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Sony's Stringer Pushes Back Against Kotick's 'Noise' On PS3 Pricing
by Leigh Alexander [PC, Console/PC]
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July 8, 2009
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Sony's been taking heat from all sides for the price of the PlayStation 3 in recent months. Comments from publishers and developers, retailers and analysts of both the professional and the armchair variety continue to suggest the PS3's $399 tag is prohibitive to the growth of install bases -- and calls for a price cut have only mounted now that E3 has come and gone with no hint that one is imminent.
Just a few days ago, Tecmo Koei CEO Kenji Matsubara told CVG he'd like to ask Sony to "please cut the price," somewhat an unusual move for a Japanese publisher. But the boldest statements came last month from Activision CEO Bobby Kotick, whose blunt threat to withdraw support for the platform as soon as 2011 without a price cut was widely publicized in the consumer, trade and technology press alike.
Now Sony's pushing back, it seems. "He likes to make a lot of noise," Sony Corp CEO Howard Stringer told Reuters of Kotick. "He's putting pressure on me and I'm putting pressure on him. That's the nature of business."
And when Reuters asked Stringer about the logic of sustaining with no price cut, he was similarly direct: "I [would] lose money on every PlayStation I make -- how's that for logic."
At the same time, SCEA president Jack Tretton's talking about the company's long-term strategy and the need for patience. Tretton said especially given the state of the economy, industry watchers and consumers are less willing to wait for long-term investments to take root, and that impatience with pricing and hardware growth is one of the challenges of being in the video game business.
"People are always wanting you to lower your price on hardware," he tells FastCompany as part of a larger interview on the oft-discussed 10-year plan for the PlayStation 3 .
"We could've come out with a PlayStation 2.5 for $299 or less, and in the first two or three years it would sell extremely well. But there would be a point where people would be going, 'I am not really seeing the incremental leap.'"
"We feel that we're sacrificing the short term to pay dividends in the long term," he adds. "People are having short-term thinking--the platform is not even three years old. It was $599; it's now $399."
He says Sony "appreciates" the concerns about the console's price, but believes their strategy is on the right track for the long haul to gain the consumer base it wants. "You won't get them all day one, but we're looking to get them over a 10-year period. It's going to take different things to get different consumers."
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I'm waiting for the fanboys to chime in about "The PS3 is totally worth it when you look at all the features it comes with"
YAH OK.
love my ps3, no more waiting for the "red light" which was the death of my 360, I am one of the one's who got burned by MS and for half the price I will sell you my now defunct 360. I willingly paid more for blue ray and a working unit thanks.
you're wrong here.
Here you go http://www.neogaf.com/
John Smith, just accept that the feelings are probably mutual, Sony doesn't want your money right now either. They take a loss on every console sold as an investment in a customer that will later enrich them; the last thing they want is to invest that much in someone who is already spoken for and may only give them 50% of the expected return at best. There are better fish in the sea, so to speak; 22 million of them so far. They might catch you on the rebound though when they have nothing to lose.
I usually buy them (new) when they drop around $30. Sega recently said Overkill saw sales surge when lowered in price. People want cheaper things, especially in this economy. People can save money to buy the consoles, but they probably won't save up for a game, which seem more like impulse buys.
Bought bioshock ps3 new for $25. It was worth the wait.
I love my PS3, in fact I like it better than both of my 360s. But they need to bring down the price before i will buy another (or maybe offer aq slimline with a 120G+ HD).
Note that even though I love the PS3 I own two 360s. They all play (nearly) the same games, so why should I buy the more expensive console? Only for it's BR and other usages. But seriously, I don't need it yet. I'll wait until something better than has-been game bundles are thrown at me.
So to increase sales Sony must either increase the perceived value or reduce the price until it matches the perceived value. There also seems to be something magical about the less than $300 dollar price for point for consumer electronics.
Of course MSG is coming to the 360 (a bit different as Rising is for the PS3 as well but MSG is going cross platform which tells you one reason why Sony is cashing in on the exclusivity bundle including MSG 4 now). Look at this article and especially look at the hardcore comments for and against MS and Sony.
http://www.1up.com/do/newsStory?cId=3174497
The comments show how deep these feelings run. With this bundle it satisfies that "why not have the best of both worlds now" craving that so many gamers have.
