PS3 launching at $974 in Mexico
The biggest key business model Sony and Microsoft uses when selling their gaming consoles is to sell them for a loss and make up the profits later with royalty income. Sony, however, has decided to buck this trend when selling the PS3 in Mexico. The price will leave all but the most fortunate Mexican citizens without the means to obtain the game console.
Sony has decided to graciously sell the 20GB PS3 model in Mexico for an astounding 10,495 pesos, or $974 at current exchange rates. The PS3 is a touch higher than the UK's £425/$835 (the UK is getting the 60GB model only), but UK citizens also make 7 times as much per year as the typical Mexican citizen, making the price far more unreasonable. Hey, at least they aren't charging a full year's income, like the Xbox 360 in India.
Selling your console offering for more in clearly poorer nations -- why not just sell them at the same price as everyone else -- is a strange trend. At these prices, we think Sony should just give up on the Mexican marketplace entirely. A few measly units isn't going to do the business good, especially when they'll be snapped up by US or Japanese consumers who will likely spend far more on software.
[Thanks, Liraco]
Reader Comments (Page 1 of 2)
beesnipe @ Dec 15th 2006 6:33AM
wow
that is all
JJ @ Dec 15th 2006 6:42AM
Sony and MS... sticking it to the poor countries....
Between this and india...Geez.
Dansk @ Dec 15th 2006 6:49AM
They aren't making huger proftis. The prices are so high because of import taxes made to "protect" their economy from cheaper US made eletronics.
Demaar @ Dec 15th 2006 6:51AM
Makes perfect sense to me. Why sell the hardware at a loss when they'll likely get jack all software sales?
Other territories they know they'll make money back on the games. India/Mexico? Not so much.
Chakan @ Dec 15th 2006 6:54AM
PS3 costs 3500 US dollars in Brazil...and X360 1500 US dollars(comes with 3 games, 1 extra face plate, 1 remote control). Period. And the X360 was officially released.
So dont cry or whine about the Mexican price.
Pablo @ Dec 15th 2006 6:59AM
@drew
You're wrong, there is a middle class in Mexico, maybe you don't hear about it too often, but that doesn't mean there isn't one. Also, videogames are actually quite popular here in Mexico, just as an example, take a look at the following google trends page: http://www.google.com/trends?q=wii&ctab=1&sa=N
In fact, I belong to the Mexican middle class, and I can say that the 10,495 pesos is way too high, but to be honest, every videogamer here in Mexico expected that. All of the people I know how are interested in videogames say that they will either get a Wii or a 360 or both, but when I ask any of them if they're getting a PS3, everyone says they'll wait for a price drop.
The problem is that here in Mexico, the retailers have the final decision on the price point. So they usually set very high price points to new products and they gradually become lower as time passes and the product stops being "new". But to everyone in Mexico this is nothing new. For example, right now the price tag on the Wii is 4500 pesos which is approximately 415 dollars.
The other fact that the article omits is that that price includes sales tax which is 15% here in Mexico. Also, many people import their consoles from the US rather than buying them here since it's a lot cheaper that way.
spiderangelwing @ Dec 15th 2006 7:07AM
This is something I've been noticing for ages...hearing Americans complain about how expensive gaming is has always been somewhat funny when you get stuff so much cheaper than the rest of the world.
I live in Malta, and the PS3 will be launching at Lm 249 ($761) for the 20Gb version and Lm 325 ($993) for the 60Gb. It's the same reaction I had when people were complaining that new-gen games cost $60 or something...here a new release for the PS2 would cost Lm 32 ($98) and it's what we're used to paying...
Regula Oblique @ Dec 15th 2006 7:13AM
Yes exactly the same way microsoft should give up on japan...
Chakan @ Dec 15th 2006 7:14AM
Cry less americans..please. You guys pay WAY TOO CHEAP on everything u buy compared to the rest of the world. Thats valid for people from Europe(most of it), Canada and Japan.
steiws @ Dec 15th 2006 7:16AM
heh...
"...but UK citizens also make 7 times as much per year as the typical Mexican citizen..." and taxed 700 times more ;-)
Dansk @ Dec 15th 2006 7:26AM
I hate it when it becomes a competition to see whom suffers more.
Im from Brazil as well, i used to complain a lot. But it got old and i get a bit sick inside when i see someone else complaining about how stuff is bad here...we all kow it already.
