Sony CEO: No '08 PS3 price cut

Sir Howard Stringer tells Die Welt that his company isn't planning a further console price drop; says Wii "may be a superior business model" in terms of hardware profitability.

In the wake of last week's announcement of a new $499 160GB PlayStation 3, executives at retailer GameStop predicted a $50 price cut for the 80GB model by year's end. However, in an interview published today, Sony Corp CEO Sir Howard Stringer ruled such a move out. Speaking with the German Newspaper Die Welt, the Welsh-born executive--and first non-Japanese chief of Sony--was asked if his company planned to reduce the PS3's price by the holidays. "I think not," the executive stated flatly.

Stringer also had some choice words to say about one of the PS3's rivals, the Wii. He admitted to playing Nintendo's console, which he diplomatically described as offering "a different experience." He also said that he doesn't consider the console as a threat. "The Wii is not succeeding at our expense--it is not hurting us," he explained. According to last month's NPD figures, the Wii was outselling the PS3 in the US by two-to-one, with the Xbox 360 running a close third place.

Stringer continued, "The Wii is a well-made device that has found a new target group. For a while, we held the same target group with the SingStar karaoke game. But perhaps we neglected to pursue that avenue. PlayStation games are rather designed for those who play a lot. Although it's a different strategy, it pays off... The major difference lies in the fact that Nintendo makes money with the hardware alone, which may be a superior business model."

Unfortunately, by his own account, the CEO said that it will be a while until the PlayStation 3 hardware becomes profitable. Although Sony's PS3 manufacturing arm has hit a "production bottleneck" due to demand, Stringer joked that Sony won't make back its hardware-production cost "for as long as I live."

"The traditional business model for the PlayStation envisaged us making a loss with the hardware in the early years until the production costs had decreased to a point that enabled us to break even," explained Stringer to Die Welt. "In the meantime, we earn money with the games. We are currently at the stage in which we need to get a grip on the production costs. That takes time. We are already making more money with the games than we are losing with the hardware."

322 Comments

  • Apokalipse

    Posted Nov 25, 2008 12:36 pm PT

    Unfortunately, vishawn, neither model has backwards compatibility. On the positive side, the ps3 might drop in price again in March '09. The article is here - http://www.gamespot.com/news/show_blog_entry.php?topic_id=26685950

  • vishawn

    Posted Nov 1, 2008 5:05 pm PT

    Sony, you may have just broken a deal with me. I WAS going to buy the 160 GB this November, but I just may Stick with the $400 80 GB model with no BC.

  • ZacherWol19

    Posted Oct 28, 2008 8:17 pm PT

    With Xbox at 200 i dont see y anyone would get this

  • RD1109

    Posted Sep 12, 2008 10:44 am PT

    Darn, I wanted at least $50 off the price by Christmas.

  • DavidFry1

    Posted Sep 2, 2008 11:10 am PT

    I would like to get a PS3 with a 160 gb harddrive. I don't think this is too expensive. When you buy a new video card for a pc it might run you $500.00 or more and that is just one component.

  • Tratzo

    Posted Aug 31, 2008 7:22 pm PT

    At least their turning over some sort of profit now, and also in demand for new consoles.

  • Thebomb44

    Posted Aug 31, 2008 5:31 am PT

    I really wonder how the PS3 costs so much to make. It may have a lot of bells and whistles, but it has a real problem with keeping 60 FPS. If you don't believe me, look around in the air in MGS IV, then look at a battle and you can see the framerate drop.

    I wouldn't be caught dead buying a PS3. The only reason I own one is that it's my brother's. $500 is too much for a lot of things, and a PS3 is one of those. The consumer should indeed be looking for a price-cut. Although Stringer wasn't as arrogant here, he's always been an egotistical fool about Nintendo's whooping them in sales. And also, Stringer? Wake up. You never held the massive audience that the Wii does with a game as obscure as SingStar.

  • tawagivercetti

    Posted Aug 30, 2008 10:28 pm PT

    theyd have to cut the price in half for me to buy one, my current doorstop is doing fine anyway

  • TheArcade

    Posted Aug 30, 2008 1:30 pm PT

    Saturn and Dreamcast are my home boys from wayyy back. I spent countless hours playing oldschool games on those systems.

    I used to hang with Super Nintendo and Sega Genesis as well back then in the golden age of gaming. Man I used to love Sega back then... still do 'till this day. You play what you like people.

  • korno640

    Posted Aug 30, 2008 11:33 am PT

    at least he knows whats hes talking about

  • ps3thabest

    Posted Aug 30, 2008 11:16 am PT

    i agree!sony my homies we go way back.

