Sony Chief Executive Howard Stringer has dismissed Activision's subtle threat to drop support for the PlayStation 3 if a price cut doesn't come soon, saying CEO Bobby Kotick "likes to make a lot of noise."
Sony has steadfastly refused to reduce the price of the PlayStation 3 despite continuing calls to do so from industry analysts and executives who feel that the high cost is stunting the growth of the market and, as a result, of the money they could make on PS3 versions of their games. Kotick, head of the biggest publishing company in the world, took the rhetoric to a whole new level in June when he said that if the price isn't dropped, "[Activision] might have to stop supporting Sony."
That threat doesn't seem to bother Stringer, however, who brushed off both Kotick's remarks and the suggestion that a PlayStation 3 price reduction would happen anytime soon. "He likes to make a lot of noise," he told Reuters. "He's putting pressure on me and I'm putting pressure on him. That's the nature of business."
When asked about the logic of holding the price point on the console, Stringer added, "I [would] lose money on every PlayStation I make -- how's that for logic?"
Despite his comments, GamesIndustry says rumors of a price cut announcement at either Gamescom or the Tokyo Game Show are "rife," noting that some analysts believe the company's guidance for its current fiscal year suggest a reduction planned for sometime in the latter half of 2009.
Wouldn't it at the end of the day, yes, you lose money on each Playstation, but wouldn't the volume of sales at a cheaper price point make up for the loss, more so if they sell more peripherals? Talk about somewhat bad business practices.
mrfft: Wouldn't it at the end of the day, yes, you lose money on each Playstation, but wouldn't the volume of sales at a cheaper price point make up for the loss, more so if they sell more peripherals? Talk about somewhat bad business practices.
I concur. If the price went down, I might actually consider buying one.
Well sony's basically caught between a rock and a hard place now.
You have consumers, Activision and all of these other companies saying, "We have had enough of your bullshit, lower the fucking price", and then you have Stringer on the other hand saying "Listen you fucktards, this thing is expensive to create, and I lose money on every Playstation made."
It's a very wishy washy situation, but the question is, wouldn't they lose less and gain MORE if they lowered the price point?
mrfft: Wouldn't it at the end of the day, yes, you lose money on each Playstation, but wouldn't the volume of sales at a cheaper price point make up for the loss, more so if they sell more peripherals? Talk about somewhat bad business practices.
Actually they already loose a decent amount of money on the system at the price they sell them now yes they might sell more peripherals. But there are also a lot of aftermarket peripherals and such that work with the system such as headsets. You can use any bluetooth and most USB headsets with the system. I am sure they would love to cut the price and get people off their backs. But they have to look at how they would recoup that loss and that is not an easy thing to do in big business.
When asked about the logic of holding the price point on the console, Stringer added, "I [would] lose money on every PlayStation I make -- how's that for logic?"
I really don't understand why they would add the (would) in there considering him saying "I lose money on every playstation I make" is a true statement already.
buy teh haloz: Well sony's basically caught between a rock and a hard place now.
You have consumers, Activision and all of these other companies saying, "We have had enough of your bullshit, lower the fucking price", and then you have Stringer on the other hand saying "Listen you fucktards, this thing is expensive to create, and I lose money on every Playstation made."
It's a very wishy washy situation, but the question is, wouldn't they lose less and gain MORE if they lowered the price point?
Depends really, especially when people say this:
CinosNroca: If the price went down, I might actually consider buying one.
Sony doesn't want you consider buying a PS3 if the price went down. Sony wants to know that you will purchase their system.
mrfft: Wouldn't it at the end of the day, yes, you lose money on each Playstation, but wouldn't the volume of sales at a cheaper price point make up for the loss, more so if they sell more peripherals? Talk about somewhat bad business practices.
I concur. If the price went down, I might actually consider buying one.
I as well. No matter how much I want to play Heavy Rain and possibly The Last Guardian no console that costs that much is worth it just to play two games.
