Sega, Ubisoft want a PS3 price drop in 2007

by Ross Miller { Jul 3rd 2006 at 2:55PM }

Two big-time publishers have shown caution regarding the PlayStation 3's price relative to its (non-) competitors, Microsoft and Nintendo.

Ubisoft President Yves Guillemot told Bloomberg that, while the PS3 will sell out its first shipments, the price of Sony's console must go down in 2007 to stay competitive. Sega of America exective Scott Steinberg echoed similar sentiments, telling GameDaily that "for a lot of families [the launch price is] too expensive." We have no doubt that early adopters will secure a successful PlayStation 3 launch in all regions (Sony is more than sure of that), but beyond the launch window is still a mystery.

Ubisoft is bringing the possibly exclusive Assassin's Creed to the PS3, while Sega has reaffirmed their commitment to the PS3 version of Virtua Fighter 5.

Read - Sega's Scott Steinberg Talks Next-Gen
Read - PS3 price must drop in 2007, says Ubisoft boss

Reader Comments (Page 1 of 1)

cyrix_0 @ Jul 3rd 2006 3:02PM

Shody Journalism, Joystiq bloggers at its best.

Evil Inside @ Jul 3rd 2006 3:06PM

Game makers want to reach as many end users as possible to maximize their profits. I can see the high price of the PS3 having the same effect on developers and publishers that the the GameCube had later on in it's lifecycle. If the console is too expensive for the average family/gamer/etc, developing for it will yield in lower profits for game makers.

ddt @ Jul 3rd 2006 3:06PM

if you want journalism go buy a newspaper.

Eagle @ Jul 3rd 2006 3:14PM

I'm sure there will be a price drop in a year or so...but only because they'll start releasing higher end models like they plan to do...

I don't know how that will work out, but it's one method of doing things. I think every developer shares these thoughts, so even if I'm buying a PS3 at launch, I'd still hope for a price drop at least before the big boys start rolling in...(MGS, FF)

No matter how much you are against the PS3, I don't think $400 is resistable, unless you've sworn a blood pact against Sony, which many have done...for what reason, I have no idea. Fanboyism has reahed new heights these days.

Cage @ Jul 3rd 2006 3:19PM

So let me get this straight. You can buy a standalone blue ray player for $1000. A PS3 costs $600 and is does a lot more than play games. Sony has already confirmed that they lose a WHOLE lot of money from each console made. People think the console price is going down anytime soon? Youre crazy...

the_game_master @ Jul 3rd 2006 3:24PM

Sega of America may have to write up a Virtua Fighter 5 game for Wii to meet demand, cause nobody I know is going to buy no damn PlayStation 3.

And thats the cold hard truth.

Anonymous Rep @ Jul 3rd 2006 3:27PM

First off, this has been, and always shall be my friend - er, sorry, a blog. That means that it's opinions - which, granted, is what most newspapers are today, but that's another issue.

Anyway, let's look at the two articles in question, and see just what was said:

Sega - "we're bringing Virtua Fighter 5 from the arcades to the PS3 in a relatively few number of months, and there is going to be very little if any noticeable degradation to the graphics. So, effectively you've got thousands of dollars worth of arcade tech in a machine that's 500 bucks, 600 bucks."

Okay, that's acceptable. However, you could do the same thing on the Xbox 360 if you chose to do so, which means you're not saying that much here.

"To ignore that and sort of use price—I mean PS2 was $299 for a long, long time, so there's definitely a band of consumers who if they're fired up about a piece of software or multiple pieces of software, they'll pay it. Whether that's after the 5th million or 6th million unit is sold, that's super arguable and they're going to have to lifecycle price the hardware in a way that brings it to the masses, I would think relatively soon, because it is expensive. For a lot of families that's too expensive."

Bingo - This clipping says it all. Sony does have a hardcore base that will pay any price for the system. But they will NOT reach and flood households at this price point - thus, losing market share.

And for the other article:

"Ubisoft president Yves Guillemot has warned that while his company is optimistic about the prospects for the next-gen consoles, Sony must be prepared to drop the price point of the PS3 in 2007 if it is to compete effectively with the Xbox 360.

Speaking to business news agency Bloomberg, Guillemot expressed the view that while the PS3 will see enormous demand from early adopters this year, the price point could be a major stumbling block in the following months."

