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Everyone and their dog is jumping on the rumours of Sony chopping the price for PS3 next March. Sony in response has said it doesn't comment on rumour and speculation.
However now it doesn't matter if the rumour is true or not - it basically paints Sony into a corner this coming Christmas season. Well, kind of.
Sony has maintained it wouldn't be chopping the price of the PS3 this year. However the desperate and optimistic would no doubt have harboured a hope that the entertainment giant might pull a fast one in December and do it anyway. Stranger things have happened.
But by saying it wouldn't happen this year - and by deliberately not putting a timeline on when it would happen - Sony would have stood to reap quite a few Christmastime sales from people who would have reasoned that waiting for a price cut to occur hopefully sometime in the following year was too much to wait for.
Sony still will flog a fair chunk of PS3s this Chrissy - it's kind of their "turn" in a way. If you're the kind of person who is willing to drop serious cash for a gaming console, you've probably had ample time to figure out if you wanted the hi-def competition, Xbox 360 or not by now. And the lower spending part of the market will be also busy deciding Wii or Xbox 360. But still, with cash in short supply worldwide and container loads of expensive silicon needing to be shifted, Sony would have wanted every possible sale they could get in December and the New Year, and this type of rumour doesn't help.
Now that the rumour is in the wild and spreading, it's bound to put off punters who still aren't yet swayed by the software offerings on Sony's console. LittleBigPlanet is great, but as Joab observed in his review - it's open to debate whether it's a system seller. Resistance 2 is a solid, good-looking experience but once again hasn't had the cut-through to consumers of a Halo or Gears of War, let alone a Wii Sports. Looking at Sony's lineup there is little impetus to suddenly grab a console if you are hearing the price will be slashed in March 09. That's a manageable wait time in the absence of a killer game title (hello Gran Turismo, God of War 3).
From our point of view, this leak/rumour restricts Sony's options:
One: bite the bullet and bring forward a price cut in December Announce it asap. Hope that the money you lose on selling the hardware at a discounted price is offset by people buying PS3 software to go with it. It will irritate the market who are looking for signs of restraint from the Big S after a forgettable year, but it shows initiative and sets the stage for a 2009 where maybe finally the software can deliver on the promise offered by the hardware.
One thing a lot of people are forgetting is that the real effects of the global cash crisis are yet to really hit home. This may well be the last Christmas for a couple of years where people feel at liberty to really splurge. If that's the case, good luck telling a population struggling to keep their jobs that they need a high def videogame unit in their living room.
Chance of this happening: (sadly) exceedingly small
Two: cut the price in March 2009 On one hand you save money for every PS3 you sell between now and then. You also have to expect that production cost for the console will continue to drop in real terms in the intervening period, which means that on a per-unit basis you'll be saving money every week you delay cutting the price.
However on the other hand you've just given another Christmas away, and our money is on the heavily discounted Xbox 360 doing well this time around... in the absence of a cheaper PS3. Further, Sony's got the reality to contend with that every household who buys a standalone Blu-Ray player this christmas will be that much less incentivised to buy a PS3... and this too is shaping up to be a potentially decent period for BD.
Chance of this happening: quite high. March is a favoured launch window, and a price cut would make timing "sense" here. Even if Sony weren;t intending to before, they could well have their hands forced.
Three: announce the killer app So far there's very little on PS3 that demands you buy it. There's niche appeal titles that do the job but it's fair to say that years after launch the PS3 still lacks titles that had the impact of say, Ridge Racer on the first Playstation - titles that just stagger you with their superiority to the competition.
It's way too late now to pull something out of the hat, but the only thing that Sony can do if they're determined to wait out this Christmas is give people something worth waiting for - something to encourage people to get something else this Christmas - not a Blu Ray player, not a Xbox 360 and not a Wii. Home is still getting pushed out in beta, and isn't able to sell a system to the masses in the volumes Sony needs.
Chance of this happening: approaching zero. And it's because of this that we think Sony needs to get on the front foot now, not next year.
It's not as if Sony's goose is cooked - the PS3 continues to sell in steady numbers, and the PlayStation Network is really beginning to make some cash for the company - but expansion of their install base should be the company's mantra. The Blu-Ray player is a great edge to have, but even that advantage risks erosion - players are beginning to plummet in cost, and if Microsoft ever got its act together and released a Xbox 360 with a BD player for a reasonable ($AU500 sounds good) price, it would really cause some head scratching.
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