Real Talk From The HipHopGamer

Even With Price Cut PS3 Is Destined For Last Place

Posted on 21. Mar, 2009 by The_Faceless in Real Talk with the HipHopGamer

Pressure has been rapidly mounting on Sony to drop the price of PS3 this year. Historically the third year of a consoles life cycle is a good time for a price drop. However  this generation has been anything but normal for Sony.  Having already dropped the price of the PS3 once since the systems release is Sony ready to do it again? On one hand given the competition they are up against the move seems likely. On the other hand given the competition they’re are up against, will it even mater?

The PS3 is in a peculiar situation. The system is without a doubt the most high-tech console on the market, and with that comes a high price. Currently the PS3 is a profitable venture for Sony, so you can understand their laid back attitude towards a price cut. When the PS3 was first released the manufacturing cost per unit were $494. Today that cost is nearly 40% lower. Fiscally speaking a price drops makes sense when you look at it from a manufacturing point of view. However when you look at what that does to Sony’s profitability the argument is no longer so one sided. A price cut basically comes down to Sony asking themselves what they feel is more important. Profitability or sales.

The PS3 has also had some steep competition this generation from Nintendo and Microsoft. The Wii has become the must own game system for the family while adolescents have flocked to the Xbox 360. Leaving Sony to sit in third place picking up the leftover scraps. The Wii has maintained its popularity by catering to the casual audience which seems to be growing bigger every year. I don’t think that Microsoft or Sony in their wildest dreams ever could have imagined just how much the Wii would shake up the video game industry. Nintendo seems to have tapped a market that no one could have known had just barley been scratched. As of right now the Wii is poised to be the best selling console ever, but for both Sony and Microsoft the Wii is not seen as the direct competition.

Microsoft came into this generation with a chip on its shoulder and its sights set on Sony. The 360 was released a full year earlier than the PS3. Being the first to the market Microsoft began to buy up exclusive titles like Gears of War and Dead Rising while the PS3 was still in development. Ever since that first year Microsoft has continued the practice of buying exclusives  and the results have been extremely successful.  The first year allowed Microsoft to build up a lead in install base that has proven tough to over come. The 360’s early release gave Microsoft sole owner ship of the next generation for a whole year. By the time that the PS3 stumbled out of the gates the 360 had already established itself. Xbox Live is now the standard that all online gaming communities must live up to.  PSN still has not been able to gain the same respect from fans and critics despite being a free service. It really says something when consumers are more than willing to pay for Xbox Live over PSN.

Microsoft’s early entry combined with Xbox Live and a killer selection of games, defined the next generation before Sony could even step to the plate. Xbox 360 like the PS2 and PSone before it, is the preferred traditional gaming console. Kids want it for the games and parents like it because it is cheep. This is a fact that would remain even with a PS3 price cut. The PS3 would still be more expensive and kids and teens will still want the 360 more.

Sony has failed to carve itself an identity this generation. They have great games, a decent online setup and Blu-ray. Yet they still can’t seem to define why their system is better than the other two systems. Price cut or not PS3 is destined to remain in third. Recent trends show no slow down in sales for Wii or the 360. Couple that with an identity crisis and a badly lost popularity contest and you have the ingredients for a third place finish regardless of what Sony brings to the table. For The PS3 it is simply too late.

Tags: Price cut, ps3