Sony CEO Dismisses Calls for PS3 Price Cut

[NDWolfwood5268]

Console developers ALWAYS do until the later stages of the life cycle. Consoles are NOT meant to make a profit, they make the cash back my licensing games. Microsoft and Sony get cash for each title sold on their system, making the initial lost trivial.

It's the same with cell phones: Apple sells the store iPhones at $600 a pop. You buy it for $190 (or whatever it is) and they make the cash back by making you sign a contract that requires payments over time. Consoles don't have a legal contract, but you ARE gonna buy games.

 

[GonzoGamer]

Wouldn't it at the end of the day, yes, you lose money on each Playstation, but wouldn't the volume of sales at a cheaper price point make up for the loss, more so if they sell more peripherals? Talk about somewhat bad business practices.

I concur. If the price went down, I might actually consider buying one.

And if MS fixes the rrod, I might consider buying a 360; but I'm not holding my breath and neither should you. They came out with luxury hardware at THE wrong time and they probably don't want to lose more money. Even if they were planning a price cut, they're not going to tell everybody about it.

If he was commenting on consumer pressure, that's one thing but I think he should've just ignored Kotdick's threats; they did seem really empty-why the hell would activision give up selling overpriced individual songs to a whole 'nother portion of the market. These sony execs usually sound like complete morons, I was just surprised to find that this guy said some fairly intelligent stuff.

 

[midpipps]

Wouldn't it at the end of the day, yes, you lose money on each Playstation, but wouldn't the volume of sales at a cheaper price point make up for the loss, more so if they sell more peripherals? Talk about somewhat bad business practices.

Actually they already loose a decent amount of money on the system at the price they sell them now yes they might sell more peripherals. But there are also a lot of aftermarket peripherals and such that work with the system such as headsets. You can use any bluetooth and most USB headsets with the system. I am sure they would love to cut the price and get people off their backs. But they have to look at how they would recoup that loss and that is not an easy thing to do in big business.

True, but they make no money what-so-ever if a console just sits on the shelf unsold.

That is true but they still sell systems at the current price point. In fact they are gaining sales compared to previous months

* Nintendo DS: 633,500 (down from 1,040,000)
* Nintendo Wii: 289,500 (down from 340,000)
* Xbox 360: 175,000 (same as last month)
* PlayStation 3: 131,000 (up from 127,000)
* PlayStation 2: 117,000 (down from 172,000)
* PlayStation Portable: 100,400 (down from 116,000)

Source [http://g4tv.com/thefeed/blog/post/696490/Analysis-June-2009-NPD-Hardware-Sales----PlayStation-3-Rises-Xbox-Holds-Steady.html]

So now you tell me if you were gaining speed at the current price point and you were already taking a loss would you be so fast to drop the price? Put yourself in their position once.

 

[Logan Westbrook]

Wouldn't it at the end of the day, yes, you lose money on each Playstation, but wouldn't the volume of sales at a cheaper price point make up for the loss, more so if they sell more peripherals? Talk about somewhat bad business practices.

Um, no. When he says he will lose money, he doesn't mean that it will cut into the profits, he means it will actually cost Sony money. Consoles are usually pretty heavily subsidised, and the PS3 especially so.

 

[KSarty]

I honestly think the PS3 is as cheap as it can be at this point in the game. Buying a 360 with a hard drive, wireless internet, and a years worth of online subscription (all of which the PS3 comes with already included) brings you to $450 according to Best Buy. The PS3 right now is $400, what is the problem here?

The problem is if you don't want all of those -- you just want a game machine.

Then you wouldn't want a PS3 no matter how cheap it was and my point still stands. The system is as cheap as they can afford to make it right now.

 

[sneak_copter]

You know there's no added costs to the the ps3 like there is for the 360, you have to pay for online play, pay if you want wi-fi, you have to get a warranty in case of red ring... over the course of a couple years you'll spend more on your 360 than you would on a ps3.

We're not comparing the 360 to the PS3. We're discussing wether or not the PS3 needs a price cut.

Why do people feel the need to compare every single console and/or game?

 

[KSarty]

You know there's no added costs to the the ps3 like there is for the 360, you have to pay for online play, pay if you want wi-fi, you have to get a warranty in case of red ring... over the course of a couple years you'll spend more on your 360 than you would on a ps3.

We're not comparing the 360 to the PS3. We're discussing wether or not the PS3 needs a price cut.

Why do people feel the need to compare every single console and/or game?

It makes perfect sense to me. The PS3 catches an amazing amount of flak for it's price, but a 360 with the accessories that a PS3 comes with costs even more. I have nothing against the 360 personally, I've enjoyed playing quite a few games on my friends' systems. The comparison is to put things in perspective, not to bash the 360.

 

[midpipps]

A price cut is NECESSARY. That's the main (and only, to my knowledge) complaint about the PS3. Sony would start making money off the PS3 if more people owned them. Then they'd buy the add-ons and extras, because those are priced pretty well.

But fine, you don't want to cut the price. Here's an alternative plan, Mr. CEO, free of charge. Sell PS3s in separate parts like the X-box 360. Sell a full PS3 at the normal price, but also sell a core system with no hard drive, no wireless, less USB ports, and, well, WHATEVER you can cut out and sell separately. Sure, if you buy a core PS3, a hard drive, and wireless adapter separately it would end up costing MORE than a full PS3 (Like it does with the 360) but hey, mo' money mo' money.

Sony, you make great products, by you guys know nothing about marketing.

See there in lies the problem they really have nothing they can yank out of the system other then maybe the wireless card. They have to have the hard drive there is no memory cards for the system. Also they would not make the money back on the hard drives because their system will accept most sata laptop hard drives so instead of buying an overpriced plastic encased one like microsoft people could just buy a seagate or western digital off of newegg for 50 bucks.

