Analysts dismiss PS3 price cut as 'ridiculous'

PS3 News | Could Japanese price reduction be bad news for Sony?

While the news that Sony would be slashing the price of the PlayStation 3 in Japan was generally met with optimism in our forums, at least two leading analysts have begged to differ. Their argument? That Sony's decision to reduce the price of the budget version of the PS3 before the console has even launched is a premature and needlessly negative strategy.

Speaking to Bloomberg, Retela Crea Securities' Yoku Ihara said, “It's ridiculous to decide to cut the price before they start selling the PlayStation 3. They may cut the price again if sales don't go well.” Meanwhile, Naoki Fujiwara of Shinkin Asset Management hinted at a greater potential danger for Sony, stating that the price reduction is, "negative for the short term because the company may not be able to sell enough consoles to cover an instant loss caused by the price cut.”

It is currently unknown whether Sony's new-found largesse will spread to regions outside Japan when it comes to the PS3. However, with the machine set for a November launch in Japan and North America, the time for further declarations of intent is running out.

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15 Comments

Echo

5 years ago

I dont quite agree with that.

The Brett

5 years ago

I cannot fathom how a price cut could be a negative move. I don't envisage too many gamers coming into EB and saying to me, "actually, I've decided to cancel my preorder on account of Sony showing a weakness." Give me a break.

The Plague

5 years ago

I see what they're saying. Sony are only going to have half a million units at launch. They will all sell out on the first day. Cutting their price now isn't going to make them sell out any quicker. Cutting their price in nine months when there are actually units on the shelves unsold might be a better move. Surely Sony doesn't really want to lose even more money on the PS3 than they already are.

If this comes down to which company can afford to take a bigger loss to be the market leader, Sony can just quit now. They need to be smarter, because they sure aren't richer.

The Brett

5 years ago

No, you see, reactionary price cuts are not smart. You have to pre-empt the market. The Dreamcast is evidence that even if a console sells ridiculously well to begin with, a price cut when it's selling poorly doesn't mean you'll sell more. At the end of the day, this will benefit Sony. By starting at a more affordable price, potential buyers will not be deterred into buying a 360 or a Wii, instead waiting for more PS3 stock to hit shelves. Likewise, Microsoft will drop the price of the 360 not because it's doing poorly but purely for strategy's sake. That's the only motivation for Sony here.

LeonJ

5 years ago

The biggest problem is a price cut only in Japan. What does that say to the rest of the world?

Anyways, big point missing there, it still is only a price cut for the BUDGET model.

renegadesx

5 years ago

I think the price cut reflects a chance to lure the Japanese away from buying a Wii. I think its kind of stupid to do it for the first batch. The budget model isnt exactly cheap in the first place and I thought they would be trying to sell the premium ones.

Dont forget the budget model are going to be very rare.

Emuaust

5 years ago

Jebus is all i can say, Jebus.

I mean everytime sony DO SOMETHING that can only strengthen there
position peeps are quick to find a negative spin.

Sony CEO does he's own grocery's, News at 11.

Jebus.

Honestly if the price drop carries through to other markets then in australia
the price may equate to around $750, the price of the ps2, $750 for the
cheaper model with better backwards compatibilty, HDMI and bluray,
sure makes the $650 we paid for our 360's seem expensinve.
One can hope this carries through to other markets as it will be very hard for MS
to compete with this on there current pricing structre without nearly giving
away there HD-DVD addons.

troublemaker

5 years ago

Wiki is listing the UKs price for the 'basic' version as 215pound/$410US ... hopefully we should get a drop here too.
http://en.wikipedia.org/wiki/PlayStation_3

Now that HDMI is back with the basic version, I think the basic model could sell quite well as you're only really losing HD capacity, WiFi and a memory card reader, all of which you can upgrade to if required. It's not like the 360 core pack where it was an option that was quite unusable.

Ellegarden

5 years ago

troublemaker wrote

Wiki is listing the UKs price for the 'basic' version as 215pound/$410US ... hopefully we should get a drop here too.
http://en.wikipedia.org/wiki/PlayStation_3

Honestly thats quiet tempting for my point of view beats the 360 core in terms of value, if only software prices were as good. Wiki is reporting $60 (US) to $100.

I definantly see the analyst's opinion, if sony take a hit on hardware sales it would mean they have take more from Blu-ray movie sales and games, accessories sales or suffer loses or minimal profit. Unless of couse blu-ray movies becomes mainstream and adopted which helps sony increase its revenue in one area while recouping loses. Just a thought I guess.

Jellyfish

5 years ago

UmbrellaCEO wrote

I definantly see the analyst's opinion, if sony take a hit on hardware sales it would mean they have take more from Blu-ray movie sales and games, accessories sales or suffer loses or minimal profit. Unless of couse blu-ray movies becomes mainstream and adopted which helps sony increase its revenue in one area while recouping loses. Just a thought I guess.

Considering the Wii controller is $60, and the 360's is $80? Sony could put theirs at $70 and main customers won't bat an eyelid. They will make a huge killing that, considering how could cheap the parts are.

Qbert

5 years ago

Sure, this might not make much business sence, when SONY will sell out of PS3's anyway, but at least it will help out those European's and Aussies who are looking to import. The thing is still region free is it not?

DancesInUnderwear

5 years ago

For first party games at least, I beleive.

David

5 years ago

Qbert wrote

The thing is still region free is it not?

I wouldn't count your chickens.

(I seriously doubt it will be truly reigon free).

Infested Jibbs

5 years ago

Making anything nowadays region free is a great way to shoot yourself in the foot.I was 100% NOT surprised that the wii wasn't and the same will apply here.It's great for consumers, **** for the industry.

Ellegarden

5 years ago

nikack wrote

UmbrellaCEO wrote

They could, but how many controllers does one person need, max would be about 4-ish and accessories is generally a limited market. If they sold it at £216, and well the high development cost of software and plus limited accesories sales profits will take while before Ken gets some extra zero's in his paycheck. I dunno it could be possible, that sony would get profitable quickly, but I personally dont see it. But I am really tempted by the price, maybe a copy of FFXIII.

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