Tag Archives: Sony

A PlayStation 3 Price Cut Looming!?! Who Could Have Foreseen This?

You heard it here first, ladies and gentleman! My previous post on March 31st of this year, Despite Sony’s Denial, PS3 Price Cut Inevitable, says it all. Here’s a quick recap:

March 30th: Sony executives cut the price of the PS2 but adamantly denied that they would even think about cutting the price of the PS3, despite economic conditions.

In response, I said that unemployment would keep rising. As a result, more parents would be home with their kids, Nintendo Wii would become even more popular – it’s already the most popular of the 3 consoles due to its social and family oriented platform and games – which would continue to put pressure on Sony and PS3. As such, a price cut for the PS3 would be announced by Christmas time at the absolute the latest.

Mario gets a new life

Fast forward to the NPD report released late yesterday evening regarding video-game sales for the month of April. Now, sales of just about everything got hit, especially hardware and console sales, but just take a look at the numbers. According to the report, Nintendo Wii sold roughly 340,000 units, which is just under twice as many as the 175,000 Xbox 360’s that sold in April. But it’s almost 3 times as many units sold as the 127,000 PlayStation 3’s! So what do Sony execs announce today? Price cuts may be coming.

Oh how quick Sony changes its tune when sentiment about this economic “rally” we’ve been having turns just a bit sour. Keep in mind, on March 31st, the markets, stocks, and economic indicators had all been moving in the right direction, (finally!) for 3 weeks straight. And the stock price – my goodness! – Sony (NYSE: SNE) had gone from as low as $15.64 on March 9th to as high as $21.35 on March 30th, the day they made their emphatic denial regarding a price cut. I mean I get it, you know, regaining 36% in your stock in 3 weeks, that’ll make you feel a little arrogant, a little powerful. I get it. But now that rally is flattening out, and today’s reversal by the electronics powerhouse is quite possibly the purest lesson anyone in business can learn about the hubris of success.

When you’re on top, plan for the dips and don’t get cocky! When things look dismal, keep your head because that’s when fortunes are made. Looks like Sony had a problem with the former, while Nintendo’s been focused on the latter. Despite, the 43% drop in sales on a month-over-month basis, Nintendo Wii was still the number one selling system, and the top four selling games in April…all made by Nintendo. Seems as though their strategy of focusing on the social and personal aspects of usage that a player can get out of the Nintendo Wii console is working in bringing Nintendo out of eternal adolescence and into adulthood, as Nintendo products and games have been widely known to be void of extreme and graphic violence, and catering mostly to the younger generation of gamers.

The new Nintendo, all growed up, certainly doesn’t seem shy anymore when it comes to blood, guts, and gore, just take a look at the recently released MadWorld. Just to give you a sense of it, you have to enter your birthdate into this GameStop website link before you can watch a video of or even about the game. (I love it!) I have to admit, I was and still am a diehard PS3 fan, or “fanboy,” or whatever you want to call it, but even I broke down a few weeks ago, and added to Nintendo’s sales numbers when I got my own Wii along with MadWorld, and a few other games and accessories. I know, I know, for hardcore PS3 players and advocates, this is akin to joining the Dead Rabbits” while living in the Five Points, but I have a pre-teen little brother that I look after often, and a girlfriend that used to complain about video games, but couldn’t stop playing Mario Galaxy at Best Buy, even after we were done with our purchases.

Nintendo Wii + games and accessories = $400.

Playing Mario Kart with your girlfriend and little brother for hours while reminiscing about your childhood – when you looked like you were having a seizure, jumping and moving with the 64-bit characters of the original NES or Sega Genesis (when it certainly didn’t help move the characters the way it does with a Wii) = priceless!

Don’t get me wrong, I still love and play games on my PS3. But right now, Wii definitely has the “1-Up” in my household. However, for those that want and don’t have a PlayStation 3 due to its high price, it’s certainly looking more like a price cut of at least $100 could be here by Summer’s end. Maybe even Sony will try to create some of its own “fireworks” for the Fourth of July…

Mario hits a homerun!