Don Jose @ Dec 15th 2006 7:27AM
Now I totally understand illegal immigration.
dazza @ Dec 15th 2006 7:32AM
Im glad pablo pointed out the pricing issue. People do have to consider companies do charge there own prices for products they sell. It also doesnt mention which retailers are selling it at this price, nor does it reveal how much Sony are charging companies to buy there product. Sony and other companies only offer a guide price to which you should sell at, its up to the stores whether they go with that or not
Rob @ Dec 15th 2006 7:46AM
Theres around 106 million Mexicans in Mexico, and 40% of them live below the poverty line. That gives you around 63.6 Million Mexicans capable of investing on a game console. Personaly that's a lot of consoles to be sold there, but i think it won't be PS3 because Nintendo has an iron grip on mainstream Mexico.
John @ Dec 15th 2006 8:12AM
"the UK is getting the 60GB model only"
Really? That sucks, and at £425 or $835 it isnt gonna sell here! Wii60 ftw!
minus_273 @ Dec 15th 2006 8:59AM
considering at last count, 9% of the mexican population is illegally in the US, at least some of them are paying the same as the US for a ps3.
Jairo @ Dec 15th 2006 9:02AM
That's why people here in Colombia buy a console, hacks it, and buy backup games at 2 dollars.
Scythe @ Dec 15th 2006 9:06AM
I can't help but laugh, take that stupid Illegal's!
Javi @ Dec 15th 2006 9:28AM
This is retarded, why would any of my fellow mexicans buy a PS3 in Mexico for that much when they can just come to the US and take one back.
Ok, I'm guessing they charge so much because in Mexico they don't have many laws against pirated software, for example I know some guys who had a PS2 or an xbox and they bought their pirated(from any region) games for 1o pesos or 1 dollar. I guess it evens out in the long run.
Scott @ Dec 15th 2006 9:32AM
Heh...I need to tell my friend at work this. I sold him my PS3 for $700 so that he could give it to his nephew in Mexico.
James @ Dec 15th 2006 9:34AM
2 good points have already been made, but I wanted to reinforce them:
1.) The costs of getting a console to market in different countries varies. In the US, we have huge, efficient, and therefore cheap supply chains. Wal-Mart can probably move a Howitzer here from China for a few bucks, mostly because the total volume of stuff they import is so great it can hitch a ride with something that they were already going to be bringing over. I can't say for sure, but I'd guess that Mexico will be getting a truly paltry number of PS3s, at least within the next year, which means that the per-unit cost of getting them there will be much higher than for the US. And, like some people have pointed out, that's not counting the government costs of importation [tariffs] and sale [taxes].
2.) Like other 3rd-world countries, Mexico has a booming black market, which I'm sure will manage to crack whatever protection Sony has tried to put on their games. They'll likely figure out some way to put all the games on DVDs (perhaps sacrificing some of the content from gigs 9 thru 25 ;-), then sell backups for 5 bucks -- scammers make a few bucks, Sony gets nothing. Result: Sony (like everybody else) can't afford to sell at a loss in the 3rd world like they do elsewhere. I don't blame them for realizing that the loss-leader business model works in some places but not in others.
Earl @ Dec 15th 2006 9:34AM
Last I checked, Europe has ridiculously high taxes and includes those taxes into the final price of something. Not sure about South American, and Mexico, but I would imagine there being some sort of "luxury tax" or something similar to what Australia does.
This could mean that Sony, Nintendo and Microsoft are selling the consoles at whatever regular price is, then retail has to jack it up due to taxes, etc.
Liraco @ Dec 15th 2006 9:48AM
Thw worst part is that most of the proffits are gonna go to the store and not Sony.
The retailers here jack up prices not just because of taxes (I should clear up that this prices in Mexico include the sales tax), but because they're greedy. They exploit demand by jacking up prices to get higher utilities, and THAT is where the biggest boost in price comes from. Heck, the Wii costs $450 USD over here, and new games for ALL consoles are over $70-80 USD.
Truth be told though, once PS3 games can be pirated (but with blu-ray... it'll be a while), you can bet they'll be bought like crazy. That's the only reason the Xbox and PS2 sell so well here. You spend a ton on the hardware but a few measly dollars on pirated games.
