Publishers push for PS3 price cut

Janco Partners analyst says Sony is facing "reallocation" of development resources to market-leading Wii; predicts $50-$100 cut by April.

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Sony is in a precarious position with the pricing structure for its flagship gaming console, the PlayStation 3. On the one hand, the Japanese electronics giant is taking a beating across many of its divisions as part of the global economic climate. That problem could be aggravated if Sony were to cut the PS3's price tag, which currently stands at $399 for the 80GB model and $499 for the 160GB SKU.

On the other hand, the hardware manufacturer is facing increasing pressure from its third-party publishing partners to lower the price of its console or risk having development resources diverted to other systems. Speaking to financial news service Bloomberg, Janco Partners analyst Mike Hickey said he believes that unless Sony can substantively increase the PS3's installed base, publishers will likely enact "a capital reallocation" of resources to Nintendo's market-leading Wii. As such, Hickey said he believes that Sony will cut the price of the PS3 by $50-$100 by April.

The call for a price cut is apparently being echoed throughout the publishing community. Bloomberg notes that publishing giant Activision Blizzard derived 39 percent of its revenues during 2008 from the Wii, as opposed to 19 percent from the PS3. Fellow publishing heavyweight Electronic Arts has also begun pouring more effort into the Wii, with CEO John Riccitiello saying as part of his company's third-quarter earnings report in February that EA must "increase focus on the Nintendo Wii platform."

"You can't ignore the guy who has half the market," EA Sports president and former Microsoft executive Peter Moore told Bloomberg, continuing, "Sony obviously still has a ways to go with their pricing." Partially EA-owned Ubisoft also expressed optimism over a price reduction, with CEO Yves Guillemot telling Bloomberg, "Anytime a console manufacturer reduces the price, software publishers benefit."

However, Sony remains committed to the PS3's current price structure. Speaking with Bloomberg, SCEA senior VP of marketing Peter Dille said that there are "no immediate plans" to shave the price on the PS3. "Everybody in the development community would love for the PS3 to be free, so they could just sell razor blades," Dille told Bloomberg, going on to say that Sony is concerned with both profitability and installed base.

As part of its third-quarter earnings report in January, Sony's games division reported sales of ¥393.8 billion ($4.01 billion), down more than 32 percent from the same period of 2007. For the quarter, Sony managed to sell 4.46 million PS3s globally, a dip from the previous year's 4.9 million units. Anticipating its first company-wide loss since 1995, the Japanese electronics company has also announced a cost-cutting measure that will save $1.1 billion through April 2010--at the price of approximately 16,000 jobs.

Discussion

555 comments
Malco_Vincenzo
Malco_Vincenzo

TeabagChampion "Microsoft announced that they will be bringing down the price of the elite to $299.99" FAIL! Where did you hear this? Proof Please.

Kleptos21
Kleptos21

See heres the thing. MS and Sony 360- horrible system with tons of defects...however amazing games, great online, good price. Sony- Amazing system that we probably have not seen the best of yet...but has a horrible line up of games and is priced too high, especially during a recession! Simply put, Sony needs to do this $100 price drop, ps3's will sell. I for one would put the money down first thing with a price drop. Its a simple matter of economics, supply and demand. Lower price creates a demand for more consoles thereby maximizing reveue. They just need to find that profit maximizing point...but they wont find it till they drop the price a bit...and the longer they wait, the further Nintendo gets away and the more MS beats Sony in this one on one battle.

MagicOneUp
MagicOneUp

its about time it should be burried.

sasha08
sasha08

The quality of this machine compared to others is way greater. I believe theres no way sony's price will get even close to the xbox360, the PS3 is just way better, the hardware, media playing options, blueray, etc... xbox is worth $200 maybe, but seriously the PS3, $500+, easily worth every dollar.

Depresso
Depresso

I agree with joel and son of nepharious there, Panasonic is consistently the most reliable brand, just go speak to a second hand specialist to see how many Panasonic returns he gets: zero.

thenephariouson
thenephariouson

@ joelgargan, I absoloutely agree, Panasonic make fantastic hardware, solid built and technically brilliant, not totally reliant on their brand name (unlike certaiin other manufacturers).

joelgargan
joelgargan

@depresso If you get a Panasonic viera 42 Inch HDTV you will not regret it. I have a 47, and my friend has a 50, but they are all seriously flawless. Anyway they are not too expensive, but sony Bravias are junk. good for ps3 and sony DVD players, CRAP beyond imagination for tv. go panasonic. Viera. Oh and this would be kinda cool, pissed me off though how i got a 40gig ps3 and 2 months later you get an 80gig with a dualshock 3 for the same price with better games too.

