Sony Cuts PlayStation 3 Prices

**johnnymk** · 07-09-2007, 04:24 AM

http://www.nytimes.com/2007/07/09/bu...th&oref=slogin

LOS ANGELES, July 8 — Facing slower-than-expected sales of its PlayStation 3 video game system, Sony said it would announce Monday that it planned to lower the price of its console in the United States by $100, to $500, effective Thursday. The lower price of the 60-gigabyte device comes as a rival system, the Microsoft Xbox 360, is inundated with reports of widespread product failures. Microsoft announced last week that it would spend up to $1.15 billion to repair the machines.

The other rival system, Nintendo’s Wii, is hard to find in stores because the company miscalculated demand. Lines still form at stores that announce they have the product, and units are listed by sellers on Amazon.com at up to twice the suggested retail price of $250.

Sony said it would also introduce an 80-gigabyte PlayStation for $600. It had discontinued a 20-gigabyte model earlier.

Although PlayStation 3 is more technologically advanced than its rivals, sales have drastically trailed those systems. NPD Group, a market research company, said that as of May, Americans had bought 5.6 million units of Xbox 360, 2.8 million of Wii and 1.4 million of PlayStation 3.

Since it began selling the PS3 last November, Sony has been criticized for setting the price higher than the competition and including expensive features that most consumers were not ready to use, like a Blu-ray high-definition DVD drive.

Even after cutting the price, Sony will still have the most expensive game console available. An Xbox 360 with a 120-gigabyte hard drive sells for $480, but less powerful versions sell for less.

“There certainly has been resistance to the price,” said Jack Tretton, president of Sony Computer Entertainment America. He said that the lower price of $500 gave the company “a higher level of confidence” that it would sell 11 million PS3 units worldwide, as it had predicted, by the end of its fiscal year next March, Mr. Tretton said. The company is making a similar price cut in Canada.

The company will also sell 10 million older PlayStation 2 consoles and 9 million PlayStation Portable machines this fiscal year, Mr. Tretton predicted.

Analysts said that Microsoft’s huge task of repairing Xbox 360s and the brand’s reputation would allow Sony a chance to gain customers. Given the amount of money that Microsoft is setting aside for repairs, as many as a third to one-half of all Xbox 360s may need to be fixed. Microsoft has declined to specify the extent of the problem.

The product failures could also create discord with its retailers, said Richard Doherty, a partner in the Envisioneering Group research firm. “Best Buy now has to deal with returns instead of selling new products,” Mr. Doherty said. “Sony’s price cut really does change the playing field this summer.”

Mr. Tretton of Sony said that PlayStation 3’s technological sophistication would benefit the company, as more consumers upgrade their video experience.

“If the play was for a couple of years, the answer would be, yes, we overengineered this product,” Mr. Tretton said. “But in the long term, over a 10-year period, this technology will absolutely pay off.”

PlayStation 3’s reduced price equals the list price for Sony’s new entry-level Blu-ray DVD player, which began shipping last month. Consumers who want a Blu-ray machine could buy the PS3 once they realize that the prices are the same.

**VTGreg** · 07-09-2007, 08:40 AM

It will be very interesting to see if the PS3 can gain some traction with the price reduction. Microsoft needs to respond with a price drop for the mid-range XBox 360. I have been holding off on buying until they drop the price. However, the recent reliability issues may cause me to reconsider and look at a PS3, which for only $100 more, is far advanced compared to the XBox 360.

**beatbox32** · 07-09-2007, 03:50 PM

I guess I've been lucky. My 360 has been solid since it's purchase last November. I play it all the time and for awhile, it was my main DVD player.

The price cut is a welcome event for the PS3, but I think I'm going to wait after the Bluray/HD-DVD war is settled and the PS3 has a decent library of games. Nothing has come out to pull me away from my PC/360 gaming.

-beatbox32

**shaggyucla** · 07-09-2007, 03:55 PM

Nice.. very nice... now... where did i put that spare 500$ i need for games and console???

**CornMonkey** · 07-09-2007, 04:57 PM

Originally Posted by VTGreg

It will be very interesting to see if the PS3 can gain some traction with the price reduction. Microsoft needs to respond with a price drop for the mid-range XBox 360. I have been holding off on buying until they drop the price. However, the recent reliability issues may cause me to reconsider and look at a PS3, which for only $100 more, is far advanced compared to the XBox 360.

