Cheaper Blu-ray Player Sparks Speculation of PS3 Price Cuts

These days, literally the smallest whisper about falling costs of blue-violet laser diodes will set off speculation about a PlayStation 3 price drop. Yesterday, Sony announced that it would be shipping its second-generation Blu-ray Disc movie player for $100 less than initially announced, fuelling talk of possibly the same cut being applied to the PS3. Analysts sure seem to think that the lowered price of BDP-S300 is a sign of PS3 things to come. Arvind Bhatia, an analyst with Sterne Agee & Leach Inc., says in a Dow Jones story, "If the cost of Blu-ray is coming down, you can drop the price of anything with Blu-ray in it. "

What some analysts may be overlooking is that falling costs for Blu-ray components do not mean a higher profit margin on the PlayStation 3. While standalone Blu-ray movie players are sold at prices above costs, the PlayStation 3 is sold at a considerable loss – a common penetration tactic in the video game console business. The PlayStation 3, compared to its competition, is performing below expectations, leading to a conclusion that the video game market is highly price sensitive. Regardless of Sony Computer Entertainment Inc.'s bottom line, analysts have repeatedly called for a lower price in order to stir PS3 sales. "Feedback from retailers continues to indicate that a price cut on PS3 will be important," Bhatia astutely pointed out.

View: Full Story
News source: DailyTech

Report a problem with article
Previous Story

LogonStudio Vista 1.0

Next Story

Pointstone Internet Accelerator 1.40

19 Comments

Commenting is disabled on this article.

Software sells hardware.

Like the 360 in 2006, the PS3 has a weak software library. Price has little to do with it.

Once the big titles start hitting this Fall, you'll see a radically different holiday sales figure.

except that x360 had alot of games on its way in, there were some decent games in 2006, graw,pgr, burnout, nfsmw...i know some were cross platform but it was still the only console at the time with them in HD with all the other jazz of x360....and was well priced for what you got...

I know there will be a hell of a battle this xmas with full production of all 3 consoles...no limited supply anywhere, the ps3 may drop in price, the x360 WILL drop in price, if they knock of 50-75 from the x360 price, it will jolt the sales for the console

PeterTHX said,
Software sells hardware.

I completely agree. However for me, the 360 has more games coming out this summer/fall that I want to play.

Blue Dragon, Bioshock, Halo 3, Assassin's Creed, Mass Effect, Splinter Cell Conviction, and Call of Duty 4 > MGS4.

So it looks like I'll be skipping the PS3 for a while longer.

I agree it's worth it for the system... but the price point is out of reach for a lot of people, especially when lower costing alternatives are available and lack of games that make ppl want to consider it. Example FF XIII is the 1st game to peek my interest... which is now pushed back to March of 2008.... for a Japanese Release.

Galley said,
You can deny it all you want, but the truth is, the PS3 is actually worth the $600 price tag. :cool:

If you've got money to burn, maybe. But when it comes down to it, unless you're interested in both Games AND HD films, you're probably better off buying a 360 or a standalone player.

i'll wait until early problems are resolved and i can get a 45nm chip in it. i don't like the idea of my system burning itself up.

Galley said,
You can deny it all you want, but the truth is, the PS3 is actually worth the $600 price tag. :cool:

Galley said,
You can deny it all you want, but the truth is, the PS3 is actually worth the $600 price tag. :cool:
Only if you want the Blu Ray player. Otherwise the lack of exclusive titles currently makes the 360 more appealing and cheaper.

Smigit said,
Only if you want the Blu Ray player. Otherwise the lack of exclusive titles currently makes the 360 more appealing and cheaper.

Its been how long? 6 months and then sum. The 360 didn't have many great games when it first came out. Everyone seems to try and ignore the PS3's lifespan and not look ahead, wait until the system matures a little.

Xero said,

Its been how long? 6 months and then sum. The 360 didn't have many great games when it first came out. Everyone seems to try and ignore the PS3's lifespan and not look ahead, wait until the system matures a little.

That's true. I didn't want a 360 until Christmas of '06. I didn't get one however due to seeing everyone telling me how their 360 just got back from the repair shop. :/

PS2 I didn't touch for the first year it was out, and it's one of the greatest consoles created.

The PSP was doing so poor that retailers indicated make it sell, drop the price or it gets pulled off the shelf. Since they did the price cut, sales have increased and there is a nice "buzz" about it again.

Sony been trying to spin the PS3 as a "cheap" blue-ray player or game machine or both (depending on the market). If blue-ray player(s) drop below ps3 price it cuts out buyers who are looking for the "cheapest" blue-ray player.

Developers have shifted resources away from PS3 to Wii due to the success of the Wii.. and lack of strong sales of the PS3. $$$ has been on of the most common complaints (among others) as to why it sales are bad.

One of the big factor's of the Sega Dreamcast collapsed was due to developer(s) jumping ship. Sony killed Sega in Japan, where Dreamcast did well, but not great in the United States.

I do think Sony should cut the price, $100 at least, more if they could. As bad as this sounds.... Sony should of held off another year or two so they can produce at cost of xbox360 and eat the market loss MS would of won on them to keep more marketshare then the possible failure of how things turned out.... When the PS3 sells less then the OLDER Nintendo game boy advanced.... there's a sign.

Now part of there gambit that does pay off, before the EU PS3 launch.... HD DVD was in the lead, but with PS3 in the market, Blue-Ray has a nice surge. Winner of the HD gen war still too early to give predictions.

According to April/May sales PS3 is losing ground very fast compared to Wii everywhere and xbox360 in USA. I must say that PS3 is starting to look more and more like a big faliure for Sony. At this point it is questionable if price cut would accomplish anything, since the gap between competitors has widened extremely.

I must say that PS3 is starting to look more and more like a big faliure for Sony.

People have been saying that since before the PS3 came out. They need a simple game machine without the BD player.

Samboini said,
They were too eager to push the BD format. It should've waited until the next generation.

That's what's hurting thier bottom line...the cost of the non-optional BD player. I don't like BD simply because it's associated with Sony, but it should have been an addon, not mandatory. I think the PS3 is going to bite Sony in the ass.

What you don't seem to realize that Sony forcing the Blu Ray player into the PS3 has made Blu Ray the #1 selling format in both North America and Europe. So if they take a shot for the PS3 they did it for the sucess of Blu Ray.

MrCobra said,

That's what's hurting thier bottom line...the cost of the non-optional BD player. I don't like BD simply because it's associated with Sony, but it should have been an addon, not mandatory. I think the PS3 is going to bite Sony in the ass.

So typical. Thumbs down with new technology just because of someone who backs it. You know how much crap you wouldn't buy if you knew who was associated with it? I mean, Sony isn't even behind the creation of BD, they're merely supporters of it. Honestly, I think it's the ONE single thing they've done right in a while, despite failing at making a cheap gaming rig, rootkits, and all the endless junk I could go on with. Everything will get cheaper as it always does, meanwhile 10x write speeds are possible making BD even more desirable than ever if you ask me. I could care less about Sony.

On the plus though, cheaper PS3.

Sony is in a hell of a tight spot. They have two choices - Keep losing money on the PS3 and hope that sales start to pick up or Drop the price, handle the temporary larger costs and hope it turns things around.

So it's a choice between wait and gamble a smaller amount but for less chance of an increase in sales, or bet it all with a price cut and hope for the best.