Depresso
Depresso

Sorry CyberJedy you're right, my mistake, God of War 3 it is. But do not call me MS lover ! I am not a fan of any company (unless they pay me...). True, at the moment I prefer the 360 games but, as I said b4, I will be looking to buy a PS3 when some good exclusives come out (GOW3 being one potentially and Heavy Rain) and when the price is right. I am also not quiet ready to ditch my 42inch plasma screen cos it's not HD so I guess I'll be hunting for a recession discount HD tv set somewhere when I want to invest in Sony big monster. Also another minus is that all PS3 games seem to be a good tenner more expensive than the 360 versions, probably due to HD, again, but who cares, my kids want to play with the Wii now, tse !

JERMINITIS
JERMINITIS

With me being a Wii owner, this makes me happy. Not 'happy' in the sense that a PS3 price drop is lurking, but 'happy' in the sense that maybe some of the third party developers may take another look at the Wii.

joke_man
joke_man

Mastara, The 360 plays DVDs without the Drive. The Drive is for High Def and we all know that HDDVDs failed quite some time ago. I have a Blu Ray player and I occasionally use it depending on if bringing out the quality in a movie is worth the extra dough for buying Blu Ray over DVD. I have considered by a PS3 a couple of times, but the starting price is a big first spend. I mean $500 is a third the cost of my Laptop and the cost of my 360 compared to my laptop is only about 1/7 (btw, my laptop is a Vaio and I love it, talk about quality!). I admit to being jealous about MSG4, God of War 3, Little Big Planet, etc., but at the moment I am up to my neck catching up playing 360 games when I find a small window to start up a game. So I probably wouldn't buy one even with a price drop. I really hope Sony is able to buckle down and make it through the economy for another run in the next generation of video games. Microsoft could learn alot about consoles from them and I've gotta say, I've loved the company for quite some time, even considering I have a 360 over the PS3 at the moment.

TSNAKE617
TSNAKE617

Pitch Black, The 360 got plenty of exclusives last year, more than a few. But this year the PS3 has a chance of taking back the spotlight. By the way stop using the "...".

xroguekillax
xroguekillax

$50 to $100 price cut? My guess is probably the latter. The 80GB will probably start being sold for $300. Not a bad deal at all.

RPG_Fan_I_Am
RPG_Fan_I_Am

the cables that comes with the ps3 are good enough... your not gonna get much better quality out of an hdmi cable. besides they only cost 6 bucks if you really want one.

brendanhunt1
brendanhunt1

yes there will be a new xbox 720 and ps4 around 2011 but who here buys a new game console in the first year, the good games wont be out yet and it cost too much

brendanhunt1
brendanhunt1

why do people still complain about ps3 not having an hdml cable with it, they dont cost alot

brendanhunt1
brendanhunt1

It would definitely boost sales but it would risk them making money on the console it self, its a decision that will make or break playstation

swamptick
swamptick

A price drop would probably boost sales for Sony and certainly give Sony an image boost. The PS3's real problem is lack of quality 'must have' software. That is not to say there are not a few 'must have' titles, there are just very, very few. If Sony and the publishers for the PS3 can boost quality titles and promote a price cut in the machine it will probably help Sony in the long haul. I sometimes wonder if Sony is seeing the big picture. I have a PS3 and an Xbox 360 and enjoy them both, but right now it just seems that one company is floundering about, searching for an identity while the other knows exactly what it's about and where it is headed. Here is to hoping both companies do well.

thenephariouson
thenephariouson

It ammuses me that these big companies are concerned with sales figures when compared to the Wii, they should simply ignore it as the wii has its very own niche market (little kiddies, mums & grandparents.. oh and fat people), MS & Sony should concentrate on real games for real gamers and not worry to much about the cutsie cuddly coin collecting genres, oh and the comical wiifit (GET OUT MORE)!

DoeJohn531
DoeJohn531

@ Triton Are you serious? I use my PS3 90% of the time as a BluRay Player and 10% of the time as a gaming console.

marthinuss
marthinuss

Love to see the XBox fanboys commenting. Last time I checked the XBox has only sold 7 million consoles more than the PS3. So when it comes to price, I do not think Sony has a big problem since they still sell. The big problem is resources being shifted towards the pathetic Wii. When that happens both the PS3 and the XBox people loose not just the PS3. Remember the Wii almost sold as many consoles as the XBox and PS3 sales put together.

hatieshorrer
hatieshorrer

@TeabagChampion "Microsoft announced that they will be bringing down the price of the elite to $299.99" Seriously where did you hear this TeabagChampion? Ive cheeked www.xbox.com www.gamasutra.com and www.screwattack.com for news of this $100.00 price drop on the X360 Elite and found nothing.

