Sony clarifies Americans aren't 'cheap,' but U.S. labor is

by Alexander Sliwinski { Mar 27th 2007 at 2:30AM }

Near the PS3 launch in Europe, Sony's UK Managing Director Ray Maguire was interviewed by GI.biz, and while discussing the cost of the PS3 in the UK said, "If you take what's considered to be the most expensive and the least expensive -- consider the US with its massive land and cheap people. Then you look at the UK -- a little island where rent and rates are at an absolute premium, and the cost of people is a lot more."

Coincidentally, in the same interview Maguire also said, "Nowadays, with how the media works, not only does information fly around at the speed of light, so does mis-information. With blogs on the increase, people's thought processes are transferred from one place to another and picked up by people who might be lazy when it comes to finding out whether something is true or not."

Well, to prove him wrong, 1UP went and followed up with Sony America today. They explained what Maguire was trying to say is that the cost of living and labor are different in the two countries. The minimum wage in the UK is roughly $10/hr USD against the US's $5.15/hr. 1UP concludes, "Wouldn't that make us, essentially, 'cheaper?'" Well, no. By that thought process the U.S. is essentially poorer. Sony is doing the U.S. a favor by making the PS3 cheaper for the well-populated, but poor, country.

Tags: cheap americans, playstation 3, ps3, ray maguire, rich british, sony

Reader Comments (Page 1 of 2)

Hikaru @ Mar 27th 2007 2:38AM

That kid is creepy...I think he's trying to kill me and telling me not to scream....

samfish @ Mar 27th 2007 2:43AM

The US needs to implement a living wage. This minimum wage crap ain't cuttin' it no more.

NoHitHair @ Mar 27th 2007 2:48AM

Samfish:

That sounds like a slap in the face to Laissez-Faire Capitalists everywhere. America revels in its gluttony far too much to pay any attention to its working class. Remember: education is a means to employ a workforce, not to educate.

http://blog.myspace.com/nohithair

anti-fanboy @ Mar 27th 2007 2:54AM

Well he is right $5.15 an hour gets you nothing after rent, food and your other bills if you can afford them. We Americans aren't cheap we are just overworked and under paid. It's a shame when the CEO of a company makes more by noon then one of their employees make all year. Even the raise to $7.25 the House has passed a few monthes ago is not enough.

SuMtOnE @ Mar 27th 2007 2:50AM

if the minimum wage goes up everything else does... look how much the UK have to pay for their PS3... ouch..

Jessica Q. @ Mar 27th 2007 2:57AM

samfish - I agree.

That said, though, what an ignorant thing for Sony to say. If they really think Americans are "cheap people", well, screw them for being so damn presumptuous and downright racist (nation-ist?).

But more importantly, whether Sony UK (or whoever said this) thinks less of Americans or not is kind of irrelevant. What bugs me is that a huge corporation like Sony should know that a quote like this is going to be seen as HORRIBLE and insulting toward a whole nation of consumers. So whether they meant it to come off as rude as it did or not, they're idiots for wording it the way they did.

And I don't think this is just a matter of American and British English/grammer butting heads. I'm pretty sure the term "cheap people" can be seen as "people who aren't worth a lot" no matter where English is being spoken.

Sony - You are pissing me off. Just shut the hell up and stop making me feel like a sucker for owning a Vaio desktop and a PS2. BE NICE and I will support your company. Be dicks and I'll keep buying HD DVDs. Argh.

Jessica Q. @ Mar 27th 2007 3:00AM

Oh sweet jesus, I wrote "grammer." I KNOW IT'S SPELLED "GRAMMAR"! I KNOW! ACK.

*hangs head in shame*

js @ Mar 27th 2007 3:01AM

A higher cost of living does not imply a higher standard of living, as anyone living in Manhattan will tell you. Similarly, a higher minimum wage (in a country with a higher cost of living) does not confer greater wealth.

Now, of course, it's interesting that retail goods are more expensive in the UK, as it seems this would create opportunities for arbitrage. However, I imagine the high rent and VAT in the UK makes importing goods from the US infeasible.

In response to Samwise, if we did raise our minimum wage to the UK's level, our cost of living would increase similarly. So would the salaries of everyone else. Congratulations, you just inflated the US dollar. (Alternatively, we might just fire all the minimum wage workers and outsource drive-throughs to India via VOIP. Already been done with some pizza places.)

Aex @ Mar 27th 2007 3:06AM

@Jessica Q.

Whoa, whoa, whoa. Settle down there missy. He wasn't doing it to be disrespectful, he was just explaining the difference in the UK pricing scheme. Perhaps he may not have chosen the most PR wording but what he says is basically true. He doesn't think of Americans as less of a people, but more as pricing here reflects our economy and society. Just as the pricing in the UK reflects theirs.

