Tretton: PS3 will be "difficult to cost reduce"

Stupid is the man who spends anything above $300 for this machine.

No biggie

Higher PS3 prices = less units sold

Less units sold = Less games made for the PS3

Less games made for the PS3 = More games for the 360 & Wii which is a great thing for all 360 and Wii owners.

The price is quite right for the system, if Time Warner's dual HD/Blu-ray disc takes off over just HD or just Blu-ray. The games are not too good right now, but within a year, it's going to be an awesome system!

A 360 price cut would all but force their hand to do the same. The 360 is already so much cheaper and it is now clear that the price difference is hurting Sony...that and the fact that there isn't anything on the system so far that shows the extra $200-$300 is somehow worth it.

$600 until '08? With Xbox 360s getting cheaper by the second and Wiis at $250, I don't think it can stand to be priced so high for so long. Not to mention if rumors become true and Microsoft reduces the price on the Xbox by next holiday season, Sony should be worried.

But who knows? Personally, I'm waiting out on MGS4 and other big name games to hit the system before I pick one up. Resistance and about 10 other games I already own for my Xbox and Wii are not enough to persuade me into getting one.

There is no way in hell it will remain competitive at that price (original launch price) over a year from now. The 360 will have a price drop by then, H3 will be out to drive the sale of even more 360 systems, and the Wii will continue to evolve and drive more sales for itself.

The most I would consider paying for a Ps3 would be 249.99. Maybe...at Costco in a package deal with extra controller and 2 or 3 games..

Bzzt. wrong.

Actually, PS3 will be easier to cost reduce, given the high initial price.

The only new component that is more difficult to cost reduce (near impossible) is the HDD. Meanwhile, the optical drive, which some say accounts for $100+ or more of the incremental cost over DVD will fall to near parity with DVD readers in no time, given that BluRay drives are at very high production levels already.

Because of this, it'll be easy for PS3 to fall to $400 quickly, $300 in short order. Because the HDD is in there, it will be nigh-impossible to get to $119, but that won't affect PS3 in the first 4 years of its life. Maybe by then they'll just put 20GB of NAND flash in it, who knows?

Boing:
Given that there are essentially no 3rd party exclusives in Next-Gen, reducing games made for PS3 won't affect Wii and 360 much. The 3rd party titles are already coming out for Wii and 360, and the 1st party titles will still be made for PS3 or not at all.

Sony is just bluffing.

Lets assume that by summer of 2008 there is a price drop. How much would that price drop be? Realisticly, it would probably be $100. So almost two years after the fact you will be spending $500(60gb) for a game console. This is the main reason why microsoft and mainly nintendo will have a huge advantage. What if microsoft drops the premium from $400 to $300. What if the Wii drops from $250 to under $200? Sony is still going to be screwed unless by that time they can come out with some killer apps that would make a 360 explode, but is that realisticly going to happen?

I don't see this thing falling to $399 anytime soon. That's the absolute most I'm willing to fork over for it. Sorry I still don't see the "value" in this system to fork over $600.

@Steve2
Sony is already losing nearly 200 dollars per ps3 sold. Your estimation of an easy price fall is way off. So unless Sony plans on losing money on every single hardware unit sold during its lifetime, they will not be reducing the price for a long time.

Retail stores have plenty of PS3s in stock and they aren't moving. There really is no reason to buy the PS3 right now. Not many games, no franchises on board yet (they seem to be wating for the installed base to increase), other projects seem to have stalled. the only thing the PS3 has going for it is linux, so PS3 owners can enjoy playing SNES and gameboy games..., there also always tuxracer...
I really do hope they find a way to make the PS3 sell. I think it is a good system, and it does pack a whole lot, but 600 f'ing dollars ?!! I can't do it.

$199. Even if they sell PS3 for $249, I still buy Wii. Yes, I am a fanboy. Fuck PS3.

The PS3 is a nice piece of hardware, and looking at it from a purely hardware perspective, it might be a good deal. But a game system without games is nothing. The PS2 was weaker its competitors, but it was a resounding success because of its phenomenal 3rd party support, which it earned through a strong showing during the PS1 years.

They could have easily won this generation too, but they got arrogant and created a beastly, expensive system thinking they could rest on their past support. But the system's too expensive to be mainstream, and developers want to develop for the biggest base.

With Nintendo is having a great showing this round, this generation is totally up in the air. Sony could still win it out, although they've had a rough start. Unfortunately for Sony, they blew a huge, huge lead.