I love how the CEO never said anything about the consumers though. They won't bite the hand that feeds them.
mrfft: Wouldn't it at the end of the day, yes, you lose money on each Playstation, but wouldn't the volume of sales at a cheaper price point make up for the loss, more so if they sell more peripherals? Talk about somewhat bad business practices.
Actually they already loose a decent amount of money on the system at the price they sell them now yes they might sell more peripherals. But there are also a lot of aftermarket peripherals and such that work with the system such as headsets. You can use any bluetooth and most USB headsets with the system. I am sure they would love to cut the price and get people off their backs. But they have to look at how they would recoup that loss and that is not an easy thing to do in big business.
True, but they make no money what-so-ever if a console just sits on the shelf unsold.
buy teh haloz: Well sony's basically caught between a rock and a hard place now.
You have consumers, Activision and all of these other companies saying, "We have had enough of your bullshit, lower the fucking price", and then you have Stringer on the other hand saying "Listen you fucktards, this thing is expensive to create, and I lose money on every Playstation made."
It's a very wishy washy situation, but the question is, wouldn't they lose less and gain MORE if they lowered the price point?
Depends really, especially when people say this:
CinosNroca: If the price went down, I might actually consider buying one.
Sony doesn't want you consider buying a PS3 if the price went down. Sony wants to know that you will purchase their system.
Let me clarify: if there were more than just 2 or 3 games worth a hoot for the system, I would definetely buy it.
You know there's no added costs to the the ps3 like there is for the 360, you have to pay for online play, pay if you want wi-fi, you have to get a warranty in case of red ring... over the course of a couple years you'll spend more on your 360 than you would on a ps3.
A price cut is NECESSARY. That's the main (and only, to my knowledge) complaint about the PS3. Sony would start making money off the PS3 if more people owned them. Then they'd buy the add-ons and extras, because those are priced pretty well.
But fine, you don't want to cut the price. Here's an alternative plan, Mr. CEO, free of charge. Sell PS3s in separate parts like the X-box 360. Sell a full PS3 at the normal price, but also sell a core system with no hard drive, no wireless, less USB ports, and, well, WHATEVER you can cut out and sell separately. Sure, if you buy a core PS3, a hard drive, and wireless adapter separately it would end up costing MORE than a full PS3 (Like it does with the 360) but hey, mo' money mo' money.
Sony, you make great products, by you guys know nothing about marketing.
not sure why everyone wants a price cut, they are both around the same price right now as it is
they are losing money on them or were at the beginning, i'm not sure if it's evened out but they do need to make some of the money back that they did lose originally. i'd like to see ANYONE constantly lose money on their product and willing lose more money when someone says "cut your price"
Yeah, you guys do realize that being able to make money on volume only works if the increase in volume is high enough to make it so that you can get better discounts from your suppliers, right?
Besides, Sony doesn't care about the PS3 as a game console, folks. The raison detre for the PS3 was Blu-ray and winning the format wars of this generation. The gaming aspect was how they got it into people's homes. Now that that's accomplished, anything else it brings in is purely gravy, so there's no way they're going to take a loss on the things if they can at all avoid it.
Proof? They're still selling the PS2 and have removed backwards compatibility from the PS3. They seriously don't care how many units the PS3 sells now -- not for gaming. The PS3 is now a videophile's piece of equipment, as it is still the standard against which reviewers compare other, generally lesser, Blu-ray players. And they know that videophiles will be willing to pay the price for it.
I honestly think the PS3 is as cheap as it can be at this point in the game. Buying a 360 with a hard drive, wireless internet, and a years worth of online subscription (all of which the PS3 comes with already included) brings you to $450 according to Best Buy. The PS3 right now is $400, what is the problem here?
KSarty: I honestly think the PS3 is as cheap as it can be at this point in the game. Buying a 360 with a hard drive, wireless internet, and a years worth of online subscription (all of which the PS3 comes with already included) brings you to $450 according to Best Buy. The PS3 right now is $400, what is the problem here?
The problem is if you don't want all of those -- you just want a game machine.
