Rumors have been circulating for some time now regarding a potential reduction to the PS3’s price tag.
Industry analysts and arm chair commentators alike have been iterating for some time now that if Sony wants to see a rapid growth to the PS3’s installed user base, the company needs to reduce the console prices significantly.
Sony however has remained adamant that they will not be reducing the price of the PS3 anytime soon. The electronics giant insists that its primary current objective with regards to the console is profitability.
The most recent call for the console’s reduction comes from two of Sony’s most important developers, namely EA Sports and Media Molecule.
Peter Moore of EA Sports and Alex Evans from Media Molecule have both publically announced their feelings that the PS3’s price needs to come down so that the installed user base can grow. Obviously the larger the PS3’s user base becomes, the more games these developers can sell so it is no surprise that they are making the appeal.
Moore even went as far as to say that he believes that despite what Sony is saying now, they will reduce the PS3’s price soon.
Sony maintains that they are happy with the PS3’s sales. After all, the console is not selling as badly as many would have us believe, and in 2008 the PS3 sold 10.77 million consoles, coming in surprisingly close behind Microsoft who sold 10.8 million consoles.
However, Sony is still sitting with around 9 million less total console sales than MS, making the Xbox 360 a far more appealing development platform than the PS3. Many analysts are arguing that if Sony wants to hold on to the developers it has, it needs to work towards catching up with the Xbox 360 in terms of its installed user base.
18 months ago, Sony was losing around $290 on every PS3 sold. Multiply $290 by 10million, and you begin to get a vague idea of how much Sony has lost on the PS3. Of course the company does make decent profits on software sales, but these are not enough to pull the console out of the red.
The company has just recently managed to get the production cost of the PS3 down to just $50 above retail, meaning that each console is only costing Sony around $50. By this logic, Sony does have some room to reduce the console’s price.
However, Sony is currently in the process of implementing a worldwide cost cutting plan, which includes the closing of a number of manufacturing plants. This makes a price cut unlikely.
Despite all the evidence to the contrary, and Sony remaining adamant that the PS3 will not see a price reduction, many onlookers are predicting a price cut of between $50 and $100 within the next few months.
If this happens then PS3 sales will surely skyrocket, which would undoubtedly lead to Microsoft reducing the price of the Xbox 360.
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