This is the same sentiment that national and local game stores have indicated to me as well. They see the PS3 initial shipments selling out, and selling on eBay for 2 - 3x the original cost, during the holiday season. They are also excited about the prospects of still being able to sell a console this holiday, because the inventory of the 360 will be high enough to meet the demand - including the demand from customers who come in looking for a PS3 and realize that they can't get one until March or April, and instead of being forced to wait like they were last year, they can get a 360 now.

Heck, I've even heard a Sony rep state that they're going to be in Microsofts position from last year - too much demand and not enough product.

striderhayasa @ Jul 3rd 2006 3:32PM

@ cage

AGREED. PS3 is not going down in price anytime soon, period. If PS3 gets a price cut in 2007 that's a very bad sign for Sony. They're bleeding money as is now, 243 million for back taxes in Japan, 100 million in back taxes in europe, 91.1 million to Immersion for copyright infringment and if they exhaust their appeals then they have to pay another 114 million for the license to keep all those PS2s, dualshocks and games on the store shelves.

Let's just face it now, a price drop in 07 is wishfull thinking.

Cabbage @ Jul 3rd 2006 3:34PM

@ Eagle's "I don't think $400 [for the PS3] is resistable..."

Perhaps $400 is not resistable to you, but I've resisted buying a PStwo for $129 and I have no intention to purchase a PS3 for any price, even the same $129. Some people, like me, may never in their lives purchase a Blu-Ray or HD-DVD disk simply because DVD will always be cheaper, and it is just good enough.

I have nothing (other than the usual) against Sony, and I owned a PS1 for a time, but as a father of small children/husband/engineer/aspiring novelist(?) I have little time anymore for cutscene filled RPGs, nor do I want to own games that I can only play once the kids are in bed. There are better things to do in life once the kids are in bed.

I realize that there are plenty of people out there with sparkling HDTVs and the urge to devote a grand or two per year on gaming, but I think that there are even more people out there who can make do with a GameCube (to be replaced by Wii) and/or a couple of DSes.

So, to stay on topic, the $600 price point of the PS3 will be a serious turn-off for many gamers, and considering that the PS3 may never see a sub $250 price point, there are probably going to be a lot fewer homes with the newest Playstation this time around.

Darcrequiem @ Jul 3rd 2006 3:36PM

To Eagle, I refuse to buy Sony for a damned good reason. Its called substandard hardware. With the exception of the original NES, I have never had any video game console fail on me. Well until I started dealing the Playstation brand that is. My brother bought a PS1 and it was a PoS. After about a year, we had either turn it on its side or flip it upside down to get that thing to play any software. I had a PS2, it broke in less than two years. My brother is on his third PS2. My best friends PS2 died and like me, he decided not to bother with another one. My co-worker bought a PSP, his X button stopped working. My brothers Atari Lynx and TurboXpress still work. My Dreamcast and Saturn still work. My Saturn is a year older than the PS1 my brother had bought. My X-box and Gamecube work. So yes people are Anti-Sony because they don't want to spend hundreds of dollars on console only to have it go kaput in 18 months or less.

molecule @ Jul 3rd 2006 3:41PM

This sentiment is in sync with a recent analization of how the PS3 will be in hot water if it retains its 600$ price point going into the 2007 holiday season. (found at http://www.gamespot.com/news/6153458.html)

"A $600 price point is okay for launch but it will not fly in holiday 2007. If Sony wants to drive unit volume 2007 needs to be not only the year of price cuts, but the year of drastic price cuts. There is going to be a shakeup in the video game industry and even if Sony executes perfectly there could be a new market leader in two years."

With the known unreliability of such analyzations, I at first took this gamespot piece with a grain of salt. But in my book, if legitimate developers like Ubi and Sega are now echoeing the same concerns, this analyzation just gained a little more credence.

Jed Merrill @ Jul 3rd 2006 3:42PM

I 100% expect Assassin's Creed to port to both 360 and Wii. To not do so would be a bad business decision for Ubisoft. (And bad news for gamers.)

striderhayasa @ Jul 3rd 2006 3:42PM

also, the only reason I can see the 360 not getting VF5 is because of the small 360 userbase in Japan. There is no way in hell Sega can tell the gaming community that the PS3 is the only console that can handle that game....not after looking at Dead or Alive 4 on 360. I would buy a PS3 for VF5 alone...if it wasn't 500 and 600 dollars.