VoiceofHarold @ Mar 27th 2007 3:22AM

He probably thinks the US is too cheap to buy Sony's awesome new machine! Have you seen it lately?? Sittin on shelves!! hee hee!!!

Ridge Rrrrrracer!!!

Giant Enemy Crab!

Dark-Pen @ Mar 27th 2007 3:35AM

....hold on, by that logic, shouldn't the PS3 be expensive as hell in Japan? What the fuck.

....what IS Japan's minimum wage, anyways?

Slaziman @ Mar 27th 2007 3:43AM

So he is basically saying they will charge the British a premium because they earn more money to begin with? Nice.

john @ Mar 27th 2007 3:46AM

"The minimum wage in the UK is roughly $10/hr USD against the US's $5.15/hr. 1UP concludes, "Wouldn't that make us, essentially, 'cheaper?'" Well, no."

Well, yes! From the viewpoint of a multi-national corporation (which Sony is) the US is cheaper than the UK. If you want an hour of work done the US worker is cheaper than the UK worker. Not cheaper as in frugal, cheaper as in we are literally worth less money.

And for balance: Yes, from the point of view of a multi-nation hippie we are all beautiful snowflakes who transcend monetary value.

razer @ Mar 27th 2007 3:51AM

Wow, I'm insulted and embarrased to own their product at the same time.. Way to go Sony!

Mephistopheles @ Mar 27th 2007 3:57AM

You're supposed to move beyond minimum wage jobs; they are not supposed to be livable wages. It's easy to move up in any professions most people are lazy and find tons of excuses when they have to explain why they can't succeed. The answer is simple; sacrifice. Too many people are unwilling to give up certain things in order to create a better future for themselves. I've risen up from poverty with no problems doing so. It's not hard it's just that people are not determined enough; they want somebody to come in and save them from themselves.

At any rate; the problem with minimum wage is that it does not increase at the same rate as inflation and thus you actually take a hit to real income every year. This should be adjusted so it does not occur but at the same time it is not hard to move beyond minimum wage.

Nova Scotian @ Mar 27th 2007 4:35AM

If you're living on minimum wage (and no health insurance in the USA) then gaming is the last thing that should be on your mind no matter the cost.

DCfireuk @ Mar 27th 2007 4:53AM

In the UK those on the minimum wage are usually part time youths (aged 16-25ish), and as they earn more (varying between £3 and £5ish depending on age) they are able to spend more. Traditional economic theory proved to be wrong where minimum wages are concerned, they have ambiguos affects on the economy. As most people on the minimum wage are dependant on parents etc. (ok, im ignoring alot of people, such as part time employed mothers etc.) the money they earn is disposable, and as they are aged between 16-25(a key age cohort which games are marketed at) they are able to spend more on things like games consoles if they earn more. That may partially justify higher prices in the UK, but its still bang out of order that i have to pay more :(. wont be affording one for a few years yet. :'(.

Helmgren @ Mar 27th 2007 5:14AM

Sony is wrong. england is way more poor. Look at facts. USA people makes $43,500 each a year, and england people makes only $31,400. I would hate to be them, poor, and PS3 also costs more.

Ben @ Mar 27th 2007 5:20AM

I thought the best part of the interview was when he explained why sales of the PS3 in the US have been low:

"The truth of the matter is that we've stopped the supply to the US because we're making PS3s for our launch. The reason sales are low is because I've just put in loads of product to the UK in order to have the largest launch of a console in UK history."

Another fine example of Sony's PR-savvy execs!

http://gamenian.blogspot.com/

mocax @ Mar 27th 2007 5:58AM

the kid looks like one of those weirdos in Dune.

brogan @ Mar 27th 2007 6:21AM

Minimum wage has to been more in Britain because we have larger tax burden than the US that gets wanked away on silly stuff like making sure health care is free for all at the point of use

Rubang B @ Mar 27th 2007 6:22AM

They're not weirdos you ass. They're Fremen.

Skipjimroo @ Mar 27th 2007 7:11AM

I'm really starting to tire of all these limey bastards complaining about the high retail price of the PS3. I thought the Scots were supposed to be the cheap ones!

Whichever way you slice it the UK has emerged with the better cut of the deck:

Granted, the current(ish) conversion does bring the British minimum wage to an impressive sounding $10/Hr but lets review. The British minimum wagers are no better off than their American counterparts, also living in squalor and left with practically nothing after they've paid the rent/food/disease riddled prostitutes. Does someone who earns $10 an hour face these same daily trials?

I could go on and on about how the general quality of living is better in the states, what with their cheaper housing, more attractive retirement proposals etc - but I need to take a big shit.

In short, consumer electronics aside you can buy the same jazz with a dollar in the states as you can in the UK with a pound sterling. Thusly, even the most tight-fisted of the queens fair public would have to agree that £425 is far more attractive than £600.

