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Will A PS3 Price Cut Really Help?

Gamers didn't get the expected price cut on the PlayStation 3 that they were expecting and hoping for at E3 this year, and in the past few weeks the consumers aren't the only ones asking Sony to drop the price. Activision has threatened to stop supporting the platform if the price doesn't drop. Now, Tecmo Koei has stated that they've been asking Sony to cut the price for a while now.

While the pressure is on Sony, we probably will not see a price drop until this holiday season at the earliest. This will no doubt give Sony a boost in sales and increase the install base, but will it be enough?

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Genesis53027d ago (Edited 3027d ago )

Well when the PS3 started out selling the 360 on a regular basis in America they cut the price of the 360. Did it help? These people seem to have very short memories.

thesummerofgeorge3027d ago

Sales at least. I guess it depends if it'll help enough to make a price cut worth while.

Mr_Showtime13027d ago

The kind that get made into a "news story" and posted on N4G on an hourly basis?

Anon19743027d ago

Six months in to 2008, the 360 was behind worldwide by over a million consoles. September they cut the price and voila! 2008 calendar year ends in a tie between the two consoles.

6 months in to 2009 the PS3 seems to be trailing the 360 by approx 300,000 units. Surely if history has taught us anything in this industry it's that consumers respond to lower prices. If the 360 can overcome a deficit of over a million consoles with a price cut it's not too far of a stretch to expect a PS3 price cut could bridge that 300,000 unit gap and pull out well in front of the 360 for 2009.

And on top of this, Sony raised their own targets for this year 30% higher than last. Clearly they have something up their sleeve. These ship targets aren't made lightly as Sony, like any publicly traded company, is answerable to their shareholders.

heroicjanitor3027d ago

Yes. Yes they do. Great question.

talltony3027d ago

What the? Of course a freaking price cut will help the ps3 sell more. Sounds to me the xbox fan man that wrote this is just as uninformed as all the other ones on this site.

mrblacknut3027d ago (Edited 3027d ago )

What difference does it make what they did in 2008. Doesn't matter they they ended up selling the same in 08 it still is sitting 8mil behind and still selling less than what it did in 08. Since November the PS3 has sold less on a Year on Year loss and then we find out in UK the 360 IS outselling the PS3. Whenever the price drop comes it will only do so much and as the article states back full circle. I don't understand the focus about HA HA it outsold it this year or tied in this when it still is behind and still cost too much. They are still losing money on the console and everyone wanting a 100 price cut when the system is losing 40 dollars on it doesn't make any sense from a company standpoint to cut it.

bjornbear3027d ago

It won't help because people always prefer to spend as much money as possible.

/s *facepalm*.......-_-

Anon19743027d ago (Edited 3027d ago )

My point in bringing up 2008 sales is simply to illustrate a point. The 360 was down and out, and the price cut boosted them. You'd have to be a fool to predict that somehow a price cut for the PS3 would offer up a similar boost.

Secondly, it's rather naive to focus on just the down months to illustrate your point. Last June, were you predicting the demise of the 360 based on only 6 months worth of sales data? Of course not, and it's equally ludicrous to make sweeping sales predictions based on just the recent sales slowing while we're in the midst of a global depression.
The fact remains that even with the current slow down, consumers are adopting the PS3 much faster than they picked up the 360. Currently the PS3 sits just shy of 23 million consoles, a full 4 million consoles more than the 360 was at this stage in it's life cycle. I don't buy the "but it has 8 million more units" nonsense. If installed user base was all that mattered to developers, no one would have made a single game for the 360...we'd all still be playing PS2 games - or everyone would have switched to the Wii.

Finally, as for the cost of the PS3, how do you know the PS3 is still being sold at a loss? Sony has never revealed what it costs to currently produce the PS3. Just like Microsoft has never said they make money off the 360 hardware (indeed, since the 360's price cut, MS Entertainment has seem almost half a billion in profits disappear despite increased sales and increased revenue leading some to suspect the 360 is actually still selling at a loss). The PS2 was also sold at a substantial loss for quite some time and we know how that turned out. At any rate, hardware isn't where the money is made. It's software..always has been.
And even by the best industry estimates the PS3 hardware would be break even right now if it weren't for the appreciation of the yen vs the US dollar and Euro.

