Pachter pauses to percolate E3 thoughts, says $499 PS3 is here to stay
by Alexander Sliwinski 
{ Jul 16th 2007 at 12:30PM }
Pachter says the theme of this E3 was "non-traditional" game software. Music games, games targeting or including female gamers and titles focused on the casual market. He also says that unlike prior E3s, access to new product offerings was relatively unrestricted -- well yeah, because everyone was there for business and barely had time to see the hangar. The key companies Pachter says to invest in are Activision, EA, THQ and Ubisoft. He also says the the big news of E3 was the Sony "price cut" and that he expects Microsoft to follow by the end of the year. But what about that 60GB not being manufactured news? Pachter thinks the $499 PS3 is here to stay and, when those 60GB units are depleted, the 80GB model will take its place.
Reader Comments (Page 1 of 2)
Ryan @ Jul 16th 2007 12:35PM
I would think that Sony would keep the price at $499. Raising the price back up to $599 after advertising the huge price cut just seems tantamount to market suicide to me....
(Then again, if the 80GB PS3 is $499, it's too bad I didn't wait to buy my PS3 until then!)
Anam @ Jul 16th 2007 12:50PM
That's the problem.
Possibility 1: They drop the 80GB price down once the 60GB versions sell out. This pisses off everyone who bought the 60GB version, since they were lead to believe that it was a good deal.
Possibility 2: They keep the 80GB price at $600 even after the 60GB versions are gone. This pisses off everyone that wanted one for $500 and couldn't get it.
The only good solution for Sony is to continue to manufacture the 60GB version, since relatively few people really care about the extra 20GB anyway.
synce @ Jul 16th 2007 12:51PM
They got rid of 20GB $500 and only offered the 60GB $600 for a good while. Why should this be different?
Anam @ Jul 16th 2007 1:00PM
The difference is that the 20GB version was always $500, rather than having a price cut RIGHT BEFORE announcing that it would be discontinued.
p-diddy @ Jul 16th 2007 1:15PM
I disagree. I picked up the 60GB PS3 the day after the price drop announced on the rumor that they were going to switch to software emulation. I'd rather pay $500 now for a 100% backwards compatible PS3 and get a couple months out of it than wait and get 20 more gigs plus gimped emulation.
I'm happy with my purchase... now if they just had some exclusives besides Tekken and RFoM, I'd be pleased as punch.
-p-
FermitTheKrog @ Jul 16th 2007 1:20PM
Anam : You think Sony cares about pissing off its consumer base? Where you been the last two years.
Vidikron @ Jul 16th 2007 1:31PM
@Anam
It's not really that big a problem. What they'll do it unbundle Motorstorm and then sell the 80 GB for $499. In reality, the 80 GB is overpriced right now compared to the 60 GB. Motorstorm plus the extra 20 GB really isn't worth the extra $100 over the 60 GB version. But people buying the 80 GB now won't really have much room to complain since they could have picked up the 60 GB instead.
Almack64 @ Jul 16th 2007 1:45PM
I've heard a lot of people say that they wanted the 60GB PS3 for hardware BC but isn't it true that they disabled that in a firmware update and that currently for all models software BC is being used even the models that still physically have the EE?
Can someone comment on the validity of this statement?
Vidikron @ Jul 16th 2007 12:35PM
LOL... You have to love these professional analysts. I, and many other people, were saying this exact same thing mere minutes after Sony let slip that the 60 GB was being taken out of production... only I don't get paid to say it. I'm doing something wrong.
Mr.Ironic @ Jul 16th 2007 2:50PM
Yeah how DOES one get a predictions job!
http://gamerjames.blogspot.com/
Anticrawl @ Jul 16th 2007 5:06PM
Filed under: Culture, E3, Bullshit
Anticrawl @ Jul 16th 2007 5:10PM
This guy seriously has no clue as to why they are cutting the price and pushing the units out of the market does he? Sony wants to make a profit. They were losing a considerable ammount of money on the 20gb model and just a little bit less on the 60gb. Now they are removing ps2 hardware to cut the cost of production and adding on much cheaper(80gb) harddrives so they can finally break even on selling these monsters. Everyone wants to make money. I doubt we'd see another price cut until the competition puts the pressure on with a price cut of their own.
Roland @ Jul 17th 2007 3:13AM
Lets drop this Analyst thing once and for all. Why cant you guys grasp the fact that these Analysts are supplying information to potential investors... AKA your DAD and this information is not necessarily for the in-the-know Joystiq crowd.
If you are looking at stocks to buy to diversify your portfoli and you're thinking about the fashion industry, you would probably know jack squat and would love to have the opinion of an industry analyst to give you advice or to support your opinions.
I dont know why I bother bringing logic to the boards sometimes...
sheppy @ Jul 16th 2007 12:37PM
Say here we go, here we go, here we go again.
