RSSSony CEO Stringer: No PS3 price cut
By Tim Conneally | Published July 8, 2009, 1:59 PM
Sony Corporation's Chief Executive Officer Sir Howard Stringer made statements at the Allen & Co. Conference yesterday affirming the company's pricing strategy for its PlayStation 3. If the video game console got any cheaper, Reuters quotes Stringer as saying, "[I'd] lose money on every PlayStation I make, how's that for logic?"
Last month, Activision Blizzard CEO Bobby Kotik went on the attack against Sony, saying, "They have to cut the price [of the PS3], because if they don't, the attach rates are likely to slow...If we are being realistic, we might have to stop supporting Sony."
"He likes to make a lot of noise," Stringer said of Kotik. "He's putting pressure on me and I'm putting pressure on him. That's the nature of business."
The public correlates the PlayStation 3's high price points with its low sales figures, but often neglects to take into consideration the fact that Sony has always offered the console at a tiny profit, or even at a loss because of the cost of the hardware.
When the console debuted in 2006, Sony Computer Entertainment of America President and CEO Kaz Hirai said the company would not be cutting any corners to get the console to market, which meant no settling for replacement processors or components, even though countless successful consoles before PS3 were released with lower power than had originally been planned.
Even though it was already taking a hit on its expensive hardware, Sony dropped the console's price by $100 in 2007, after Stringer told the Financial Times that the company was struggling with consumer-friendly pricing. In the ensuing quarters, sales of the PlayStation 3 went up, as the company's profits were simultaneously going down.
That decline in profit has only continued as the strengthened Yen decimates Japanese CE export profits. While cutting the price of the console is a sure-fire way to increase sales in the United States, the profits back in Japan are already decreased, and any further reduction would be -- as Stringer said -- not logical at all.
why drop the price anyway? the PS3 is worth every penny and with the new MGS4/killzone 2 bundle coming out its going to be hard for people to refuse that.
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|why drop the price anyway?
Because people like me who PC game and already own the 360 can't justify the price of the PS3 for a handful of exclusives. I'm not a big FPS gamer anyway, but the 360 has plenty of FPS games to keep someone satisfied. Very few people are willing to pay $400+ to play MGS4. If the PS3 had a huge number of star-lineup games like the PS2 did, I'd probably buy it. With many former PS-exclusive series like Final Fantasy and such being released on the 360 I don't need a PS3.
Oh, and before someone else mentions it, I have a BluRay writer/HD-DVD reader/DVD+/-RW combo drive in my PC that I purchased for less than $200, so I could care less about paying $400 for having BluRay in my console.
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|How hard is it to refuse..well...let's see.(tick tock tick tock.."how will he answer? the crowd waits with anticipation") My final answer is pretty easy. "Just say No" (You're right..crowd applauses and I win a ticket to nowhere...ya)
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|You have to love the Seattle Geekly: here's their headline_
"ActiBliz to Sony: How about dropping the price on the PS3 so people will buy them? Sony to ActiBliz: how about you STFU? http://bit.ly/EMlt6"";
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|I think that Sir Howard Stringer should be fired by sony, there's a reason why consumers don't want to buy the playstation 3 and it's not because of the features it has, it's because it's way to expensive to buy. Why pay over $400 dollars on a video game console when you can buy a blu-ray player for a lot less. I agree Sony is a joke, I had a Sony blu-ray player but I got rid of it not because of the price of it but because of the lack of features it had in it. All most all of Sony's blu-ray players are the same, I can't see any of them that are really different in the look, with the features, and the prices. Sony wants to get on the good side of the consumers well they got a way's to go before they impress me or the consumers to buy the playstation 3 or any of their electronics.
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|Doesn't Sir Howard understand no Blizzard NO PS3??
Sony is a Joke.. Buy products from companies that are responsive to the customer..
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|They're suggesting that the price of the hardware hasn't dropped much at all over the last 3 years? Are they joking?
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|Nah, what they're saying is that they had a huge price cut back in 2007 when the hardware was still very expensive to them. This caused them to bleed even more money and now that they're finally making a profit on the machine (or at least breaking even) they'll be DAMNED if they go into red again, especially when Sony is hemorrhaging cash all over the place already. Right now Sony is hanging on with claws and teeth to any tiny profit they can make on anything, including their video game division.
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|So, they're not losing money on each console already the way they did at the start?
Obviously, they're still selling PS3 and a lot of those sales are probably because it's the only relatively safe line of Blu-Ray devices.
Sony does seem to be failing in a lot of areas. They're not going away but still, they might want to find a way to generate more sales and/or better products.
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|It's probably costing them half as much or less to make the PS3 now than it did 3 years ago. I mean, they saved a bundle by crippling it and removing the PS2 backwards compatibility chip. I would be very surprised if Sony wasn't making a profit on the PS3 at this point. They won't drop the price and as time goes by it costs them less and less to make the console while the price is staying the same, so they make more and more money on it. They lost hundreds of millions back when the first price cut happened and that really hurt them. Now they're expecting to make those losses back.
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|Let's see, you are in third place and have the most expensive console....yeah, cutting the price is not a good idea. Stay the course, third place is good enough, and to hell with those major developers saying they will stop supporting you. If they do...it is their loss, right?
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|OMG... I agree. I think we better check if hell is frozen!
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|And send the Sony CEO to hell to do the checking, on a one-way ticket.
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|Yup, that's right! I remember back when the PS3 came late to the party and all the Sony zealots just shrugged and said it would easily catch up to the Xbox360 in a year or so. Then after a year has passed they said it would probably take two years. Well, it's been like three years now and not only is the PS3 no closing in, the gap is actually widening. But hey, you can use Sony math and conclude that by selling less and less consoles than your competition, you will still eventually catch up to them.
Oh and the other funny thing is how Sony expect the lifespan of the PS3 to be 10+ years and has no plans for a new console until then. I'm willing to bet will have a Wii 2 and an Xbox720 long before the PS4 comes out. :)
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