LK @ Jul 3rd 2006 3:43PM

Considering Sony does not have strong first-party or second-party developers, it might have to cut the price if enough third-party developers pressure it to do so.

matt @ Jul 3rd 2006 3:47PM

I am gonna buy one. $600 for a video game player, dvr, blue ray player, internet access, link to the psp for content on the go. My HDTV and I want one so bad we can taste it (mmmmmmmm, blue ray). I have easily spent around three times that much on software for the ps2 that i bought and sold back to Gamestop/ebgames within weeks after beating the game and then not having any replay motivation. Hopefully episodic content will help in that regards to extending the replay value of some games. I will just have to be a little more selective in the games i want to buy and those that should be left for a one-time rental.

Anonymous @ Jul 3rd 2006 3:47PM

Blu-Ray is a moot point. It is meaningless to 90+% of people, and worthless to the 95% of people who don't have HDTV. You won't even be able to benefit from it with the $499 version of the PS3 because it doesn't have HDMI. A lot of people will get bad tastes in their mouths.

Finally, HD-DVD is likely to get far better support because it's not controlled by one (greedy) party.

If Sony had agreed to a unified standard, they might have been in the game, but their hubris puffed up their little heads again and they blew it.

On the other hand, Blu-Ray is the straw that will sink Sony's back, so it may not be such a bad thing. (The PS3 at least.)

Catalyst @ Jul 3rd 2006 3:49PM

#1: Shoddy spelling, grammar and logic, Joystiq posters at their best.

Anonymous @ Jul 3rd 2006 3:49PM

Innovation and the interest of the gamer may soon be restored to video games! Yay!

the_game_master @ Jul 3rd 2006 3:51PM

Is it me or does Virtua Fighter 5 doesn't look that much of a step up from VF4,

So why is this game being PS3 exclusive. Sega's dumb decisions which cost them they're chances in the video game market prevails.

striderhayasa @ Jul 3rd 2006 3:52PM

@ darcrequiem

true that too...great comment. My PS2 only survived as long as it has because I hardly play it, which totally defeats the purpose of having game console, I know. But games I play on it are few and far.
but, my orignal PS...all three of them...broke on me. Sony is the worst at making long lasting hardware, which is one reason why I haven't bothered with the PSP.
PS3 is going to be a nightmare. Can you imagine....broken consoles and no replacements until March 07 at the earliest. Heads will roll...

matt @ Jul 3rd 2006 4:02PM

My psp is still working fine dropped it a couple times and even spilled pop on it last week. As far as other companies products remember the x-box exploding power source issues. The reason Nintendo usually doesnt have many hardware problems is that they are not using the most recent technology with their older systems. If you ask me there is probably a lot of different things that might affect that wiimote. So we might see Nintendo finally have some issues. Sometimes you just have to pay best-buy the money for that protection plan.

Shogan @ Jul 3rd 2006 4:02PM

the_game_master - It's not just you.

matt @ Jul 3rd 2006 4:07PM

Some tvs are capable of 1080p over component cables, my sharp aquos lcd is. So hdmi is nice but not a deal killer.

[-Z-] @ Jul 3rd 2006 4:30PM

Good, with publishers support, Sony will definately lower their price after first shipment. Now it's not a good time to argue with publishers esspecially when you have a war going on. So from my view, definately for price reduction...

SuicideNinja @ Jul 3rd 2006 4:51PM

"I refuse to buy Sony for a damned good reason. Its called substandard hardware. "

http://www.joystiq.com/2006/07/03/sega-ubisoft-want-a-ps3-price-drop-in-2007/#c1688058

Although I don't refuse to buy Sony's crappy Playstation hardware (exclusive games force me to), I can second those many problems with Sony products. I can't agree with a problematic PS1, but the PS2's have been a nightmare. I'm really sick of fixing them, so I've just been giving friends instructions and wishing them luck.

If the PS3 is anything like the PS2 in terms of quality, there's going to be many pissed off people missing half a grand in their wallets. I hold it to Sony for the PS3 to last 10 years as Hirai mentioned in an interview.

terminal @ Jul 3rd 2006 4:56PM

Lower the price of the core console to 400, And make the premium 500.

