http://www.dailytech.com/SCEA+CEO+Says+PS3+Will+be+Difficult+to+Cost+Reduce/article5810.htm


The magazine asked if the PS3 would see a price drop schedule similar to PS2, which saw a reduction of a third from $299 to $199 just over a year and a half after launch. Tretton replied to the question with a simple “No,” thus leaving the current price points where they are at for at least the rest of 2007.

Wii and 360 are both now sold at a profit per unit. Giving both of those companies the ability to leverage lower prices in 2007. Neither side has issued a price cut so far simply because they don't need to yet. While a higher priced PS3 doesn't affect the HD war directly it does making the platform less attractive to gamers. Higher prices will slow adoption, and also cause Sony to lose more exclusive titles. Both of these will reduce the value of the PS3 and mark it harder for the "trojan horse" strategy to work.

He may be referring to the fact that Sony is selling every one of its new consoles at a loss, making it nearly impossible to move on the price until manufacturing costs are reduced. Analysts currently estimate that Sony is taking a $241 hit on 60GB versions, and a $307 loss on 20GB PS3s.

While every console is sold at a loss initially these are very steep numbers. The xbox360 was only sold at a $150 loss at launch. The 20GB PS3 is about $80 cheaper in Japan making the loss on that unit almost $400. Price does matter even for a name brand like Sony. And these record losses mark it hard for the Company to bring the product retail price down.

European gamers, who have had to wait for PS3 whether they mind it or not, will be seeing the new console in March at €599 ($777) for the 60GB, and €499 ($648) for the 20GB models – considerably higher than what North Americans and Japanese pay. The UK may get the worst of it all, as the 60GB PS3 will go for £425 ($842) for the 20GB PS3 it will be £350 ($694).

Not sure what Sony is thinking here? They cut cost in Japan where it is likely to have the highest demand yet the prices are even higher in Europe than NA. How many gamers in the UK will be lining up to pay over $1000 for console, extra controller, and 2 games (after Christmas)?

I never thought Sony would hit their 2006 projections and I thought 6 million units by March was tight. Now I think they will be lucky to have 4 million units by March and 10 - 12 million by end of 2007. Will this change the Studios conviction in BD?

I never thought Sony would hit their 2006 projections and I thought 6 million units by March was tight. Now I think they will be lucky to have 4 million units by March and 10 - 12 million by end of 2007. Will this change the Studios conviction in BD?

That is the question, isn't it?

Fox has stated several times that the PS3 was a HUGE factor in them choosing Blu-Ray. Should the PS3 be less successful than projected, we could see some changes of heart.

~Alan

It affects the video game war. It doesn't affect anything in the BD/HDDVD war. The PS3 is the cheapest BD player on the market. The stand alone BD players are the ones that need to lower their prices.

Unfortunately, I think it will prolong it ... but not by much. I do think that the lack of announced HD-DVD titles (vs. Blu-ray) will have a more decisive effect ...

That is the question, isn't it?

Fox has stated several times that the PS3 was a HUGE factor in them choosing Blu-Ray. Should the PS3 be less successful than projected, we could see some changes of heart.

~Alan

Newscorp may force them to support HD DVD if PS3 sales don't rise throughout the year. Sony sold everyone on the PS3 being God's gift and frankly it hasn't been. I think a lot studios are thinking about how to abandon the exclusivity and not look foolish in the proess.

If HD DVD can apply pricing pressure and deliver 300 new titles this year consumers will continue to buy into the platform and exclusive studios will end up going neutral. What studio is going to turn down 2 million players in consumer homes?

Unfortunately, I think it will prolong it ... but not by much. I do think that the lack of announced HD-DVD titles (vs. Blu-ray) will have a more decisive effect ...

Does you typical consumer follow release schedules as closely as the AVS fan? I don't think they do. I think they open up their Best Buy add and see what titles have hit and they go buy the titles they like. Every here seems to assume consumers know the same information that we do. They don't. They don't care that much. They are going to see a player that is priced affordably for them and see a stack of movies and buy in.

Priceless FUD.