Xeno @ Dec 15th 2006 10:07AM
The thing that surprises me that it took 19 posts before some idiot posted an xenophobic comment - usually they are within the first 10. I guess congratulations are in order since it is a vast improvement over the typical response.
jaz013 @ Dec 15th 2006 10:10AM
Well, it could be high prices, but still the systems are selling. Even at 500 dollar (over 5000 pesos), the Wii was sold out with few weeks in pre-orders, and as today, it's almost imposible to find one. As for the PS3, some stores have sold-out pre-orders. Never understimated what a fanboy can do to get their console, and here in Mexico thera are lots of them.
Personally, I'll wait for Metroid Prime 3 before consider buying anything.
strider_mt2k @ Dec 15th 2006 10:12AM
Quote from Sony:
"...but we don't want the Irish!"
Matt @ Dec 15th 2006 10:13AM
Yeah! Stupid Illegals! In their own... country... Hm.
Carlos Augusto - alzcarlos @ Dec 15th 2006 10:14AM
There are a lot of true words here.
There are a lot of people in México (like in any other places) that play games, "original" games. Since the PS, Xbox, PS2 the piracy busissnes is the rule for a lot of people, because the price at greedy retails. All those "chip-ed" consoles are gotten at US, so the sale count ups there. Then the games are selled at just 1-5 USD at the streets.
That is the reason because Nintendo has better numbers here, because the piracy is not an important issue, and buy from retail are sometime very close to the prices in the North american market. Free market really makes low prices, like nintendo products and recently huge events have shown here.
Oh just one point to explain those Laaarge price difference is that here exists a "protection tax" from Chinesse product, that says, all the electronics, and toys with the "made in china" mark, are taxed up to 350% over the market value in the US. that´s why.
Grive @ Dec 15th 2006 10:30AM
"...but UK citizens also make 7 times as much per year as the typical Mexican citizen..." and taxed 700 times more ;-)
Of course, after that, you end up with a yearly minimum wage of 900 quid. Yes, how you should envy mexicans.
This pricing is stupid. Nintendo is even worse. At 4500 pesos (about $410 USD), the Wii is truly a piece of overpriced crap, it's only $40 USD cheaper than the PREMIUM 360. The only company that actually seems to care is microsoft, who is selling the 360 for $4000/$5000. That amounts to $360/$455 USD... tax included (considering VAT here is 15%, that means $316/$395 USD w'o tax).
There IS a market for videogames in mexico. Even lower classes usually save up and get their gaming on. it's just that it has been rather informal. With moronic chains that a) charge 150-300% of US value for games and b) Don't take into account the accelerated depreciation of games (You could still get SNES games at full price well into the N64/PS1 era), the informal importing market thrived. Those living near the border usually just go to the US. Check sales data for, say, McAllen, TX. I can bet you they sell at least twice more games per capita than places up north.
Now, all this seems to be changing, thanks to MS. We're now getting games for about $62-65 USd plus tax, which is basically rounding for nicer prices (60 plus tax is around 780 pesos... they just round up to 799 and are done with it).
Kspraydad @ Dec 15th 2006 10:48AM
Can you even make a taco on a George Forman grill?
Sonrics @ Dec 15th 2006 10:52AM
Im also from Mexico and couldnt agree more with Pablo (7), im also in the middle class and can afford one next gen system, making some sacrifices and saving for some time, and wisely i chose the 360. The system is selling for the same as in the US, and also the games. The Wii is selling for $4,500 pesos(thats about 400usd), almost the same as the 360(360 premium sells for $5,000 including taxes). So I think i made the best choice 360!. MS seems to be the only one commited to win a lot of small markets in other countries.
BlackHeart @ Dec 15th 2006 11:00AM
Of course, the Liverpool ones are IMPORTED, the official PS3 release date for Mexico is 1st Q 2007.
http://www.sony.com.mx/playstation/noticias.htm
GhostRiderTGAC @ Dec 15th 2006 11:01AM
I guess we will have to see what the market can handle. Sony has shown thusfar that there aren't many usits to sell anyway so the law of supply and demand would prescribe that the price should be higher as supply is diminished and demand remains high.
Does this give Sony a good PR point, well no I don't think it does. The question is, do the quality and features of the product make it such that consumers will overlook the overtly obvious profit driven approach this new sales model represents?
Sony has seen brisk sales of the PS2 system this year in lieu of the shortage and high price of the PS3 and this can be attributed to the fact that the brand is very strong. There is a fine library of titles available for the Sony consoles and many developers are already working on Next Generation titles.