Sony is in big trouble, not only because of the price but also because of their lies. 1080p is the biggest marketing ploy of them all. Notice how their games are coming in at 720p? Unless, of course, the game is a simple game such as tennis. What Grand Turismo will not be in 1080p??!! Of course it won't and if you thought it was you fell for the lies. So to answer the question- NO!!! Sony is a greedy, desperate company who relies on lies to sell there products. What arrogance.

Say what you want, but at $600, you are not going to move alot more units just for FF or MG. No game is worth that much. To get most consumers even to consider dropping $600, you will need a VAST library of great games that can't be had on a system that costs $200 less. It appears to me that this will not happen as exclusives are becoming more rare.

I might consider a PS3 at $400, but I believe I'm in for a long wait. Good thing it's not a painful wait.

I'll buy it for $400 (60 GB, of course)...and I'm a former Sony fanboy. Unfortunately some people (like #12) are a bit too "fanboy". With your uneducated-sounding remark, edo, you sound like all you can afford is used Gamecube games.

@Steve2

Wow, its interesting that you know more then the people that work at Sony about them cost reducing there system. Maybe you should work for them.

Sometimes I feel like people are are retarded.

First of all, you don't announce price drops until they are about to happen. If someone knows that in a month or two the price on something is going to drop for certain, why would they go out today and purchase said item for the current higher price? If MS announced today, that on September 5th, 2007, They will drop the price of the Xbox 360 Premium to $300, how many people do you think would go out and buy one before that date?

Secondly, The price to manufacture PS3 will drop faster than any of the systems, because new tech always has the quickest drop rate. The Wii will take much longer to reduce price on, but they don't need to, at their current price point people are gobbling them up.

Lastly, Sony would be idiots not to reduce the price until Mid-2008. The price is a major factor as to why the PS3 isn't doing as GREAT as everyone thought it would. I know I wont buy one until the price is more reasonable, and I don't think it is such a stretch for other people to do the same.

I don't plan to buy one till it's under 300, like the Wii

I think that Wii is the new PS2

First of all, STOP saying that the 360 is cheaper than the PS3... add the components you need to get the thing [360] up and running. *sheesh* That's like saying that WalMart is cheaper by "rolling back" prices to .96 than the other's .99.
I want a new computer for surfing... and I want it on my tv. I was going to buy a Mac mini... the PS3 is a MUCH better deal than that because you also have the added advantage of playing a ton of games.

Hell it still isn't even released here in Europe yet.

Is the UK price or release date confirmed yet? Launch titles? Anything? Sorry Sony, you loose. 360 and Wii are doing more for cheaper, with better graphics on 360, more games, better online service and more innovation and "fun" coming from the Wii.

The PS3 is just plain expensive and uninteresting.

@ #5 - I find it very amusing that you seem to think your expertise of the complications of price structure are so much greater than the head of SCEA, its not like he is the person who would know absolutely about something like that and should definitely heed the raving lunacy of a deluded fanboy.

To answer your question I am more than willing to wait until about 2010. If you think about the big picture by about 2010 developers will be able to tap the potential of the PS3 (Toaster Over, etc. (whatever you currently call that thing) I just feel based upon the history of most consoles exsistence's year three is when we start to see truely great games. So I'll see you in about 2010 until then I will save my case and continue on playing my wii360.

new tech has the quickest drop rate? Please cite something to support that. Maybe percentage wise that is true, but actual cost, no.

Sony wont think of dropping the price until they at least turn a profit on a console. Something nintendo is already doing.

Well I think that the only way that I'll get one is when I can get the 60 gig model for $300. Oddly enough that's what I paid for my premium 360 :). Hopefully by the time I can buy one for that price there will be plenty of games to want as well.

Oh, well, well, well ... Sorry #5, thin you're wrong.

They are loosing HUGE (see how I spelled it uppercase to increase drama?) amounts of MONEY (dito) on each PS3 ... What? How much did you say is that? more than 200$?? 250$ maybe ...

Heck ... Why not drop it to 300 $ and go down with elan?

Price drop ... yeah, right ...

Given that I already own an Xbox 360 and a Wii, the most I could justify myself spending on a PS3 is $249 or so. And if it never gets that low... well, then I guess I'll never have a PS3. I won't lose any sleep over it - I barely have the time to play games on the systems I already own.

#6: I agree, my gut tells me they're bluffing too.

