Analyst says PS3 needs $200 price cut to recover
by Alexander Sliwinski 
{ May 24th 2007 at 4:25PM }
An analyst at Bank of America believes for Sony to make up the ground they've lost this console generation they don't just need the expected $100 price cut, but a $200 price cut. The analyst who made these remarks to GameDaily.biz, Michael Savner, believes this is unlikely, but believes it is the way to recovery.Savner says, "While Sony could cut the price by $150 - $200, we view that as less likely given that it is already losing approximately $200 per console at $599, based on our estimates ... Offsetting a potential price cut are decreasing production costs, which should improve significantly this year. We estimate that the loss per console could decline to about $50, assuming Sony does not cut its wholesale prices. Bottom line, we don't expect Sony to make up meaningful ground against the Wii this year."
So, according to Bank of America, Sony's gotta drop the price, take the loss, lose the year, and maybe they'll recover in the long run. But wait, there's more. Savner says that the success of the Wii is hurting the industry. That publishers have invested research and development in next-gen graphics and tech, so if the Wii is successful that money spent is useless. He also notes that Nintendo doesn't play very well with third party publishers so that'll hurt the entire industry. There's a lot of jargon in there, Savner simply could have laid it out in geek-speak we could understand: Save the PS3, save the industry.
Reader Comments (Page 1 of 3)
Rubang B @ May 24th 2007 4:32PM
AHAHAHAHAHAHAHAHA!!!
jc @ May 24th 2007 4:35PM
Both Sony and Xbox 360 need to cut their console prices immediately. The Wii is a horrible platform (I bought into the hype but recently sold it) thats will in fact stifle game innovation due to the simple fact that developers dont have the processing power to do anything really meaty and interesting (AI, Virtual Worlds, Simulations). Minigames get old fast.
It's gone untouched long enough. If it had to compete with 360 or PS3 at the same price, it would be recognized as the dud hardware it is. Microsoft and Sony need to suck it up. Take your losses, you can afford it. The wii is a 99 dollar system being sold for 250 bucks "because they can".
logikil @ May 24th 2007 4:37PM
Here's what i don't get. The 360 is currently the Next-Gen market leader regardless of how long anyone believes it will stay there. So why is it that the analysts don't even seem to mention it anymore? I mean if HD graphics and being pleasant to 3rd Parties are what will save those publishers and the industry in general, then why is it that there is no push in the direction of the 360?
Seems odd to me.
Grog @ May 24th 2007 4:40PM
I love how much people badmouth the Wii's hardware, yet consistently praise games like GoW2 that are made on hardware that the Wii far surpasses.
majortom1981 @ May 24th 2007 4:41PM
UGh know all the bashers will come in to bash nintendo. How is the wii a horrible platform.
It cant eb that bad with all its sales.
JC your full of garbage. The wii can to do all that stuff. If the ps2 and the original xbox can do those things why can't the wii. Did you forget god of war one and 2 are both on the ps2?
The wii is making nintendo a ton of money. When the ps3 sgets into its own nintendo will be ready for its next system.
Heck even by that point so will microsoft.
Chilly @ May 24th 2007 4:42PM
@2 jc: Your argument is so false! If a Ferarri could be sold at $18K then it could compete with a Kia at the exact same price and then everyone would realize how much of a dud a Kia is and everyone would buy Ferarris and no one would ever buy a Kia again.
The problem is that a Ferarri is NEVER going to cost $18K. In that same way, a 360 or PS3 is never going to get drop to $250 until it is old enough technology a few years from now that it won't make much of a difference in marketshare by that point in time.
Fernando Rocker @ May 24th 2007 4:42PM
But IF the PS3 drops the price, Microsoft and Nintendo ALSO will drop the prices of their systems, and again, the PS3 will a lot more expensier, even at $400. Sony FTL
Grog @ May 24th 2007 4:42PM
Oh, and the reason why everyone talks about the Wii rather than the 360 these days: www.vgcharts.org
In 6 months the Wii has sold 3/4 of the units that the 360 has sold in 18 months. Love it or hate it, it's a hot-selling system and looks to take over the lead pretty soon.
Malcom @ May 24th 2007 4:43PM
Don't bring logic here, Grog. The only thing people understand is bashing systems. I swear, you'd think people were getting paid for how much they bash and cut down systems.
ck @ May 24th 2007 4:42PM
Make up ground against the *Wii*? But that's a $250 console with a completely different market FFS. Which is also owning the 360 and anything else you care to mention.