The added incidental bonus is you even have an extra £175 to buy steak and kidney pies and butter crumpets.

Rule Britannia!

Korova @ Mar 27th 2007 11:50AM

This guy ate one too many mad cow burgers.

Any consumer who buys that logic will buy the Brooklyn Bridge.

And for one of the people who originated the English language he surely dont use it good.

LaughingTarget @ Mar 27th 2007 7:54AM

Maguire needs to get his figures straight. The $5.15 is the federally mandated minimum wage. However, very very few people run off of $5.15. Raising it would result in a wage increase so small it won't even register. Just because the federally mandated minimum wage is $5.15 doesn't mean that is what we're making. As shown above, the US average income is higher AND we have lower costs of living.

Are we cheap? Absolutely. We get to keep more of our money. This is why we get to buy stuff for half the cost as our UK cousins.

Jack of No Trades @ Mar 27th 2007 8:00AM

People that live on thier own and make $6.00hr don't go buy PS3 or 360, or Wii. They buy old PS2, Xbox and Gamecube.

yonderboy @ Mar 27th 2007 8:19AM

I'm glad at least *ONE* person here has the IQ and education to realize that "minimum wage" is *NOT* supposed to be enough to live off of. I'm sick of hearing about how it's not enough. As for Sony, who dropped them on their heads when they were babies?

Neal @ Mar 27th 2007 8:22AM

Who cares about minimum wage? The only people making minimum wage are illegals (who shouldn't be here) or 16 year olds. If you're making minimum wage and older than 16, you have a whole different set of problems.

Boss Tempo @ Mar 27th 2007 8:33AM

And now a message from the flamer formerly known as "Joe" - I see my name has been compromised by some PS Fanboy in another thread so I'm changing it up.

Jack is right. This is why people love Gamestop in the states. Cheap old games on used old systems go a long way for someone on the minimum wage. It still sounds like a lot of Sony backpeddling to me though. They called you people cheap because you're not buying their over priced, over hyped, cancer curing, sims-wanna-be-live waffle iron. Get over it.

Jake @ Mar 27th 2007 8:47AM

Growing up, I thought the US was this horrible place where the rich practically enslaved the poor. I was raised in poverty. I had a nice and enjoyable childhood and good parents, but we were basically poor.

I busted my ass, got into a good school with a lot of federal and state loans, received a degree in engineering, and now I make 60k in my second year working. My gf just started making 50k as a nurse. Our rent is 700 a month. We have everything we could want. America is a great place, but you really have to bust your ass and take care of your money or she'll shit all over you.

boc @ Mar 27th 2007 9:18AM

I spend half my time in New Orleans and half my time in Michigan. While in New Orleans I work at a taco bell for $12/hr. While in Michigan(worst economy in the nation thanks to granholm) I work for $8.00.
Both of these jobs are of the minimum-wage-sort... just some numbers from a teenage worker

Muu @ Mar 27th 2007 8:57AM

I'm sure the true cheapie would either be content playing free flash games, or playing illegal rips of existing PS2 games on a modded PS2. Since their cheap SDTV can't show the incredible difference between the PS2 and PS3, this more than suffices (since the only enhancements are graphical anyway).

delldude420 @ Mar 27th 2007 9:09AM

the lowest paying jobs in new orleans right now aref ast foot like mcdonalds and burger king

who are paying 9.50-10.50 an hout + a $500 a month bonus, and a $100 sign in bonus

its pretty standard now. after the hurrican u could get a job at those places for $15-16 an hour + a 600-700 monthly bonus. and a 100 sign on bonus

Jack of No Trades @ Mar 27th 2007 9:16AM

Jake your absolutly right. You do have to bust your ass to get what you want in life. The more effort you give the more you get back (in theory).

I work with Catia and Solidworks with Raytheon. What do you do in the engineering field.

Killer @ Mar 27th 2007 9:22AM

I would love to point out that only a small percent in America pays the $5.15 an hour, such as Mcdonald's and other fast food restraunts in America. Many companies already pay $7 or more an hour. Also the reason the UK has a $10 an hour rate is because they are taxed more then the average American. So to really say america is "cheap" in labor really doesn't cut it. the problem Sony really has is that Americans aren't willing to buy a gaming console that is $600 or even more. That's why it's cheaper, because Americans don't feel that paying 600 dollar or more is worth what they get. It's a gaming console for christ sake. You know what you can buy with 600 dollars in America? (ok, not alot of cool things) but still, 600 dollars can buy something else.

Dave @ Mar 27th 2007 9:23AM

I didn't realize they were manufacturing the PS3 in the US.