I'm not a fanboy of any system and just now picked up a used 360, while I had my Wii preordered for release day. I have a threshold for how much I pay for a console, and that seems to be about $300. I wouldn't buy the PS3 for more than $400, even if it had a crapton of great games (which it doesn't). I waited for a 360 till there were some games I wanted on it, while Wii had some I wanted at launch and PS3 has zero even in the future (no GT, MGS or FF for me... I'll take Forza, Splinter Cell and Zelda).

Steve2, I would think a little harder about your statement calling BS. While it is entirely obvious that a Sony person would state no price drops (why pay now when you can pay less later?), I do believe his reasoning. This is especially true when you remember what Mike says about how much they lose on every system sold. Harddrives do not drop in price, they just get bigger for the same price. And until the mass market starts to adopt BD vs HD-DVD, then the cost of producing blue lasers is going to stay high.

Even if they could drop the price, it would be a year after the 360 drop and still be $200 more expensive for essentially the same game hardware with a "free" bluray drive and extremely worthless "free" online service.

I feel like the PS3 is a good product in search of a market to actually buy it.

Steve2 (#5) please pass the Kool-aid.

First of all, STOP saying that the 360 is cheaper than the PS3... add the components you need to get the thing [360] up and running. *sheesh* That's like saying that WalMart is cheaper by "rolling back" prices to .96 than the other's .99.


What? What on earth? Don't kid yourself, jackass. Dude, I paid $400 a year ago and my 360 came with HD cables. I plugged it into the wall and into my ethernet, and it was "Up and Running." To play HD movies, I needed to buy a $150 (used at Gamestop) but that's pretty damned optional.

Once again, it goes back to the big question, Is there any game worth $600, or even $500, now or any time in the future of the PS3? Two years from now is Sony going to start advertising the fact that their system is now "worth it" to pay $500 for? The fact is that Sony arrived too late to this party with nothing to show for it. If they would have launched with Lair and MGS4, it still would have been a tough sell. $600 is $600, there is no way to dilute that. The PS3 will, for the rest of it's lifetime, be fighting an uphill battle against a cheaper system in the 360 and a much cheaper system in the Wii.

One thing everyone is forgetting, it takes SALES to lower production costs, not necessarily improvements in the manufacturing process. By this Christmas Nintendo should have sold more than enough Wii's to drop the price of the Wii significantly, perhaps to even $100 in less than two years like they did with the gamecube.

Microsoft is most certainly going to drop the price of the 360 by this Christmas, which will be another blow to the PS3, regardless of the games the PS3 has by then. A $199 core 360 is certainly not out of the cards , especially with HALO 3 coming out in November, or earlier. But, you will most likely see a $250 360 this Christmas.

The amount of money I would spend on that console depends on what happens in the next year. If I see quite a few exclusives that significantly show that the PS3 hardware is indeed leaps and bounds ahead of the 360's, I'll drop $600 on it. But as it stands now, I don't see a difference between software for either system. (This includes future titles like M.G.S., LAIR, and F.F.) So I won't be spending an extra $200 for something that I already bought for $400.

The only way I could interprete these fanboyish comments is in this quote "All those people who buy those HD TVs that cost from $700 to $3000 are all idiots, they should get same size SDTVs for much cheaper". PS3 is the most used console in my household, that $500 was a good investment.

Things that will lower the price: popularity of Blu-ray and ubiquity of it, removal of PS2 parts, HDD pricing now and later, manufacturnign costs for Cell and reduction of size, manufacturing costs of RSX chip.
You don't need to be an expert to know this.

@Tengu "First of all, STOP saying that the 360 is cheaper than the PS3... add the components you need to get the thing [360] up and running."

Hmm, Ok

360 Premium - $399
4 rechargeable AA's w/ 15min charger - $50
--------------------
Total - $449

Playstation 3 20GB - $499
Component or HDMI cable - $40
--------------------
Total - $539

Notes:
-Rechargeable AA's for the 360 offset the built in rechargeable battery in the sixxaxis.
-360 Premium was chosen for BC game playback
-A/V cable required for the PS3 as the whole point of the next gen 360vsPS3 is HD.

It looks like the 360 is still $90 cheaper. I'd use this $90 to mostly pay for a PS2, giving you the best BC possible.

I wouldn't care if the PS3 did have good games. It's too expensive. I'm oldschool I guess, where I thought new consoles should cost about $300. The 360 was expensive but it's within reason. The PS3... it's mind bogglingly expensive. It's like if I'm used to paying around one price for taxes every year, and then one year they double it and I don't get anything out of it. that I wasn't getting before. Fuck that shit. Especially for one who doesn't have an HDTV. There's absolutely not one advantage to get a PS3 in addition to a 360 and Wii. I'd rather just save the money and buy an HDTV.