The magazine asked if the PS3 would see a price drop schedule similar to PS2, which saw a reduction of a third from $299 to $199 just over a year and a half after launch. Tretton replied to the question with a simple “No,” thus leaving the current price points where they are at for at least the rest of 2007.

"Just over a year and a half" > 1.5, "rest of 2007" < 1.1 years. So where is the inability?

Newscorp may force them to support HD DVD if PS3 sales don't rise throughout the year. Sony sold everyone on the PS3 being God's gift and frankly it hasn't been. I think a lot studios are thinking about how to abandon the exclusivity and not look foolish in the proess.

If HD DVD can apply pricing pressure and deliver 300 new titles this year consumers will continue to buy into the platform and exclusive studios will end up going neutral. What studio is going to turn down 2 million players in consumer homes?



Does you typical consumer follow release schedules as closely as the AVS fan? I don't think they do. I think they open up their Best Buy add and see what titles have hit and they go buy the titles they like. Every here seems to assume consumers know the same information that we do. They don't. They don't care that much. They are going to see a player that is priced affordably for them and see a stack of movies and buy in.

Here we go again with more defection tales...if, if, if, if, blah, blah, blah. What's next? CES 2008 rumors already???

Priceless FUD.



"Just over a year and a half" > 1.5, "rest of 2007" < 1.1 years. So where is the inability?

Not sure what your point was? The PS2 took 18 months to drop 1/3 in price. Tretton is saying the PS3 will not be as aggressively priced down. Rest of 2007 is a conclusion the dailytech reached. However you are right 18 months would likely put any substantial price break well into 2008.

Does you typical consumer follow release schedules as closely as the AVS fan? I don't think they do. I think they open up their Best Buy add and see what titles have hit and they go buy the titles they like. Every here seems to assume consumers know the same information that we do. They don't. They don't care that much...

Just fast forward your BB scenario a few weeks then ... When you open up your Best Buy flyer and see 0, 1 or 2 HD-DVD new releases vs. several for Blu-Ray ... for example, check out March ... a total of 3 (yes, count' em three) HD-DVD releases for the *ENTIRE* month (vs. 14 for Blu-ray including 'Casino Royale'):

Happy Feet (Warner) *
National Geographic: Relentless Enemies (Warner) *
School for Scoundrels (Genius)

* Also available day-and-date on Blu-Ray.

Thanks for pointing out your BB Flyer scenario -- I hadn't thought of the impacts of that in the coming weeks.

The movie release argument being bandied about here is poor. If 300 titles due on HD DVD this year then I am not worried that I don't have all the information about what and when these titles are coming.

Thus your point is only valid for what can be purchased in the immediate upcoming week. Why would look at March when we're not even in Feb yet? I can't buy anything off of a Feb and March release list. That's vapor.

You continue to believe in vapor and I'll continue to believe in tangible items in stores for purchase.

Thanks for pointing out your BB Flyer scenario -- I hadn't thought of the impacts of that in the coming weeks.

I doubt the impacts of that will be much.

First of all, most people are not going to be buying a HD DVD/Blu-Ray player as a impulse buy. Most people will do research (which doesn't help HD DVD much due to Blu-Ray's marketing)... or look at the titles in the store as they're looking at the player of their choice.

Also, the amount of Blu-Ray titles doesn't really amount to much... other than the fact that it helps the numbers whenever somebody looks to see Blu-Ray sales over HD DVD sales.

~Alan

If a price drop is scheduled, Sony won't announce it ahead of time. They want people to buy it now. So at the moment, if someone asks if they'll drop the price, they'll say no. But come Fall they might lower it if they wish. It's business tactics.

The problem for both formats is that all those exclusive BD titles and HD DVD titles are available on DVD - that's what the vast majority of consumers really care about! Universal, Paramount and Warner could release HD DVD combos only at a DVD price and that would have an effect on the market. They're simply not smart enough to do it!

Cheers,

Grant

If a price drop is scheduled, Sony won't announce it ahead of time. They want people to buy it now. So at the moment, if someone asks if they'll drop the price, they'll say no. But come Fall they might lower it if they wish. It's business tactics.