viewtiful_jay
viewtiful_jay

Nintendo won't bring the price down on the Wii as long as it's selling. It's the only system that's actually makes money from the sale of the console itself, at least I think. The 360 might be making money at this point, in some models, but probably not much. I was one of those guys who didn't see value in the PS3 at it's price point - and I still don't, honestly, I own one, but I got a killer deal on it, putting it down to around $300. I found that to be a good price range, and I jumped. At $400, I'd still be kinda leary. Especially in this ecomy. I will say though, the PS3 is a cool system and Little Big Planet alone has made it worth the purchase. We use it as a Blu-Ray player too. Say what you want about the $200 BR players - none of them upscale as well as the PS3 does when it comes from going from 720p/1080i to 1080p. PLUS it's the only media device I've seen that will upscale not only DVDs, but DiVX, MPEGs, etc. Sony built one hell of a machine, especially if you want a console that has a lot of media capabilities. It's just too bad all that stuff is forced on you if you don't want/need it.

TeabagChampion
TeabagChampion

Microsoft announced that they will be bringing down the price of the elite to $299.99 and if this is the case, Sony should drop the price on there system too. I think the big question is; Nintendo bringing down the price on their system? I mean, they have out sold both Sony and Microsoft.

invictuslemming
invictuslemming

For 100$ less i'd buy it simply for the blu-ray capability alone, the console bit would be a bonus

denicola_a_god
denicola_a_god

please reduce the price sony will not regret it throw in some sick bundles too while ur at it like the one i saw with resistance:fall of man and motorstorm included in a 500 bundle

driton
driton

Hopefully they will reduce the price of PS3 and then I'll buy one, even though recession measures are going on!!!

Wardrift
Wardrift

Yes I agree with joeborg14. The PS3 is definitely not the game monopoly powerhouse its predecessor the PS2 was, but it still has some really fun and high-quality games. Ninja Gaiden Sigma and Metal Gear Solid 4 would be obvious purchases, along with upcoming titles such as InFamous and God of War 3. Personally I would also choose Disgaea 3 and Valkyrie Chronicles, because they are excellent Tactic-RPG games.

fiskefyren
fiskefyren

selling razor blades? for what? commiting sucide? xD

joeborg14
joeborg14

I love the Xbox 360, but if I saw a PS3 for $300, I would consider buying, SOLELY for God of War 3. .....and maybe MGS4, lol

mastara_ta
mastara_ta

I bought the ps3 because it is a high quality machine..if you buy the wi-fi antenna for the xbox 360 the 120gb HDD And the dvd player ..lol it is about 100$ more expensive

XanderZane
XanderZane

Makhdoom82 If there is a possibility of 50-100 price cut. Then this will be a huge achievement as i will be in line to buy it. ******************************************************** $50 price drop will either happen at the E3 or happen in October. You can quote me on that. Aanlyst are saying April, but I truly doubt that will happen. Sony knows they need to do the price cut at the right time and now isn't it. Even though, the longer they wait, the more chance that M$ will have another price cut as well. ============================================ shinchy With the current price on the Yen, this isn't going to happen. ************************************************************** It could happen in the U.S. and Japan maybe, but definitely not in UK. The price may actually increase in the UK because of the value between the Yen and Pound. Still don't see a price drop any sooner then E3 though.

GoblinsAreKool
GoblinsAreKool

Just wanted to point out because a few people have made the comment that " I dont watch blu-ray movies and I am not going to throw away my dvd collection" A Blu-Ray player such as the one in the PS3 is an up-scaling player. Which means that all your regular dvds will be played in 1080i and therefor look alot better. So even if you dont want to watch blu-rays (which is a mistake but I digress) you can enjoy your regular dvds in a higher quality. Also I call BS on anyone who calls the PSN a lag fest. I use it everyday on almost all of the games mentioned such as kz2 SFIV and I have 0 lagg problems. You may want to look @ your internet connection as the problem and not the PSN.

Tandem_Toad
Tandem_Toad

Depresso, I agree with you so much. Gears is not going to go to the PS3. Microsoft is the publisher. So they own the rights to the game. Also, Gears 2 is messed up. Of all the things I expected to be fixed in Gears 2, they got worse. I hope Sony does lower their price, though.

Triton
Triton

Drop the Blew-it Ray player...that should help the price. Make it back into a killer game machine like the PS use to be. All these Blu-ray games are taking up to much of my shelf space anyway... I still have not watched one Blu-ray movie yet on my PS3, not sure I ever will.

