Sony's PlayStation 3 hasn't even been on the North American
market for three months, but the company is already considering
a price cut on its new console. Sony trimmed the price of
the most basic PS3 in Japan before it even launched and a price cut in
North America could help
to boost slow initial sales.
"We may look at the price as part of our strategy to
expand the market when the timing is right," said Sony Senior Vice President
Takao Yuhara at company headquarters. An analyst for Lazard Capital Markets
suggests that the price cut could come as early
as this year.
Many question, however, if Sony can pull off this feat so
early in the game. Sony has seen its Q3 profits fall 5.3% from a year ago along
with a $455 USD million USD loss for its games division (compared to a $556 USD
million profit a year earlier). Microsoft, in comparison, witnessed
a $289 million USD loss for its Entertainment and Devices division.
One must also take into consideration that according to iSuppli,
Sony is losing $307 on every 20GB PS3 that it sells and $241 on every 60GB PS3.
The bigger loss on the 20GB unit explains why the 60GB unit accounts for 80% of the sales mix
in the United States.
A move to 65nm production could ease the pain of trimming
costs on the console. Sony has recently stated that it has already started
production on a number of 65nm components and has realized a 40% size
reduction in comparison to 90nm components. The company is also looking to
reduce the number of parts used in the PS3 to lead to even deeper cost reductions.
But what's bad for Sony will likely turn out to be good for
the consumer. Most consumers don't really care if Sony is losing money on the
PS3 -- all they care about is getting the Blu-ray equipped console for a lower
price. If Sony is successful with its bid to lower its own costs on the
console, consumers might just get their wish sooner than expected.
quote: So Sony may be able to reduce their prices by $150 this year (in time for Christmas) to $349/$449, whilst Microsoft can probably cut $80 (if they're still losing hundreds of millions in the XBox department then I suspect that the reality is that they're still losing on the hardware).
quote: Oh really? Like the PS2 had any games when the stupid lemmings were paying $1000+ for it when it launched.