VOODOO85 @ Mar 27th 2007 9:31AM

i worked out that for an american on minimum wage, the xbox 360 works out to 77hours of wages.

in comparison, somebody in the uk and minimum wage, the xbox360 would take them 55hours of work.

so infact, the uk gets a better deal as we dont need to work as long to buy the product as our american counterparts despite the price being higher here.

i also calculated that in the uk we pay 37.5% over the u.s price. for ps3 we pay 39.% over the u.s price but its actually the wii which is 41% higher priced over here compared to america

so, nintendo is the company with the worst pricing scheme for people in the uk and xbox360 has the best.

nb: this was comparing the premium xbox and the 60gb ps3. obviously only one wii sku available

Negativecool @ Mar 27th 2007 9:44AM

Actually that DOES make the US "cheaper."

Looking at it strictly from the eyes of SONY here people, they pay for labor like you pay for rent.

5.15 in US < 10 in UK

Hence, "rent" is cheaper in the US.
Get it? Or is everyone still going to get in a big pissing match over his easy to understand statement.

polly @ Mar 27th 2007 9:38AM

Thanks for the lesson in macroeconomics Sony. Your system is still overpriced.

samfish @ Mar 27th 2007 9:39AM

"if the minimum wage goes up everything else does... look how much the UK have to pay for their PS3... ouch.."

Actually, that's not true. Since they've been tracking the minimum wage starting in 1948 (IIRC), there's never been a rise in goods and services that can be attributed to raising the minimum wage.

charlie @ Mar 27th 2007 9:48AM

As provided by the IMF, The per capita GDP PPP of America and the UK are $41,399 and $30,436 respectively. Americans actually have considerably more purchasing power than citizens of the UK.

JasonL @ Mar 27th 2007 9:49AM

Sony Pricks!

I make a boatload of money and I'm not buying a PS3 for $600.

hegemonyhog @ Mar 27th 2007 9:50AM

"the lowest paying jobs in new orleans right now aref ast foot like mcdonalds and burger king

who are paying 9.50-10.50 an hout + a $500 a month bonus, and a $100 sign in bonus

its pretty standard now. after the hurrican u could get a job at those places for $15-16 an hour + a 600-700 monthly bonus. and a 100 sign on bonus"

Incidentally, there's a reason for this - New Orleans' employment market is virtually unique in the nation, and in most of the rest of the world.

In case anyone forgot, there was a massive hurricane in the summer of 2005 that nearly destroyed New Orleans. Thanks to the mass exodus of people and the complete focus on the economy's rebuilding, the city's economy is creating a massive number of jobs per month just to get back where it was before, which is leading to a massive spike in wages.

In other words, using New Orleans as a stand-in for minimum wage economics is like using Oprah Winfrey as a stand-in for unmarried middle-aged women.

sheppy @ Mar 27th 2007 10:05AM

You know, Sony sold a lot of units at launch. Much more than anyone expected. So you HAVE to wonder, why the PR? Why can't any of these jackoffs just shut up and let the good times roll?

Incidently, Jessica, I would honestly agree with you about the whole HD-DVD thing except for one massive problem... there are no fucking movies. Seriously, HD-DVD only has one exclusive I'm interested in and that's the NIN cancert disc (saw em live, great show) and outside of that, everything else is going BluRay.

Dolla Dolla @ Mar 27th 2007 10:21AM

Sony PR at it again.

Just shut the hell up and sell a system with good games. That's all we ask.

Jake @ Mar 27th 2007 10:44AM

Jack,

I'm a mechanical engineer and make filters for new business opportunities within my company. Make them for medical, automotive, disk drive, and microelectronics opportunities. I am basically a Jack of all trades. ;)

Jake @ Mar 27th 2007 10:53AM

Doesn't the VAT add a lot to the UK price? The US gets it a bit cheaper for more reasons than just "European people are rich" or whatever argument is being applied by people. Every electronic costs more in Europe. You make the same profit margin off sales in Europe, but you have to sell at a higher price to do so. It is the way the economics work out as a whole. Americans aren't that poor compared to Europeaners from Europe's top 5 countries, that is just Europe elitist talk. The difference is pretty small.

With that said, the PS3 costs a higher percent more in Europe than the 360 does. So, Sony is adding more than MS is. But, Sony knows Europe is their little bitch and will put up with anything they do and still buy the PS3 over the 360. Why wouldn't Sony bend them over if they ain't gonna say no to it.

Zach @ Mar 27th 2007 11:12AM

Um - wow. There are a lot of assumptions going wild here. Does Sony really think you could come to the US and pay anyone $5.15/hr to do ANYTHING? We have the lowest unemployment in the world (~4%), which translates to the most competitive job market. You can't even pay a teenager $5.15 to flip burgers - someone else is willing to pay them more.

So let's look at average salaries in the US compared to the UK, and you'll see numbers like $40k/yr US and $30k/yr UK. Throw in a 17% tax on EVERYTHING in the UK, and that really puts it into perspective.

What it comes down to is an idiot at Sony making an idiotic statement. Sell the damn console on its merits.