PS3 price fixation "short-term thinking"
Tretton: Sony is "on the right path".
Jack Tretton has said that PlayStation 3 is "on the right path for the long term" and questioned the widespread obsession with console pricing.
"People are having short-term thinking - the platform is not even three years old. It was USD 599; it's now USD 399," the Sony America boss told Fast Company.
"The focus on pricing is something we appreciate, but you have to have the conviction and the confidence that you are on the right path for the long term and ultimately you'll get all the consumers you want.
"You won't get them all day one, but we're looking to get them over a 10-year period. It's going to take different things to get different consumers."
Tretton's overall message was that Sony won't be rushed into anything because the rules are different for a 10-year life cycle. For example, he said that traditional cost/benefit calculations went out of the window for certain games because their job was to promote certain aspects of the console's personality.
"We want the platform to be successful, we want to be profitable. But it is getting harder to measure that," he said. "And when you get down to a game like The Last Guardian, you can't just look at the number of units it sold versus it's development cost; it's what did you do to drive our message of diversity."
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Comments (74) Latest comment 3 years ago
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It seems they want a massive user base nearer the end of the console lifecycle, when devs/consumsers will be looking at the next gen.
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For now I will stick with my 360 and PC
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If you'ed spent billions of dollars on R&D you'ed be keeping the price high for as long as possible too.
@ Shrui - Its only Activision thats even mensioned dropping support and thats simply just hot air. And rememeber, this from the publisher thats expecting you to pay over £100 for a plastic DJ turntable!! Value for money anyone?!?!
People seem to think its their right to have a price cut. They're not cutting the price anytime soon, get used to it!
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"You won't get them all day one, "
Oh fuck off Sony. You don`t have an advantage over the competition anymore, I can buy a cheapo Blu Ray in Tesco for £70, so quit moaning and get competetive pricing.
The consumers have voted with their feet, and in ten years time you will be lucky to retain your current third place in the market.
This statement continues a long line of bullshit Sony denials about their embarrasing showing in this console cycle, very few people believe this bollocks anymore.
And don`t even mention how UMD was a stop-gap until full digital distribution - tossers !
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Ill assume thats intended to be sarcasm. Im sure Sony have limited money too and they're concerned with getting the PS3 to a price THEY can afford. Should I start writing to Ferrari demanding that they reduce the price of their cars because I want one? Should I be offended when they don't?
I realise there are alot of people out there with limited funds who are waiting for the price cut but Im getting frustrated reading page after page of comments from people who seem to think Sony are being unreasonable. In this economic climate it would foolish of Sony to sink themselves more into debt because game players demand it!
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I think Sony have had their hands tied by the Blu-Ray player slightly with regards to the price, so I can't say I'm suprised it costs as much as it does at the moment.
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The PS3 has done pretty well considering the only reason statistically the 360 is ahead is its one year launch advantage.
If the PS3 had been out during the same time as the 360 and maintained sales consistent with what it has now it would be ahead.
Fact of the matter is I know most children only get what their parents buy them and that pretty much sums up most morons typing here but this has always been Sonys model when it comes to their consoles.
It started with the Playstation 1 that reached 2.2 million sales in 2 years(compared to the PS3's 20 million in 2 years) and went on to sell 100 million.
Yeah they will get more consoles sold and more software sold when the price drops but the money they lose from the hardware will negate anything they make from software and increases hardware sales.
We all know how well the xbox venture worked for Microsoft and theyve been losing money with the 360 since launch. If they didn't have all that money they have from their online ventures and operating system Microsoft would have been bankrupt with the xbox franchise. They probably soon will with their failure to buy Yahoo and their operating systems selling a dozen copies tops.
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roflcopters
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Bought one already, PiranhaUK?
Should I start writing to Ferrari demanding that they reduce the price of their cars because I want one?
That is a straw man. Ferrari are not a company who wants everyone in the market to buy their cars. If you were to write to, say, Ford, and enough people were to do the same in this economic climate, I'd say there's a fair chance the prices of their products would come down. Indeed, you could achieve the same effect by just haggling in a dealership.
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Not really, accountants are in the business of just making numbers up to suit their clients.
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For that, read "It is getting harder to present our figures in a way that makes us appear profitable".
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The PS3 really isn't that expensive for what you get, and there are some great bundles out there (Example - £300 for a 80gb PS3 with InFamous and Killzone 2 is good value for money as far as I'm concerned- [link url=http://www.game.co.uk/PS3/Hardware/HardwareBundle/~r 342457/Sony-PlayStation-3-80GB-Console-with-Infamous-and-Kil lzone-2/).