People won't complain as much if they do that.

copa @ Jul 3rd 2006 5:18PM

I will also quote from the DFC Intelligence Report, since they have said it better than I can:

"Sony has done very little to justify why the system is worth a premium price for consumers that don't care about raw hardware performance and are not hard-core audio/visual consumers," DFC said. "Unfortunately we believe that represents over 90% of the consumers in the marketplace."

"With the PlayStation 3 the company is going after the high-end power user. It is almost as if Coca-Cola not only decided to go with a new formula, but also decided to exit the low-brow soft-drink business to go into high-end wines."

"Of course, there is a market for high-end products but it is 1) a very different consumer type and 2) not nearly as big as the blue collar mass market. Wal-Mart sells more toys than FAO Schwartz and McDonald's sells more beef than Ruth's Chris Steak House."

Michael @ Jul 3rd 2006 5:18PM

In terms of Sony hardware quality ...

I stay away from Sony after purchasing three consecutive camcorders from them. All three of them broke within 18 months. Just out of the warranty period.

Indepth @ Jul 3rd 2006 5:30PM

I don't understand the early criticism. If Sony lowers the price of it's console, then why should anyone buy early? Even if they do lower the price, it can't be by that much (I'd say more than $100) as again, it penalizes early adopters. A better strategy would be for Sony to value add the bundle by including more with console at the price they're asking. Give us free games, movies, or universal remotes. Or better yet, don't start at such a high price.

For developers to openly critise Sony is a unfortunate sign of things to come.

Dux @ Jul 3rd 2006 5:32PM

@26^
Thats very true, If Sony would lower their price by 100 dollars for both models, they would be In a better position with the public, anaylist, and with publisers. I personally would be more optimistic about getting a PS3. 500 Dollars for a Blue-Ray Player, 1080P HD, Wireless controllers, and the most powerful next-gen console, would be killer. But Sony would be losing even more money, so It wont happen :(

Not a fanboy
Im a 360 owner
and future Wii owner and PS3 I hope ^-^

jason @ Jul 3rd 2006 5:33PM

"Blu-Ray is a moot point. It is meaningless to 90+% of people, and worthless to the 95% of people who don't have HDTV. You won't even be able to benefit from it with the $499 version of the PS3 because it doesn't have HDMI. A lot of people will get bad tastes in their mouths."
ICT flag won't be set until 2011. Comfirmed that HDMI is not part of the blu-ray spec until 2011.

"Finally, HD-DVD is likely to get far better support because it's not controlled by one (greedy) party."
If you think blu-ray is controlled by one party then you are greatly mistaken. Blu-ray has BY FAR the most support. http://www.blu-raydisc.com/ has the list of the members of the blu-ray disc association. Sony is only one member of the blu-ray association. If anything Toshiba is controlled by one party as Toshiba is the only CE company backing it. Also less than 40% of hollywood back HD-DVD where ass more than 90% of hollywood back blu-ray. HD-DVD is backed by warner brothers, and Paramount. Both of which also back blu-ray. It's lone exclusive support comes from universal. Blu-ray, on the other hand, is supported by warner, paramount, Sony pictures, MGM, Buana Vista, Disney, Pixar(owned by Disney with heavy influence from steve jobs), Lionsgate, 20th century fox (no star wars movies for hd-dvd unforateunly), and digital playground(porn studio).

cap-n-crunch @ Jul 3rd 2006 5:34PM

Sony as a company might not care about being the market leader in video games anymore. I mean no company will ever have 100% market share, too much competion. I think They see bigger growth and opertunity with pushing blue ray and cell.

daddycool @ Jul 3rd 2006 5:51PM

Price drop in '07??? Do you think Sony WANTS to be selling this thing for $600?? They don't. They are forced into it so they lose the least money possible. that Blu-Ray and Cell stuff may have sounded good in the lab 4 years ago, but when it got to production time, it's a very expensive road to be on. Too late to turn back too. It takes a while for a new technology to come down in prodcution price. Sony has shareholders and they can't keep losing millions every quarter. No price drop in 07 I think. More like Summer 08. They might drop it a C-note then maybe another 50 at Christmas.