  • Taryn-

    Posted Aug 30, 2008 8:51 am PT

    Well,i have two PS3's a regular 360 and an elite...i had a Wii but sold it. So to me i'll pat sony all i want because i prefer them. When i was 5 i was playing PS1,they are my homies at home.

  • charizard1605

    Posted Aug 30, 2008 7:53 am PT

    the Wii IS getting a lot of uncalled for neggative feedback, and I simply don't see why.

    While releasing the Wii, Nintendo never ever promised that the console would be for the so called 'hardcore' gamers... they were clear from the outset that the console would be for everybopdy, with games that would have players experience an all new dimension. Everybody includes both, the hardcore and the casual gamers. And Nintendo, for its part, has lived up to both sides of its p[romise.

    For people moaning that there are no 'hardcore' games on the system, let me remind you that all of Nintendo's 'hardcore' franchises: Zelda, Mario, Super Smash Bros, Pokemon, Metroid, Mario Kart... all have made an appearance on the Wii, with more, like Animal Crossing, to come.

    As for third party games, well, there HAS been a lot of support on the Wii: Prince of Persia: Rival Swords, The Godfather: Blackhand Edition, Bully, Manhunt 2, Resident Evil 4 and Resident Evil Umbrella Chronicles, Spiderman 3, Harry Potter and the Order of the Phoenix, and more like the upcoming Call of Duty 5 and the Final Fantasy titles. Quality control is something that simply isn't up to Nintend, and all the first party 'hardcore' games, and many of the third party, like The Godfather, Resident Evil and Need for Speed, have been good.

    Ultimately, all I wanna say is that you have to give the developers and publishers some more time to find their footing: the Wii is something new, and it'll take some time before they can make games that truly harness the power of the system.

    Finally, I would like everybody to remember he DS: iut faced the same problems, and the same critism two years down its release. Today, it has an excellent array of games.

    GIve them time, folks, and they'll come up with something good, you'll see.

  • ullerw_basic

    Posted Aug 30, 2008 7:08 am PT

    I cant believe there is anyone on these forums patting Sony on the back for not giving a price cut. As a consumer, we should all want a ps3 price cut. And saying you want them to cut the price doesn't make you anti-sony, it just makes you an intelligent consumer.

  • kb8618

    Posted Aug 30, 2008 6:33 am PT

    "the CEO said that it will be a while until the PlayStation 3 hardware becomes profitable" does he mean the hardware division or the current cost of manufacturing PS3s, cuz if he means the current manufacturing cost then i highly doubt it will take much longer, if they aren't making a profit already. I still don't expect a price cut, cuz they have to make back the money someday.

  • NinjaMunkey01

    Posted Aug 30, 2008 12:54 am PT

    Fair enough. I already have a ps3 anyway but even though some people may think this is bad, for sony it makes sense. They are generally outselling their direct rival (360) each month and they have a good lineup of games.

    Sony has always done it this way. And i thknk its great, I dont say this as a fanboy though. What i mean is its great that we get the console cheaper than it should be.

  • daveg1

    Posted Aug 30, 2008 12:50 am PT

    what they need is to stop hyping games then bring them out 3 years later!

  • TheArcade

    Posted Aug 29, 2008 11:52 pm PT

    @darkride66

    Where are these lies you speak of?? I rarely find someone lying about a PS3 on a daily bases. All I see is honesty and a little bit of fanboyism. You talk of PS3 as if it was the only victim when in most of these news articles I see lies and slander told on both sides of the tracks. "Xbox is a shooter system" this "PS3 is a glorified Blu-Ray Player" that. For almost every insult for the 360 there is one said for PS3. There is no picking favorites to defend because they all pretty much get bashed evenly, even the Wii gets the occassional attack on it's person when fanboys are accusing it of being a so-called "gimmick".

    If you like to talk about gaming why not talk about something "good" on each system? Look for positive discussions instead of debate.

  • TheArcade

    Posted Aug 29, 2008 11:37 pm PT

    @darkride66

    I don't think I can be anymore straightforward, but I often forget that this is my job and sometimes I take for granted that others can't as easily wrap their heads around these matters.

    Wrap my head around nothing you are making light of the fact that Sony took such a huge loss on the PS3. I mean I expected Sony to take a hit but not this big. It caught me completely off guard how they lost all that money from 2006 going into 2007 all because of the PS3. Sony and stock investers could not have seen this coming. As arrogant as they were in the past Sony expected PS3 to rise the way the PS2 did. Uh-huh!