Say here we go again....
franx @ Jul 16th 2007 12:46PM
"Pachter says to invest in are Activision, EA, THQ and Ubisoft"
This guy must be a freak'n genius! Thank heavens for his Wharton master's degree! (add sarcasm here)
arkurland @ Jul 16th 2007 1:10PM
Hey, does anyone know where I can get the full version of his report? I tried Google but came up with nothing. I am interested in what other stuff he says :)
Stef Geiger @ Jul 16th 2007 12:43PM
Notice how Sony said they have enough 60 gigs for the next few months? They're likely saying that as though they're going to sell 4 million in the next few months. I'm betting they have a HUGE stockpile of them - at least six months worth.
Tony @ Jul 16th 2007 12:43PM
I'm not even sure why we listen anymore. I've been told the Wii wouldn't do that well, the PS3 would be impossible to find from launch until June... how often is any of this right?
I'm not even sure how people get these positions. And if they're wrong, there seems to be no consequence at all. I wish that was my job.
Scott @ Jul 16th 2007 12:50PM
Pachter is more wrong than right it seems. I don't know why everyone keeps reporting what he says.
hegemonyhog @ Jul 16th 2007 12:45PM
If Sony is keeping the $499 price point, then the worst thing they could do is release a limited-edition $599 bundle that's essentially asking you to overpay by $40 to get a $60 game bundled in.
That's what makes no sense about this - the 80GB standalone makes the announced bundle at the announced price a blatant ripoff.
Digi Smalls @ Jul 16th 2007 12:54PM
that's the beauty of it. the 80gig "bundle" is a red herring, to increase the perceived value of the $499 60gig.
it's labeled as a "limited edition" for a reason, they don't expect many people to buy it. until it loses Motorstorm and sells for $499 that is...
.
Fernando Rocker @ Jul 16th 2007 12:48PM
This is Sony strategy... fooling consumers, cheat about a price cut, when in reality is a clearence. Clearence of a product that is 7 months old.
If this startegy doesnt work, I can't think anything else that Sony can do.
Even if the PS3 have good games, people still are not buying games. Wii Sports is selling twice in Japan than Ninja Gaiden Sigma.
I don't know whats wrong with Sony. I have a PS2, a Gamecube the Xbox. I like all three systems (specially the Gamecube).
I have a Wii and a 360, but for some reason, the PS3 doesnt appeal to me, because theres nothing that the PS3 can offers to me.
The 360 do what the PS3 can do, and I dont count
Bluray becasue the mainly purpouse is to be a gaming machine, not a movie player, folding machine that happens to play some games.
blooh @ Jul 16th 2007 6:48PM
i thought wii sports came with the system, why would it have sales figures?
Fernando Rocker @ Jul 16th 2007 6:51PM
Wii Sports dont come with the Wii in Japan.
Jeff @ Jul 16th 2007 12:49PM
The Best Buy near me is already sold out of 60GB systems. I doubt there are as many out there as some of you think - Sony manages their inventories just like every other company.
I know BB is sold out because I bought one yesterday and I had to go to GameStop (mistake... if only for the 7 day return policy). I wanted a 60GB for the hardware BC before the 80GB takes its place. I also agree with Pachter on the $499 price and I've been saying that ever since this fiasco started - no way Sony's going to go back to having only a $599 model on the market. They just can't say it right now, or nobody would buy *either* model as they wait for 80GB price to drop. (Which would then never happen, because the whole strategy depends on clearing out 60GB units. PS3 sales would basically grind to a halt.)
For me, though, the hardware BC was worth more than the extra 20GB, especially considering I plan to just upgrade the drive to 250GB or 500GB eventually anyway.
vidGuy @ Jul 16th 2007 1:04PM
Must be your location. I'm in a city of 125,000 and there's still a dozen 60GBers on the shelf at Best Buy, 3 at Target, and 4 at Walmart. I might call GameStop to see how many they STILL have.
Stef Geiger @ Jul 16th 2007 1:52PM
Why is it that no one's caught on that about 99% of the games you own will work without issue with software emulation? Or the fact that if a game DOESN'T work, it likely will after a later update?
Digi Smalls @ Jul 16th 2007 12:49PM
Pachter must read Joystiq. didn't we all concluded Sony would drop the 80gig back to $499 post-60gig within minutes of seeing Kaz overstate himself?
oh, and Halo3 plus Sony's big sendoff Killzone 2, are only about as traditional as it ever gets.
.
HaloFans @ Jul 16th 2007 12:56PM
Pachter is rarely correct. I remember he said the Xbox 360 would price drop last week at E3.
He was dead wrong.
Digi Smalls @ Jul 16th 2007 1:29PM
Pachter gave a good reason for why MS didn't announce the expected price drop at E3.
the warranty announcement pretty much blindsided everybody, including him. having a price drop announcement so close to this warranty announcement may not have been a good PR move. he (and i ) agree that the 360 price drop is still imminent. now revolving around the release of Halo3.
.
vidGuy @ Jul 16th 2007 2:10PM
I'd think it'd be months after Halo 3's release - that game is going to sell consoles at the current price like no other.
Digi Smalls @ Jul 16th 2007 2:13PM
yeah that's why i said revolving around, not explicitly before.