Boody-Bandit3027d ago (Edited 3027d ago )

Really.

That's like asking if water is wet or the earth is round.
When I am shopping for nearly anything I want to get the best price possible. TV's, AV equipment, cars, furniture, nearly anything. I know quite a few people that are waiting for the price to drop to pick up a PS3. Every dollar counts right now.

Sez 3027d ago

Gotta love how people on this site want to say that when ps3 was outselling the 360 for like what 6 to 7 months out the year. 360 needed a price drop. Yet forget the the 360 was outselling the ps3 longer. And also forget Sony dropped the price of the ps3 twice in it's first year just to sell on par with the 360. I remember when the ps3 couldn't outsell the gameboy advance.

All-33027d ago (Edited 3027d ago )

--> I don't buy the "but it has 8 million more units" nonsense. If installed user base was all that mattered to developers, no one would have made a single game for the 360...

LOL - and even less would be made for the PS3... what's less than none?

--> we'd all still be playing PS2 games - or everyone would have switched to the Wii.

But because of the PS2 install base --> there ARE games still being released on the PS2.

http://ps2.ign.com/index/re...

Many many more game publishers/developers are making Wii games --> because of the install base. Care to argue about 3rd party Wii support?

You don't have to 'buy' into any install base numbers nonsense... but the game publishers/developers are. You haven't proven your case at all with the PS2/Wii examples.

--> Just like Microsoft has never said they make money off the 360 hardware (indeed, since the 360's price cut, MS Entertainment has seem almost half a billion in profits disappear despite increased sales and increased revenue leading some to suspect the 360 is actually still selling at a loss).

The MS Entertainment division is affected by more than 360 costs. The Zune cost Microsoft a huge amount in losses.... and the Zune is part of the MS Entertainment division.

Trebius3027d ago

Every year people expect a price drop, and it just hasnt happened.

Thats the only reason why sales seem to be declining lately.

It doesnt help much that M$ was going around saying PS3's cutting prices soon, just to sabotage their sales.

TONS of people are waiting for the price to drop, that's absolutely 100% fact.

As soon as they announce the price drop, everyone will say "FINALLY! Goddamn!" And you'll see sales skyrocket.

CrazzyMan3027d ago (Edited 3027d ago )

PS3 will destroy competitors. =)

Why 299$ price matter? Because 299$ is mass market price this gen.
Not to mention, that PS3 is still selling on PAR with 199-299$ costing x360.
Price difference in Europe is even bigger.

Come on, PS3 has really GREAT games already and is getting even more great ones like God of War 3, Uncharted 2, Heavy Rain, Gran Turismo 5, Agent, Ratchet:CiT, Team Ico game and many other AAA games.

PS3 is a MUST HAVE console this gen, and when it will reach 299$ price, there will be left no excuses for not getting one.

eagle213027d ago

Microsoft will sweat bullets when PS3 is $299. If a Slim model is introduced, I expect even owners of PS3 (around 20%) to buy another one eventually. Nintendo will drop price when PS3 drops price. 360 only outsold PS3 by a measly 44k in May 2009 with a $200 difference in price. I don't think 360 is selling well AT ALL. If 360 is so hot, why the heck is it selling so slow at $199? :)

Traveler3027d ago

The PS3 is still generally selling on par with the 360 despite the 360 being much cheaper. This indicates that the PS3 is a more desired product. When Sony drops the price of the PS3 I have no doubt we will see a significant jump in sales.

Grandizer3027d ago

cut a 100$ and I buy one.

Yes it will help. At least me in getting one.

Boody-Bandit3027d ago (Edited 3027d ago )

I am definitely picking up another PS3 when it drops to $299.

FamilyGuy3027d ago (Edited 3027d ago )

Are you kidding me?
If there weren't so many price cut rumors constantly in circulation the PS3 would be selling more NOW. That said, just imagine what happens when/if an actual price drop DOES hits.

Of course a price drop will help, Amazon.com proved that, woot.com proved that, any recent discount we've seen that sales out in a day proves that.

