Is the PS3 above the average consumer's 'price ceiling'?

by Kyle Orland { Sep 11th 2007 at 5:54PM }

We know that the PS3 is relatively expensive for a game console, but how much cheaper would it have to get to change that perception? In other words, is there a specific cut-off where a piece of consumer electronics goes from "unfathomable" to suddenly "affordable"?

Creative Strategies Analyst Tim Bajarin has a theory about that. In a USA Today article yesterday, he says that the average consumer won't pay more than $399 for a piece of electronics, no matter how awesome and must-have it may be. While consumers will make exceptions for high-end items like TVs and computers, smaller items have trouble reaching mass appeal until they drop below $400. "That is pretty much the highest you can get and still have large volumes," Bajarin said.

The article specifically cites the PS3 as a cutting-edge device that has had problems selling above this ceiling. They might not have a problem for long, though, if analyst predictions of a $399 PS3 by April pan out. Hey, if you're going to listen to one random analyst, why not go all the way?

Tags: analyst, business, price, ps3

Reader Comments (Page 1 of 2)

Fernando Rocker (NDF - Water Ring) @ Sep 11th 2007 6:00PM

Look... all people says: Nintendo is for kkdies, PS3 is for mature people, hardcore gamers. So, according to this, almost everyone who wants a PS3 have a job, so price its not a problem.

Its the lack of good games. And Im not trolling, im just giving my opinion.

loungemonkey @ Sep 11th 2007 6:04PM

You know what is funny I was going to come in here and post queue Fernando...but look at that...already beat me.

Guybrush Threepwood @ Sep 11th 2007 6:05PM

Let's count the "good" (exclusive) games for the PS3 vs. those for the Wii:

PS3:

Resistance: Fall of Man
Warhawk
Mototstorm

Wii:

Metroid Prime 3
Super Paper Mario

Let's face the facts; the only reason the PS3 isn't selling as well as the Wii is price. If the PS3 cost $250 (not that it ever will in this decade, though) it would be kicking the Wii's ass in sales.

The PS3 isn't even selling that badly either. If you look at the slaes charts, it's keeping pace with the 360's sales at this point in both systems' lives.

All I know is that if the PS3 exclusives coming out later this year and next year pan out, the PS3 will get a major sales boost.

And if it does it can only be a good thing if you're a gamer.

Shmil @ Sep 11th 2007 6:07PM

thats not what it said at all Mr. Rocker, it simply stated that $399 seems to be the highest price you can set for any low-end item like a game console and still sell a decent amount of them, it simply states that people don't like paying over 399

Calviin @ Sep 11th 2007 6:07PM

No offense, Guybrush Threepwood, but you left out Zelda, and honestly, I don't care for any of the games you listed with PS3. I do want a PS3, but not for those games. I'll play LittleBigPlanet instead.

Mr Khan @ Sep 11th 2007 6:15PM

He meant "exclusive," Zelda is GC too

but a third to pit against the PS3's in Guybrush's list would definitely be Strikers Charged

odd that the only "good exclusives" (although that whole concept reeks of subjectivity) on both sides are first/second party titles

Bloo @ Sep 11th 2007 6:17PM

@guybrush
as an owner of a Wii and PS3 I have a different opinion:

Wii:

Wii Sports
Zelda TP
Metroid

PS3:

still waiting...

(I do use my PS3 every Thursday for downloads though and have many Blu Ray movies so I'm not saying it's a waste)

Thr3e2wenty8 @ Sep 11th 2007 6:18PM

I can't say that when my PS3 was bought that we threw caution to the wind..it is alot. Seeing how I have turned it on and used pretty much every day I'd say it was worth it.
Now, if I got it just to play games or watch a standard dvd every once in a while - it would be a waste of money. I have no problem with the price drops if thats what it takes to get more people I know personally to get one so we can play online and talk trash.

Spend your money your way. Don't let some dufus with his/her different circumstances ell you why you need it.

