Should Sony Cut the PlayStation 3’s Price Again Now?

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It really depends on who you talk to or when and where you think the endgame’s lines are going to be drawn. Sony’s been rather mendacious, and it knows this, about how it sold the PS3 in the system’s first six months. Punditry about the company’s arrogance aside, there’s no denying Sony’s game plan rested almost singularly on the popularity of its PlayStation brand.

That brand of course failed to transcend the hard economic realities of foisting $500-$600 and change for extras plus higher-priced $60 games on a price-is-still-king audience, especially when one of the system’s primary selling points — Blu-ray — was an unknown and unnecessarily inseparable component. The train bringing high-definition to the masses is coming, but it’s still barely out of the station when you check sales and demographics (and that, ladies and gentlemen, is why the PS3 didn’t zip off shelves at any point all last year whatever high-def enthusiasts want to bleat about the PS3’s “total value”).
Think about what might have been, had Sony instead sold the PS3 with an optional Blu-ray drive from the start. Such a system might have gone for as low as $400 or even $350. And let’s get something straight: no game developer today absolutely needs Blu-ray’s storage capacity. Nope, no more than the Xbox 360 needs an integrated HD DVD to play the same cross-platform games. Do gamers care about swapping DVDs once or twice over the course of a 40 to 60 hour game if that becomes necessary? They sure didn’t mind swapping up to four CDs playing stuff like Final Fantasy VII. I don’t recall a review anywhere that’s ever knocked a console game for coming on more than one piece of physical media.

Sony could easily have introduced a Blu-ray integrated version for $400 (the entry level model’s going price) around the holidays, or at the Winter CES, or at GDC next month. (They’re certainly no strangers to juggling internal components and SKUs with all the unprecedented model shuffling that’s already occurred.) No one could have predicted the significant corporate shift to Blu-ray that’s just occurred, but with Blu-ray’s momentum hypothetically kicking in, think about how Sony might’ve capitalized on the last 12 months of uncertainty by graduating (instead of bullying) toward an all-in-one player.

Imagine 12 months of a $300-$350 PS3 running terrific exclusives like Uncharted: Drake’s Fortune and Ratchet & Clank Future plus all the solid cross-platform stuff, e.g. Call of Duty 4 and Assassin’s Creed. Add in an external Blu-ray drive for early adopters as optional. I think such a system could have at the very least played neck-and-neck with the Xbox 360 in monthly sales last year, and produced an entirely different 2007 ouctome than the company’s funereal actuals.

Back to the now: GamePro dropped Sony a line about so-called “rumors” of an imminent PS3 price drop and got this response:

“We have no plans for any pricing announcements on the PS3.”

Do you believe them? Maybe you shouldn’t, if history warrants credit, though I wonder sometimes if companies scrub things like planned drops when leaks occur just to spite the media. Sony certainly played a curious game with the media this last year when it flatly denied a rumored $100 price drop in July, only to officially confirm the drop 48 hours later, leading into E3.

On the other hand, someone got sloppy last July and leaked an actual Circuit City ad that spawned the $100 price drop rumor. That’s not the case with this latest tittle-tattle, which doesn’t even rise to the level of rumor, really. It’s not based on anything tangible, just speculation off news a few weeks ago about Sony’s manufacturing costs for the PS3 plummeting. Late-to-the-game punditry, in other words.

Should Sony drop the PS3’s price again? That’s an entirely different question. Sony’s actually lost less money than you’d think by letting a kind of inverse “economies of scale” offset its low monthly sales numbers. Selling more of something you’re losing more money on has the contrary effect of blowing chunks over your monthly quarterlies, after all.

Still, even with the notable bloodletting that would ensue in terms of component costs, the best reason to drop the PS3 to $300 is to eliminate the visible price delta between the PS3 and the Xbox 360. We’ve already talked about who’s really more expensive (the Xbox 360) but most people only see the sticker price, and “total cost of ownership” be damned. Brand identity is worth something, but you only see buy decisions start to factor with price parity. You eliminate the visible delta, you quash remaining arguments for not betting on Sony
(taking the brand-identity-is-king angle, anyway). And if new owners only wake to the value of the internal Blu-ray player a year or two from now, so be it, and more power to high-def sales.

Posted by Matt Peckham (PCWorld)

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Through out my years, Sony has been a passion of mine.

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