  • MTMind2

    Posted Aug 29, 2008 11:22 pm PT

    @darkride66

    "I have, however, been labeled a 360 fanboy on a few occasions defending myths being perpetrated regarding that system as well"

    we all believe you darkride, really we do. hehehe.

  • darkride66

    Posted Aug 29, 2008 9:17 pm PT

    TheArcade said "For those simple folk out there who are spreading lies about the PS3 here is a solution for you Darkride simply ignore them. Why do you care what they think at all?"
    It's a hobby. I like gaming, and I like talking about gaming, however I think gamers should be informed. When I hear people spreading lies about the Wii, 360 or the PS3 I think it does a disservice to gamers as a whole. It just so happens that most garbage is directed at the PS3. I have, however, been labeled a 360 fanboy on a few occasions defending myths being perpetrated regarding that system as well, but mostly it's people spreading lies about the PS3. It bugs me, no matter what system it's regarding.

  • darkride66

    Posted Aug 29, 2008 9:13 pm PT

    TheArcade said "According to that IGN article they really did loose 3.3 billion dollars on the PS3 console. I'll be damned."
    The point I was trying to make is this is part of a planned, long term investment in a product. The money spent on the PS3 was known, and willingly invested, just like the PS2 before it. It wasn't the result of unforeseen, gross mismanagement that resulted in billions in unexpected repair bills, and potentially billions more. This investment didn't catch investors by surprise and it certainly hasn't affected the long term stock price and targets for the company because this was what was in store all along. Do you understand the difference now? I don't think I can be anymore straightforward, but I often forget that this is my job and sometimes I take for granted that others can't as easily wrap their heads around these matters.

  • Gergroy_

    Posted Aug 29, 2008 8:57 pm PT

    @darkride66
    ok, nice try. the 10 million blu ray is a NORTH AMERICAN figure. while you are trying to quote a GLOBAL ps3 sales figure. I'm sure if you went global you would find blu ray sales were around 30 million, although all i can find throug google is north american figures. good effort though, again you try to twist numbers around to fit your views mr "stock broker."

  • DannyBoyVai

    Posted Aug 29, 2008 8:54 pm PT

    I have already seen a few places cut the price of the 80gb model. Wether Sony intends it to happen or not seems somewhat irrelevant.

  • darkride66

    Posted Aug 29, 2008 8:38 pm PT

    Gergroy said "Hey there mr stock broker"
    Hi!
    "i love your assertion that 10 million blu ray discs to 50 million ps3 games in 2007 . You know what the best thing is about these numbers? it is the fact that you are taking the sales figures from yearly blu ray sales and comparing the to the combined retail numbers of 2007 and 2008."
    Um, no. Those were Sony's official numbers for fiscal 2007, about 57.9 million games sold. (March 07-March 08 ) http://www.sony.net/SonyInfo/IR/financial/fr/viewer/07q4/
    Still, obviously outselling Blu-Ray, even if I were off by 40 million sales, which I'm not. Thanks for playing!

  • darkride66

    Posted Aug 29, 2008 8:26 pm PT

    teknicz said "I like disagreeing with everything DarkRide66 has to say. He just talks way too much. Give it a break already man."
    ----No.
    Ok, you get a week. I'm down in Mexico till the sixth. You can all line up and take cheap shots at the PS3 till I get back. Knock yourselves out.

  • teknicz

    Posted Aug 29, 2008 8:13 pm PT

    I like disagreeing with everything DarkRide66 has to say. He just talks way too much. Give it a break already man.

  • TheArcade

    Posted Aug 29, 2008 6:25 pm PT

    Little Big Planet did not come out yet. How do you know it's great?

  • Little_Socrates

    Posted Aug 29, 2008 6:08 pm PT

    I'm somewhat impressed by his humility.

    And even if his console is expensive, it is selling better than the X360 (which just had a price drop). So people are obviously willing to pay to get great games like MGS4, LittleBigPlanet, etc.

  • dunnowhathuh

    Posted Aug 29, 2008 5:39 pm PT

    You know, that's the first time I've seen a Sony exec. not blatently talk up the PS3.

  • xdeiri

    Posted Aug 29, 2008 5:07 pm PT

    If you take out all this late night discovery science style infos and videos, mgs4 could fit in just 2 x360 disks with nothing compressed

  • siLVURcross

    Posted Aug 29, 2008 4:50 pm PT

    "actually sadarse, hideo has stated many times that NOTHING is compressed in MGS4. So you really should stop looking like a fool and keep up"

    False. Look up MGS4 on Wikipedia.

    Another example that things were cut out from MGS4 is the movie viewer that were seen in previous versions. They just didn't have enough space to do it.