@Tengu,

...I have no idea what you're talking about

waiting for the price of a console to go down is idiotic. Most gamers waste money on every high profile game that comes out on a given system anyways, instead of sticking with a select few titles on each system.

@Airintake

Dude the Play and Charge kit is runnin like $15 on amazon... That's way less than the $50 for your batteries. But also, the ps2 component cables do the same thing on the ps3, so you could use those for cheaper than $40 and you can also search the internet for a better deal on HDMI cables, given your TV supports it. Then there is always the chance that someone with an HDMI compatible TV Already has a spare HDMI cable lying around. Either way, Unless you want your console to play HD movies or upscale dvds the difference between the PS3 and the Xbox 360 is about $100. Now if you want more functionality out of either of them, the console's price narrow in to something a might more comparable. In some cases for the same functionality, the PS3 may cost less. But for the agreed upon internet basics of HD consoles, it's a cool $100 difference.

@neilbert

Why would the Xbox 360 have a price drop if it is selling? If people are buying a product I have for the price I am asking, why would i go, "Hey you guys, you know what, I don't like money all that much, so give me less for the product you are walking away with." Same with Nintendo. On the other hand, demand for the Ps3 at the curent price will drop alot faster and price adjustments will be necessary to push consoles out. I also don't see MS dropping the xbox 360 price until a few months after Halo 3 drops, unless they are in trouble. If you have a known console seller, why lower the price of the console before it comes out?

Most I'd pay for a PS3 as it stands (with both current games and future possibility considered) = $149

Most I'd pay for a PS3 if it were to get some must-have exclusives beyond the very few I know about = $299

Keep in mind I own both a 360 and a Wii, so I'll already be getting more than 90% of the gaming experiences this generation.

Unless Sony does something quickly (in the next 6 to 8 months), the PS3 may be effectively dead in the water, waiting for some stellar exclusives and a price drop to feed it a Phoenix Down.

Its still a bargin.

I'm saying it right here and now. PS3, at $600 is a death sentence. I don't care how much "value" you are getting. These systems are largely supported by casuals from the mass market, and 600 dollars is just not a mass market price, Not fora videogame system. not even close to it.

If Sony doesn't price drop then hardware sales will continue to suffer, and in turn so will developer support, and what follows will be a vicious downward spiral/cycle. Mark my words.

This is like a train wreck that just won't stop. Sony, seriously! STOP TALKING TO THE PRESS. You're not doing yourself any favors.

Folks, the truth hurts if you like Sony and want a cheaper PS3, let me explain.

First of all the guy who said the PS3 is actually EASIER to price-reduce than the PS2 is extremely un/misinformed.

He claims the hard drive is the hardest thing to price reduce when, in actuality, of all the costly components in the PS3, the harddrive is the easiest thing to price reduce over time. While hard drives get cheaper to produce by the day, Blu-Ray isn't going to see profitablilty for at LEAST two years, so nix that. The cell processor is extremely expensive to manufacture, so forget that. And, overall, with the games library for the PS3 not expected to grow appreciably for another year, Sony simply can't afford to reduce the cost of the hardware even if they wanted to.

Lastly, Sony knows once the marquee games like MGS4, Gran Turismo and others start rolling in, people will pay the $600 to get into the PS3. Maybe not as many as got a PS2 initially, but more than enough for them to start the snowball really rolling. And let's not forget that the PS1 just got discontinued recently. Sony has already said they plan to give the PS3 a TEN YEAR life cycle, so they are not in a hurry-up position. They are being very patient. That patience might come back to bite them in their collective butt, then again, it may not.

Oh, and please don't delude your self into thinking that Sony is bluffing. Sony is not bluffing, they can't afford to. Otherwise they would never have come to market at such a high price point in the first place, especially considering negative public perception and Microsoft's one year headstart.

Microsoft is not going to reduce the price of the Xbox360 for at least two more years. Their reasons are different but just as important. Indications are, that they are going to be profitable by the end of this year with the Xbox360, and they are going to make money on their console this generation, not give it away to get in the market like they had to do with the first Xbox. Also, they are more aware of Sony's predicament than anyone and they are not going to reduce their profits when they fully realise that Sony is in no position to force them do otherwise.

No, if you want to get a console in this generation then you better be prepared to pony up the bucks, because its not going to be cheap.

