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That strategy hasn't worked for the last three years, it's not going to start working when xBoxes and Wiis are $150-$200.

Get your head out of the sand Sony, you'll sell more software if you sell more hardware. Eating a loss on the hardware will pay off in the end.
 

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In the beginning a lot of people bought the PS3 because of the Blu-Ray drive, since it was the best and cheapest on the market. Now however those days have gone, other Blu-Rays have come down in price, now you have a console comparable to the masses to the 360 but for more money.
 

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They have sold 23 million to date. Had they knocked $100 off the price, the company would be $230,000,000 poorer now.

From a BUSINESS perspective, lowering your price is a race to the bottom. It may sell more units in the short run but if, in the long run, you're bankrupt, it really doesn't help you.

Sony's refusal to take a bath on hardware may frustrate game companies and consumers but they are not exactly newbies when it comes to selling new products in the Consumer electronics field.
 

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The big difference Hugh is that the PS and PS2 sold like hot cakes, so Sony didn't have to take a loss on the hardware to generate sales. The PS3 is not selling very well, and thus their past strategy isn't working here. They stand to make much more on game sales and licensing royalties from the game developers to recoupe the losses, though. That is why the big push from outside parties to reduce the hardware price.
 

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Sony needs to dumb the ps3 down to the 360's level in order to make room for the price cut. Drop br movie playback (but keep the br drive for the great games that need the space such as kz2, mgs4, gt5, gow3 uncharted 2, etc.) and give it a "just big enough hdd" so as to play and save games. As Canterbury Tail mentioned, br movie playback is not a system mover anymore because of the cheaper br players. Do this and give it a $289 price tag (just to spite all the naysayers) and watch them fly off the shelves.

Then I can pull out the "I told you so" when everyone buys one of these AND a br player for more than the price of the old system. I'm glad I got the 60 gig when they were still around.
 

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They stand to make much more on game sales and licensing royalties from the game developers to recoupe the losses, though.
How can you say that? Are you privy to internal Sony numbers that we aren't?

If Sony really thought they could make more money by reducing the price, rest assured they would have. This is Sony's third go around on gaming devices so give them some credit for understanding the marketplace and for understanding the relationship between lower prices, game sales and the impact on PS2 sales.

Sony is perhaps the most successful consumer electronics company in the world, doing what few other company's have ever done, so I wouldn't be dismissive of them.
 

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if Sony wants a plan to get back in the gaming market I'll give them my idea for free.

a) stop making the PS2
b) going forward make all future PS3 systems PS2 backward compatible (issue a firmware patch for all current PS3 systems if possible)
c) drop the price by $75-$100
d) market the hell out of the multi-media aspects of the PS3; it plays home-movies from a USB stick; it can wireless connect to your windows media PC; it can play music; it can do a slide show of you last vacation pictures
e) push the streaming rental/purchase concept with Netflix, etc
f) make the coding engine more development friendly so that more games are made for it
g) keep the great exclusive games exclusive to PS3 (Metal Gear Solid, Final Fantasy, Gran Turismo, MLB, Motor Storm, etc)

And there you go!
 

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How can you say that? Are you privy to internal Sony numbers that we aren't?

If Sony really thought they could make more money by reducing the price, rest assured they would have. This is Sony's third go around on gaming devices so give them some credit for understanding the marketplace and for understanding the relationship between lower prices, game sales and the impact on PS2 sales.

Sony is perhaps the most successful consumer electronics company in the world, doing what few other company's have ever done, so I wouldn't be dismissive of them.
I am not being dismissive of them Hugh, just noting that they are in a position that they have never been in before with their gaming console. Basically, their old model isn't working this time around, because of the increased competition. Sony is not infallible - they have made mistakes before, just as most companies have. Sony misjudged the marketplace and lost the VHS/Betamax war, and the result is that JVC has since collected BILLIONS in royalty payments from VHS manufacturers and cassette distributors. That is Billions of dollars that Sony thought they would be getting, but do not. Sony has also paid millions in the recent music CD rootkit fiasco. So yes, Sony does make mistakes. And yes, over the long haul, the royalties from game sales can more than recover losses from console sales.
 

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There will be a price cut this year. If the rumors of the PS3 slim are true then I'm sure the 2 will coincide. Personally I don't think it is even debatable. There will be a cheaper PS3 this year. It would be stupid to announce it. Why kill the sales between now and then.