Rubang B (NDF - Heart) @ Sep 11th 2007 6:24PM

I'd say the best Wii games are Wii Sports, Elebits, Strikers Charged, RE4, and Kororinpa. I'm most looking forward to No More Heroes, Dewey's Adventure, and Manhunt 2, and uh... Smash Bros. I want to get Alien Syndrome too, anybody czech that out yet?

bm @ Sep 11th 2007 6:24PM

"Let's count the "good" (exclusive) games for the PS3 vs. those for the Wii:"

Hahahaha, did you seriously just list a piece of generic, dumbed down old crud like Resistance on an equal level with MP3? Oh man, hahaha...

Snukadaman @ Sep 11th 2007 6:28PM

sales charts dont mean nothing if you have too sell off IPO's.

Mr. P @ Sep 11th 2007 7:00PM

Would someone ban this Fernando guy? He actively turns every news post into a flame war. I almost hate coming here because I know I'll see his ugly mug talking about how Wii is great and everything else sucks because he's too poor to afford it and try it himself.

waves @ Sep 11th 2007 7:08PM

I think you can define the point at which a thread becomes a fanboy war, and that's the point when people start listing games.

Sinister Rouge @ Sep 11th 2007 9:04PM

Resistance being absolute rubbish doesn't help that list, either.

hoagie @ Sep 11th 2007 9:19PM

Do these analysts get paid? If so, I think I missed my calling in life. They either state the incredibly obvious or make ludicrous, off the wall predictions that even your grandmother would scoff at.

hvnlysoldr (NDF - Wind Ring) @ Sep 11th 2007 9:33PM

@waves
The second comment?

Joshua @ Sep 11th 2007 11:01PM

Like others, I disagree with Guybrush's PS3 list.

Wii

Zelda (although I really do see it as a GameCube game...eh...)
Super Paper Mario
Metroid Prime 3

PS3

Warhawk

Seriously, have you even played Resistance or Motorstorm? Not at all top-notch games.

is @ Sep 12th 2007 4:24AM

I think its silly to talk of Wii games as non-exclusive. By virtue of the motion controls, if they are indeed implimented- every wii release is exclusive.

RE4 -Wii Edition is a perfect example. The game is so different from its other versions that it merits the subtitle 'Wii Edition'. Can you play 'Wii Edition' on any other console? Of course not. Is the Wii edition better than any other version? Yes. Yes it is.

Wii gets all the exclusives - thats the prize nintendo win for doing something radically different.

Calviin @ Sep 11th 2007 6:05PM

I would disagree with Both Fernando and Tim Bajarin, on two different points. First, I am not buying a PS3 soley because of price. I would buy it for everything it has if it costs less. I have never paid more than $250.00 for a console. At best, I might budge on PS3 if it were $300.00. For me, it's not games, it's price. And I have a job. A very good one. I can afford multiple PS3 with just one of my paychecks. But I won't spend that much on a game console. It's the same reason I didn't get an iPhone. I can afford it, but that doesn't mean I'll buy it.

That leads into my argument against Tim Bajarin. If the price point of the PS3 was too high for a "smaller items", then how does one explain the success that the iPhone has seen. It is no more PC than a PS3 is, but nobody questions if it is selling well.

Simstim @ Sep 11th 2007 6:12PM

Did you read the article? The guy mentions the iPhone's sluggish sales and recent $200 price cut by the second paragraph.

Calviin @ Sep 11th 2007 6:20PM

I don't think the iPhones sales have been sluggish. Did you read this:
http://www.engadget.com/2007/09/10/apple-iphone-hits-the-one-million-mark/

or this:
http://www.engadget.com/2007/07/25/apple-sold-270-000-iphones-in-the-first-30-hours/

iPhone sales have already hit 1 million, ahead of Apple's projections. They said they'd hit 1 mil by Sept 30th. They hit it 20 days early. iPhone's sales are great, which is entirely the opposite of how the market is viewing PS3's sales.

Yes, I back things up with sources. I'm sorry that Tim Bajarin was just speculating.

Simstim @ Sep 11th 2007 6:36PM

Sony hit its 1 mil shipped goal in Jan 2007 with the PS3. And Sony sold the majority of its PS3s in the first couple months and then sales stalled by late winter/early spring.

You are not saying anything here to help your argument.