Personally I own both consoles for different reasons. Linux on the PS3 is awesome, so I can wait for the games to start trickling in over the next year. The 360 is a fantastic gaming machine, period. Nevermind XboxLive, which I XboxLove! (sorry, couldn't resist)

I get the best of both worlds by not hating on one or the other. Did it cost me roughly $2000 to fully get into both? Yep, it did. But, hey, that's the price I'm willing to pay. I'm that committed to my gaming. Or perhaps, I should just be committed? I can't remember.

I currently own the Wii and the PS2.

I'd buy the PS3 for $199. Maybe $249 or $299 if it had some killer exclusives. Right now the games just aren't there.

I'd say just about the same price point would be perfect for the Xbox360. At this point though, it has better games, so I may eventually break down and buy it even for $399 after I finish playing all my holiday gift games.

-Aaron

Retailers: PS3 will be "difficult to sell"

Does anyone here even own a PS3? Out of all these posts I think only one person has admitted to buying one! I personally don't know anyone who's bought one yet. I do know a bunch of people who bought 360's this Christmas though.

Folks, the estimate of Sony losing $200 per unit is from a company (iSuppli) who then released a cost workup on the iPhone, a device THEY COULDN'T EVEN GET HOLD OF TO LOOK INSIDE.

Stop speaking of it as if it were gospel. iSuppli messed up a cost estimate on a device I worked on by 40%. I saw the BOM cost, and I saw iSuppli's estimates and they didn't match up at all.

The PS3 has two advantages when it comes to cost reduction:
1. It's the most expensive. It's easier to take $100 off a $600 unit than a $150 one.
2. It's brand new technology. New technology drops in price faster. Going from making 10,000 a month (BluRay+HD-DVD in June) to 1,000,000 a month (BluRay+HD-DVD in December) is going to drop the price more than going from 50,000,000 a month (DVD in June) to 70,000,000 a month (DVD in December). I paid $600 for my first CD writer. In a year it was $150. In another they were $45. Now DVD writers are $30. The technology in PS3 is newer and thus at the steeper part of the price drop curve than the tech in other consoles (Wii, for example).

I'll add another. Sony and Toshiba have been working on 65nm parts for almost a year already. They started 45nm months ago. Sony will be to 65nm before MS or N will be. And with the huge size of the chips in PS3, that'll make the biggest difference to them.

Now, unfortunately for Sony, even though you can drop more quickly in absolute dollars from $600 than from $250, PS3 will never be cheaper than Wii and probably will never be cheaper than 360 (unless new 360s gain significantly more features, driving the price up).

But still, the idea that PS3 is the most immune to price drops is incorrect. At some point, the PS3 will be $350 or less, and the Wii will never, ever be free.

AirIntake: I'm with AEX on your pricing.

none: I already mentioned the HDD issue. Why do you bring it up? Why do you mention the market adopting BD versus HD-DVD? First of all, the market is adopting BD. Check (http://www.dvdempire.com/index.asp?userid=99365260045540&tab_id=61&site_id=68&site_media_id=0), at the moment BD is selling 50% better than HD-DVD. Additionally, HD-DVD uses blue lasers also (only the early versions used chirped red lasers, that was abandoned), so adoption of BD versus HD-DVD is a non-issue for the price of blue lasers. Adoption of both of these versus DVD is an issue, but frankly with BD already at a run rate of 1,000,000+ a month, the price will be dropping very quickly indeed on BD components.

To those who think I'm portraying myself as an expert who knows more about component pricing than Jack Tretton, I would mention that Jack Tretton works for SCEA, a software-only division. They don't make PS3s, or indeed anything. The closest they came is designing the EyeToy, but they still don't make it, production is handled by Sony Japan.

You all somehow forget Sony cut the price of the 20GB PS3 in Japan before it even came out. It dropped from 598,000 yen to 498,000 yen. Kinda makes that idea that it's impossible to cut the price on the PS3 any time soon look silly, doesn't it? Sony responded to competition then (by dropping the price of the 20GB PS3 to the price of a Core 360 + HD-DVD playback solution), and they'll do it again if necessary. They just don't want to state they will.

The PS3 can't remain competitive into February at its current price. Sony is going to have to cut it or settle for being last by a long shot this generation.

"Did it cost me roughly $2000 to fully get into both? Yep, it did."

Start waving!

That's mass market penetration leaving town, slumped over on its horse.

You know, $600 may be a great deal for the technology in a PS3. And $3000 may be a great deal for a refrigerator with inventory manager, rot detector, juicer, cuisinart, first-aid kit and downloadable HD cooking shows...but there's no way in hell I'm paying $3000 to keep my orange juice cold.