PS3 price: Europe wants Sony to show them the money

Stan Beer
Thursday, 12 July 2007 06:27

Opinion and Analysis

Numerous reports have stated that Sony was losing up to US$200 per console when they were selling for US$599 in America and the loss was even greater in Japan. If so, then Sony certainly wasn't losing money on console sales in the UK, Europe and elsewhere in the world, where it has been selling for the equivalent of well over US$800 in most countries. Given the spike in US sales when the price dropped to US$499, will Sony drop the price in Europe?

There has been talk that Sony will not drop the price of PS3 in markets like Europe, the UK and Australia, where the unit is selling comparitively well despite the outrageously high price tag. Instead, rumours are circulating that Sony intends to entice more console buyers by bundling in another free game or so. If true, this would be a bad move and a lost opportunity for Sony.

Obviously bundling games is a cheaper solution than price cuts for Sony but in markets like Europe and Australia there is evidence to suggest that demand for PS3 as a Blu-ray device is hot.

In Australia, PS3 consoles are currently retailing for AUD$999 (US$861). One of the major PS3 retailers, the Myer department store chain is already bundling the either of the two most popular PS3 games.

"Myer is adding value to the PS3 console through a current marketing campaign that allows customers to buy a console and receive a free MotorStorm or Resistance game promotion which has so far proved popular with our customers," a Myer spokesperson told iTWire.

However, a quick trip to the audio visual department of any Myer store, or other major PS3 retailers, such as Harvey Norman and JB Hi-Fi, will reveal that the Blu-ray factor in PS3 sales is huge.

At one of Harvey Norman's largest stores last Sunday, the games department was practically empty of customers. PS3 (and Xbox 360) consoles were standing idle with no eager gamers queuing to have a turn at playing MotorStorm.

However, a trip across the floor to the audio visual department revealed a plethora of shoppers looking at 46 inch and 52 inch flat panel TVs. Many of these were connected to PS3 consoles, some of which were playing Blu-ray movies and others PS3 games. The number of gamers sitting cross-legged on the floor playing MotorStorm in front of a big screen HD TV explained why there were no gamers in the games section of the store.

"We are finding that customers are purchasing the PS3 console for a variety of uses, both as a games console as well as a blue ray player. We have noticed an increase in customer interest around large panel screen televisions to support the PS3, providing PS3 users with a higher quality picture," said the Myer spokesperson.

Europe, like Australia, is a market where Blu-ray is fast becoming the high definition video format of choice. With the still chronic shortage of PS3 games, Blu-ray is a large factor in driving PS3 sales, despite the high price tag. Right now, gamers are holding off on buying PS3 consoles as much for the lack of choice of games as the price. Bundling in games may bring a few more gamers to the table but dropping the price will bring in both gamers and Blu-ray players buyers.

The message to Sony from markets outside the US: "Show us the money not bundled games."