http://videogames.yahoo.com/feature/ps3-will-be-299-in-april-analyst-predicts/1279759 Could the days of the $400 Playstation 3 be numbered? So says financial analyst Michael Pachter, who predicted this week that Sony will trim the price of its cheapest Playstation 3 pack to a "more affordable" $299 in April, and that an Xbox 360 price cut will follow by June. And the Wii? Don't hold your breath. "We expect Nintendo to maintain Wii pricing at $249 until the company sees signs that demand is slowing, which means a price cut may not happen until late in the year, if at all," Pachter said. Upcoming PS3 Titles Like any analyst, Pachter, who is employed by securities firm Wedbush-Morgan, isn't always right, but he boasts a healthy hit rate at anticipating similar moves in the past, notably predicting PS3 and Xbox 360 price cuts in 2007. Don't expect official confirmation from either Microsoft or Sony, though: telling your customers about price cuts four months in advance tends not to be a very common strategy. Ailing Sony, which is tipped to be about to post its first annual loss for 14 years, could well expect a significant sales boost if Pachter's prediction pans out. The Playstation 3 is heading into 2009 with a bumper lineup of upcoming exclusive games, including Killzone 2, Uncharted 2, God of War 3, and superhero-themed DC Universe Online, and a lower price point could well lend the console much-needed momentum.
i'll get one at 249, which is possible if the msrp goes to 299. I just want the blu-ray player with the option to play a ps3 game. all the games i currently want to play are available on 360. actually i think you can download twisted metal 2 on the ps3, that I'd definitely do.
The Wii is overpriced by about $100. Its the one console that can actually sell for below price and still make tons of money from its ridiculous accessories.
The price is determined by supply and demand. Since the Wii has been scarce from the beginning, it's actually been underpriced. If you meant the Wii was overpriced because Nintendo has the audacity make a profit on each unit sold, I disagree. The fact is Nintendo's business model makes a lot more sense (and profit) than the other two.
Do any other analyst says this or is it just this guy? The articles I've read keep pointing to the same guy saying that the PS3 price will get cut in april. Any other expert opinions?
Yeah, Twisted Metal 2 is on the PSN. If you're interested, there will likely be a Twisted Metal for the PS3, but probably not until 2010 I think. Pachter is probably one of the more "famous" analysts. I don't recall seeing what other analysts think, but it probably isn't too different (although each analyst may think a different thing). I did a quick search and found another analyst suggesting that Sony should cut the PS3's price prior to the holidays, which isn't too different I guess. A price cut during the Spring or possibly early Summer (around E3?) seems pretty obvious at this point. PS3 sales have been less than stellar, and I'm guessing production costs are low enough to handle it. Of course, the (alleged) leaks from SCEE mentioning a price cut around March 2009 doesn't help stop the rumors either. The economic situation and the overall problems at Sony may complicate matters, but I don't think they should interfere with Sony's plans to cut the PS3's price, especially since the price cut could/should lead to higher profits.
Completely agree with everything. Im not debating market conditions, but more on production cost vs market costs. How much do you think a stardard Wii cost to produce? $50 maybe? A PS3 probably costs $300 to make.
There were tons of people lining up to get them when Sony launched the PS3. What has changed...or what didn't change? History is backing up on it being all about the games. 400 bucks is a bitter pill to swallow, but it doesn't totally explain the PS3's worse than expected piss poor sales. I would say the Gamecube was a great and cheap system for what it did. With Nintendo's backing, gamers were guaranteed at least three or four AAA games a year. I would even say that their launch offering up was better than the PS3s in the same timespan. If that didn't convince them to buy a Gamecube, what happened? Those few, but must have titles, and their pricecuts didn't matter much because the PS2 offered more games with more value. The best way to improve customer value and branding for a console is still its games and to whom they're appealing. Nintendo bet right. It's ridiculous how many people bought overpriced Wii+Wii Fit bundles that for the same amount and effort could've landed you a PS3. Nor does price explain the Rockband/Guitar Hero mania that can run up 200 bucks for the entire set.
Different analysts believe that Nintendo makes a profit of somewhere between 5-10 dollars on each system. Part of it is mindshare. A combination of hype, word of mouth, mainstream press, etc. etc. For those who are more everyday gamers - i.e. they don't spend days on gaming forums, reading gaming sites, blogs, etc. - this tends to be the type of thing that reaches them the most. Every generation has a system that has that mindshare/familiarity. Not to say that it is *the* determining factor, but it plays a part. PS3 stumbled right out of the gate in that area. Price, lack of big name titles when it launched, the use of Blu Ray when no one really cared about Blu Ray (at the time), etc. etc. No matter how true or false they were, this is the stuff people read/heard about. And then you had the press. Early versions of big name games - Madden, for example - were 'better' on the 360. Some exclusives could now be found on 360, etc. None of that helped during the first year. Hell, just this last month there were all sorts of negative PS3 articles - after the bad sales numbers during the holidays - that catches the 'mainstream' eye. General sites like Yahoo and CNN Money were running them. Word like that spreads to the mainstream, causing them to lose some of that mindshare. It's hard to get that back once you've lost it.