Sony may not come out on top of the current console generation war as Microsoft and Nintendo have received a good boost from the shortages of PS3 systems. Also both companies are receiving much good press coverage for their respective consoles.
In the end Sony may still succeed with the Playstation 3 but we won't start to see the turn around until next holiday season when supply increases and price comes down into a more consumer friendly range.
GhostRiderTGAC (www.ghostriderszone.com)
Slaziman @ Dec 15th 2006 11:16AM
To all saying that Microsoft cares, you are retarded. The retail pumps up the price, not Nintendo, Sony, or Microsoft. The Xbox 360 has been on the market for a while, so the demand is low, and the prices drop accordingly. Instead of spewing the "Xbox 360 is 5000$ and Wii 4500$ LOLS NINTENDO RIP OFF" bullshit, find out the price of the Xbox 360 in Mexico at launch. I assure you it was NOT 5000$
(All amounts in pesos)
theRat @ Dec 15th 2006 11:24AM
At least is there officially.
In Colombia, Sony has pulled out the gaming division, stating that the software piracy was way too rampant to even compete against it.
The wii is selling for about $512, x360 premium for $608 and the PS3, imported of course, for $1173
So, yeah, there you have it. New-gen gaming is not for the third world it seems...
iNZoW @ Dec 15th 2006 11:43AM
$1,383 [400 KD] = The Lowest price you can find for PS3 here in kuwait.
Some stores sold it for $2,766 [800 KD].
Sony and Microsoft should really pay attention to middle east, they are rich and money spenders.
Lalo @ Dec 15th 2006 11:54AM
@ 13
jajajaja te mamaste
pero realmente de ke se preocupan si, como ya dijeron, una vez pirateados, el precio de los sistemas y los juegos que uno compra en la calle se balancean.
y si uno kiere juegos originales, nomas una vuelta a McAllen o Laredo o el resto del valle de texas.
y eso de ke nintendo has a grip on mainstream mexico ya se esta acabando
Anyway, de ke se juega en mexico, se juega. (sea formal o informal)
Enrique De La Torre @ Dec 15th 2006 11:59AM
To 35. The Xbox 360 at launch (the official launch in Mexico, February 2)costed 5,000 pesos, which is about the same price as in the US. When the 360 launched in the US some stores here in Mexico sold the imported 360's for a much higher price, but that was before the 360 had launched in Mexico, so it was not up to Microsoft.
Microsoft set the ESRP of their console in Mexico at the same price as in the US. Nintendo set the Wii price as almost the double as in the US, and that's the official mexican Wii launch. It seems Sony will follow a similar path to Nintendo's. Both Nintendo and Sony have their reasons and strategies for implementing a more retailer-friendly aproach but you can't come up with the retail argument while Microsoft is folowing another strategy in the exact same market.
ecco @ Dec 15th 2006 12:15PM
I live in Mexico, there are several points that should be taken in consideration regarding the above article. The official date for the Ps3 in Mexico is in March 07. The department store (Liverpool) which is one of the most expensive stores in Mexico is now selling the Ps3 at a higher price ahead of the official release time price, which, obviously it will be lower.
Let me tell you, that even though prices are very high, the Ps3 is almost selling out by this time, so its silly to suggest Sony to give up on the Mexican market. No doubt, prices are very high in México but I ask myself, can everyone buy in America the Ps3 at U.S. prices????
kthxbaii @ Dec 15th 2006 12:22PM
Some places are selling the 20gb system for $1156US ($13,299 pesos) lol
http://www.gamers.com.mx/noticias/237#com
Alex @ Dec 15th 2006 12:36PM
@ 15.
Indeed, Nintendo has it's own office in Mexico (and it's the main office for all Latinamerica) since 1995, formerly they were represented by a company called C-Itoh, but then Nintendo bought it and started to give the benefits to have support in your own country, the prices were somewhat fair, actually, The Wii costs around 4500 pesos (430 USD), Sony doesn't have this, everyone who buys a PS2 (or 3) doesn't have Tech Support directly from Sony, (and btw, with the cost of a PS3, you can buy 2 Wiis or 2 Xbox 360)
Of course, I know the deal, if I wait 2 or 3 years to buy a PS3, there will be a newer, faster, smaller version and the price will be cutted.
Weymaster @ Dec 15th 2006 12:39PM
We are used to this kind of shit. The worst of all of them was Nintendo a few years back, their official stores would sell the games at twice the US price just because they could.