I have a better idea. Sony should cut the price of the PS3 to $50 and throw in a free 70" HDTV. Then Nintendo will be truly fucked.
God-damn ANAL-ysts.
Mr Khan @ May 24th 2007 4:42PM
I wouldn't think so
I think there's room in the market for everyone at this stage, since each of the 3 is offering something fundamentally different, A totally networked experience, a full multimedia experience, a new way to play
This generation, all bets on how things will go are off, just because this gen is a Hardware revolution, where consoles are doing things they've never done before
Agathos @ May 24th 2007 4:45PM
The WII is an outstanding system, but I enjoy the 360 and PS3 just as much but it's definitely a different system with different games and I dig that.
Now why does the PS3 need to drop price again? Its a super slick piece of electronic hw, with high end well reviewed BD player and will upscale all my dvd's and PSOne/2 games, has free online services improving everyday, and a great list of exclusives still on the way.
The 360 has some great games but it's a fudge of a hardware bomb, major hardware failures, loud, MS just isn't capable of hware on the levell that Sony is. But damn I love the selection of games for it and it's got a great online service.
Sony shouldn't worry about price drops for broke internet bitches that can't afford one time cost difference of a few hundred bucks that countered by the time you buy an HD player or pay for a few years of online service. If they want one so bad they have to bitch about the price they should work an extra hour late instead of posting messages online hating it. To read the posts of those users you'd think Sony was aksing for 200$ monthly!
To hell with these broke bitches, do your thing Sony.
XGamerX @ May 24th 2007 4:45PM
wow harsh words. I would think companies could easily use the older technology they have laying around to make games for the wii. The ps3 needs a price drop but that doesnt do a whole lot if the games dont back it up.
http://gamergeddon.com/
Rubang B @ May 24th 2007 4:47PM
@2, The Wii is not stifling innovation. Processing power is not the driving force behind innovation and never has been. It also has nothing to do with AI.
@3, No matter how you slice it, the Wii takes first place worldwide before Christmas. Microsoft wasted a year-long headstart. They sold 6 million in 12 months. Nintendo did it in 5. Microsoft gets to be on top for a few more months, but they're basically a lame duck now.
CakeOrDeath @ May 24th 2007 4:48PM
Even if developers have invested in next gen tools and such, that doesn't Nintendo is making them lose money.
i.e if a buy a new toaster and someone comes along and fixes my old toaster for free. The guy who fixed my old toaster didn't lose me money.
megaStryke @ May 24th 2007 4:48PM
None of this matters. In five or six years when the next console cycle begins, people are gonna look back at the 360 and PS3 and attempt to fathom how the hell we could ever play anything substantial on such dated machines, then Wii 2 will appear with five-year-old graphics and clean up the industry once again.
sheppy @ May 24th 2007 4:49PM
"The wii can to do all that stuff. If the ps2 and the original xbox can do those things why can't the wii. Did you forget god of war one and 2 are both on the ps2?"
Umm, did you forget how many game experiences the last generation gave us that PSOne, Saturn, and N64 just COULDN'T do?
As technology marches forward, immersion becomes a key play, and immersion actually requires "raw paaaaaawaaaaaar." The Wii is technologically inferior, period. It's limited to 64MB of ram. 64! Gee, wonder how this will effect games that rely on RAM for textures.... actually, we already know how that will work out. Ton of repeating textures and constant swapping of assets. But don't take my word for it, play Spiderman 3 and keep going up, up, and up some more. Eventually the optimization code thrown in the free up ram becomes overly apparent as LODs pull the textures from all the city geometry.
I'm not saying the Wii can't handle impressive stuff. But I am saying the Wii isn't capable of moving forward.
Yourself @ May 24th 2007 4:50PM
I don't get how the Wii is hurting the industry. Like, by expanding it to a broader audience I guess? It seems kind of ridiculous to suggest that because Nintendo knew better than MS or Sony what the consumers wanted, that they are somehow damaging "the industry" by beating competitors that misjudged demand. It seems like, instead of "save the ps3, save the industry" it should be "support the wii instead of supar-cool graf-x, save the industry."
Oh and someone made a good point. The 360 is still winning. The PS3 sucking means the PS3 sucks, not that people don't want next-gen graphics and tech.
OhJustSomeRandomGuy @ May 24th 2007 4:51PM
It should be pointed out, that this is motherf**king BANK OF AMERICA.