Console developers ALWAYS do until the later stages of the life cycle. Consoles are NOT meant to make a profit, they make the cash back my licensing games. Microsoft and Sony get cash for each title sold on their system, making the initial lost trivial.
It's the same with cell phones: Apple sells the store iPhones at $600 a pop. You buy it for $190 (or whatever it is) and they make the cash back by making you sign a contract that requires payments over time. Consoles don't have a legal contract, but you ARE gonna buy games.
mrfft: Wouldn't it at the end of the day, yes, you lose money on each Playstation, but wouldn't the volume of sales at a cheaper price point make up for the loss, more so if they sell more peripherals? Talk about somewhat bad business practices.
I concur. If the price went down, I might actually consider buying one.
And if MS fixes the rrod, I might consider buying a 360; but I'm not holding my breath and neither should you. They came out with luxury hardware at THE wrong time and they probably don't want to lose more money. Even if they were planning a price cut, they're not going to tell everybody about it.
If he was commenting on consumer pressure, that's one thing but I think he should've just ignored Kotdick's threats; they did seem really empty-why the hell would activision give up selling overpriced individual songs to a whole 'nother portion of the market. These sony execs usually sound like complete morons, I was just surprised to find that this guy said some fairly intelligent stuff.
mrfft: Wouldn't it at the end of the day, yes, you lose money on each Playstation, but wouldn't the volume of sales at a cheaper price point make up for the loss, more so if they sell more peripherals? Talk about somewhat bad business practices.
Actually they already loose a decent amount of money on the system at the price they sell them now yes they might sell more peripherals. But there are also a lot of aftermarket peripherals and such that work with the system such as headsets. You can use any bluetooth and most USB headsets with the system. I am sure they would love to cut the price and get people off their backs. But they have to look at how they would recoup that loss and that is not an easy thing to do in big business.
True, but they make no money what-so-ever if a console just sits on the shelf unsold.
That is true but they still sell systems at the current price point. In fact they are gaining sales compared to previous months
* Nintendo DS: 633,500 (down from 1,040,000) * Nintendo Wii: 289,500 (down from 340,000) * Xbox 360: 175,000 (same as last month) * PlayStation 3: 131,000 (up from 127,000) * PlayStation 2: 117,000 (down from 172,000) * PlayStation Portable: 100,400 (down from 116,000)
So now you tell me if you were gaining speed at the current price point and you were already taking a loss would you be so fast to drop the price? Put yourself in their position once.
mrfft: Wouldn't it at the end of the day, yes, you lose money on each Playstation, but wouldn't the volume of sales at a cheaper price point make up for the loss, more so if they sell more peripherals? Talk about somewhat bad business practices.
Um, no. When he says he will lose money, he doesn't mean that it will cut into the profits, he means it will actually cost Sony money. Consoles are usually pretty heavily subsidised, and the PS3 especially so.
KSarty: I honestly think the PS3 is as cheap as it can be at this point in the game. Buying a 360 with a hard drive, wireless internet, and a years worth of online subscription (all of which the PS3 comes with already included) brings you to $450 according to Best Buy. The PS3 right now is $400, what is the problem here?
The problem is if you don't want all of those -- you just want a game machine.
Then you wouldn't want a PS3 no matter how cheap it was and my point still stands. The system is as cheap as they can afford to make it right now.
Siegreich: You know there's no added costs to the the ps3 like there is for the 360, you have to pay for online play, pay if you want wi-fi, you have to get a warranty in case of red ring... over the course of a couple years you'll spend more on your 360 than you would on a ps3.
We're not comparing the 360 to the PS3. We're discussing wether or not the PS3 needs a price cut.
Why do people feel the need to compare every single console and/or game?
Siegreich: You know there's no added costs to the the ps3 like there is for the 360, you have to pay for online play, pay if you want wi-fi, you have to get a warranty in case of red ring... over the course of a couple years you'll spend more on your 360 than you would on a ps3.
We're not comparing the 360 to the PS3. We're discussing wether or not the PS3 needs a price cut.
Why do people feel the need to compare every single console and/or game?