Exactly. It's also why Microsoft will deny a new XBox 360 model w/HDMI.

They want people to buy now, not wait until the fall.

Gary

Game companies always say that they aren't gonna lower the price. Nintendo insisted they weren't dropping the price back in May of 2002, and then a couple of weeks later dropped the price.

The PS3 has bombed in the US and Japan and since no one is buying them, Sony is going to be forced to drop the price or lose even more marketshare to Wii and XBox 360.

Don't be surprised to see a price drop to $400 for the 20 gig version as soon as April, or whenever 360 drops the price. Do you think Sony is gonna let Wii and 360 walk all over them. If PS3 dies, Blu-ray dies, they have no choice but to drop the price. Also consider that this quote doesn't take into account magazine lead times. In late November the PS3 looked like it was going to be a hit, and Sony may have had different plans.

The PS3 has bombed in the US and Japan and since no one is buying them, Sony is going to be forced to drop the price or lose even more marketshare to Wii and XBox 360.

the ps3 is coming up on 2 million units sold a lot faster than the xbox 360 did at its launch. and thats without europe even in the equation. or any real game support yet. so if the ps3 is bombing, what was the 360's launch then?

i know they cut prices in japan which is hard to reconcile with the above facts, but still...

the ps3 is selling faster than the xbox 360 did at its launch, while
1.) being 200 bucks more
2.) having no new games come out since launch
3.) not even selling in europe yet

i think the bombing thing is only in the minds of the internet fangroups hellbent on sony's demise.

the ps3 is coming up on 2 million units sold a lot faster than the xbox 360 did at its launch

That is not true in the slightest. The 360 had sold about 100,000 more units by the end of December 2005 than the PS3 had by the end of 2006, and the 360 launched on average about a week later in the calendar than the PS3 did, giving it less time to sell those 100,000 extra units.

You also were not able to find a 360 at retail for month after launch, unlike the PS3 which is currently readily available due to low demand.

You also were not able to find a 360 at retail for month after launch, unlike the PS3 which is currently readily available due to low demand.

Actually, I didn't see a XBox 360 in stores until March... compared to the first week of January for the PS3.

I've also heard from several businesses that they've had a lot of people return PS3s.

~Alan

Does you typical consumer follow release schedules as closely as the AVS fan? I don't think they do. I think they open up their Best Buy add and see what titles have hit and they go buy the titles they like. Every here seems to assume consumers know the same information that we do. They don't. They don't care that much. They are going to see a player that is priced affordably for them and see a stack of movies and buy in.

Yeah, to DVD.

You'd be surprised at how attuned to when a movie is coming out and content in general the average customer can be. Especially if its something they really liked.

That is not true in the slightest. The 360 had sold about 100,000 more units by the end of December 2005 than the PS3 had by the end of 2006, and the 360 launched on average about a week later in the calendar than the PS3 did, giving it less time to sell those 100,000 extra units.

You also were not able to find a 360 at retail for month after launch, unlike the PS3 which is currently readily available due to low demand.


I thought the numbers were more like 687,000 PS3s to 600,000 360s. Not trolling, but I'm pretty sure that's what the NPDs said.

That said, I do agree I didn't see a 360 "in the wild" until March. I lucked out and was in Target early morning Dec. 05 to pick up some Christmas cards before work when they got 360s in.

I just waltzed into Best Buy a week ago for my PS3. However, Sony I belive has handled manufacturing better than MS did. Shame that Sony's PR is basically mud right now.

There's a lot of misinformation passed around with regards to game sales around here. PS3 is selling faster than PS2/PS1 according to the NPDs and faster than 360, again according to NPDs.

However, that is merely a factor of Sony glutting the market with PS3s. We have no idea what the 360 would have sold with a similar glut. I'm pretty sure it would have sold faster and more than PS3. Sony's is a price/PR limitation. MS had a hardware manufacturing limitation.

However, Sony I belive has handled manufacturing better than MS did. Shame that Sony's PR is basically mud right now.

The ironic thing about that is, while I know/knew people who were interested in getting the XBox 360, and were not able to find them due to lack of availability for a while... as well as people who are having the same problem with the Wii now...

