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Sony announces PS3 price drop to $249.99

Posted at 17 August 2011 01:50 CET by etdragon

Sony is not messing around. At this year’s Gamescom the company announced they would be cutting the price of the PS3, yet again, bringing it down to $249.99 (or €249.99 in Europe and ¥24,980 in Japan) for the 160GB.  If Sony’s Andrew House is to be believed that price is effective immediately.

About this time two years ago Sony cut the price of the PS3 console down to $299 so apparently Sony’s M.O. is to reduce their prices in August. With the 160GB model now being $249.99 Sony has also priced the 320GB model at $299.99. Along with a cut to the PS3 price Sony also announced a new PSP model (available only in Europe) that will come in at €99 but strip out a bunch of features including the WiFi abilities of the system.

What’s interesting about this move by Sony is it wasn’t prompted by any such move by Microsoft or Nintendo. Sony states that PS3 is gaining momentum right now which means if they are to be believed, the price cut isn’t due to poor sales. The real problem is in the current console landscape there aren’t a phenomenal number of exclusive titles anymore. With the software library of the PS3 and Xbox 360 being very similar, price is often the deciding factor for a consumer who doesn’t have a brand preference. Microsoft has been aggressive about the Xbox 360’s pricing and as such has sold a boatload of consoles.

The other issue Sony has come up against is a nasty public view of the company after the hacking nightmare they faced this past April. The Welcome Back Program Sony introduced did a decent enough job of calming angry console owners but it didn’t do anything to change the public opinion of the company to those without a PS3 currently in their home. Sony is likely hoping to attract even more new customers to their system via this new price cut.

In theory this cut should generate a few decent months for the company, especially going into the holiday season, but it likely won’t result in mind blowing numbers. The economy is still rocky and that means adding another electronic device is a tough sell no matter how many features it has. With Blu-ray players being so cheap these days it behooves many consumers to skip the PS3 (especially if they have another console in their house) and just buy a standalone Blu-ray player to watch High Def movies.

The more interesting question is exactly what is Sony doing with the PSP. With the Playstation Vita launching early next year in most territories, why would Sony manufacture yet another model of the PSP? It doesn’t make sense to try and convince consumers to buy into a platform on its way out the door in the same breath as you are trying to get everyone hyped up about your new portable system. The message there is jumbled and confusing.

What does all of this price jockeying mean for Sony moving forward? Likely nothing for right now. Most of this is likely aimed at having a strong holiday season by moving consoles and software. Some are predicting Sony is already ramping up to launch the PS4 in 2012, but this price cut doesn’t read like a fire sale on the PS3. Sony will likely wait until Microsoft makes a move before even discussing the PS4 officially, let alone discounting the PS3 to make room. Speaking of Microsoft, it will be worthwhile to watch how they react to this price cut.

The real question is will Microsoft react to this with a cut of their own to keep their hardware sales strong during the holiday season or will they let it ride and see what happens?

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There are 6 comments

SithTracy
MyCE Senior Member
Posted on: 17 Aug 11 03:08
    Needs to be cheaper.
    Anthony1uk
    MyCE Senior Member
    Posted on: 17 Aug 11 13:18
      Sony have to be the second greediest company behind Apple.

      The main selling point of the PS3 over the Xbox360 was the hardware was much better. But as an owner of an Xbox360 Slim and PS3 Slim 320GB i would say in terms of hardware the 360 is sleeker and better,

      Other than of course the lack of Blu-Ray but really this is offset by the face that you can install every game to the hard drive on the 360 and get totally fast loading silent running.

      The Ps3 320GB needs to be £200 in the UK. and 160GB model £170 Anything more than this is over priced.
      tmc8080
      MyCE Resident
      Posted on: 17 Aug 11 14:56
        From a ripe high of $600 to $249? Hmm, now you know how much being ripped off feels like... making the console these days probably doesn't exceed $100 nor did it exceed $250 in the first days of production. Companies keep the true costs a closely guarded trade secret, even those teardowns are very high ballpark esitmates and are PR spins to justify the MSRP price. Where are the next generation consoles?

        Also, if they think they can make a console beyond the $500 price tag again, they're heading for a bath on sales. The gaming industry while strong, is not what it used to be.. the ability to keep games exclusive to a console are not as viable anymore (especially with computing power the way it is today, emulation and multi-platform porting is a much easier task today than it was say.. even 10 years ago). Game consoles will also need to think outside the box for a bit.. they will be media hubs, set-tops and multi-os platforms rather than dedicated consoles.

        The evolution is upon us, WHO will get there first with a popular concept? SONY, MICROSOFT, APPLE, GOOGLE?
        ivid
        MyCE Resident
        Posted on: 17 Aug 11 20:18
          Come on guys be realistic. $250 is not bad at all for a top gen console specially when it has a blu ray player as a bonus.

          I would hardly call Sony or Apple greedy with respect to their hardware, considering with the low margins these products make per unit. Read about it. You want greed look at HDTV manufacturers, those have huge profit margins.

          tmc8080 you're wrong. The PS3 cost a fortune to make in the beginning and when it was released at $600 it was not profitable. It exceeded $800 to manufacture a PS3 in 2006. Yes $800 ! They make their money on the games.
          Console hardware, like any PC product, has a premium price when initially released. and comes down over time. We all know this. Even at 250 they are not making much profit, they may still be taking a loss actually. In 2009 it still cost $336 for them to make the PS3 when it sold for $299. Can't find the current cost...

          Anthony1uk I agree but for different reasons. It was always lie that PS3 had superior hardware. The video / graphics tech inside the 360 was a generation ahead of the PS3's nVidia GPU Sony used. 360 had the first DirectX 10 video card in it a year before they came to the PC, thanks to the collaboration between MS and ATI ! Its true. 360 has a more efficient, non-segmented / unified GPU architecture. PS3 had a higher CPU processing power but not GPU, and was far more difficult to program for.
          AIRBUD7
          MyCE Member
          Posted on: 18 Aug 11 06:08
            "Sony announces PS3 price drop to $249.99"

            To Late, If Sony had been consumer friendly...They would not be Falling like they are Now!!!
            tmc8080
            MyCE Resident
            Posted on: 22 Aug 11 01:24
              Very few companies mass produce a product at a loss... Sony included. If you believe the company PR spin then you probably drink the Apple kool aid as well about their products and the publicisized teardowns of build cost. How many companies do you know that publish their true mass production contract terms? It's almost unheard of. Estimates are based upon component costs, labor and production facilities, but never does a company reveal the "to the penny" numbers. If they say it was $800, they're lying. There were some increased costs because a high number of the blu ray lasers were failing in initial production. Then they had to keep revising the motherboard due to hardware hacks which would attack the copyright protection and that cost money as well, but NOT $800, not even close.

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