Calviin @ Sep 11th 2007 7:47PM

Considering Apple faces more than two competitors in the cell phone marketplace, I would submit that 1 million for them is not the same as 1 million for Sony. Especially when all 1 million they sold made them profit, not loss. But then again we are comparing 1 million sold iPhones to 1 million shipped PS3s. I think you know the path sold vs shipped always travels. We don't have to go there.

jorojoserojas @ Sep 11th 2007 10:43PM

Well said, Calviin...need more comments like yours around these parts.

Simstim @ Sep 12th 2007 3:00AM

You're right, cause the cell phone market is a hell of a lot bigger than the console market will ever be. Roughly an 880 million cell phones are sold anually.

Calviin @ Sep 13th 2007 8:55AM

Slimstim, If you're going to be including the entire cellphone market like that, I guess we need to add casual game sales and cell phone based game sales into the videogames market just to make things comparable. But if we want to be honest with each other, pay-as-you-go phones and many other types of cell phones aren't actually competing with the iPhone. iPhone is not up against the Firefly phone. The PS3 IS up against the Wii.

Let's bottom line it for you. In the marketplace that iPhone is in, it's sales of 1 million have brought people to praise Apple's decision to enter this gadget into the market. In the marketplace the PS3 is in, it's sales of 1 million have brought people to negatively criticize Sony's decision to enter this gadget into the market. It's not simple fanboyism in the market, either. People like Sony. 100 million PS2s says they do.

You're right, cause the cell phone market is a hell of a lot bigger than the console market will ever be. Roughly an 880 million cell phones are sold anually.
2 hearts

Vince @ Sep 11th 2007 6:11PM

I think i speak for everyone when i say "DUH!"

ukickmydog @ Sep 11th 2007 11:18PM

no shit sherlock

Rob Accomando @ Sep 11th 2007 6:16PM

PS3 is expensive? Wow, what a realization.

I knew there was a reason why I haven't bought one.

Simstim @ Sep 11th 2007 6:18PM

In other news the sky is blue, cats and dogs hate each other, and water travels downstream.

Mr Khan @ Sep 11th 2007 6:23PM

Well, specifically, this argument is meant to counter the pro-PS3 "look at how much its offering. You'd have to pay a lot more to get the same thing in seperate increments" argument. This argument makes the point that, even though it does offer great value for a price, that such value is still not worth it to many, that $400 is simply too much to pay for anything, no matter what you're getting for it

I could see how this would be mistaken for a simple visit from Captain Obvious

Simstim @ Sep 11th 2007 6:33PM

Mr Khan @ Sep 11th 2007 6:17PM

Correction: Will not pay more than $400 unless it is a Home Computer

people seem to be willing to be price-gouged by the mainstream PC/Mac sales outlets

Evan @ Sep 11th 2007 6:19PM

I don't think there is one magic price, I think it depends on the perceived value of the item. A consumer may feel comfortable spending $750 on a TV, but be unwilling to spend $500 on a game console.

Perceived value largely depends on item's price range. A consumer might feel that a $750 Vizio HDTV is a great value, because they see Samsung and Sony HDTVs with prices over $2000. And a consumer might feel that $500 is a poor deal on a PS3, because they see PS2s at $125 and Wiis at $250.

Rubang B (NDF - Heart) @ Sep 11th 2007 6:27PM

$600 ain't shit to Rubang B. I wipe my ass with $600. I'll pay you $600 to shut the hell up. I bought a PS3 just so I could have a nice monolith to put my Wii on.

Hirsbrunner @ Sep 11th 2007 6:41PM

werd, dawg...werd.

Vainglory @ Sep 11th 2007 11:27PM

Ahahahahahahaha!

You are a right ass, good sir. And I swear I don't mean that in a bad way. That's the hardest I've laughed all day.

bm @ Sep 11th 2007 6:30PM

I'll definitely buy a PS3 once it falls below $100 (or if I can get one off Ebay for that price). That is, providing Squenix don't screw up on Final Fantasy. Again.