]http://ww w.game.co.uk/PS3/Hardware/Hardw...[/link]
Hearing people moaning about the price of thing is getting a little bit boring. Sony are a business, selling a product - if you don't like their product, or you don' t like their price - don't buy it...'simples' (as the meerkat would say). .
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Let alone first party games being £44 from the high street, thats just rediculous MS don't charge that!
Sony are just arrogant to the point they can't see their product is failing to sell as well as it could.
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Neither right now are Sony. Im sure they will drop the price when they can still maintain a decent profit on each sale and then Im sure they will welcome everyone into the market with open arms.
The playstation cost $800 to build when it launched and the average cost to the consumer was $450 dollars making Sony a $350 dollar loss. If they had sold 20 million units at launch they would have lost over $70 billion dollars! Im sure they have wanted steady sales until they can reduce they're costs.
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£44 for a 1st party game? Methinks you need to shop around a bit more...
Additionally - not long ago I saw HMV trying to sell Sonic the Hedgehog on the PS3 for £50!!! Retailers do take the piss, and if people are willing pay ridiculous prices, and/or are too lazy to find a more reasonably priced shop that's their look-out - not Sony's/MS's/Nintendo's.
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... And i think your also forgetting that Microsoft tried to charge £55 (RRP) for some titles @ the consoles launch!
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Sticking your head in the sand while the competition keeps outselling you is not thinking at all.
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Also 55! bloody hell I didn't notice that!
Still 300 is still too much for it. Although Uncharted easied the pain quite a bit!
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What!? Firstly, why talk down the sales of The Last Guardian when it's not even out yet? What's to say it's not going to be the biggest selling game on the PS3? Secondly, " it's what did you do to drive our message of diversity" - how about "it's what our very best and most artisticly gifted development team is producing to demonstrate what a truly next-gen video game can be"?
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True but sony should get used to the fact that people wont be spending their money on that system any time soon. Goes both ways you see.
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Except for the fact that people ARE spending money on the console and its doing good business. Just because your not buying the console doesnt make it a failed system.
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I'm not keeping track but every time EG does one of those sales things it always seems to end up last in console sales. At the very least it's a far cry from the position in the last couple of generations. Sony is far from being as popular as they used to be.
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Fixed
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If I were shopping for my first console, I don't think I'd be that bothered on price at this stage...
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Yes. But a sub $300 price point is going to get a rather large group of different consumers. (Heck, I already have one and I'll buy a second one if it hits that price point.
While I think it's definitely worth the asking price, it needs to expand the market more significantly. And hey, guess what - you'll probably get more return on investment from your software too.
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It's getting harder to measure whether the business is profitable? I would have thought that was pretty straightforward accounting.
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A valid point in theory, but what is it that Tretton imagines is going to make people suddenly buy a PS3 when they haven't before? The longer Sony delay a price cut, the more people buy 360s and Wiis. As that happens, those machines become steadily more attractive to developers. As that happens, the chances of anyone writing a PS3 killer app decreases.
All the fanboy nerds who'll buy a PS3 for MGS4 or Final Fantasy 73 or whatever have already bought one. GT5 is pretty much the last shot Sony have with regard to a big-name exclusive and again, that's only really targeting fanboys. Even if it gets cheaper, exactly what is it that's going to sell a PS3 to all the people who haven't already got one? Little Big Planet aimed at the more mainstream audience and stiffed. Nintendo have the mums-and-dads market sewn up tighter than a drum, and the middle ground between hardcore and casual have nothing to gain from buying a PS3 over a 360, with the possible exception of free online play (which is of very minor importance to the non-hardcore market). But that's only £3 a month, set against the increased cost of the hardware, so it's pretty hard to see it making the difference.
They can have all the 10-year-plans they like, but Sony can't afford to slip any further behind, and right now that's exactly what they're doing with every passing day that the PS3 is so much more expensive than the competition.
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And yet oddly enough also different to that other console with a 10-year life cycle, the PS2.
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They sure like cashing in on cheap-ass plastic peripherals that they scalp people for, though - how about they cut the cost of their plastic pap to what it's actually made for to make those more palatable to the thrift-conscious consumer?
No - didn't think so Activision - what was the price for DJ Hero again?
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Now I don't expect that to continue while the 360 remain £100 lower then PS3, but while that remains the case Sony can keep the price at a level where they're not taking a massive loss on each one sold.
Any fool can sell goods at a loss.
MS can afford to buy marketshare by taking a hit on 360 HW as they have a huge OS cashcow which rakes in money and props up a lot of MS's unprofitable businesses.
BTW - No matter what you think of Sony or the PS3's price, you have to admire them for bankrolling games that may not sell in huge numbers but stand out as something different on their platform amongst all the shooters and driving games.