Yet everyone (including PlayStation 2 owners/fans) that I know has stated they do not intend on buying the PS3 until it goes WAY down in price... or have no plans to buy it at all due to feeling alienated by PS3's price tag... and it's very easy to find/buy a PS3.

~Alan

There's a lot of misinformation passed around with regards to game sales around here. PS3 is selling faster than PS2/PS1 according to the NPDs and faster than 360, again according to NPDs.

Got a link for that "fact"?

I got one (it's from Sony)
http://www.scei.co.jp/corporate/data/bizdataps2_e.html

The PS2 sold over 1 million units in the first 2 weeks of the Japan Launch. It had sold nearly 2 million units in Japan by the 10th week. Remember this is Japan only. It was virtually impossible to find a PS2 within the first couple months in Japan.

The PS3 has sold less units to a worldwide market and can be easily found. Even auctions on ebay are for little more than retail The new thing is a PS3 + 4-5 games + extra controller for less than the retail prices of those products. Looks like even the fanboys are bailing.

However, that is merely a factor of Sony glutting the market with PS3s. We have no idea what the 360 would have sold with a similar glut. I'm pretty sure it would have sold faster and more than PS3. Sony's is a price/PR limitation. MS had a hardware manufacturing limitation.

Sony is glutting the market? The initial launch was suppose to be 2 million units, then it was revised to 1 million. It turned out to be less than half of that. Then they were suppose to hit 2 million units by end of 06, they missed that also. Next they are going to hit 6 million units by March and it looks like they will miss that. They are far beyond where they are suppose to be yet demand is still weak.

Spin it anyway you want but the PS3 has had a horrible launch. This fall will be even harder on Sony with a $199 or even $149 Wii and $199/$299 360.

Sony is glutting the market? The initial launch was suppose to be 2 million units, then it was revised to 1 million. It turned out to be less than half of that. Then they were suppose to hit 2 million units by end of 06, they missed that also. Next they are going to hit 6 million units by March and it looks like they will miss that. They are far beyond where they are suppose to be yet demand is still weak.
.


Links to your "facts"?

Looks liek PS3 demand is slowing in Japan

Here are the latest Japanese console hardware sales for the week of Jan 8 - 14:

Wii 93,708
PlayStation 3 25,531

Hmmm does anyone actually believe sony have ship 3 million PS3's?

Sony announced they have shipped 1 million units of PS3 in Japan, and 2 million units in North America, the company expects the worldwide shipment to reach 6 million units by the end of March 2007.

Got a link for that "fact"?

I got one (it's from Sony)
http://www.scei.co.jp/corporate/data/bizdataps2_e.html

The PS2 sold over 1 million units in the first 2 weeks of the Japan Launch. It had sold nearly 2 million units in Japan by the 10th week. Remember this is Japan only. It was virtually impossible to find a PS2 within the first couple months in Japan.

The PS3 has sold less units to a worldwide market and can be easily found. Even auctions on ebay are for little more than retail The new thing is a PS3 + 4-5 games + extra controller for less than the retail prices of those products. Looks like even the fanboys are bailing.



Sony is glutting the market? The initial launch was suppose to be 2 million units, then it was revised to 1 million. It turned out to be less than half of that. Then they were suppose to hit 2 million units by end of 06, they missed that also. Next they are going to hit 6 million units by March and it looks like they will miss that. They are far beyond where they are suppose to be yet demand is still weak.

Spin it anyway you want but the PS3 has had a horrible launch. This fall will be even harder on Sony with a $199 or even $149 Wii and $199/$299 360.

Boy you spun that fast. I was talking about in the US; I didn't make myself clear. I got my info from a 1up podcast where Luke Smith and Shane Bettenhausen were discussing the NPDs and comparing launches. It has sold at a faster rate than PS2 and PS1. Rates mean more than absolute numbers in the short term. Sony is glutting the market relative to price and relative to what 360 did. They didn't ship jack to the US for PS2 compared with Japan.

Demand is "weak" but retailers around me are still selling out a shipment over a week.