Supposedly, MS is going to have an announcement about their own price reduction for all their XBOX360 SKUs. I forget the exact figures but I thought I read 399 for the Elite, 350 for premium.

But it's good to see Sony finally coming to its senses. $500 for the 60gb model isn't too shabby, especially when you can get 5 free Blu-ray movies with it.

I don't have an HD TV at the moment and that's the only thing preventing me from pulling the trigger on a PS3 right now. But then again, by the time I can afford one, I'll be waiting for a price-cut on a PS4.

**beatbox32** · 07-10-2007, 07:25 AM

Came across this article this morning:

Konami: PS3 price cut too little, Metal Gear exclusivity in doubt

http://www.gamesindustry.biz/content_page.php?aid=26543

That was one of the games that made me buy the original Playstation. If they bring it to the 360, I'll be all smiles!

-beatbox32

**Prngr44** · 07-10-2007, 07:30 AM

399 for the elite? *dons earmuffs* Ididn'thearthatIdidn'thearthat.

**1boogie** · 07-10-2007, 08:15 AM

I am glad that they are lowering the price of the PS3. But why discontinue the 20GB one, they should have lowered the price on that one too

**VTGreg** · 07-10-2007, 10:46 AM

Originally Posted by 1boogie

I am glad that they are lowering the price of the PS3. But why discontinue the 20GB one, they should have lowered the price on that one too

Because no one was buying it?

**Prngr44** · 07-10-2007, 12:38 PM

I've heard the 360 elites are indeed dropping to 399, the Pro's 349, and the cores to 299.

**VTGreg** · 07-10-2007, 01:37 PM

Originally Posted by Prngr44

I've heard the 360 elites are indeed dropping to 399, the Pro's 349, and the cores to 299.

Hear anything regarding a date for the price drop?

Edit: Just found this. http://www.pcworld.com/article/id,13...s/article.html

**ray** · 07-10-2007, 02:37 PM

I bet the price cuts are announced at E3

**CornMonkey** · 07-10-2007, 03:41 PM

Originally Posted by Prngr44

I've heard the 360 elites are indeed dropping to 399, the Pro's 349, and the cores to 299.

Core should be somewhere around 250. 299 is how much they cost now.

**zippyjuan** · 07-10-2007, 10:38 PM

Microsoft May Lower Xbox 360 Pricing to Boost Sales – Analysts.
Microsoft Corp. to Respond Sony’s Price Drop with Price Cut

Category: Multimedia

by Anton Shilov

[ 07/10/2007 | 02:26 PM ]

The world’s largest maker of software is projected to decrease the price of its latest Xbox 360 game console shortly, analysts think. The move comes shortly after the company said that it failed to sell the number of consoles it predicted and also prolonged the warranty on the gaming machine due to increased failure rate.

Wedbush Morgan Securities analyst Michael Pachter stated in a note to investors that Microsoft will announce an Xbox 360 price-cut at E3 Media & Business Summit. As a result of the price drop, Xbox 360 core package will cost $249, the Xbox 360 premium version will drop to $349, whereas the Xbox 360 elite model will be available for $399, reports Next-Generation web-site.

Late last week Microsoft said that it failed to sell 13 million Xbox 360 game consoles by the end of its fiscal year and that it only managed to sell-in about 11.6 million units, which means that the popularity of the game machine among end-users is lower than expected. In addition, the company extended Xbox 360 warranty to three years and said it would provide reimbursements to those already paid for repairs of their consoles.

Even though sales of Microsoft’s Xbox 360 game console fell below expectations, the gaming machine has been outselling Sony’s PlayStation 3 in the recent months, which means that its installed base has been growing quicker than that of the rival. If the information regarding the price cut is correct, then the pace of adoption is likely to stay the same, which is positive for Microsoft.

But the biggest rival for Microsoft Xbox 360 is not the PlayStation 3 from Sony Computer Entertainment Inc., but Wii from Nintendo, which has been outselling PS3 and Xbox 360 combined for months in the U.S. As a consequence, both Microsoft and Sony will not only need to keep the prices on their game consoles inline with that of Wii, but also to ensure that their offerings appeal to casual or novice gamers, the auditory of Nintendo’s latest product.

Microsoft has not confirmed price cut on the Xbox 360 game console.

http://www.xbitlabs.com/news/multime...710142504.html