Jeff @ Sep 11th 2007 6:31PM

Guybrush-

Eh, I haven't tried Warhawk yet, but Resistance was just slightly above average to me and Motorstorm is kind of a big fat "meh" for me (and I own both of them). I know some people really dig Motorstorm, but for the life of me I just can't get into it... Just not for me I guess.

Ninja Gaiden Sigma was pretty good, though... Probably my favorite PS3 game so far. Warhawk is just too expensive for me to buy right now... $40 doesn't seem worth it for a downloadable version of the game and $60 definitely seems overpriced for the kind of game it is.

And I think you forgot Zelda for Wii, which ranks right up there with MP3 if you ask me. RE4: Wii Edition, despite being a remake (as Sigma is), is also pretty awesome.

My next PS3 purchase will likely be Ratchet and Clank and/or Uncharted. Despite being a big fan of the series, R&C is a little iffy to me at this point because of the lack of multiplayer (and the fact that it was included with its previous games at a $20 cheaper price point). Heavenly Sword screams rental to me, so that's likely the direction I'll go with that one.

But, back on topic... the question is not just about price but also about "value". PS3 can tout all kinds of features, but these "features" (like Blu-ray) are just not "worth" the extra price to most people. Add in the fact that the 360 is actually demonstrating better graphics across even the same games still and the fact that the PS3s exclusives still have yet to really live up to the hype and the "value proposition" just doesn't make sense for most people yet. Whether "$400" is some magical psychological barrier is debatable. People probably do have something reminding them "Do you really need this?" for anything that requires them to shell out over a half a grand. =)

-Jeff
http://alinktothefuture.com

bm @ Sep 11th 2007 6:44PM

"RE4: Wii Edition, despite being a remake"

BZZZZZZZZT! Back up there for a bit. Resident Evil 1 on the Gamecube is a remake. Final Fantasy III on the DS is a remake. RE4 Wii is a port.

Not to downplay RE4's awesomeness. Just get your terms right.

Jeff @ Sep 11th 2007 7:05PM

Alright, whatever...

Except that in this case the "port" is way more awesome than most "remakes" considering the new controls, enhanced widescreen support, and complete content (from all versions of the game).

Whatever you want to call it, it was still worth the move to the new console.

-Jeff
http://alinktothefuture.com

Simstim @ Sep 11th 2007 6:31PM

Game Artist @ Sep 11th 2007 6:33PM

Not surprising. Everyone has their own little internal list of how much things should cost. If you get too out of line with that, you're not going to sell many no matter how cool it may be. Personally I think most people's idea of what "new" game consoles cost is around $300. $400 is a stretch from there, and the ps3 is well outside people's expectations.

the_game_master @ Sep 11th 2007 6:36PM

I remember when people thought $399 was expensive. Have everyone forgotten Sega Saturn's high price tag vs the $299 PlayStation?
I paid $299 for the Xbox 360 and bought the HDD & Component cable for dirt cheap prices off ebay, no since in wasting money.

HB96st @ Sep 11th 2007 6:36PM

When the 80Gb drops to $299.....

...I still wont buy one.

ApocalyPS3

Play Be-Yawn...

Hirsbrunner @ Sep 11th 2007 6:47PM

"Is the PS3 above the average consumer's 'price ceiling'?"

I personally believe that U.S. Americans are unable to do so because, uhmmm, some people out there in our nation don't have money and uh, I believe that our, I, economy like such as uh, South Africa, and uh, the Iraq, everywhere like such as, and I believe that they should, uhhh, our economy over here in the US should help the US, uh, should help South Africa, it should help the Iraq and the Asian countries so we will be able to build up our future, for us.

LaughingTarget @ Sep 11th 2007 8:04PM

Ah, great beauty pagent speech spoof.

Rubang B (NDF - Heart) @ Sep 11th 2007 9:26PM

Hahahahahahooooo oh man, good stuff.

Vol @ Sep 11th 2007 6:48PM

I own all three consoles. Sony has to start producing games on this console. I bought it two weeks ago and it has been collecting dust since I bought BioShock and Stranlehold for my 360. I rented Motostorm, Madden 08, and GRAW 2. None of those games made me think it is superior to my 360.