It's Shadow of the Colossus, ICO etc which made the PS2 a must have console. Singstar and Buzz were also something risky and new at the time.
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Yes, it is third.
Yes, it is not in the same position as last gen.
But, hell yes, the console IS keeping up with 360 sales, with the latter only having marginally better sales - although it only cost 45% of PS3's price.
Why oh why would Sony drop the price now? And what is wrong with the exec saying so?
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In fact, currently the 360 is outselling the PS3 by considerably more than 2:1 in the UK.
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Of this Gen the Wii will be the only one that gets near the sales mark of the PS2.
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If you look at it objectively, it's actually the Xbox 360 that is underachieving, after all it's very cheap relatively and has tons of great games but it hasn't had the same success as the more expensive and quality games deprived (IMO) Wii. Microsoft must be a bit disappointed really even if they'll never admit it. The failure of the 360 in Japan and lack of popularity in Europe outside of the UK and Japan doesn't help nor did the Xbox 360's reputation for breaking down during its first couple of years on sale.
The PS and PS2 never really achieved mass sales until they dropped below the "magic" £200 price barrier in this country (UK) so I fully expect the PS3 to follow the same trend once it drops to that price or less. The surprising success of the Wii probably means it'll never achieve the same massive sales figures as its predecessors though. Still Sony must be satisfied with PS3 sales if they're adamant that its fairly priced.
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That's certainly not the case the world over though. The Xbox 360 continues to sell poorly in Japan, despite Microsoft's best efforts to revive the market there, and it isn't that strong in the rest of Europe either.
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However, I believe there are a significant number of people who would like to buy a PS3 but consider it overpriced, regardless of Sony's profitability problems. I'm one of them and I first started expecting a price cut back in March. I've now waited so long that I'm determined not to crack and give in until Sony cuts the price. Unless Sony announces that the PS3 Slim has even fewer features than the current model...
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You mention exclusives but really the Xbox 360 isn't exactly overloaded with them either. The fact is that multiformat games dominate all three of the current consoles so the choice of which one to buy boils down to which of the few exclusives appeal the most.
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I'm not bothered about a price drop because I picked up a 60 gig model just before they vanished but it does strike me that whenever a Sony employee opens his mouth it inevitably leads to bad press. A better PR approach would be to have no PR.
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That said, Sony's current predicament with the Playstation 3 is proof that you cannot take a company's strength in the marketplace for granted, so it is hardly inconceivable that Microsoft could loose their grip on this 'space' in the marketplace. But the fact that Sony have no other choice but to wait for their competitor to make mistakes (thanks to Kuturagi leaving Sony with a piece of hardware that is a financial liability) surely isn't part of the plan.
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And I'm not too partial to auto-cannibalism either.
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While sales are still quite poor, actually the 360 is making great progress in Japan - from being outsold more than 10:1 by the PS3 it's now only down about 2:1, and closing the gap all the time. Japan is in any event the smallest of the major markets, and the 360 was starting from almost zero there.
"and it isn't that strong in the rest of Europe either"
Got any numbers to back that up? The entire rest of Europe put together barely equals the UK's sales anyway.
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now... these numbers might not be 100% correct, but I do think they are adequate enough to make that deduction.
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I think we all care about Sony's market position a lot more than they do. Playing the long game certainly seems to have riled a few folks...
The price of their console will drop when Sony are ready to drop it. The folks that wanted a ps3 have bought one. The folks that are waiting for a price drop will get one when the price drops (presumably).
The problem was the Blu-Ray trojan horse but as some have pointed out, you can now buy a cheap arse Blu-Ray for less than a decent pair of trainers (I can only assume that the porn industry has embraced Blu-Ray) so that's one barrier to price dropping removed at the very least.
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now... these numbers might not be 100% correct, but I do think they are adequate enough to make that deduction.
Numbers from where?
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While MSs continued success or whether or not they 'drop the ball' is obviously going to impact on Sony and the PS3, I don't think the PS3's success (or lack of) is entirely dictated by the success of the 360.
The PS3s long term success if dependent on whether Sony can bring quality, original titles to the PS3, clearly convey what the console is capable of and win the minds of consumers. If Sony really does fail to achieve the long term goals they've set themselves with the PS3, it will ultimately be a result of their own decisions, not MSs.
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the numbers were from http://www.vgchartz.com< /a>
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@donnie
how long do you think it will be before Sony pull support for ps3 entirely, in the same way that support was pulled for Deamcast, Gamecube etc...after all, those consoles suffered from what I would call "lacklustre"sales. I worked for a well known electrical retailer when they were both launched...i don't remember selling a single dreamcast that didn't get returned for refund/exchange.