Mario hits a homerun!

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Despite Sony’s Denial, PS3 Price Cut Inevitable

Slimmer, Sleaker PS2 now $99.99

Slimmer, Sleaker PS2 now $99.99

Sony Corporation (NYSE: SNE) today announced that starting tomorrow, April 1, Playstation 2 will be available for $99.99. Playstation 2 is not only the best-selling console ever, with over 140 million units sold by mid 2008, but it is also the fastest-selling console as well, reaching 100 million units sold within 5 years and 9 months.

I remember when the word Playstation first started to become a household name. Nintendo and Sega had been the dominant players in the video game industry for decades, and there was a ton of doubt surrounding whether Sony, which had been dominant in overall electronics retail, had the ability to compete with the “big boys” in the video game wars, without having enough industry experience and know how. Aside from the stiff competition, it is well-known that the hardware side of video gaming is typically a losing endeavor for the companies that produce the consoles, as it costs more for the company to produce them than the price they receive at sale. However, large profit margins made on software sales, combined with much more significant volume of game sales, more than makes up for the losses experienced on hardware. But at that time, there was also talk of problems with coding on the software end of Sony’s new venture, which only added to mounting skepticism over the new console’s fate.

Even after the overwhelming success of Playstation, and its variant PSone – which combined, was the first console to ever reach sales of 100 million units, – Sony faced the same skepticism when rumors of their plans for the second generation, Playstation 2 console, hit the press. Launched at the turn of the century in the year 2000, Playstation 2, as mentioned, is now the fastest selling console ever, reaching 100 million units sold in almost half the time it took for the original Playstation to hit that mark.

With todays announcement regarding not just the price cut, but also the deep bench of more than 100+ titles slated to be added to its game arsenal just this year, it’s no surprise that almost 10 years later, Playstation 2 is showing no signs of slowing down in popularity. Aside from that, Director of Hardware Marketing, John Koller, is quoted in this article as having stated, “We don’t intend on discarding the system any time soon.” Meanwhile, direct competitors, Microsoft Xbox and Nintendo GameCube – both released a year after Playstation 2 – were discontinued in 2006 and 2007, respectively. Based on all that, I’d say Sony has certainly proven the naysayers wrong regarding their ability to enter and dominate the video game industry, or perhaps even any sub-industry within consumer electronics, without having gleamed prior industry experience or know how.

Sony’s newest generation console, Playstation 3, however, has sorely lagged behind its predecessors in terms of sales volume and popularity, mostly due to it having the highest price point of all the newest game systems at $399.99.

Special Edition Gun Metal Grey 40GB PS3 Metal Gear Solid 4 Bundle

Special Edition Gun Metal Grey 40GB PS3 Metal Gear Solid 4 Bundle

With the price of the PS2 being cut today, along with Sony’s recent weaker-than-expected earnings announcement, all in the midst of the current economic recession, some serious pressure has been mounting for a big drop in the price of the PS3. Most argue that a $50-$100 price cut would make the PS3 much more competitive with current console-sales leaders, Nintendo Wii and Xbox 360. Despite absolute denial of the corporation’s willingness to do so, recent news of technological advances within the industry, like the rumor-heavy OnLive service set to launch soon, as well as rising popularity of the other competing consoles, I’d say a PS3 price cut this year is inevitable. With unemployment looking to continue rising, which means more and more parents staying home with their children, Nintendo Wii, which is the cheapest and is widely accepted as the most family and socially oriented of all the current systems, may have an opportunity to take a significant amount of market share away from Sony during the upcoming summer months, when kids are out school and playing video games more than ever. If Sony remains stubborn on price throughout the summer, I have no doubt that an ’09 Christmas price cut could be the company’s last option in an effort to keep PS3 competitive with Wii and Xbox 360. If that were to happen, I think the war over which console is best, Wii, 360, or PS3, would come to an abrupt end with a nice three-peat for Sony. Power to the Players!