Aka, the most onerous bank in terms of fees on the face of the planet. Their idea of profitability, and the idea of profitability to someone who didn't like raping their customers is probably a bit different.
Just saying is all.
Milkshake @ May 24th 2007 4:52PM
Just like the hype Sony is so over, they won’t recover plain and simple. The wheels come off a long time ago and they couldn’t make the next stage and like the end of a Sega Rally stint its “Game Over Yeahhhhh! “
required @ May 24th 2007 4:53PM
"According to Bank of America's Michael L. Savner..."
...the iPod needs a price cut, $400+ for a MP3 player...
Matt B @ May 24th 2007 4:53PM
The PS3 doesn't have to drop its price. It is more expensive because it offers more out of the box than the 360 or wii. I'm not getting into the specs, we all know what is in each box. Now a price cut on gas, that is something I can get behind.
He bashed the most expensive and the cheapest console. Why settle for mediocrity?
Mac Aoidh @ May 24th 2007 4:53PM
The Wii is a great thing for gaming.
Most of the people buying a Wii wouldn't have bought ANY console otherwise. It's bringing lots and lots of new people into the medium.
And let's face it no one who was going to get a 360 or PS3 is going to get a wii instead (frequently as well). The only thing it's hurting are its competitor's image...
Vader582 @ May 24th 2007 4:54PM
"BRING OUT YOUR FANBOYS! *rings bell* BRING OUT YOUR FANBOYS!"
required @ May 24th 2007 4:54PM
BREAKING NEWS!!! an analyst at Bank of America told me otherwise.
vidGuy @ May 24th 2007 4:55PM
Wii60 owner here. The Wii is promoting innovation by giving us new ways to play and not giving us "BiGgunNer2007 - Now with more sweat!" constantly. The PS3 would have to drop to $199 before I'd consider buying. I think it'd have to drop to the mass market price of $299 to make any headway, and that's a $300 drop!
Fernando Rocker @ May 24th 2007 4:55PM
@sheppy
So the Wii cant move forward?? Im completely sure that nex gen systems, both Microsoft and Sony, will implement motion and pointer capabilities... and im very, and I mean, very sure, that the next PSP will have touchscreen... Nintendo is the only who is innovate. Ps3 add raw power... nothing innovative.
silkylove @ May 24th 2007 4:58PM
If they drop the price to $400.00, fix and speed up the slow and wonky disk drive, come up with a better cooling system, include a rumble controller, and pack in a killer 1st party game (perhaps LBP) then I might consider purchasing one...maybe.
Rubang B @ May 24th 2007 5:04PM
Sony has become the Tim Allen of the video game industry. They're stupid but in a cute lovable way that's fun to laugh at. The only new feature they can comprehend is upgrading the power in their systems to ridiculous new heights, and then it backfires on them in humorous situations, like say, selling only 82,000 a month and getting creamed by the GBA.
Agathos @ May 24th 2007 5:04PM
silkylove proves my above point.
His comments against the PS3 were completely false (slow wonky disk drive!?), better cooling system (what?), WTF!? It's f'in obvious you don't own one of these.
Man like I said above the 360 has some good games that I enjoy but it's the only console I know of with hw issues out the ass, like major cooling probs, a house sized power supply, and what's the failure rate on these again...?
Dude, just say I'm a broke and hateful person who wishes I could afford a PS3 too.
Thanks for proving my points in these posts guy.
Ocho @ May 24th 2007 5:07PM
So, Wii is hurting the industry because popular demand is contrary to what the out-of-touch industry leaders thought would be popular?
The Wii didn't hurt the industry, the industry hurt itself.
sheppy @ May 24th 2007 5:06PM
I don't even know why I'm responding to this but sure...
"So the Wii cant move forward?? Im completely sure that nex gen systems, both Microsoft and Sony, will implement motion and pointer capabilities... and im very, and I mean, very sure, that the next PSP will have touchscreen... Nintendo is the only who is innovate. Ps3 add raw power... nothing innovative."
Umm, Tiger Electronics was the first to bring touchscreen to a portable console.
http://en.wikipedia.org/wiki/Game.com
But yes, I said it. Wii CANNOT move forward. What it has is the raw specs. GAMEPLAY innovations are limited simply to the controller. Meanwhile, what they can do with the game worlds require raw power. If it wasn't for the boost in hardware, we would not have seen games like Crazy Taxi, which ultimately blazed the path for GTAIII and the new Sandbox genre. We haven't seen the new hardware's ability to expand gameplay yet, but as time passes, Wiis limits will become apparent.
