Support NeoGAF

[travisbickle]

So only home owners can afford PS3. :lol Brilliant. What a shame for everyone who rents (like me) or is on a lower income. At least in December it could've been a nice Christmas present for rich kids. It's gonna be an uphill struggle in March.

Nah, he said a reason why it won't sell in Britain is because of rising housing rates. He could've just said it won't sell because it's expensive, but he decided to pick an area of society that are considered affluent, property owners, and make it seem like it's too expensive for someone that has a house and mortgage, "doom and gloom".

 

[MrSardonic]

£400 shouldn't be considered too high if you have either a mortgage, or are considering buying a house.

Ok I get the issue you were trying to call someone out on, but it actually affects many other people too, including those that rent or first-time buyers (increasingly young)

1. Videogame systems have not traditionally been sold at prices "not too high" for home owners!

2. In the UK, the cost of living is so high that many people in their early 20s spend close to 50% of their total income on the bare essentials alone (housing costs, transport costs, phone bill) and many with families are also short of disposable income. For these people, spending ~£500 (PS3 + game) on entertainment hardware is almost out of the question unless gaming is your main hobby.

3. School children, students, postgraduates - a sizable group of active gamers - are not going to be regularly dropping ~£500 of their pocket money or student loans on a gaming system. Not to mention that university leavers typically have £12,000+ in debts.

4. Plenty of people with a house/mortgage are not going to be prepared to part with £425 for a piece of gaming/entertainment hardware anyway. It's an issue of value. Spending £500 on a kitchen appliance is better value than £500 on gaming/movies.

I'm sure the PS3 will sell relatively well, the PSP did despite its high price in the UK, but the price is just too high for significant pentration. The UK is also heading into a time of increasing inflation, increasing interest rates (making mortgages a larger drain on income), and increasing debts. For a lot of people in this country, £500 is a sizable chunk of their disposal income budget each year

 

[Haunted]

Nah, he said a reason why it won't sell in Britain is because of rising housing rates. He could've just said it won't sell because it's expensive, but he decided to pick an area of society that are considered affluent, property owners, and make it seem like it's too expensive for someone that has a house and mortgage, "doom and gloom".

Now that's just ****ing paranoid, honestly.

 

[Pug]

The import duties on electronics are no more or less than many other items. And the duties are nowhere the differential in prices when compared to the states.

 

[Luckett_X]

Jesus, I only referenced mortgages and stuff because they've been going utterly mental recently. I wasn't specifically targeting home owners and mortgagers yelling "WHAT ARE YOU DOING EVEN THINKING OF BUYING A PS3 MAN!". I'm just saying that right now, in this segment of the year you aint gonna get many people suddenly dropping £500 on a system and game.

 

[Mama Smurf]

There are huge costs associated with selling anything like videogames/music/film/etc that have been slapped on by the Government.

Its like cigarette tax or alcohol tax!

The Government taxes anything - and usually, those costs are passed onto the consumer!

I'm pretty sure the import duties on consoles stopped in 2004. And even when it was around, it was 2.2%, which doesn't make up a $91 difference.

 

[travisbickle]

Now that's just ****ing paranoid, honestly.

Looking at it, it probably is. I've got no problem with spending that amount of money on it, even though I won't, I'll get my PS3 at Christmas when I've got time to play it.

People in Britain spend their money on crap, spend £100s on nights out, £1000s on home luxuries (TVs, hot tubs, home f'in jacuzzis), £10000s on cars they can't afford that they buy on credit, Britain is in massive Credit Card debt............based on the society I live in, I think a £400 luxury item will sell like hot cakes, on credit obviously.

 

[iapetus]

What other consumer electronic devices in the UK retail for GBP 425?

For £425? Well, I've done some searching at or around that level at Dixons, one of the large high-street electronics chains.

£399 will get you a Mac Mini.

£426 (so close) gets you a 23" LCD HD-Ready TV made by Philips.

£429 (or £419 in the sales) will get you an Olympus digital SLR camera.

£429 will also get you a PC (3GHz Pentium 4 processor, 1GB RAM, 80GB hard drive, 17" LCD monitor)

(don't buy PCs from Dixons)

£460 is good for a pair of 80GB video iPods...