Now that Microsoft and Sony have official presences over here, all of them have to consider the competition with their prices and all.
We don't have EB games, we have large retailers setting up their own prices. Games are available at much more reasonable prices on unofficial business.
Regretfully those unofficial businesses' sales don't count as a mexican sale because the games were purchased originally from the US and then imported and resold in Mexico. Hence, mexican software sales look even smaller.
Piracy is a big problem and I understand why the price will be so high. However, the true victims are the mexican people. Anyone would prefer the original version of the game, they just can't afford it. Backups are cheap and available pretty much in every corner (in Mexico City).
I don't blame Sony for selling higher nor the mexican people for buying piracy. This is just a consequence of a much more important and complicated economic/social problem in Latin America.
He dicho.
Arxh @ Dec 15th 2006 12:52PM
I dont think depriving an entire country of a console is the right way to go. Frankly in Latin America we should be used to steeper console prices but I do agree that the mexican price is ridiculous, then again the american PS3 price is equally ridiculous to me.
I live in Panama and the console is going for a whopping $1,300 for the 20GB model, some other places are going as far as asking for $2,000 for the 20GB. These are American dollars mind you, not weird money, which we dont really have... Meanwhile the Wii is going for 300 bucks and it selling like gold-coated chocolate chip cookies.
enrique @ Dec 15th 2006 1:25PM
Ok, but you are forgetting one thing. sony may make money out of each hardware sale here in mexico, but once the blu-ray is hacked, the bigger loser are going to be the publishers, because they will not sell the games, only backups...
again, thats why the ps1, ps2 were so strong here, because with 5usd you can get 4 different games... sony of course makes money on each console they sell, and the losers... its ok, they only make the games...
Chuy @ Dec 15th 2006 2:15PM
I live in Tijuana, so I can cross the border any time I want and buy a "cheaper" PS3.
Laser Visa FTW!!!
Dave Silva @ Dec 15th 2006 2:55PM
Why is this so surprising to you Americans? You have no idea how many stupid taxes the Mexican government tacks on to everything that's foreign. That and the vendors go nuts with prices, too.
I've seen $19 video games get sold for $70 down here. It's not surprising at all.
@46:
Screw Tijuana, long live Mexicali! :P
gusd @ Dec 15th 2006 3:13PM
""...but UK citizens also make 7 times as much per year as the typical Mexican citizen..." and taxed 700 times more ;-)"
Mexico has very high tax rates too, on personal income we are taxed almost the same as the UK: http://www.nationmaster.com/graph/tax_com_of_tax_per_inc_tax-taxation-components-personal-income-tax
At least in the UK you get decent services from the taxes you pay.
Juan Tan @ Dec 15th 2006 3:37PM
Like #38 said [Lala] most kids get theirs from here in th e U.S.
Thats how my cousins got their PS2s and their xBox360s that live in Mexico, we bought them for them.
And in Mexico you get a simple modchip and you have access to a lot of pirated games. Mexicans that I know woouldn't pay $80 for an xbox game so Sony would be dumb to think they'd pay $900+ for a PS3.
Spuky @ Dec 15th 2006 5:19PM
Mexico does have a big market for games, the real problem are the inflated prices some stores set for the consoles and games, also since there are no specialized stores(and the specialized stores in Mexico sucks)they bring only very high selling games(i struggled to find Yggdra union for the GBA, but FIFA 07 is everywhere)
And to the guy that said that Liverpool is selling the PS3 at an inflated price because and its likely to be a smaller price in other stores, check this page:
http://www.gameplanet.com/ps3.php
Gameplanet is one of the Few specialiced gaming stores, and you see the price there? $13,299 is almost $1,200 us dollars
yeah, pirateria FTW!
(por cierto, yo soy de Monterrey, y aunque el mercado gris de monterrey es muy decente, la mejor opcion es irte a comprar cosas al otro lado, de preferencia a mcallen, pero es cierto, aqui la pirateria pwns everyone everyday)
dynamius @ Dec 15th 2006 7:48PM
a lot of people don't realize that when microsoft and sony release their consoles to some countries where piracy is prevalent, they cannot count on making a profit on software sales. because of this, they cannot price their systems for less than what they make it for like they do in the US, Europe, and Japan, etc. they must price it higher than it costs so they can make a profit on selling the systems alone.