I'll call it now. No price drops on anything this year. Instead, the 360 and maybe the PS3 will get higher quality pack-ins like bigger hard drives, remotes, etc.

Wii? Why in the hell would Nintendo drop the price on it? Its printing money, sold at a profit and is 5 year old tech. They'll drop the price when demand drops, which based on recent reports isn't any time soon.

Japan is so in love with Nintendo right now that Sony didn't stand a chance. Have you seen how Nintendo DS sells? Nintendo does no wrong right now in the Land of the Rising Sun.

I still don't get the utter hatred for Sony versus the unadulterated love for MS. I absolutely LOVE my 360 more than any game machine since the SNES, but I've enjoyed my PS2 and, despite not owning any games, am enjoying my PS3. Its no 360 by any means, but its a nice machine and I love the BD playback.

On 1up, I'm considered a Sony basher and hater and an "Xbot."

Here, because I dove in to HD using BD, and refuse to play fanboy to any console or format (Read: HD DVD and Xbox), I've been labeled a Sony Fanboy in record time. Its really disheartening.

Is there any agreement in place with the other BR makers that might prevent Sony from dropping the price of the PS3 to fast? Obviously the other CE manufactures of BR drives have allowed for the PS3 Trojan to establish a quick leg up in gaining BR market share while severely undercutting their own prices. But I wonder if Sony had to agree to hold the line on price to allow for the makers of stand alone players to "catch up" to its price point before all next gen players enter the point of commodity type prices.

OK - here are my thoughts on this.

First off - the PS3 has not done as well as was expected. I believe that this is apparent, since the BD camp expected it to "wash over" HD DVD in one fell swoop. Instead, BD disc sales are now neck and neck with HD DVD, each side swapping a slight lead day to day.

Second - the PS3 was only able to "catch ip" based on getting 2 million players (according to some reports, they have only sold 1.5 million) into the market. If one examines this rationally, one is forced to conclude that the movie "attach rate" for the PS3 is about 1/10 (one tenth) to 1/7 the attach rate of the HD DVD players in the market.

Third - and most worrying for the Bluray side, I would think. The PS3 was able to get over a million players out around the holiday season, but now sales have slowed dramatically and units are reported to be available almost everywhere. It's starting to look a LOT like the initial sales were mostly "pent-up demand" for the unit and that there wasn't enough demand to satisfy the limited supply that continues to make it into shops.

Fourth - IF this turns out to be the case, then you will see HD DVD movie sales start to gradually pull ahead of Bluray again over the next couple of months, as new 2nd Gen HD DVD players and the Xbox add-on continue to sell strongly.

Fifth - This leaves Sony and the Bluray camp in a bit a quandary. Demand does not look like it is strong enough to sustain the required growth in Bluray movie sales, yet it would look INCREDIBLY bad if they cut the price of the PS3 in the US so close to its launch. But without lower prices, they will likely not get the neccesary sales.

Sixth - I believe that Sony made a mistake when they decided to launch the PS3 with over 80% of the mix as the 60 Gig version. I can understand WHY they did so, since they lose an even more horrendous amount of money on the 20 Gig version than they do on the 60 Gig version. And I assume that they also felt demand would be stronger than it is proving to be. However, the price point of the 60 Gig version at $600, couple with the bundling tactics of retailers (typically $800 or more) has hurt sales. They can (and probably will) change the mix and supply more of the 20 Gig versions to the market, but this will take time to implement and the benefits may be too little too late.

Seventh - which brings us to the price cuts. I strongly believe that there will be price cuts both for the PS3 and for Bluray players. I feel that Sony and others are afraid to admit this since it will effectively *kill* short-term sales figures, while people wait for the lower prices, and I feel that this statement of mine will probably be argued against the hardest by some here as a result of that risk. I think they will cut prices by the end of April, but will try to play tricky with the way they make the PS3 more "affordable" so as not to give Wall Street the impression that they have had to discount so soon.

In the mean time - I expect to see HD DVD movies building a lead again over the next two months.