Also the reason they cut backwards compatibility was because of everyone complaining about price so they pulled the emotion chip out to save money on production and went to a emulated ps2 system which never worked right so they dropped that for the time being I have a feeling you will see a sony ps2 emulator come back sooner or later for the ps3.

So yes a price cut may be NESCESSARY in your mind but to sony it is not so cut and dry of a situation.

 

[Nazrel]

Sony has managed to level out there production costs to the point that they are making money on the sale of units.

Yet some of you seem to think that if you're selling in the red is a good idea, and that selling a lot in the red would be a great one. This is because you are unreasonable morons.

Here are some fundamentals of business, selling something for less then it costs to make is a bad idea, this means you lose money every time you sell something, this is counter to the idea of business, which is to make money.

Then why sell for less to being with you might ask? For market share, they know they can decrease the cost in the long run so they sell it at a cost they know they can achieve eventually, this increases their install base, which increases the games for it, which increases demand for the system.

There is however a point where this stops being a good idea, and the PS3 isn't selling so badly they would want to turn it back into a hemorrhaging wound on the companies income statements!

 

[murphy7801]

I honestly think the PS3 is as cheap as it can be at this point in the game. Buying a 360 with a hard drive, wireless internet, and a years worth of online subscription (all of which the PS3 comes with already included) brings you to $450 according to Best Buy. The PS3 right now is $400, what is the problem here?

Ha here in UK all those with a 360 are still less than a ps3.
360 premium £169.99 wireless connectivity £45 years subscription to live £39.99 = £255
PS3=299.99 also the 360 gets better bundles

 

[MK Tha Rebel]

A price cut is NECESSARY. That's the main (and only, to my knowledge) complaint about the PS3. Sony would start making money off the PS3 if more people owned them. Then they'd buy the add-ons and extras, because those are priced pretty well.

But fine, you don't want to cut the price. Here's an alternative plan, Mr. CEO, free of charge. Sell PS3s in separate parts like the X-box 360. Sell a full PS3 at the normal price, but also sell a core system with no hard drive, no wireless, less USB ports, and, well, WHATEVER you can cut out and sell separately. Sure, if you buy a core PS3, a hard drive, and wireless adapter separately it would end up costing MORE than a full PS3 (Like it does with the 360) but hey, mo' money mo' money.

Sony, you make great products, by you guys know nothing about marketing.

See there in lies the problem they really have nothing they can yank out of the system other then maybe the wireless card. They have to have the hard drive there is no memory cards for the system. Also they would not make the money back on the hard drives because their system will accept most sata laptop hard drives so instead of buying an overpriced plastic encased one like microsoft people could just buy a seagate or western digital off of newegg for 50 bucks.

Also the reason they cut backwards compatibility was because of everyone complaining about price so they pulled the emotion chip out to save money on production and went to a emulated ps2 system which never worked right so they dropped that for the time being I have a feeling you will see a sony ps2 emulator come back sooner or later for the ps3.

So yes a price cut may be NESCESSARY in your mind but to sony it is not so cut and dry of a situation.

True. Everyone's gotta make money. I'm no expert on stuff like this. Still, Sony needs to cut the price SOMEHOW. That's the main complaint about the PS3.

 

[Wordsandstuffwillbenexttothis8465]

I guess I am never gonna get to play MGS4....

 

[Logan Westbrook]

Wouldn't it at the end of the day, yes, you lose money on each Playstation, but wouldn't the volume of sales at a cheaper price point make up for the loss, more so if they sell more peripherals? Talk about somewhat bad business practices.

Um, no. When he says he will lose money, he doesn't mean that it will cut into the profits, he means it will actually cost Sony money. Consoles are usually pretty heavily subsidised, and the PS3 especially so.

True as that may be, oh wise and powerful Nilcypher, it still doesn't address Mrfft's comment that peripherals and game royalties are where the console creators are supposed to make back the losses, and indeed, profit.

No, his point about peripherals was a valid one, which I assumed - apparently incorrectly - was implicit by me not mentioning it.

 

[HeyZeus_Ezekiel_Jesus]

People that complain about the PS3 not having a price cut are people that have no ability to save their money until they have enough to make the purchase.

 

[owner276]

I'm amazed that Sony has managed to survive this long...They need to stop being arrogant dickheads, and try to help the fans if they want to succeed. I mean, at least Microsoft and Nintendo occasionally listen to their fans, and (gasp!) admit they were wrong...

 

[FinalHeart95]

I won't buy one until they put backward compatibility back in. So, probably never.

 

[ActualOvaltine]

Well I am was going to buy a PS3 if the price went down, but it seems like I will not be anytime soon. They are losing money with every unit made already. The only thing I do have to say is that Sony is in kind of a shitty situation. If you keep the price, your costs are not so high, but you sell a lot less because of the cost and the current economy. If you drop it, the manufacturing costs are increased but the possibility that many people still will not buy it. However, if they lower the price, it is a crap shoot, but it could work.

 

[IceStar100]

You know there's no added costs to the the ps3 like there is for the 360, you have to pay for online play, pay if you want wi-fi, you have to get a warranty in case of red ring... over the course of a couple years you'll spend more on your 360 than you would on a ps3.

true but thats just how the game played. Xbox is better at it then sony. It's not one lump some it's bit and peices.

 

[murphy7801]

Though I did find it funny when saying there putting pressure on activsion how ?
Activision makes loads money has lots successful franchises and making games for the ps3 isnt that profitable for them?
Sony has depts piling up and is driving away software developers left right and centre!

Yes sony your big boy your not getting yourself in to trouble when you speak.