To compete with MS and Nintendo, Sony announced plans to cut the price of the 80-GB PlayStation 3 to $499. At the same time, it also introduces a new 40-GB model. According to this company, the new plans will benefit consumers a lot since consumers can have less expensive products containing the same core technological components.
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"We're pleased to offer the consumer a lower price point without sacrificing the core technology components that make PS3 the most advanced high-definition entertainment system available," Jack Tretton, President and CEO of Sony Computer Entertainment America, said in a statement. "Every PS3 comes with a Blu-ray drive, HDMI output, an integrated Wi-Fi connection, Cell Broadband Engine, and a built-in hard drive."
console Sweet Spot
Sony's price cut was long overdue, according to Mike Goodman, a video game analyst at Yankee Group. Goodman pointed to three ingredients to a successful console -- price, a robust game library, and must-have titles. Sony just recently expanded its line of games, he said, but until this announcement, the PS3 was still priced too high.
"We've known for a long time that the sweet spot for the console is $299," Goodman said. "Sony just didn't believe it. They thought they knew better than everyone else and that the sweet spot was whatever they said it was. Guess what? They were wrong." The price cut puts Sony closer to the sweet spot in time for the holidays.
Some gamers might not appreciate the fact that the new 40-GB PS3, unlike the 80-GB PS3, will no longer play PlayStation 2 titles. Sony said it made the decision to eliminate the PS2 technology in the 40-GB PS3 because there is now a more extensive library of PS3 titles.
The company promised attractive retail pricing on games for the holiday season, including "Ratchet & Clank Future: Tools of Destruction," "The Eye of Judgment," "Uncharted: Drake's Fortune," and "Heavenly Sword." That might not be enough to drives sales, though, Goodman said.
Smash-Hit Titles?
Nintendo's Wii boasts must-have titles Zelda and Mario Brothers, Goodman said, and that's driving the marketplace for Nintendo. Microsoft, of course, has blockbuster smash hit Halo 3, BioShock, and more on the way. Goodman said Sony's first must-have title is coming next year with the next installment of "Metal Gear Solid."
"Ultimately it's the software that drives the console," Goodman said. "Particularly as we are moving into its second year of existence, it's all about the software. You are moving beyond the hardcore market, and mass-market consumers are more price conscious."
Mass-market consumers, said Goodman, are driven by what they can play on the console and particularly what is exclusive to the console. "They know there is only one place you can play Halo 3 -- the Xbox 360."