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Getting back to the price cut issue.
If the rest of Sony corp was coining it, then they perhaps could absorb a big loss on PS3 hoping to make it back on software sales.
But as it stands, it's a very risky strategy against much healthier competition.
I think the main fear would be that if Sony were to take £100 of the price of their console (taking it as a loss) what to stop MS taking £50 of theirs, leaving Sony back in square 1 with the most expensive hardware and the same people moaning.
Looking longer term, if Sony can retain respectable market share, then they can go to PS4 with a far smaller R&D budget.
Presumably Cell2 can expand to 4 cores with 32 SPU's with far less R&D then the original design.
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As I see it both Microsoft and Nintendo (of course Nintendo much more) should be satisifed with how their system are performing. I'm sure Microsoft would have wanted to crack the "casual" market and probably are jelous of the Wii-success but the fact is that the Xbox 360 is doing well, much better than the Xbox.
The fact that Sony still only manages to almost catch up with the Xbox 360 (and they have had some help with the fact that Microsoft still haven't cracked how to succeed on the Japanese market) with all those hundred of millions of PS2 users, that to me is a failure on Sony's part. To go from a 70-80-90% market share (not sure what the PS2 had in the end) to basically equal to the Xbox 360, that IS a serious miscalculation. Or are we seriously to belive that Sony internally said that "lets make it an expensive luxury item and sacrifice our marketshare"?
I think the PS3 is slowly coming down to a good pricepoint (I bought mine when it came out and to be honest, it feels a bit of a stupid decision now as it isn't until now that it is starting to get games I like) but it also is now facing a different market. Bluray players are now getting quite cheap and there is a financial crunch going on.
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MSs first go in the console market? Eh? What was the Xbox then? A dry run?
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I personally would like a PS3, but would like it to drop just slightly in price. Just a £40-£50 drop as all I'm asking.
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(Ahhhh bless Kuturagi)
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I just think it should be amazing enough to see X360 actually selling units in Japan.
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TBH though price isn't the issue with PS3. £280 is a fair price and has been for many gens (plus you do actually get quite a bit IF you use all it's features - which many don't). As long time fan of Sony consoles, a fan of PS1/2 and a fan of PS3/PSP (but one who sees the potential was just flushed away with these two) I feel donnie080208 hit the nail on the head with one sentence.
"...like ive said the playstation as a brand has serious problems where once it was synominous with gaming..."
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Basically a Celeron CPU with an off the shelf nVidia DirectX part quickly cobbled together mainly by people outside Microsoft. Which is why the thing was hacked to bits.
[link url=http://ww w.xbox-linux.org/wiki/17_Mistakes_Microsoft_Made_in_the_Xbox _Security_System#The_Xbox_Hardware
]http://ww w.xbox-linux.org/wiki/17_Mistak...[/link]
Part of the reason the 360 has not been hacked (to my knowledge, or to a much lower extent) is that MS where so much more involved in the hardware design.
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The 360 hasn't been hacked? Are you serious?
Every single retail game that has come out on the 360 has been leaked on torrents days/weeks before the official launch (e.g. GTA4 was out a week before launch - 24th April 2008, Gears 2 was leaked 2 weeks early on 20th October 2008).
I would say that it's just as bad as PC game leaks, although fewer people do it because they can get banned from Live if caught. I believe that's a MAC ban as well as an account, so that gamerscore will be no more and also whatever they paid for gold access would be lost too. I believe the main software people use to stealth their 360 is iXtreme 1.6.
If there were a lot of games I wanted to play on the 360, I would buy an Elite and stealth it, but there are only 2 and one is from XBLA so I will spend my cash on something else.
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And to the dumb PS3 owners who complain, what the fuck did you buy it for, that computer you use to game cost more which will be the case for the Xbox after a few years, that’s why we are in a recession, if these dumb fucks can be stringed along so easy to buy more shit for there xbox every 12 months then I don’t see how we will ever get out of this recession.
I could avoid all this let’s see, what is the PS3? , IT IS A FUCKING MULTIMEDIA MACHINE. What can it do? , if there are features you don’t like then don’t fucking buy it don’t even look at it. Do you remember your mama telling you something of that sort when you were young?
Simple isn’t it. Sony has the right to be cocky and to stick to their guns they have the superior machine.
In this day and age its funny to see how people are still so easy to lead off a cliff with a few big numbers and a well placed article here and there, when was it that cheaper ever meant better how long will that blue ray player from tesco's last.
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It certainly seems to have been kept pretty much undercover, whereas almost everyone knows that the PSP & DS are rife with piracy due to the ease they can be hacked. Mind you, I still don't know how the UMD's are ISO'd