LaughingTarget @ Jul 3rd 2006 5:52PM

Pricing is a huge concern. The mass marketability period for consoles seems to be at the $200 mark. The PS2 didn't really take off until after it hit that $199 mark. Based on historical information, the PS3 will never reach that price point. Home consoles usually drop to half their launch price and rarely go below 40% of launch price during their generation. The units may drop below that when a successor is released ($99 PSOne units for example), but even then, that is 33% of launch price.

Based on these numbers, and historical information, and percentage of previous price and launch price, here is a little compilation:

PS2 Launch - $299
1st Price Drop - $199 (~67%)
2nd Price Drop - $149 (~50% launch, ~75% from first drop)
3rd Price Drop - $129 (~43% launch, ~87% previous price)

So, based on this, the PS3 will likely follow as thus:

Launch - $499/$599
1st Drop - $325/$399
2nd Drop - $249/$299
3rd Drop - $199/$249

Historically speaking, it will take roughly 6 years, or until the PS4 is getting ready to replace the PS3, before the PS3 reaches a mass marketable price, and even then, it is the lower-end package with the higher end in a questionable grey area.

Sega and Ubi are right to be a little afraid. The PS3 won't reach the point where the bulk of the consumers are willing to go out and buy it. Unlike many people who post here, the average consumer isn't going to spend a lot of money to play their favorite franchise. Folks who's entire gaming library is Madden XX will look at those prices and pass on it. Madden isn't worth $600 or even $300. It is worth $150, maybe even $200 if stretching it.

Sony is going to have to find a way to skim 67% of the unit price off the PS3 by the end of '07 to remain viable. It is a difficult job given their current situation. They did just recently replace their auditor with a new one, which usually bodes poorly as that kind of action tends to be a precursor to a fraud situation, which would result in fines, restatements of financials, and the loss of a lot of money. This is on top of the already existing back taxes and huge loans to pay the BluRay R&D.

AC @ Jul 3rd 2006 7:35PM

I doubt there are gonna be as many early adopters as they predict. $600 is alot of money to spend on a game system for anyone. Sony is going after the high-end gamer and people into the next generation dvd, and these people are definitely in the minority. Most gamers could care less about the next gen format wars. Unless you are rich or have an HD TV or both, its gonna be hard to fork over $600 dollars for a system, and then expect to spend more money on games ($60-100 for each game).

LongshotX @ Jul 3rd 2006 8:56PM

Stupid Sega. Make Virtua Fighter 5 a non exclusive and port it to the Xbox 360. I'm sure it'll sale very well on a cheaper system with graphics that are just as good as the PS3. How much is Sony paying you to kiss it's ass? Must not be enough to return you to your once great image. You are a pathetic company. Shame on you.

Ubisoft will release Assasin's Creed for the 360. To not do so would be a complete and utter mistake.

PS3 will not see a price drop until mid 2008 IMO. By then Blu-Ray will fail and the rest is history.

Enigma @ Jul 3rd 2006 9:53PM

I love this irony, yet Sega and Ubisoft have no problems charging $10 more a game ($60) because it has a 360 logo on the box, port or not!

ipodfanboy @ Jul 3rd 2006 10:22PM

There is no way sony is going to drop the price of the ps3 by next year. I think by O8 there will be a hundred buck price drop on both ps3 skus. By 08 the core value ps3 will be 400 bucks and the premium will become 500 dollars.. IF sony drops the price of the ps3 by next year it will be bad news for sony but good news from some consumers eventhough particularly those who are stuck inbetween hardcore/casual gaming group. Sony cant afford to drop the price of the ps3 too soon and combine with the fact sony is in the red for fucking up the walkman line against apples ipod and the TV line against samsung and LG, and getting pimp smacked by Dell for realising stupid Vaios. Im sure many 3rd party developers are worried about the ps3. For one its expensive to develop for, two its on expensive blu ray rom disks, 3 the console costs to damn much. Many 3rd party developers have to worry because a console at a high price means no mainstream people will buy it, this happen to many consoles like the NEOGEO, Panasonic 3do and the Sega Saturn, consoles for 400 or more will never fly off the shelves with mainstream consumers, it will only fly with the hardcore. Many developers dont want to jump ship on sony, I'm sure developers would rather develop for the ps3 instead of developing for the wii or 360. It only hurts developers of the cost of the ps3 will sway many casual gamers away. If the ps3 have problems with selling thier consoles to average joe then 3rd party profits will start to sink into the red, you have to remember that lots of 3rd party games dont sell well on nintendo or microsofts consoles consoles except for exclusive gems. Many developers still want to see sony be number 1 and dominate. IF the ps3 does not capture the glory that the ps1 and ps2 had, I hope that 3rd party developers have contingency plans on how to market and sell to wii and xbox360 fans if the ps3 fails. IF sega and ubisoft wants sony to drop the price of the ps3, Sega and Ubi should confront sonys number1 supporter EA. And we all know how EA is really popular with sony crowd. OVerall many developers will loose if the ps3 dont sell like ps1 and ps2.