The initial question is as pointless as the article itself.

They think it won't make a difference for long but they're wrong.
Reason being that since (i believe) sales are currently held back because of all the people waiting on a price cut, then AFTER a price cut people will continuously buy them because they will have no thought of another possible price cut coming soon holding them back from purchasing.

It's obvious.

Anon19743026d ago (Edited 3026d ago )

You did nothing to disprove my point. Your comment that developers are going to drop the PS3 because the Xbox 360 has 8 million more units simply isn't happening. That's the end of that story.

And yes, the PS2 still has games because it's still be supported. What's your point?

And the Wii's third party support? Where on earth have you been? Anyone that's been paying attention knows that the Wii's third party support is lacking. Your "installed user base" argument hasn't just been sunk, it's sitting at the bottom of the Atlantic and people are doing documentaries about it.

Here's an article right here about the Wii's struggles with third party support and Nintendo commenting on the issue.
http://news.softpedia.com/n...

Yes, Microsoft entertainment is effected by other things than the Xbox...but the Xbox is hands down the biggest contributer. The Zune brings in about 100 million in revenue for the year. The 360 brings in 5 billion. The rest of the revenue that MS entertainment brings in is made up of Windows for mobile and Office for Mac (go figure).
The Zune did not cause MS Entertainment to lose half a billion in profits since MS cut the 360's price. Use your head.

El Botto3026d ago (Edited 3026d ago )

Seeing how PS3 is the most wanted console amongst real gamers. I personally do not care a single bit because I already own a PS3. Price cuts wont affect me a bit.

PS3 is in a better position than MS 360. The 360 is "supposedly" selling more units after last years pricecut (before the price cut, its sales were abysmal and PS3 was outselling it worldwide every week). But the higher sales comes at a high price, people. Let me fill you in on a little secret here.

MSs Xbox division is NOT doing well. Things are abysmall there. They are doing so poor that Steve Balmer unleashed his wrath in that division, firing up tp 50% of the XBOX division. Things are going bad, people. They sacrificed higher margins for a lower pricecut. They just want to move more units out but at the same time, every units (including the cheapest 199 model) is sold at a LOSS.

So they get higher sales because of a lower price point. But the higher sales dont mean anything because they arent getting money with each console sold. In fact, they are back in red ink again. In the business world, red ink refers to LOSS.

Check this out. The facts listed there, WILL SHOCK the majority of you.

http://boycottnovell.com/20...

A quick but not exhaustive summary in that link:

- MS XBOX division operating at a LOSS again
- 7 billion (last year. Its around 9 billion now) in loss since they stepped in gaming and the future prospects dont look good. Nothing shows that they will make money in the future.
- They are selling hardware at a loss.
- XBOX division PR doing their utter best to keep you from knowing the reality (which myself and several others have already claimed on several occasion)
- People leaving XBOX division because its a cesspool place. We have all seen XBOX India chief leave about a month ago. And just a few weeks ago: John Schappert.
- RROD still not solved (obviously, since its a DESIGN flaw and not a manufacturing flaw. Something goes wrong in the factory (ie manufacturing) and you can fix it. But this isnt a factory issue. The fking motherboard, graphics card, processor and every other cheap plastic in there, simply DONT work properly together. And worse, its being claimed that its over 60%. Meaning 2/3 of every 360 owner will face it eventually. Some will even face it multiple times.
- MS going through great lengths to keep these a secret. Whistleblower on RROD is FIRED.

Rofl, everyday that I come online here, it strikes me how absolutely CLUELESS the 14 year old 360 fanboys are. I mean they come in here and gloat about 360 while talking bad about PS3 and they take every opportunity they get to bash the PS3. Meanwhile they think 360 is doing so great with its "sales" (always the fking sales argument) when the 360 has the biggest problems of all 3 consoles.

http://boycottnovell.com/20...

People dont be surprised if 360 is going to be MSs last attempt in the videogame industry. After that, we might see IBM, Apple or EA give it a try but MS...I think they going back to the software side of videogames rofl ("Sega").

