the PS3 has done well. What kind of Orwellian newspeak are you trying to pull?
Not Orwellian ;) just personal opinion. I don't doubt that they've failed to hold onto market dominance this gen. I qualified my opinion by saying that I recognised the strengths of the competition. Their network is worse, the services they provide here in europe are considerably lacking, multi-platform titles suffer from performance issues, first-party titles suffer delays (or worse, like resistance 2, are rushed and half finished) and yet the units sold, at a considerably higher price point, for 3 years at a consistant pace in a market thoroughly different from the last gen. And I'm surprised by that, as I said.
Being fazed out ASAP is hardly "co-exitsance". More like forced migration to me, co-exsitance would mean equal 1st party support. And I don't think any company in the console market has done that and ever will.
Liar
I can sort of understand what he means. I'm constantly amazed by how well the PS3 has been doing. When you consider how strong the competition has been this generation, and the higher price point, it's been selling roughly on par with the 360 worldwide (since launch the 360 has only increased its lead by about 2 million units). This has probably given them the confidence to hang on for as long as it took to get the redesign up and running. It would have seemed wise to have dropped the price this time last year but their sales have been acceptable and they've been hitting the targets that people dismissed as impossible.
What a sack of shit.
Of course this was a response to the PS3's performance. If the PS3 had been selling like hot cakes, or even luke-warm cakes, they would have never blown their load this early. I suspect they released a slimmed down version as quickly as the hardware allowed them to do so. PSOne launched nearly six years after the Playstation. PS2 Slimline launched over four years later. PS3 Slim was barely two and a half years.
Also, Sony has been talking about the longer-life-cycle for the last ten years, and what have we gotten? Nothing. Again, he's full of shit. Consumer electronics has been decreasing in life-span since the dawn of the electronic age. From people owning televisions and radios for decades, to stereo systems that only survive the audio medium, to computers that need updating every five to ten years, now to the full COMMODITIZATION of what was once rare and valuable. Idiot.
We have laptops that people throw out after 18 months. iPods rendered obsolete every year. The consumer electronics model is faster and more "toy like" than the video game market. If anything, the current five-year model is the MOST stable market in electronics.
If Sony actually thinks this, which I doubt, they're stupider than I could have ever imagined. What survives is the PLATFORM, not the hardware. If they want to extend the lifespan, make the hardware interchangeable and push the platform. Apple's iPod/iPhone hardware doesn't matter nearly as much as the iTunes/App Store platform. It's the software, you retard. Maybe this is why Sony's software blows chunks. They still think it's the 1980's.
I think it's the guy's smug, douchebag smile that set me off. I just couldn't take it.
on the surface lackluster sales seem to be what triggered the price cut, and i'm pretty sure a desire for increased sales played on the decision, but i don't think it was the only thing. i'm inclined to agree with Sony here. if this price drop was a response to lackluster sales, don't you think Sony would've put it into effect oh, i dunno, a LONG time ago? it isn't ironic that we got a price cut shortly after Sony announced production costs dropped 70%.
as for everything else you said, well, that's a matter of perspective. the PS2 went strong for a good 7 years, and after nine years it's still selling moderately well considering how old it is. again, i'm not so inclinded to dismiss their 10 year claim; then again, i was never one of those people who expected Sony to hold off until 2016 before releasing the PS4. to me 10 years meant 5 or 6 years of PS3 only, then 4 or 5 years of PS3/PS4 coexistence.
I never said that the sales were the only reason. I just think that it was the major reason for such an early release of the slimmed down version. And yes, one would have thought they would institute a price drop a long time ago. Everyone thought they should have. It was widely seen as a dumb move to not drop the price. Basically, I think Sony was waiting for a few reasons
I actually find all of these reasons moronic except for the second one. I don't know what kind of internal projections and calculations they did, but the result could have worked out to "We will never achieve a leadership position in this hardware cycle. If we wait to lower the price, we will lose market share to cheaper alternatives, but the Playstation brand will likely drive late-cycle sales (2010-2012), and with each system sold at a lower loss, we will likely break even or begin profiting at that point."
That's totally reasonable and good business, but I suspect the loss of many hardcore gamers to the Xbox, and the loss of the casual gamers to the Wii scared Sony a great deal. Perhaps they didn't anticipate the market erosion that took place. Combined with a market downturn that hits the premium products hardest, they were forced to put a new system out earlier than initially projected. Reduced cost, marketing momentum, a win-win.
Nice words, but isn't everything affected by sales, good or bad?
no, Sony's goal since the launch was making the PS3 hardware profitable first
If their goal was profitable hardware, then why have they just re-designed and re-released the PS3 in a form which still makes a loss? Surely, according to your opinion, they should just be selling the cheaper old version?
The truth is the PS3 and BluRay are a calamitous failure and Sony are still too arrogant to admit that. (And I mean: it came last - yes, that is future tense).
The older version apparent;y cost more, this redesign cut costs significantly according to Sony by around 70%. But then Kaz Hirai said they are still making a loss. Who knows what is really going on, it's hard to gauge what Sony's true figures are on savings/profitability as it's mostly just spin.
Would they have even worked on this had they been in first place? They already went below cost on the first unit, & they invented the "taking a loss on hadware" strategy - PS2 vs. Dreamcast.
I don't know. It's weird to say consumer interest is irrelevant to a manufacturing company.