32_footsteps @ Jul 3rd 2006 11:23PM

You know, I have no idea as to whether or not Sony will (or could afford to) offer a price drop for the PS3 that early. However, given that they have very recent and bitter history with such matters, I'd listen if Sega starts questioning the viability of your console past the launch window.

But beyond that, I have to wonder about a company like Sega that would publically questionthe doings of a corporate partner and still give them an exclusive piece of work like VF5.

Rare Hare @ Jul 4th 2006 12:53AM

"In terms of Sony hardware quality ...

I stay away from Sony after purchasing three consecutive camcorders from them. All three of them broke within 18 months. Just out of the warranty period."

so... you think Sony's hardware sucks because their products lasted as long as they promised they would? ok.

Bored @ Jul 4th 2006 2:25AM

Don't we all want a price drop Ubisoft and Sega? If Sony gets by with this craptacular price point, then what is to stop them from making PS4 $899? Somewhere people will wise up and say no to this slippery slope of "inflation".

Gareth Jones @ Jul 4th 2006 5:35AM

> so... you think Sony's hardware sucks because their products lasted as long as they promised they would? ok.

A warranty is not a promise of how long a product will last.

A warranty is a guarantee given to the purchaser by a company stating that a product is reliable and free from known defects and that the seller will, without charge, repair or replace defective parts within a given time limit and under certain conditions.

Based on this I'd say he was pretty correct in assuming that Sony hardware is shite.

Gazbin @ Jul 4th 2006 9:20AM

The thing is, Sony will not have the volume this time around. Every time I hear a Sony spiel, they go on and on about how they sold 100 million systems...

Well they won't have a 100 million users this time. Microsoft & Sony will be fighting each other (and the more powerful PC's on the way), but I have a hunch the Wii & the DS will be the one ending up with the big customer base.

Developers will swing their support to the Wii & DS - I have no doubt at all.

GamerG @ Jul 5th 2006 5:44AM

Either Sony are very arrogant and have performed NO market research or they simply are not interested in their leadership the mass market gaming anymore.

Sony will always have their hardcore gamers (because its has the support of the Japanease developers) but for the mass market its all about cost, they buy when they percieve the benefits (latest Madden/GTA etc) out weigh the cost. For the PS3 that will be way off maybe in 2008 or longer, for the 360 it maybe this Xmas if there are price cuts as rumoured.

Magus @ Jul 5th 2006 11:42AM

The price will drop when manufacturing costs go down.
Either that or Sony drops price because theyre seriously hurting. I could care less about BlueRay as a media format. I dont have the TV or anything because of greedy as companies pulling the strings of 1/2 gen products to fill their pockets. However the gaming benefit from BD is huge and will be completly unaffected by the media wars.

There will be exclusives it will always piss someone off.

In my opinion even with this pricetag more ps3's will sell in japan/asia market than xboxes which breeds exclucivity that Sony is banking on.

clowny @ Jul 5th 2006 12:40PM

listen people...idont know why you make such a thing, if youre not gonna buy it then just dont buy it, you dont have to tell it to the entire world, evoy forum i enter is the same,"its too pricey", "im not gonna buy it", "i have family and cant waste my money like that", listen i cant care less about your situation, im married too, have a wife and a kid and im really lucky because my wife also likes games, in fact she beats in almost every fighting game that i own, but thats not the issue, the fact is that im going to buy one, and for those who say that the play station that they bought went to trash after a year, i dont know what you made with, maybe you tried to open a can with but my ps2 is still working and i bought it like a month after the launch.