Drew @ Jul 19th 2007 1:35PM
@Digi Smalls, that still makes Pachter wrong and incorrect in his prediction about the MS price drop. Blindsided or not, isn't that his job as an "analyst" to take into consideration what could blindside him? Otherwise, the people posting here are simply better than he is at being an "analyst".
vidGuy @ Jul 16th 2007 12:58PM
"Pachter thinks the $499 PS3 is here to stay and, when those 60GB units are depleted, the 80GB model will take its place."
Um, duh? The problem is if Sony CONTINUES this trend - by releasing a NEW $599 model. In that case, the PS3 will be $499-$599 for the next few years, rather than droping from $499 to $399 to $299 - the sweet spot.
Desiri @ Jul 16th 2007 2:12PM
When the 60GB version is gone and the 80GB drops to $500 they will release a 120GB version with rumble controller and a game for $600.
hvnlysoldr @ Jul 16th 2007 1:00PM
Mainstream and business people listen to him, analysts in general, and so that's why he keeps getting posted.
rootball @ Jul 16th 2007 1:08PM
Man, this guy's pumping up EA as a strong buy when it's selling at a 201 price to earnings ratio, worse than any other game company he lists? That's just insane. It makes everything else he says totally specious.
vidGuy @ Jul 16th 2007 1:58PM
Sure, but their earnings are going to go up with Madden's release. It'd be interesting to look at their financial history and see if you could make out big by buying stock before Madden's release and selling a little afterward.
I know you could have done that with MS stock. Buy before the annoucement of a new OS and sell before the release of the OS. IIRC there's historically been something like a $10/share jump in stock throughout that time, then after the OS release they deflate again.
whosmav @ Jul 16th 2007 1:10PM
Typical Sony BS. Who's buying PS3's? You've got to be out of your mind. Its funny hearing people say nintendo isn't trying to appeal to gamers when its clear from every move they make that Sony wants to actually alienate is fans.
Lies, fake price drops, forced Blu-Ray(gonna lose the war too). This is crap.
I'll never buy a Sony game product. I mean, someone give me a good reason.
Vidikron @ Jul 16th 2007 1:35PM
What's your reasoning for thinking BR is going to lost the format war? So far it's winning. The only studio keeping HD-DVD in the game is Universal. If they dropped BR or went dual format the war would be over instantly.
Konny @ Jul 16th 2007 1:12PM
Retailers will demand a standalone PS3 SKU after the 60gb version is gone.. so, the 80gb PS3 by itself will take that place for $499 until xmas when they will drop that price to $450 and bring in another 100-120gb SKU for $550-600.
Almack64 @ Jul 16th 2007 2:04PM
Even if the 60GB does sell out before Xmas I don't think they will lower the price before then. Remember the 60GB was sold at $599 for months by itself when the 20GB were no longer available.
faceless coward @ Jul 16th 2007 1:23PM
Why does everyone think Take-Two is set to plummet in stock price?
hvnlysoldr @ Jul 16th 2007 1:31PM
Because they generally have been already. Why do you think the board retaliated and kicked off a bunch of guys. Until games come out they're not on a buying session.
polly @ Jul 16th 2007 1:26PM
They'll probably just get rid of Motorstorm and drop the 80 gig model to $500 around Thanksgiving. With any luck we'll see a $400 price next spring/summer. I don't know how Sony will stay in it otherwise.
MosquitoControl @ Jul 16th 2007 1:26PM
Yeah, most of us here had agreed with that.
The question is how long it takes for the current supply of 60GBs to disappear (just because they aren't on your store shelves doesn't mean they aren't in Sony warehouses waiting to be shipped somewhere.)
If the price cut of the 80GB one happens between now and Christmas, which it probably will (second week of November I'd say) then people will be angry. Those that rushed out and purchased a 60GB and really got nothing for earlyish-adopting, as there won't be all that much to play between now and then, will rightfully be peeved.
Digi Smalls @ Jul 16th 2007 1:34PM
what about all of those who bought a 60gig PS3 for $600 with barely anything to play for months and now this price drop? we aren't already miffed?
.
Shagittarius @ Jul 16th 2007 1:47PM
Except for the Hardware BC and the fact that they get to enjoy the system for the next 4 months.
Zach S @ Jul 16th 2007 1:32PM
The main problem with this theory is the cost of manufacture - it may have gotten better than when the PS3s first came out, but, if I remember correctly, they'll still be incurring a loss on every PS3 sold - so WHY would they stay with a lower price - they might sell more units, but enough to offset the cost of a $100 price cut? They'll have to really REALLY bank on software then, even more than they are now.
socrates @ Jul 16th 2007 1:44PM
I ordered the 60gig PS3 from Amazon the other day, and I fully expect Sony to drop the 80gig model down to the $499 price this winter. In fact, there is a 100% chance this will happen, I believe. If anyone purchases the 60 gig model and then gets angry that a future price cut is coming...they are an idiot.
1. 20 gigs - not a big deal. If you're going to put tons of media on there, you're going to get your own hard drive for next to nothing anyways.
2. Of course future price cuts will happen. If you get angry at something that seemed so shocking, it is because you lack foresight.
I pulled the trigger now because I just want to be sure I have a ps3 in place before GTA4 hits, and I don't want it to be tough to get one for 500 bucks this fall. Why people are so super-hyper-sensitive about Sony's business moves are beyond me....