It makes perfect sense to me. The PS3 catches an amazing amount of flak for it's price, but a 360 with the accessories that a PS3 comes with costs even more. I have nothing against the 360 personally, I've enjoyed playing quite a few games on my friends' systems. The comparison is to put things in perspective, not to bash the 360.
MK Tha Rebel: A price cut is NECESSARY. That's the main (and only, to my knowledge) complaint about the PS3. Sony would start making money off the PS3 if more people owned them. Then they'd buy the add-ons and extras, because those are priced pretty well.
But fine, you don't want to cut the price. Here's an alternative plan, Mr. CEO, free of charge. Sell PS3s in separate parts like the X-box 360. Sell a full PS3 at the normal price, but also sell a core system with no hard drive, no wireless, less USB ports, and, well, WHATEVER you can cut out and sell separately. Sure, if you buy a core PS3, a hard drive, and wireless adapter separately it would end up costing MORE than a full PS3 (Like it does with the 360) but hey, mo' money mo' money.
Sony, you make great products, by you guys know nothing about marketing.
See there in lies the problem they really have nothing they can yank out of the system other then maybe the wireless card. They have to have the hard drive there is no memory cards for the system. Also they would not make the money back on the hard drives because their system will accept most sata laptop hard drives so instead of buying an overpriced plastic encased one like microsoft people could just buy a seagate or western digital off of newegg for 50 bucks.
Also the reason they cut backwards compatibility was because of everyone complaining about price so they pulled the emotion chip out to save money on production and went to a emulated ps2 system which never worked right so they dropped that for the time being I have a feeling you will see a sony ps2 emulator come back sooner or later for the ps3.
So yes a price cut may be NESCESSARY in your mind but to sony it is not so cut and dry of a situation.
Sony has managed to level out there production costs to the point that they are making money on the sale of units.
Yet some of you seem to think that if you're selling in the red is a good idea, and that selling a lot in the red would be a great one. This is because you are unreasonable morons.
Here are some fundamentals of business, selling something for less then it costs to make is a bad idea, this means you lose money every time you sell something, this is counter to the idea of business, which is to make money.
Then why sell for less to being with you might ask? For market share, they know they can decrease the cost in the long run so they sell it at a cost they know they can achieve eventually, this increases their install base, which increases the games for it, which increases demand for the system.
There is however a point where this stops being a good idea, and the PS3 isn't selling so badly they would want to turn it back into a hemorrhaging wound on the companies income statements!
KSarty: I honestly think the PS3 is as cheap as it can be at this point in the game. Buying a 360 with a hard drive, wireless internet, and a years worth of online subscription (all of which the PS3 comes with already included) brings you to $450 according to Best Buy. The PS3 right now is $400, what is the problem here?
Ha here in UK all those with a 360 are still less than a ps3. 360 premium £169.99 wireless connectivity £45 years subscription to live £39.99 = £255 PS3=299.99 also the 360 gets better bundles
Sony doesn't want you consider buying a PS3 if the price went down. Sony wants to know that you will purchase their system.
You totally missed his point buddy, are you seriously that thick.
Let me spell it out for you, "MORE PEOPLE WOULD BE ENCOURAGED TO BUY THE PS3 IF THEY LOWERED THE PRICE".
You may think you sound smart by stating 'oh lol but doesnt meant ull ACTUALY by 1 lol', but you are rather just being very ignorant about the amount of people that actually would buy a PS3 if the price was more reasonable. Because ATM, considering 360 has better range of games AND better online, the price tag on the PS3 is pretty large considering.
The buyer you quoted is much like me, I would probably buy a PS3 if the price was worth it, but even my cousin is going to get a 360 even though he already has a PS3. Why? Because the 360 base is larger (BECAUSE it is cheaper. so his mates have 360s, they can share games) hence the 360 has a larger range of games.
You are completely moronic if you actually think the price of the PS3 has no factor on why it is not selling well. Sony had ALL the advantages, just look at the PS2, yet they completely failed with the PS3.
