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Discussion Starter · #1 ·
 http://www.dailytech.com/SCEA+CEO+Sa...rticle5810.htm

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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.

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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.

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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?
 

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Quote:
Originally Posted by namechamps /forum/post/0


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
 

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Quote:
Originally Posted by Alan Gordon /forum/post/0


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?

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Originally Posted by Ilka /forum/post/0


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.
 

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Priceless FUD.

Quote:
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"
 

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Originally Posted by hmurchison /forum/post/0


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???
 

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Discussion Starter · #8 ·

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Originally Posted by tgable /forum/post/0


Priceless FUD.




"Just over a year and a half" > 1.5, "rest of 2007"


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.
 

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Quote:
Originally Posted by hmurchison /forum/post/0


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.
 

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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.
 

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Quote:
Originally Posted by Ilka /forum/post/0


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
 

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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.
 

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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
 

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Quote:
Originally Posted by eightninesuited /forum/post/0


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
 

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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.
 

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Quote:
Originally Posted by efralope /forum/post/0


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.
 

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Quote:
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.
 

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Quote:
Originally Posted by Sean_O /forum/post/0


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
 

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Quote:
Originally Posted by hmurchison /forum/post/0


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.
 

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Quote:
Originally Posted by Sean_O /forum/post/0


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.
 
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