A pack in with Uncharted or Little Big Planet won't attract these guys who are commenting, but K2 and MSG4, you betcha.
Why? It is simple, most of the PS2 fans bought PS2 to play a RPG or Adventure game, while racing and fps people go for a xbox (and now xbox 360), sony thing to right XBOX 360 with the games that XBOX 360 excels is a idiotic thing for a more expensive console...
If they were priced lower than 360, they would win, but they are more expensive, thus they need to offer something else, that something else is good RPGs and Adventure games, but for some reason Sony went nuts...
trevor gray said: "$399 is not an unreasonable price for the PS3 "
I agree that for what you get, it's not a bad deal. But do compare it to the competition.
My friend recently bought a 360 Arcade at Walmart for $150 (on sale). He bought it to play games like NHL 09, GTA IV, and in the future Tekken and Final Fantasy. With the unit he has a memory card, so game saves and some DLC isn't an issue. He isn't planning to play on Live anytime soon, but he is on as a Silver member (free) and he feels "connected" enough.
For $150 he can get the EXACT SAME GTA IV experience than he would on a $399 PS3. He is like the millions of PS2 owners out there, who like to play great games at home but has little interest jumping online, watching movies, using the console as a media center, etc. He just wanted a next gen console to make use of his HDTV.
He can now go out and rent games like Fight Night 4, UFC, Prototype...and play them without concern of having a inferior experience (when compared to the experience a PS3 owner gets with the same games).
Many people just want an HD games console with sequels to games they've played on their last gen units. Games like Madden, GTA, Final Fantasy, Guitar Hero, etc. They may want to get the bells and whistles (large HDD storage, online play, wireless, etc.) in the future, but don't need them now. They just want to buy Guitar Hero and play.
For those gamers (and there are quite a bit of them, as we can see not many of the millions of PS2 owners jumped on the network adapter or Hard Disk Drive add-ons), $150 is much more enticing than $399. You could argue that you get a BluRay player on the PS3, but some people are willing to buy a BR player later to offset initial costs.
The price of entry is a factor these companies have to consider. A Wii with 4 controllers and nunchucks can come out to nearly the cost of the PS3. But consumers aren't fixated on the total cost because these costs can be offset over a period of months.
Back to my point, $399 may seem well worth it for the PS3...but $150 (or $199 in it's usual retail price) is a whole lot more inviting.
i cant remember the last time i bought a 60$ game. I generally just wait til they drop to 30$. It puts me about a year behind, but its new to me!
personally, i prefer cheaper/shorter games to expensive/longer ones anyway. most if not all modern games are padded with endless upgrading/grinding/achievements that i dont care about anyway.
Mind you, that a crowd with a RPG certain taste, does not mean that is a rich crowd...
Also why they would already own PS3? FF for example is yet to be released... And the other popular square game, Star Ocean, is XBOX 360 exclusive...
This is an interesting statement. It is in fact one of the most interesting things Sony has said in a long time. I've been beginning to wonder if Sony really is going to just take the stance that they don't care if they're not selling a lot of units just as long as they're making some amount of money on each one. Now the CEO of the company is saying exactly that.
That is a substantial change in attitude from the console war days of moving units no matter what the cost. I can't say its a bad change, either. The video game industry as a whole needs to more to make itself sustainable. Sony is going to be hurting from the PS3 for awhile because they spent a lot of money on it for little benefit, but moving forward with this kind of strategy could be very healthy in the long term.
Maybe Sony is not as dumb as they look.
Also something important here that is being very overlooked, Sony is a Japanese company, headed by Stringer or otherwise - at the end of the day he is a mouthpiece. ATVI (and their ilk) are not. Sony are very proud, they have a rich and long tradition, again (like Nintendo) they will want to be stubborn, do things THEIR way, and see it through, bull-headed or otherwise. Perhaps you remember, some years ago, when Microsoft sent Ballmer, I believe it was, to approach a (distant) 3rd-place NOJ about a partnership or buyout? The old man got up on the table and yelled at him "kiss my little yellow balls!"
www.headcaseGames.com