Retrofied @ May 24th 2007 5:08PM
Ok, PS3 needs to be cut $200 but Wii is hurting money spent on next-gen and isn't nice with 3rd parties. They sure need a console that can do all that.
This article was SCREAMING "360".
Rubang B @ May 24th 2007 5:09PM
Huh, Crazy Taxi eh? And here I was thinking SimCity created the sandbox genre in 1989.
Devre @ May 24th 2007 5:12PM
Listen to this guy, Sony! :P
But as someone else already mentioned, if PS3 gets cut to 400$, the 360 will most probably go down to 300$. But, IMO, at 400$, the PS3 would be the better console. Why? First of all, free online. To play online on the 360, you need to purchase a gold membership. In 2 years, you would've paid the 100$ difference by playing online whereas PS3 users get free online play and a free online 3D community(Home). Also if you can't hook up your 360 to the internet with a wire, you gotta buy a lame WiFi adapter.
My second point is hardware. There's no questioning that Blu-ray can store way more stuff than an HD-DVD. Also you can't deny how often 360's break, while I haven't yet heard of a single PS3 crapping out. And from what I've gained from looking at gameplay videos etc, the PS3 is just more capable in terms of graphics than the 360. It may not be much, but it's still there.
But, really, it all comes down to the software, which the PS3 is still lacking. But with devs like Insomniac and Naughty Dog backing up Sony, that probably won't be such a problem soon.
But for all this to happen, a pricedrop is a must :[
cc123 @ May 24th 2007 5:11PM
"fix and speed up the slow and wonky disk drive, come up with a better cooling system"
Wtf? Where does this stream of internet idiots come from? They just talk out of their asses.
Jake @ May 24th 2007 5:13PM
$200 for a price cut is a bit much. Seriously. How about $100 and a few AAA games. That is what I'm waiting for.
But it looks like a long summer for the PS3. It is getting Sigma and Lair between now and October. That's it. Four months and two exclusives on a Playstation console. You know, the brand that usually gets way more good games than its competition. Ouch.
Rubang B @ May 24th 2007 5:13PM
Ocho wins! The industry is stupid! 99% of games are crap and the other 1% are sequels! We should be thanking Nintendo for trying something different.
"Hey I have an idea for a game, you drive a car around."
"Sounds good, what else?"
"Oh, and you shoot stuff too."
"Deal!"
Striderhayasa @ May 24th 2007 5:14PM
@jc
Are you serious? AI in 360 and PS3 games have been horrid on average so far. Since when was a 360 or PS3 needed to do great game design. You must be a new gamer. Try God of War, Devil May Cry, Ninja Gaiden Black, RE 4 or God or War 2 and get back us
@sheppy
Agreed, look at the DS. that definately has no future. DS needs the power of PSP in order to gain a respectable library...oh wait...
Striderhayasa @ May 24th 2007 5:18PM
@ rubang
yeah, I was thinking the same thing. Crazy Taxi? Huh?
----------------------
First and foremost, PS3 needs the titles and better infrastructure. MS already admitted PS3 hardware is the better value by releasing the Elite.
silkylove @ May 24th 2007 5:18PM
@Agathos
Of course I don't own one, but I do read a lot about them. Every complaint I stated was valid.
Facts:
1. PS3 has cooling problems. Many people have complained about this, especially while watching Blue Ray movies, hearing how loud the fan is on max, and having to turn off their superheated system after 20 minutes.
2. The Blue Ray drive speed is slow. A faster drive would cut down on the heat problems.
3. PS3 is the only system of the 3 with no rumble.
4. PS3 is priced out of the mainstream market.
5. One of the main reasons the Wii is so successful in the US is because it came packed with a killer piece of software called Wii Sports.
E.P. @ May 24th 2007 5:20PM
"Dude, just say I'm a broke and hateful person who wishes I could afford a PS3 too."
I'm a broke and hateful person who wishes I could afford a PS3 too. I bought a Wii cause I could afford it. Any questions?
Striderhayasa @ May 24th 2007 5:24PM
@ silkylove
uh no, PS3 doesn't have heating problems. Too many gamers are idiots is the problem. I keep my PS3 in a well ventalated area. I haven't had a problem with it yet.