On a sidenote I suspect the $3B investment rumored for the PS3 will also be absorbed partially by the PS4. I don't see there being a PS4 as much as a PS3.5. Keep the cell, just add extra cores, keep BR, upgrade the video memory and card. Tweak here and there and BOOM!
 

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Sony needs to dumb the ps3 down to the 360's level in order to make room for the price cut. Drop br movie playback (but keep the br drive for the great games that need the space such as kz2, mgs4, gt5, gow3 uncharted 2, etc.) and give it a "just big enough hdd" so as to play and save games.
But the cost of playing back the BD movies IS the BD drive, so you won't save money by not allowing people to play back movies.

Gord
 

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Hugh said:They have sold 23 million to date. Had they knocked $100 off the price, the company would be $230,000,000 poorer now.


ACTUALLY if it is indeed 23,000,000 then they would have had 2,300,000,000 less in revenue!!! One more zero. Quite a difference!
 

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There has to be some cost for br movie playback. If there is no programming to run br movies, that would save time in production which must save money. Also, Sony would not have to provide updates to play future br titles which would also save money. In fact, Sony should get rid of dvd playback and upconverting as another cost cutting measure. Who the heck doesn't have a dvd player by now? The Wii doesn't have any of this and it certainly did not suffer in sales because of it.
 

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Sony execs also denied a price cut two weeks before the $399 40 gig unit was released. Time will tell. Perhaps they see slowing sales as a result of all the price-cut talk and they're trying to spin so people won't wait to buy PS3s.
 

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Some notes regarding the cost of the PS3.

When it first came out iSuppli's teardown analysis pegged Sony's "bill of materials" at $840 for the model that sold at the time for $599, and $805 for the starter model that sold for $499. In December 2008, iSuppli said the loss was shrinking with the PS3 now costing about $450 to build.

ISuppli estimates the Cell chip costs Sony $46, down from the $64 in 2007, and $89 in 2006. The Nvidia chip now costs $58, down from $83 last year, and $129 in 2006.
Add in Marketing, Shipping, overhead etc and Sony is likely taking a several hundred dollar hit on every unit sold today.
 

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There has to be some cost for br movie playback. If there is no programming to run br movies, that would save time in production which must save money. Also, Sony would not have to provide updates to play future br titles which would also save money. In fact, Sony should get rid of dvd playback and upconverting as another cost cutting measure. Who the heck doesn't have a dvd player by now? The Wii doesn't have any of this and it certainly did not suffer in sales because of it.
But eimaj, the programming for BD playback is already done, and is part of the firmware. If they started shipping models without BD playback like you've suggested they'd still have to support the current models. Shipping two different firmwares for the two different machines would likely add to their support costs (right now there's only one version of the firmware for each PS3).

Getting rid of a software feature that currently works will not save them money, getting rid of hardware would, which is why the current PS3s don't play PS2 games (that hardware was removed).

Gord
 

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Well they need to do something. Playing catchup is not something Sony usually knows how to do. I am no marketing genius but I know that the market for video game consoles has changed dramatically since the the juggernaut called the PS2 was released. They need to adapt to the change in the marketplace.
 

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I don't think they want to go slumming all the way down to the 360's level, but they need to capture that downmarket share and try to re-establish some of their lustre.

A PS3.5 is not the answer because they are already so far ahead in terms of hardware capability. They need to take what money they have and invest deeply in software that the competitive consoles simply can not match.

That's a double-edged sword, though, because developers will be hesitant to develop titles that can't be ported onto less-capable consoles with a larger install base. Sony will have to bend over backwards to entice the studios.
 

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Well they need to do something.
I don't think anyone is arguing with that sentiment but I for one don't think dropping the price of the PS3 one hundred or two hundred dollars is going to help Sony's bottom line and could make it a whole lot worse.

From what I understand, Microsoft is now making some money off the Xbox360 but still nowhere near enough to offset the few billion dollars its lost on the product.So the Xbox360 has been out now for over 3 and a half years and is still a few billion in the hole.

Can we really say that the Xbox360 has been more sucessful than the PS3 and should Sony really emulate the business practice of a division that is still losing money as its primary product enters the twilight of its career?
 
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