£469 nets you a Panasonic DVD recorder with surround sound speakers

£500 will get you a Technics DVD mini hi-fi system

And way out of our price range, £650 will get you a Samsung Blu-Ray player...

 

[Google]

The import duties on electronics are no more or less than many other items. And the duties are nowhere the differential in prices when compared to the states.

Pug,

I dont believe its import tax, I think its something to do with the tax applied to all consumer electronics - thus why Sony pushed so hard to get the PS2 (and PS3) labelled as a computer.

Although, perhaps im very wrong, and spouting a whole heap of Bullshit!

 

[iapetus]

I dont believe its import tax, I think its something to do with the tax applied to all consumer electronics - thus why Sony pushed so hard to get the PS2 (and PS3) labelled as a computer.

Although, perhaps im very wrong, and spouting a whole heap of Bullshit!

You are. That tax was an import duty, but it was decreasing year-on-year, and although it did impact the PS2 early in its life it had disappeared completely well before the launch of the PS3.

 

[plagiarize]

Eh?

Im English, living in North America...I actually have a take on 'rip-off Britain' and im passing my opinion!

Whats the problem?

uhm, me too, and everytime i buy a video game or console over here in america, i smile at what still seems like bargain prices.

it's all well and good saying 'that's only $690 before tax!' but that doesn't mean that it doesn't cost someone in England 425 pounds to buy a PS3.

while it may be proportionately more expensive compared to the xbox 360 (50% more expensive as is the case in America), the mark up is obviously more, people in the UK and Ireland don't even get the choice of the cheaper 20 gig pack.

 

[kaching]

No. A serious one. I don't live in the UK so I am trying to just get a reference on how much a PS3 costs in comparison to another device. In other words, some might not see that as expensive as the $800+ US dollar figure when they see how it compares to other devices.

There's CE devices that cost as much as or more than the PS3 in the US, expect the same to hold true in the UK as well.

 

[Google]

uhm, me too, and everytime i buy a video game or console over here in america, i smile at what still seems like bargain prices.

it's all well and good saying 'that's only $690 before tax!' but that doesn't mean that it doesn't cost someone in England 425 pounds to buy a PS3.

while it may be proportionately more expensive compared to the xbox 360 (50% more expensive as is the case in America), the mark up is obviously more, people in the UK and Ireland don't even get the choice of the cheaper 20 gig pack.

Do you work over here?

Because I do, I whince everytime I a PS3/360 game rounds out at $80 - even though, im potentially earning more money than I was back home!

For $80 in Canada, thats like, 2 weeks worth of Groceries...

40 Quid in England is maybe a weeks worth!

And again, this is simply my opinion, as a young, married guy, who has lived and worked in both countries.

I dont for one second defend the price of the PS3, but it does annoy me when "Rip Off Britain" is uttered in threads like these!

 

[iapetus]

There's CE devices that cost as much as or more than the PS3 in the US, expect the same to hold true in the UK as well.

Perhaps a sensible way to look at it is this:

In the UK, PS3 (60GB model only) costs 1.518 times as much as an X360 (non-retard pack).

In the US, PS3 (60GB model) costs 1.5 times as much as an X360 (non-retard pack).

So the PS3 is slightly more expensive compared to the competition in the UK than it is in the US. Keep the ratio the same and the PS3 should cost £420. I think I can live with a £5 markup.

 

[Google]

I think I can live with a £5 markup.

You're one of those high flyers, eh?

 

[iapetus]

You're one of those high flyers, eh?

No, but now that I've got Sky I can reduce my budget for buying really bad movies on DVD, which should save me £5 eventually.

 

[Google]

No, but now that I've got Sky I can reduce my budget for buying really bad movies on DVD, which should save me £5 eventually.

Sky Movies Plus 3 is my favourite channel, ever!

 

[zallaaa]

Sony = how to alienate the customer...

 

[DSN2K]

Sony of Europe can go **** themselves if they think I'm paying that price.

 

[DenogginizerOS]

Perhaps a sensible way to look at it is this:

In the UK, PS3 (60GB model only) costs 1.518 times as much as an X360 (non-retard pack).

