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Analysts, LBP's Evans Talk PS3 Price Cut Necessity
by Leigh Alexander
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March 13, 2009
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The knell for PlayStation 3 price cuts is getting louder. Both Janco Partners analyst Mike Hickey and Media Molecule co-founder Alex Evans -- whose LittleBigPlanet has been a major driver for the platform -- feel the price of Sony's console should go down soon.
Talking to Gamasutra as part of an in-depth feature interview, Media Molecule's Evans says he has "absolutely no regrets" in developing LittleBigPlanet as a PS3 exclusive, despite hardware sales that are the slowest of the three major consoles, at least in North America.
Evans believes Sony's core audience has their PS3s already, and broadening the install base will be a boon: "They've had all these, you know, SingStars and the EyeToy games. They've had their casual gaming audience on the PS2, and they have to translate that over to PS3 now."
The LBP co-creator explains: "As they do that, I'll be very happy with that, because that's how I see PS3 growing. That's why I'm kind of comfortable with it for now... As soon as they drop their price, ho ho ho."
Amends the Media Molecule co-founder, "I shouldn't say that, but it's true. I mean, you know."
Elsewhere in the interview, Media Molecule's Evans also acknowledged: "A lot of people say, 'You've missed out on X million install base if you'd gone here or here or Wii or whatever'... To be honest, yes."
But he says the star treatment from Sony made it all worth it: "It's the fact that Sony put us up on a pedestal, that we were bigger fish in their kind of messy pond at the time. It meant that we wouldn't have succeeded as well without that nurturing."
As for the analyst take, Janco's Hickey expects March or April will see a $50-$100 price drop for PS3. "Sales have plunged over the last several months, likely compliments of a global economic slowdown and a meaningfully higher price point," says the analyst.
"Sony has historically revived console unit velocity at retail by cutting the price, a market measure we find likely to be repeated, particularly given the enormous recessionary pressure currently imposed on consumers."
Pegging the PS3's marketshare at only 18 percent, Hickey calls its sales pace "turtle-like," says it's "dramatically" underperforming its competitors -- "and is beginning to lose support from game developers and publishers, in our view."
Electronic Arts CFO Eric Brown recently said further price drops for next-gen platforms were a necessary part of the console cycle, noting that the largest percentage of software sales on the first two PlayStations came after several price drops.
Activision CEO Bobby Kotick recently made similar comments, insisting that even $299 is not a mass-market price tag for hardware and that further cuts are needed to drive widespread adoption and stronger software sales.
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