  • Jebril

    Posted Aug 29, 2008 4:07 pm PT

    Right now the PS2 is looking like a might good deal to me, that's a competitor that Sony should look into...oh yah....>,

  • Gergroy_

    Posted Aug 29, 2008 3:28 pm PT

    @darkride66
    Hey there mr stock broker i love your assertion that 10 million blu ray discs to 50 million ps3 games in 2007 . You know what the best thing is about these numbers? it is the fact that you are taking the sales figures from yearly blu ray sales and comparing the to the combined retail numbers of 2007 and 2008. I quick glance at vgchartz shows that 2007's total ps3 game software sales total was 17 mill. So 1.7 games were sold to 1 blu ray disc in 2007. That sounds about right, as i do work at retail i can tell you that about half of my customers buy a ps3 because they want a blu ray people. People that have no desire at all to play games. now ps3 does have a bit more momentum this year, as to blu ray disc sales. With blu ray disc sales as of aug 18 reaching numbers of about 12 mill with ps3 game sales at 37m. which is about 1 move to 3 games. Which also sounds about right as blu ray players get cheaper more people that are looking for a blu ray player are buying that and the momentum the ps3 is building is clearly seen. However, i'd still say at least 20 to 30% of people buying ps3's are still just getting them for a blu ray player. which is a very significant chunk, if you were to take 20% off of the 15 million units sold, thats 3 million ps3's that are just blu ray players, although the number is probably higher than that. Now, these are just the numbers for here in america, so they could be a lot different if you were to take that worldwide. However, mr. stockbroker, i hardly think you are in any place to condemn somebody as a "fanboy." You seem to be a very fanatic ps3 fanboy yourself, with the way you drop the fact that you are on your 3rd or 4th 360 in nearly every topic that you comment on. Also how superior psn is to xlive, which isn't true, but it is getting better. so to use the term "fanboy" in a derogatory sense is merely implying the same derogatory tone at yourself. More than anything though, you seem to be a troll. You lurk around these boards looking for someone who will argue with you on whether the ps3 is better than the 360. With each system offering great games, IT DOESN'T MATTER!!! Let people buy and play the system that fits their interest, NOT YOURS! nuff said.

  • Autolycus

    Posted Aug 29, 2008 2:30 pm PT

    actually sadarse, hideo has stated many times that NOTHING is compressed in MGS4. So you really should stop looking like a fool and keep up

  • echoside

    Posted Aug 29, 2008 2:00 pm PT

    ...Owned...

  • matrixman2k

    Posted Aug 29, 2008 1:35 pm PT

    A pity. I'm sure plenty poor wannabe fanboys were looking forward to a price cut during Christmas.

    Oh how i feel for them. Oh well, at least Stringer played the wii as a senior, i'm not surprised.

  • xdeiri

    Posted Aug 29, 2008 1:21 pm PT

    Hurray the ps3 is the size of a microwave

  • TheArcade

    Posted Aug 29, 2008 1:05 pm PT

    @darkride66

    "rasterror said "If Sony sold five times more than how come most of the sales records were made by MS and Nintendo?"
    5 times more PS3 games were sold over Blu-Ray disks for 2007. Was I not clear on that?
    Also, Sony Computer Entertainment division didn't lose 3 billion. They spent 3 billion on R&D and what not but with the games revenue had a loss of 1 billion, then a loss of 800 million the next year and are now profitable again. It's not a loss if they make enough money to offset it and still make money."

    http://ps3.ign.com/articles/883/883793p1.html

    According to that IGN article they really did loose 3.3 billion dollars on the PS3 console. I'll be damned. O_o

  • TheArcade

    Posted Aug 29, 2008 12:48 pm PT

    @darkride66

    Never said they were just your opinions and I've done enough research to know which systems library is growing the fastest and I still say it is the 360's. I am not basing it off others view points, just mine. The 360's library of overall games is growing faster, it is getting harder and harder for PS3 to catch up by each passing month. The 360 gains a greater sheer number of games I am counting XBLA and PSN as well as retail games but nothing that is backwards compatible such as PSX/PS2 or Xbox because I own those systems already. Professional game analysts are the same kind of people that said PS3 would over take the 360's install base in '08. I don't see that happening, don't believe everything you hear out of these whack jobs.

