PS3 to shine in 2008? Not at US$599 for 80GB

Stan Beer
Saturday, 14 July 2007 05:51

Opinion and Analysis

There's no doubt that 2007 has proven to be a wake up call to Sony. In 2006 the company was busy trying to bring to market the best combination gaming and home entertainment unit money could buy with a price to match. In 2007, Sony can claim lack of games has held back PS3 sales. However, in 2008 there can be no more excuses - if Sony doesn't get its pricing right, then PS3 has lost the games consoles match.

Sony has virtually bet the farm on putting in the most powerful processor on the block and on including a Blu-ray player with its new console. As a result, the PS3 is something more than just a games console. In fact all three of the nextgen consoles are more than just consoles now. They're all Internet connected devices and can all be made to be media servers. PS3 is a bit more, however, in that it's also a Blu-ray HD video player.

That last bit can be viewed as either a boon or a curse for Sony. It's a boon because it's helping Sony win the HD video format war and HD video appears to be a growing market. It's a curse because it has pushed PS3 production costs through the roof and caused delays in bringing the console to market.

Evidence that the games market is ultra sensitive to price is plain to see. Sony just dropped the price of its 60GB PS3 by US$100 ih the US and gamers are once again rushing through the door. However, it is becoming apparent that Sony intends to discontinue the 60GB model and just sell the new 80GB model at the old US$599 price point because 80GB drives are actually more economical to source than 60GB drives.

So if the US$499 PS3 disappears leaving only the higher priced 80GB PS3 in production, Sony will be back to square one - a games console that gamers can't afford. If Sony thinks that bundling Motorstorm with an 80GB console will bring buyers through the door, the company is kidding itself.

The other issue is Europe and the rest of the world, where consumers are being forced to subsidise the loss making prices of consoles in the US and Japan. Sony has arrogantly held back on any announcement regarding a price cut to PS3 in markets like the UK, Germany, France, Scandinavia and Australia, where consumers are being forced to pay the equivalent of US$810 to more than US$1000 for 60GB consoles.

It's a testament to the attraction of the PS3 that more than 50,000 consumers in Australia have so far shelled out more than AUD$1000 to get their hands on a PS3. However, retailers have said that a high percentage of those sales have been purcasers wanting a Blu-ray player.

Sony executives can argue until they're blue in the face that when the games come, so will the buyers. However, a quick trip to Blockbuster will reveal equally tiny shelves devoted to PS3 and Wii games. And as we all know, the Wii consoles are flying out the door faster than you can say "motion sensor".

So what we're back to is price. Most gamers could care less about whether the PS3 has a 60GB or an 80GB drive or Sony's definition of "value for money". What gamers want is a console they can afford. Did you hear that Sony? The PS3 will shine in 2008 if the price is right.