The facts are crystal clear:

- PS3 twice as expensive. 360 is not selling a whole lot more than PS3.
- PS3 has the better line up that you can get nowhere else.
- PS2 fanbase not going 360. Obviously they are waiting for PS3 pricecut.
- Blu Ray is now the dominant next gen format
- MS is in red ink. 9 billion in red and still not any prospect of ever getting this back. We KNOW PS3 will turn profitable in the future again (its a matter of TIME). But 360 is already sacrificing margin for higher sales. By the time, their consoles arent sold at a loss anymore, nobody will want it. Market saturation.

Conclusion: MS 360 is in the worst position.

Oh believe me, Nintendo has its fair share of problems. But as long they keep selling, the problems can be considered minor.

+ Show (18) more repliesLast reply 3026d ago
GWAVE3027d ago

So, 3/4ths of the media moans and complains and griped about the price. They say "if ONLY Sony would drop the price! If ONLY there was a price drop things would be much better!" They compare sales, show off pie charts, and say that the one thing the PS3 NEEDS is a price drop...

...and now said price drop might not even help?

The facts: in year-to-year sales, the PS3 has been keeping pace with the 360, even though it (currently) is double the price of the cheapest 360 SKU. Eliminate the 360's 1-year headstart, and you have both systems selling roughly the same number of consoles.

Use some logic, people.

mrblacknut3027d ago

No it actually hasn't
The 360 has only seen one decline in YOY sales in comparison to the PS3. At least in in North America the PS3 has sold less since November 08 for the previous year. It has yet to actually sale more. Nothing to argue about when the facts have been posted from NPD so do the research. It has been confirmed the 360 is outselling the PS3 in the UK.

IdleLeeSiuLung3027d ago

The 360 outselling the PS3 in the UK isn't exactly news. UK has a tendency to follow the US market.

What is more interesting is the 360 outselling the Wii. How the hell does that happen and why?

cereal_killa3027d ago

Note to Blacknut NA & UK =/= the WORLD.

DevastationEve3027d ago (Edited 3027d ago )

US and EU make up 4 of the 5 world powers, with 3 of them in the EU. Los Angeles alone is the 5th largest world economy.

so yes. they ARE the world.

La Chance3027d ago (Edited 3027d ago )

"Eliminate the 360's 1-year headstart, and you have both systems selling roughly the same number of consoles."

LOL, You guys REALLY do live in a dream world...

cereal_killa3027d ago (Edited 3027d ago )

ApocalyPS3 Did I say EU no I said UK UK=/=EU

So No they are not the world

DevastationEve3027d ago (Edited 3027d ago )

UK is one of those 3, so they are included. the commerce and economy that they constitute places them that much higher on the scale of things too. that's why their money is worth more. when your economy and currency are that highly productive and valuable (respectively) you are basically that much higher and more important to the world.

Traveler3027d ago

North America is a huge market, but the point still stands that if you look at global sales the PS3 has sold more than the 360 in the same time frame. It clearly has more growth potential and I think we will see huge sales increases when the price is dropped.

+ Show (5) more repliesLast reply 3027d ago
All Time Greatness3027d ago

Yea and another 360 and Wii pricecut will help also.

Darkeyes3027d ago (Edited 3027d ago )

@ATG... How much low do you expect the price of the 360 to go huh? Greenberg himself said that the 360 will be around at least till 2014-2015. As per my knowledge, the cheapest 360 SKU is available for around 200 bucks. So do you expect them to cut the price now and sell 360's for free during the later half of it's life?
Even a PS2 hit 99$ after nearly 8-9 years. Unless 360 really gets an ass whopping by a PS3 price cut, don't expect a 360 price cut for sometime.

On topic, PS3 has been doing considerably well, judging that it's nearly twice the price of the cheapest 360. A price cut would most definitely move a lot of PS3's. A new 'PS3 slim' with a lower price tag would even sell better. It's simple to analyze what Sony is doing. They are mainly waiting for the perfect time. PS3 is just 3 years into it's life cycle and another 6-7 years left. Price cut at regular intervals are essential, but over cutting the price and then a drought for another 2 years will bite them back.