The drive is slow but again...with ventilation, heat isn't a problem. I've played my PS3 for hours with no issues and to be completely fair, Wii heats up like a bitch when you play for even less time.
PS3 is getting rumble at the end of the year and you can have rumble if you get the PS2 to PS3 USB adapter.
3 I can't deny
Wii is successful because of the price and the novelty of the controller. WiiSports if good though, this is true.
Digi Smalls @ May 24th 2007 5:24PM
according to Matt B and Agathos, Sony's price is completely justified.
ok, so let's not see a price drop and see how the rest of '07 goes shall we?
.
cc123 @ May 24th 2007 5:25PM
@silkylove
3+4 are correct. 1+2 are moronic. The PS3 has no cooling problems and the blu-ray drive speed has shown no problems at all. A faster drive would cut down on heat problems?? Are you for real??
And the main reason the Wii is selling so well is cause of the price. The sale numbers just mean that it's the cheapest system not the best system...not by a loooong shot. The only thing you can conclude is that most people are freaking broke.
wiiHater! @ May 24th 2007 5:26PM
ROCKER!!!!! When did motion sensing become NEXT GEN!!! Because Pelican had a controller that does what the wii mote does years ago. PEOPLE ITS NOT THE GRAPHICS when you talk about xbox and PS3. So stop making that excuse. Its the way the game plays and much more intelligent AI. Wii hasnt had a NEW game yet its all rehashes....Oh wait here comes another mario game!!!! The one saving grace of the wii is the VC. take that out and wii sales would plummet. There simply isnt a good (disc-based) game lineup!
We live in a dumb country(bush president x2) mindless wand waving actually stimulates the majority of people. If nintendo had its way. We would all being playing low budget mini-games. Whats the cost to make a GOW game VS making a mario party games. If all best sellers were Mini games. and sold for 60x a couple million.....then they'd make a killing.
gregory mitchell @ May 24th 2007 5:26PM
HA!
ManekiNeko @ May 24th 2007 5:27PM
Here's a little advice for all you so-called hardcore gamers who are complaining that the Wii is taking the industry down the wrong path... sit down, shut up, and enjoy the ride, because the millions of units sold conclusively prove that this is exactly what consumers want.
The level of selfishness on display by the Grand Thefties and the Halo-ites disgusts me. You've had six years of the video game industry catering to your every desire, serving up endless clones of your favorite games on a silver platter (to the detriment of TRULY innovative titles like Okami). Now that everyone ELSE finally gets what they want, you're pitching a fit and making threatening predictions that basically boil down to "if we're not happy, nobody else can be."
Well, guess what, you insufferable brats? You're not the only ones who play video games. Some of us don't want to slog through one hundred hour quests, or play the same damned first-person shooter dressed up with 21st century graphics. We'd just like to sit back and enjoy ourselves with fifteen minutes of pure, simple fun, without the noise and the obfuscation and the tacky content so common in today's games.
I hope the Wii continues to dominate the industry, if only to put fun at the forefront of gaming and put all that extraneous nonsense in the background where it belongs. And I hope all you whiners get a taste of your own medicine with six straight years of mini-games and absolutely none of those "innovative" Grand Theft Auto sequels you froth over like starving dogs in a Pavlovian experiment.
To put things more simply... "hardcore" gamers, your time is over. It's time for somebody ELSE to enjoy video games for a change.
JR
Digi Smalls @ May 24th 2007 5:29PM
ugh, Strider - you're Elite argument would only make sense if the Elite had an HD-DVD player in it, and it doesn't.
you're right on one thing though, the Elite only exists because the PS3 is so outrageously expensive.
anything looks like a value compared to the PS3.
.
silkylove @ May 24th 2007 5:31PM
@ cc123, Agathos, and Striderhayasa
This comes from IGN. I have many other sources to back up my statement that the PS3 has cooling problems. Just because yours are working fine doesn't mean that a significant portion of PS3 owners are not having this problem
"Though PS3s aren't dropping like flies, a number of owners have reported ongoing heating problems with the console during Blu-ray movie playback, including playback stuttering and 'Your PlayStation 3 is too hot. Please shut down.' warnings. Short of gutting the console for a hardcore water-cooling mod, pumping more air though the chassis is the only real solution to the issue, and that's exactly what Pelican's Air Flo aims to do."
http://gear.ign.com/articles/782/782847p1.html