Please, go away you rich + stupid PS3 fanboy (since all the non-rich PS2 owners either moved onto the 360 or the Wii).
mrfft: Wouldn't it at the end of the day, yes, you lose money on each Playstation, but wouldn't the volume of sales at a cheaper price point make up for the loss, more so if they sell more peripherals? Talk about somewhat bad business practices.
Um, no. When he says he will lose money, he doesn't mean that it will cut into the profits, he means it will actually cost Sony money. Consoles are usually pretty heavily subsidised, and the PS3 especially so.
True as that may be, oh wise and powerful Nilcypher, it still doesn't address Mrfft's comment that peripherals and game royalties are where the console creators are supposed to make back the losses, and indeed, profit. A console that doesn't sell, creates a piss-poor market for extra controllers, memory cards, rumble packs, DDR pads, and light guns. But, seeing as this generation of consoles has been determined to include all the profitable peripherals (hard drives included, rumble built into the controllers, the Wiimote is already a gun), that only really leaves game royalties. And with exclusive titles on the decline, the XBox being not only cheaper, but easier to code games for, Sony is losing ground pretty hard here.
MK Tha Rebel: A price cut is NECESSARY. That's the main (and only, to my knowledge) complaint about the PS3. Sony would start making money off the PS3 if more people owned them. Then they'd buy the add-ons and extras, because those are priced pretty well.
But fine, you don't want to cut the price. Here's an alternative plan, Mr. CEO, free of charge. Sell PS3s in separate parts like the X-box 360. Sell a full PS3 at the normal price, but also sell a core system with no hard drive, no wireless, less USB ports, and, well, WHATEVER you can cut out and sell separately. Sure, if you buy a core PS3, a hard drive, and wireless adapter separately it would end up costing MORE than a full PS3 (Like it does with the 360) but hey, mo' money mo' money.
Sony, you make great products, by you guys know nothing about marketing.
See there in lies the problem they really have nothing they can yank out of the system other then maybe the wireless card. They have to have the hard drive there is no memory cards for the system. Also they would not make the money back on the hard drives because their system will accept most sata laptop hard drives so instead of buying an overpriced plastic encased one like microsoft people could just buy a seagate or western digital off of newegg for 50 bucks.
Also the reason they cut backwards compatibility was because of everyone complaining about price so they pulled the emotion chip out to save money on production and went to a emulated ps2 system which never worked right so they dropped that for the time being I have a feeling you will see a sony ps2 emulator come back sooner or later for the ps3.
So yes a price cut may be NESCESSARY in your mind but to sony it is not so cut and dry of a situation.
True. Everyone's gotta make money. I'm no expert on stuff like this. Still, Sony needs to cut the price SOMEHOW. That's the main complaint about the PS3.
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Sony CEO Dismisses Calls for PS3 Price Cut
Sony Chief Executive Howard Stringer has dismissed Activision's subtle threat to drop support for the PlayStation 3 if a price cut doesn't come soon, saying CEO Bobby Kotick "likes to make a lot of noise."
Sony has steadfastly refused to reduce the price of the PlayStation 3 despite continuing calls to do so from industry analysts and executives who feel that the high cost is stunting the growth of the market and, as a result, of the money they could make on PS3 versions of their games. Kotick, head of the biggest publishing company in the world, took the rhetoric to a whole new level in June when he said that if the price isn't dropped, "[Activision] might have to stop supporting Sony."
That threat doesn't seem to bother Stringer, however, who brushed off both Kotick's remarks and the suggestion that a PlayStation 3 price reduction would happen anytime soon. "He likes to make a lot of noise," he told Reuters. "He's putting pressure on me and I'm putting pressure on him. That's the nature of business."
When asked about the logic of holding the price point on the console, Stringer added, "I [would] lose money on every PlayStation I make -- how's that for logic?"
Despite his comments, GamesIndustry says rumors of a price cut announcement at either Gamescom or the Tokyo Game Show are "rife," noting that some analysts believe the company's guidance for its current fiscal year suggest a reduction planned for sometime in the latter half of 2009.
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