For one, the Gamecube was always <$200. As I said earlier, at around this price point and below, I think games start having a larger impact than price. Put the PS3 at <$200, and I doubt it would have anywhere near as bad of the sales it has been getting. I don't disagree that the PS3 needs some games to sell the system. I think my point is that they already have them more or less, but price is holding it back. GC had their 3 or 4 AAA games a year. PS3 probably had 2x-3x that number in just the last few months (Fallout 3, LBP, R2, PoP, MS2, etc.). Additionally, the disparity between say the 360 and the PS3 is not that great, unlike the PS2 and GC. Their libraries are probably 85% the same. Of course, you could argue that Sony would need to put out more games to differentiate it from the 360 (more must-have games needed, regardless of whether there are already 10+ or whatever), but again, I can't really see them doing more than they already have. Can't put out a MGS4 every month. With the way things currently are, I think price is the PS3's biggest issue, especially when competing with the 360, at least in the US and mostly Europe (price is also an issue in Japan to a degree, but I think they really need more games tailored to Japanese gamers there as well). They would probably have to put out 5-6 MGS4-esque games to match the effect a $100 price cut would have. I think the WiiFit/RB/GH example isn't quite that great either. It certainly is true that a lot of people are spending a lot of money on this stuff, but I think it pales in comparison to console sales. Millions of people bought PS3s at $600 when few games (or Blu-ray movies) were available. However, I do think the Wii is a bit of an exception to some degree. I do agree with Rokkit that mindshare is an important aspect, and it is clear to see which consoles were helped/hurt the most by mindshare. Actually, I think this might be the PS3's biggest problem, not exactly price...but cutting the price will likely lead to helping out its mindshare. Out of curiosity, were these recent reports? I don't doubt that perhaps this was the case at or around launch, but Nintendo is probably getting screwed if that is still the case to this day. Maybe not at $200 of profit per machine as suggested by Space Ghost, but I would think around $25-$50. Maybe more, especially with how many systems they've put out.
I actually think some of the older estimates were actually more, closer to your guess. I believe there was a report from Japan a few years ago where an analyst was guessing about 50 per system. But the newer estimates are actually pointing toward 6 bucks. The newest one I saw was in Forbes .
Anything other than that article? It seems a little suspicious to me. For one: Not sure where the author got these numbers? The $6 quote: That just doesn't sound right. The Wii makes about $6 per system, and the 360 is breaking even just about. I guess the SKUs could complicate matters, but it would be hard for me to believe that, if the Wii is making $6 per system, that even the $299 360 is breaking even...let alone the Arcade SKU @ $199 (basically, the 360 costs WAY less to make?). I wonder if perhaps the author was using outdated info from the analyst. I can't track down the analyst's original quote outside of this article, but it wouldn't surprise me if the author was just throwing in some information to prove a point (the numbers might be off, but the point still stands). It isn't like this is a iSuppli report or something like that (and sometimes those seem off). Price estimate wasn't even the point of the article...although it sure got some attention from the gaming blogs. edit: Of course, maybe Nintendo has to constantly airlift Wiis/DSs all over the world just to meet demand, and that hasn't helped with profits.
I think with the Mario generation hitting their mid-20s/early 30s, 400 bucks is not a big deal. You can say 200 bucks is the perceived value or sweet spot, but there's purchasing power for 300-400 bucks, or at least there was in the year and a half that Sony has been lagging. A price drop imo will not improve it's mindshare to the point of overtaking the 360 domestically. I guess we'll have some confirmation when the PS3 drops its price down to 300 (if it ever does) and sales pick up more than expected. By then those 10 or so great titles will have become awesome bargains for new owners.
Yeah, I couldn't tell you. I know the Forbes article was from late November/early December, but I don't know at what point the estimates were made, only that they were the last ones I saw. And I am imagining they are factoring in all costs to come out with the 'profit margin' but who knows. Even so, if early estimates had it at around $50 per system in 2006, I would imagine that number has gone down and not up since launch, but I can't say for sure.
FWIW, I don't think the PS3 will overtake the 360 in the US barring some strange events. I do think a price cut could help it sell on par with the 360 or possible slightly better, similar to how sales were in 2008 prior to the 360's last price cut. True. Of course, as I tried to point out, I think it is important to know the context of these "estimates." They're fun to look at, but depending on the source and the circumstances, I sometimes don't put that much stock in them, especially if they seem to contradict previous facts. This seems to especially be the case for the Wii. I've kind of tuned out what analysts say about it. Most of the time, it seems to be something obvious ("Wii is making a lot of money," or "No price cut until sales slow down"), or something weird ("WiiHD by the end of 2009!").
Easy. I have no life. Actually seems like I just used common sense in that post though. I liked it back when I was throwing out technical specs every other post. FLOPs, millions of triangles, GB/s, etc. Fun times...although I really didn't have a life back then.
That post wasn't the best example....I just quoted it to get your attention. I was referring more to your knowledge of this industry as a whole, which is quite impressive.
To be fair, some of the stuff I've kept track of lately isn't really all that complicated, especially here recently (OK, maybe I really do have a life). Usually just basing my thoughts off of articles, websites (thank you Wikipedia), and/or popular opinion (message boards are good for this...some of those people REALLY know their stuff). Might be good to know which places/people to check out and trust, but that's about it. Of course, it is good that I have kept track of how things have generally gone in the last 4-5 years or so, but that isn't too big of a deal either (Rokkit, Invisible Fan, etc., seem to know at least a little bit about this stuff too). Of course, that's probably enough to be a decent video game analyst...but obviously, I don't put much stock into that occupation. (OK, maybe I'm overexaggerating just a bit).