Makhdoom82
Makhdoom82

If there is a possibility of 50-100 price cut. Then this will be a huge achievement as i will be in line to buy it :D

CyberJedi
CyberJedi

Depresso GOW= God of War III OH U are loving your xbox so much ...no worries, common mistake by M$ lover

Depresso
Depresso

How is Gears of War 2 coming to the PS3 if it's partly owned by Microsoft as well as Epic ? PS3 is a good machine for sure but do not believe evertything you read. Anyway, it's Gears 1 you want, multiplayer on Gears 2 has been messed up badly and everyone has gone back to Gears 1 waiting for the miracle patch to cure Gear 2.

CyberJedi
CyberJedi

Bought PS3 last year after initially going to the mall wanting to buy Xbox360. Havent look back since it felt it is value for money. Mind you, in my part of Asia, being a PS3 gamer is expensive due to the abundant of copied games for Wii and Xbox360. Regret? Not a single moment Sony has given me joy ever since PS1, so i will stick with them atm. GOWIII is coming soon, so now worries there :)

Bufta
Bufta

Well done Nintendo youve effectively pushed the industry back ten years to accomodate your dated motion sensing pile of junk. Its only success is brining a type of easy gaming to bored housewives and dippy grandmothers. Any real gamer would use the other two machines. RANT OVER. Sony are in a hell of a situation with the pricing of PS3, maybe they should drop it by £40 that would be a sign of willing but not too large to destroy their already stressed profit margin.

Depresso
Depresso

I owe every other console but the ps3. I could have bought it but two things are standing in the way. 1) a real lack of exclusinve games I want to play in it (until Heavy Rain comes out...). 2) a ridiculous price. I do not care for blue ray as I am not about to burn the hundreds of dvds I have already got. The price is typical japanese stubbourness, they remind me of the 3DO days when I great machine failed to really take off due mainly to a over pricing. With the recession in full blown I'd rather buy two 360s than a PS3 ! (I have...) I used to owe just the PS2 and it was great so I do like the playstation but I guess I will wait until it's cheaper (and maybe smaller...).

hatieshorrer
hatieshorrer

@Snakebite27 Good point take Wii-fit for example it cost $79.99 and out sales every PS3 game on the market even MGS4 which has droped to $49.99. Your arguement makes no sense.

SnakeBite27
SnakeBite27

I can't believe how bad things have gotten due to the Wii and their casual gamers market. Of course EA and ActBlizzard are getting the majority of their sales on the Wii. They're selling low-quality games that the average Joe-the-parent knows nothing about. Low cost games selling at average/high price equals profit. You CAN make money off the PS3 and X360, and it's like BigBoi17 said, if you can start pumping out the quality, people will buy. One company who's set a great example is Capcom.

shinchy
shinchy

With the current price on the Yen, this isn't going to happen.

BigBoi17
BigBoi17

Ea, go ahead and increase focus on the Wii. Seeing as a lot of Nintendo fans don't care for Ea anyway(All Ea games have been EPIC fails on the Wii). Most of the people who own a Wii, also own a 360/PS3. So I'm thinking if they want to buy a EA game, it's gonna be on the latter 2 platforms. I don't blame them for recognizing the money potential in the Wii, but if all they see is the MONEY potential and not the CREATIVE....you will fail. Only the most creative games have been successful on the Wii. Ea's(excluding dead space) been getting by off the Madden and Live series(Take off Live if you want to lol). EA isn't known for "pushing the envelope". So John, whom im pretty sure isn't a "true" gamer at all, needs to think about what he's doing lol.

Hvac0120
Hvac0120

Microsoft is getting so many exclusives because they sold almost all their internal development studios. The money they saved from not having those costs was able to be spent on 3rd party developers to bring exclusive games and content to the 360. The difference I see is that Microsoft developers have not been a huge success, while many of Sony's internal studios pop out some of the best games in the industry. Really, it was in Microsoft's best interest to do business this way and for the past couple years it has worked out well. Since MS hasn't announced much for the near or distant future, we can only assume that news will come at GDC or E3 or MS is running out of funds/ideas. I think we'll hear some big news from MS at the shows this year. _

thekey
thekey

@ knoetgen the only things sony got wrong was pricing, timing. And there arrogant atitude(at launch) But the PS3 does everything they said it can do. Even the games have come alive the reason why the 360 is still getting more exclusives is because we are seeing the results of deals made 10 months ago. But it's going to change.

Hvac0120
Hvac0120

It seems to me that Sony might actually make up the loss on the hardware from a price cut in software sales. Not counting Microsoft loyalists, most people want a PS3, they just can't afford it. Cut the cost, sell the accessories and games, and make up the loss with the 150 million people that bought a PS2 who are waiting for a reasonably priced PS3. _

shadowhunter0
shadowhunter0

@ supersonikk sony isn't going 2 lose those games since the r publish by sony and they where created by first party devs