An interview with Sony Computer Entertainment America chief Jack Tretton in the latest issue of Game Informer revealed some troubling news for consumers waiting for a lower-priced PlayStation 3. When asked point blank whether price drops for the PS3 will be "as soon or as drastic as they were for the PlayStation 2," Tretton responded with a curt, "No."For reference, the PS2 was reduced from $299 to $199 in the United States on May 14, 2002, 565 days after the Oct. 20, 2000 release date. Using this data and Tretton's above answer, we can expect that the PS3 won't come down in price until at least June 4, 2008.
The reason for the shallower pricing curve? According to Tretton, the increased investment in R & D and hardware makes the system "a lot more difficult to cost reduce" than the PS2. "There's a heck of a lot more under the hood and it costs us more money to make it," Tretton told Game Informer. Despite this, Tretton doesn't seem to think the system's price will hurt its position in the marketplace. "I think the consumers that get their hands on a PlayStation 3 clearly see the value and not only want to buy one for $599, in some instances they're willing to pay ridiculous prices to buy one on eBay," Tretton said. (Oh really?)
Well, Joystiq readers are pretty big video game consumers, last time we checked. Do you think the PS3 can remain competitive at its current price until mid-2008? If you don't have the system yet, will you be willing to wait that long for a lower price? How much would you be willing to pay for Sony's power-packed system?
(Page 1) Reader Comments
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.
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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.
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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.
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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.
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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.
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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.
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I might consider a PS3 at $400, but I believe I'm in for a long wait. Good thing it's not a painful wait.
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Secondly, The price to manufacture PS3 will drop faster than any of the systems, because new tech always has the quickest drop rate. The Wii will take much longer to reduce price on, but they don't need to, at their current price point people are gobbling them up.
Lastly, Sony would be idiots not to reduce the price until Mid-2008. The price is a major factor as to why the PS3 isn't doing as GREAT as everyone thought it would. I know I wont buy one until the price is more reasonable, and I don't think it is such a stretch for other people to do the same.
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Wow, its interesting that you know more then the people that work at Sony about them cost reducing there system. Maybe you should work for them.
Sometimes I feel like people are are retarded.
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I want a new computer for surfing... and I want it on my tv. I was going to buy a Mac mini... the PS3 is a MUCH better deal than that because you also have the added advantage of playing a ton of games.
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Is the UK price or release date confirmed yet? Launch titles? Anything? Sorry Sony, you loose. 360 and Wii are doing more for cheaper, with better graphics on 360, more games, better online service and more innovation and "fun" coming from the Wii.
The PS3 is just plain expensive and uninteresting.
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Sony wont think of dropping the price until they at least turn a profit on a console. Something nintendo is already doing.
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They are loosing HUGE (see how I spelled it uppercase to increase drama?) amounts of MONEY (dito) on each PS3 ... What? How much did you say is that? more than 200$?? 250$ maybe ...
Heck ... Why not drop it to 300 $ and go down with elan?
Price drop ... yeah, right ...
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#6: I agree, my gut tells me they're bluffing too.
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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.
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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.
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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.
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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.
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Hmm, Ok
360 Premium - $399
4 rechargeable AA's w/ 15min charger - $50
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Total - $449
Playstation 3 20GB - $499
Component or HDMI cable - $40
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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.
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@Tengu,
...I have no idea what you're talking about
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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?
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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.
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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.
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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.
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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
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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.
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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.
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Rumors of Warhawk going the "free demo" route, and the next GT going that route, too, don't bode well for the games department.
And Sony nixing anyone who reproduces porn on Blu-Ray doesn't bode well for the HD format, either.
That said, I want to play Resistance badly. But without a lower price and a bigger games library -- it's just a Blu-Ray DVD player. And with DVDs not even being close to being exhausted as a movie format, there's no compelling reason to plop down money until the PS3 gets real easy to cost reduce.
Frankly, the PS3 doesn't satisfy any burning need for anything. Did we really need to have access to 50GB of data on one disc? The PS3 Blu-Ray drive can't read data fast enough to compete with the DVD drive of the 360.
I'd rather have an 18 GB game on two double layer DVDs, and pay $300 less for my game system, thank you very much.
Without being able to make a competitive price drop, Sony is in big trouble. Nothing like losing $200+ on every console you actually manage to sell, not to mention the loss attached to PS3s that don't sell at all.
How long before we start seeing store-sponsored special bundles, to move PS3 systems?
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