Looks like 23-03-2007 is the release date for the PS3 in Europe.
Price wise, it looks like Sony are pitching the 60gB machine at £425 for the UK.

I cant even get my name down on a pre-order list for two PS3,s.I cant see the Europe launch not being a success, and I guess that means a load more Blu Ray players and increased Blu Ray film sales.

If anything, and its just my opinion, Blu Ray looks like it will push ahead further with software sales.

The 360 sold faster than the ps3. Many forget that xbox 360 launched in more teritorys than the ps3 . Japan , Europe and NA . Ms slightly beat out the ps3 and was supply bound well into march of the same year.

If i had a ps2 i could already get 100$ off the ps3 at gamestops in the states and its not hard to find a gamestop with them in stock .


The ps3 at its current price point is way to high t osell to many gamers . Esp when you look at the games avalible . Most of them are on the 360 and better .

Sony has an up hill climb , esp this year as the 360 is expected to see a price drop and will have halo 3 along with other exclusive ip that sony doesn't have. To top it off

Cheapest system to play GTA 4 is the xbox 360 not the ps3 and its the same day

Cheapest system to play Assasian's creed the 360 not the ps3 and sony hyped this up at the last 2 e3s .

I fully expect a 100$ drop on both 360 skus and a 200 core and 300 premium will sell like hot cakes this winter with the current 360 line up th rough the year.

I really think Fox will go to both platforms by the end of this year.


Hd dvd will continue to get cheaper

The rumor is that the a2s will hit 300$ with the new model coming out , the hd dvd add on for the 360 will most likely drop in price at some point in the year and with the 360 itself seeing a price drop the add on + 360 will only drop in price .


Consumers will go out and buy a 300$ hd dvd player before they go and buy a 500-600$ ps3 or a 1k standalone .

We might also see the same effect that umd had on the psp , great initial sales and then a drop off to nothing.

First off - the PS3 has not done as well as was expected. I believe that this is apparent, since the BD camp expected it to "wash over" HD DVD in one fell swoop. Instead, BD disc sales are now neck and neck with HD DVD, each side swapping a slight lead day to day

True the PS3 boosted blu-ray a great deal, also true that it hit numbers far below and much later than what was originally promised/projected by Sony. So will hollywood view the PS3 effect as still "good enough" or as a disappointment worth taking action on? Who knows...

It's interesting to consider that if Hollywood stays firmly behind blu-ray then it ultimately may not be the PS3 itself that wins for blu-ray as much as it was the promise of the PS3 (even if the promise wasn't fully delivered) which brought Hollywood and CE industry behind the format. At this point it's clearly the studio and CE support that give blu-ray it's market advantage.

In the mean time - I expect to see HD DVD movies building a lead again over the next two months.

For hd-dvd though it's also a question of what it's own backers do. How much does Toshiba and MS esp. invest into marketing and even counter subsidizing the growth of the format. MS would certainly seem to have more cards they could play for instance with the 360. The addon could probably sell for even less at any time if demand slacked and MS was interested. $149, $99? Sure it's not standalone but if the 360 base continues to expand that's XX million more users with easy access to hd-dvd.

Will the content providers for hd-dvd deliver on 300+ titles in 2007? What will the Chinese deliver? Still a few questions out there as to whether hd-dvd can ever take back a lead...

That is not true in the slightest. The 360 had sold about 100,000 more units by the end of December 2005 than the PS3 had by the end of 2006, and the 360 launched on average about a week later in the calendar than the PS3 did, giving it less time to sell those 100,000 extra units.

You also were not able to find a 360 at retail for month after launch, unlike the PS3 which is currently readily available due to low demand.

NPD numbers are not total sold numbers. Microsoft and Sony consider console's shipped as being sold. There isn't any way at all for Microsoft or Sony to have access to large Big Box retailers sales data. The often linked stockholder's report which quotes "console's sold" is really console's shipped from Microsoft to retailers as the company consider the product sold at the point.

The reason you can find more PS3's now isn't due to demand it's due to the fact that Sony got their production capability up before Microsoft did. All that being said, it's only 3 months into launch for the PS3, you'll all know exactly how well it's gonna do by Christmas.