    I happen to disagree with you I feel Live is worth paying for (right now) I've played on PSN and it was a bad experience. Nothing decent on the marketplace no updates in weeks when you do get updates most of them take longer to install than the ones on XBL. The Live servers are more reliable, I've played SC4 on PS3 and it was a horrible experience even with good connection speed the lag is unbearable thanks to bad net code. With Live I can play online and have fast pace matches thanks to dedicated servers provided for paying customers. The games on XBLA are simply terrific plus in some cases certain games will receive exclusive DLC for a time meaning Xbox gets it before anyone else does. I feel things are just easier on Xbox 360 in terms of online. Nothing else quite compares. There is a reason why they have over 10 million subcribers Microsoft gives you what you pay for. A fun, easier, rewarding playing experience.

    For those simple folk out there who are spreading lies about the PS3 here is a solution for you Darkride simply ignore them. Why do you care what they think at all? I know your sensitive when it comes to the PS3 but it's not that bad, don't feed into their bull crap. If you know your right then let it slide. I never saw you say outright that the 360 is a bad console no, inferior though... you need to realize that most people translate that word as "bad".

  • prioritymail

    Posted Aug 29, 2008 12:45 pm PT

    This is just ugly. PS3 is way too expensive

  • Autolycus

    Posted Aug 29, 2008 12:43 pm PT

    Plain and simple, arguing against which system is better is trying to get a republican to vote for a democrat, its not happening, no matter how much you tell them. It's up to people to keep an open mind and not just see or prove what they want.

    To me PS3 doesnt have enough to offer me to justify the price. Sure GT5 will be neat but thats really the only game I have the urge to play that is exclusive to PS3 (my opinion).. MGS4 is too much of a sony marketing scheme for me to justify wanting to purchase it. That game could've EASILY fit on a DVD9 format, but of course, Hideo doesnt like to compress anything (even though EVERY SINGLE OTHER DEVELOPER DOES) and he is cut scene happy with uncompressed video (aka RAW).

    I am not saying PS3 sucks. I am saying it doesnt offer to me, an experienced gamer and semi experienced game developer, what Sony says it should. And for that reason right there (because I dont believe Sony has the right to tell people how they should watch, own, create or copy their purchased data) I wont buy it.

    Once Sony stops thinking they are king of the hill, I will give them another try. I've been waiting 15 years for that, so I dont think its going to happen. We'll see. I do the same EA. I dont own (and wont own) a single EA title (published or developed) because EA is killing creativity. The only way Sony or EA is going to learn that lesson is if you effect their $$$. So I wont give them any, plus I know better then most

  • dinkybinkleton

    Posted Aug 29, 2008 12:34 pm PT

    No price cut in '08...no purchase in '08. I need to see a whole lotta great exclusives to make the purchase worth while anyway. I'll stick with 360 and wii till they get something worthy goin.

  • darkride66

    Posted Aug 29, 2008 12:29 pm PT

    rasterror said "If Sony sold five times more than how come most of the sales records were made by MS and Nintendo?"
    5 times more PS3 games were sold over Blu-Ray disks for 2007. Was I not clear on that?
    Also, Sony Computer Entertainment division didn't lose 3 billion. They spent 3 billion on R&D and what not but with the games revenue had a loss of 1 billion, then a loss of 800 million the next year and are now profitable again. It's not a loss if they make enough money to offset it and still make money.

  • blackace

    Posted Aug 29, 2008 12:21 pm PT

    @dkell2
    The PS3 haters realize that Sony is not losing cash on every PS3 they sell... right? They sunk most of that "loss" into R&D years ago. The actual cost of manufacturing a PS3 right now is probably $250-$300 meaning more money in the bank for Sony and no reason for a price cut.

    Now MS cost for my 360? That may very well be $900. They've had to pay for 2 hard drives 2 consoles + shipping back and forth for the 4 separate times it's broken under warranty.
    ******************************************
    You are truly dilusional if you actually believe that. Sony is still paying at least $500-$650 on every PS3 they make. Stringer even saying they are still losing money on every PS3 they sell. Yes, Sony has cut the cost of the PS3 by removing the card reader, putting in cheaper chips, remove the emotion card and the extra USB ports. But they only saved themselves about $150-$200 so. The PS3 original cost about $800-$900 to make. I don't see Sony announcing another price drop until next years E3. Also, M$ refurbishes those XBox 360's and I'm sure they get a discount on shipping because they probably do it in bulk with UPS. M$ is still making more in hardware & software profits, they what they are losing in 360 repairs and shipping.

  • Nineball2112

    Posted Aug 29, 2008 12:13 pm PT

    rasterror... so because you have this theory that because CEO's can "twist facts and say half truths", then automatically your opinion about software sales is the correct one?

    Ummm.... right.

    Again, I'll take his word over your made up opinion. I think Sony's gaming division will be around for a long, long time. I'm not really worried about that.

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