80$ price cut will be perfect. It's in that sweet spot... not too much, not too less.

mrblacknut3027d ago

Why do you or anyone expect a price cut on the PS3 when it is losing money vs the 360 is no longer in the red? Why can't they price cut it if they choose too. The PS3 is not making money so why argue about what MS can actually do?

Darkeyes3027d ago (Edited 3027d ago )

Dude it's simple logic. PS3 is twice the price of the 360. You might be under the impression that Sony loses money on PS3, but it compensates with PS2 and PSP sales. Even if Sony lost money after pooling all the cash, then too it will cut the price mainly cause they have to stay in the competition... A loss now by a price cut would reap benefits in the long run. Till date, only the games and the PS brand have been puling the PS3 out of the waters.Even last year, despite a price cut, the 360 barely scraped passed a PS3 in sales... The thing that saved PS3 were games and the PS brand. Price has always been a real issue, and it's showing now. Games can pull a PS3 sales only till a few more months. Hence a new PS3 slim or a PS3 price cut is inevitable. A PS3 slim is more likely as the parts might reduce costs and so help Sony earn profits.

As far as 360's price cut is concerned, again it's marketing my friend. Why in the world would M$ cut the 360's price now when it's selling reasonably well. The price has already reached 200$ for the base model. What do you expect, another 100$ price cut!!!! You do know that even if the 360 lasts for 4 more years, price cut somewhere then would be more beneficial then.A 50-100$ price cut now, and then you expect M$ to sell 360's for FREE during the end of it's lifetime!!! M$ is the most cunning company out there... Never expect it to drop the price of a product which can sell at a higher price. Any fool with a little marketing knowledge can analyze that...

It's simple, M$ has played it's card and it's Sony's turn. Does it turn out to be a gen turning move is yet to be seen... Judging what a price cut last year by M$ did, I expect it to have an impact.

raztad3027d ago

Looking at some 360 fans logic it seems MS could cut 360 price indefinitely. That's so funny :D Well I hope that is true, imo the 360 is very well worth 99$, the sweet spot of DVD based consoles. Gimme me my 99$ 360 MS, sure as Hell I'm getting one.

raztad3027d ago (Edited 3027d ago )

Double post. Sorry

cereal_killa3027d ago

"Why do you or anyone expect a price cut on the PS3 when it is losing money vs the 360 is no longer in the red? Why can't they price cut it if they choose too."

What world do you live M$ is still in the RED and it will take years b4 they are even out in the black....as people have reported the 360 did not start to report a small profit until late 2008... What do you think they were doing before this just breaking even? no they have been selling at a loss just like every console to date plus with the extended warranty to cover RROD/E74 at about $1.5-2 billion and counting doesn't make them any more profitable than you think M$ just can't drop the price when they want maybe in your delusional world of make believe but not in this one.

Anon19743027d ago (Edited 3027d ago )

Mrblacknut is dead wrong on that. In fact, since the 360's price cut in September, not only did MS Entertainment go back in the red this last quarter (despite increased sales and increased revenue) but almost half a billion dollars in profit has vanished year over year in the last two reported quarters alone. Have a look.

http://www.microsoft.com/ms...

It'll take a long time to make up the billions lost due to the warranty debacle when you're still posting operating losses.

+ Show (4) more repliesLast reply 3027d ago
Myst3027d ago

No it surely will not, because games will still be 60.00

*Cries*

Anyway I think people know the answer to this, also I think their hasn't really been a need for price cuts due to bundles, and deals via Dell.com. Weren't they selling some PS3s at 299.99 at one point? The price of a 360 60 GB model.

lloyd_wonder3027d ago

The PS3 hasn't had a price cut in nearly two years. Sales are going to be huge in all the major territories. Remember how fast the PS3 closed the gap to about five million in 2008? The PS3 at $299.99 will close it faster because it'll directly be competing with the 360 Pro model at the same price. Xbox will lose marketshare and the PS3 will gain marketshare.

Let's not talk about FFXIII (JPN,) GT5, and GOW III...

Microsoft can't drop the price to $99.99 if they're going for a ten year life cycle and want to bundle Natal. $149.99 won't have a huge impact because of the value for money you get with the PS3. The xbox may be in for a long few years of spanking.