Sony sends 20GB PS3 to early grave in US, now for price cuts

Stan Beer
Thursday, 12 April 2007 20:12

Opinion and Analysis

Here in Australia we saw the writing on the wall for the cheaper model PlayStation 3 when stores informed us from the outset they would only be selling the 60GB version. Given the outrageous AUD$1000 price tag of the high end model, some thought it was a stupid decision. However, except for its pricing, Sony was right.

The 20GB PS3, with no Wi-Fi, was basically a crippled machine and offered users much less value for money than its overpriced big brother.

Now that Sony, which must have one of the most inept marketing teams on the planet, has washed its hands of the console model that nobody wanted, its challenge is to figure out how to move more of the consoles off shelves that many people want but not at any price.

The fact staring Sony in the face is that the only way it's going to get more PS3s into consumers' homes more quickly is to swallow its pride, bite the bullet and slash prices. And by slashing prices, modest cuts simply won't do the trick. Sony, which is already making a hefty loss on each PS3 sold, needs to be prepared to take a price beating if it wants to regain some of its lost ground in the games space.

In the US and elsewhere, it may need to slash prices by as much as 20% or even 30%. Those who argue that Blu-ray will drive the PS3 market may eventually be right. However, until that day comes, the PS3 is driving the Blu-ray market - and that is a war that Sony cannot afford to let up on.

A 20% cut in PS3 prices could do wonders for Sony's stocks in both the consoles and Blu-ray spaces. If Sony listened to its customers, it would find that not many have complained about the product. They just don't like what it would do to their bank balances.