Zelaron Gaming Forum - Playstation 3 Price Drop soon?

Zelaron Gaming Forum (http://zelaron.com/forum/index.php)

- General Gaming (http://zelaron.com/forum/forumdisplay.php?f=203)

- - Playstation 3 Price Drop soon? (http://zelaron.com/forum/showthread.php?t=48546)

Playstation 3 Price Drop soon?

http://images.pcworld.com/news/graph...t_original.jpg

http://www.pcworld.com/article/16016...he_offing.html

Quote:

Remember that $100 PlayStation 3 price drop you've been hearing about for a year or more? The one that keeps not happening? Well it's about to, according to Mike Hickey with investment firm Janco Partners, with Sony set to announce something "in the next couple days."

"Recent channel checks indicate increased speculation for a PS3 price cut announcement from Sony," said Hickey, adding that he believes the cut needs to be $100 to catalyze PS3 sales at retail and that the market's expecting a cut "in April or by June at the latest."

Assuming Hickey's right, would anyone be surprised? Sony knows the PS3's priced out of the market, and has been for awhile. The company's long since realized brand loyalty's worthless beyond a certain sticker threshold — especially in a stagnating economy. And the heady days of king-making exclusives via franchises like Grand Theft Auto are over as spiraling production costs drive publishers to agnostically view remunerative potential. For majors like Fallout 3 and Final Fantasy XIII and Resident Evil 5, there's no such thing as the Xbox 360 or PlayStation 3, just a monolithic hypothetical purchase base, like selling the same DVDs to customers with Samsung or Panasonic players. Exceptions made for DLC exclusives — and props to Microsoft for getting out ahead of that one — but the underlying publisher bean counting that's led to a preponderantly "multi-platform generation" is incontestable.

Hickey mentions "talk" of a PS3 without Blu-ray. While that's intriguing, given the number of instantly incompatible Blu-ray game titles, I'd call it noise. I can't see how splintering the market by spawning a brand new one this late in the game is going to make the PS3 any more salable. Maybe if Sony dropped the price to $200 and offered an external Blu-ray upgrade option for $100, but you wouldn't catch me betting on that approach by tenths.

In any event, the writing's on the wall, and was well before Janco weighed in. The PS3's getting a price cut, and it'll be here before 2009's midpoint.

Question is, if you had $300 to burn and intent to buy a game system, would a $100 cut tip your hand in Sony's direction?

For all of you that don't have one yet, this may finally be the incentive needed to follow through and go out and purchase a nice little peice of hardware as the PS3 is =]

May I just point out that the article is from the end of February, and that Sony have scoffed at Hickey's mentionings of a Blu-rayless PS3 - not only is it a foolish thought because Sony is one of the founding members of Blu-ray, and is using the PS3 to push the format, but then there's also that little detail that PS3 games come on Blu-ray...

Whilst it may throw Hickey's comments into a mire of implausibility, many pundits have voiced their opinions that if Sony is going to drop the price, they'll announce and bring it in to action during GDC (March 23rd - 25th(?)). It doesn't take a genius to guess that they'd do it then, though. :p If not GDC, then E3, or a Gamer's Day in London, or before Christmas.

Excellent post! I'm pretty excited being that I still DO NOT have a PS3, and am wanting to play Madden this season on it online against a few buddies, so this really should happen. Man, I can't wait!

Aren't they using a loss leader strategy? Or has the hardware prices come down so much since the adoption that they're making money on consoles now?

I don't know the details of the price, but since the original version, they've:

Removed the Emotion Engine
Removed the Graphics Synthesiser
Removed 2 USB ports
Removed the card readers
Increased the number of Cell chips per silicon wafer
Presumably improved the yeild from the blue laser manufacturing

Not to mention that increased volume on the Cell chip and the blue laser reduce per-part overhead cost. The PS3 definately costs a lot less now than it did at launch.

I'm not quite sure how that translates into dollars and cents, but if they do cut $100 off the price, they've GOT to be making money at this point. I'm guessing the original "we're losing money" statement was from the R&D which they had to cover.

No, from a materials and labor standpoint, they were losing money on the original machine. This has been confirmed by several independant sources that estimate such things.

TBH, I expect that if they are making money on consoles now, it's not much. The EE+GS removal can't save more than $100, since the PlayStation 2 only costs about that much; there could be glue components involved that inflated that price, but I don't remember reading about any when I looked at a teardown. You can get a nice card reader for about $30. The USB connectors cost less than $10. So for them to be making money on consoles, Cell and blue laser cost reduction and volume increases would need to reduce the cost by almost $200.

Still wont buy it. Don't really play console games (with the exception of my n64 and SNES once in a while) and I already have a blu ray player

I want it simply for Final Fantasy XIII Versus and MGS4

I'd buy it if the price would drop to 200. I'm a bit short on cash right now, and I have to start saving up for college and a car...

Well, if they were losing money on just parts/labor, then I guess the R&D had to be priced into the parts. If not then they were getting pummeled bad. I don't know what their cost allocation technique is, but cost allocation is why the government reports "200 dollar toilet seats" or whatever. They've allocated R&D and other indirect expenses down to each part, and inflated the cost associated to it much beyond the actual cost of that toilet seat or what have you.

You're not hearing me. Independent firms estimated the cost due only to parts and labor; they made a list of all the components and determined the price to assemble it at the current market rates. Surely the cost of developing the system is applied to game royalties.

http://www.engadget.com/2008/12/23/p...s-300-cheaper/

A good chunk of the R&D costs were from Intel's Cell processor and the blu-ray. I thought they'd developed their hardware, hence the talk about the R&D costs. The R&D is priced into the cell processor and the blu-ray drive I'm sure ;). I wonder if their "market rate" is with the discount sony would inevitably get from buying in such large quantities.

With all that being said, I'd assume that blu-ray drives and the cell processors have gotten quite a bit cheaper now. I don't think it'd be unreasonable to hit that $200 reduction in price between the blu-ray and the cell processor by now.

http://shopper.cnet.com/1770-5_9-0.h...q5628240023473

You can buy blu-ray players for close to 200 dollars now retail. That's $150 less than what it was at launch. I can guarantee that Sony's getting a material discount on even these prices. Although I guess the one in the ps3 could be higher quality? I can't seem to find any prices for the cell processor now though.

Actually, the price of the cell processor used in the original PS3 is $60 (and intel had nothing to do with its development). If you read the article from the link, the current BOM price of the PS3 is $447, as of December (and this is the model currently on the market).

I'm about due to get a PS3...

I was actually on track when my parents bought me a PS1 waaaay back in 1998. I had it for like 7 years and it finally broke down. By the time I got a PS2, it was 2 years shy of being updated to a PS3.

Ahh the good ol' days with games like Spyro and Frogger...

I'm still waiting for the drop. I plan to have it by the time Madden comes out =]

For me it was the good ol' days with FFVII, VIII, And WA1 and 2...