In the US, PS3 (60GB model) costs 1.5 times as much as an X360 (non-retard pack).

So the PS3 is slightly more expensive compared to the competition in the UK than it is in the US. Keep the ratio the same and the PS3 should cost £420. I think I can live with a £5 markup.

Thank you.

 

[DCharlie]

So the PS3 is slightly more expensive compared to the competition in the UK than it is in the US.

huh?

Wii = 170 GBP
X360 = 279/229 GBP
PS3 = 425 GBP

... isn't it much much worse in the UK?

I'm also hearing that you can pick up X360's for way less than the retail price too.


OH YEAH, i should learn how to read!
AS a UKer though - i'm more used to the value of the GBP - and 425 quid really is a lot of friggen money.

 

[Mau ®]

Still not anal rape that is happing in Mexico which is about $1300 USD for the 60GB.

 

[Ceb]

I'm also hearing that you can pick up X360's for way less than the retail price too.

Yep, ~€300 for the Premium, which is a great price and really something of a magic price point. Not as good as sub-200 of course, but I see a lot of people picking up a 360 this spring.

 

[mrklaw]

the £425 is an estimate based on a conversion from the only official European info we have, which is the 599/699 euro price. Obviously £399 would be a slightly less painful price, and I'm sure Sony will be pressuring UK retailers into doing something, but with relatively low margins on hardware the best they can hope for is a bundle (£499 with 2 games?)


I do think its a shame there is no 20GB version coming out. Much better direct comparison with the premium 360, and significantly cheaper too. I think Sony has missed a trick and I hope it doesn't bite them in the arse.

 

[mrklaw]

Yes, indeed.

And the 'tax' is 17.5%!

Along with the associated costs of selling within the UK, as well as the issues with selling consumer electronics in the English marketplace, I have no clue why those living in England are getting pissed!

the tax in some areas of the US is pretty high too if you combine federal and local sales taxes. New york is between 8-9%

course, nothing like the crazy EU, but then we're all a bunch of left-wing socialist bastards with governments that like to think they know how to spend our money better than we do - so thats ok then.

 

[dalyr95]

I don't see why people are making the point of a games console being an impulse buy, they are not. Games are an impulse buy, but the console is a means to play it. I view a console like a TV/ MP3/ DVD player as a one off expense to experience content, content that is at impulse buy prices.

Even the 360 is not loose change and the Wii was more expensive than I and my friends had hoped.

 

[FFChris]

People in Britain spend their money on crap, spend £100s on nights out, £1000s on home luxuries (TVs, hot tubs, home f'in jacuzzis), £10000s on cars they can't afford that they buy on credit, Britain is in massive Credit Card debt............based on the society I live in, I think a £400 luxury item will sell like hot cakes, on credit obviously.

Where do you live, Surrey?!

I know down south their earning/spending is a lot more than here up north. But I nearly wept when I spent £300 on my 360, I could never imagine spending much more than than on any luxury item!

£425 is a huge amount of money. Considering they are marketing to mainly 20 year olds is it? I can't imagine anyone without a very good income buying one of those.

Kids getting a £425 games console for birthday or christmas? Not any kids I know.

 

[FFChris]

AS a UKer though - i'm more used to the value of the GBP - and 425 quid really is a lot of friggen money.

Yea...that's what I was getting at.

 

[norinrad21]

Some rich people on here

 

[JB1981]

You're one of the saddest apologists I've ever seen. Ever.

 

[speculawyer]

Apparenly Sony wants to kill the PS3.

Seriously . . . WTF? Clearly price is an issue . . . so don't make the problem even worse!

 

[speculawyer]

AS a UKer though - i'm more used to the value of the GBP - and 425 quid really is a lot of friggen money.

You are a UKer living in Japan?

 

[speculawyer]

For £425? Well, I've done some searching at or around that level at Dixons, one of the large high-street electronics chains.

£429 will also get you a PC (3GHz Pentium 4 processor, 1GB RAM, 80GB hard drive, 17" LCD monitor)

That is the killer one. The whole point of consoles is that they are cheap up-front with a 'console tax' on each game that subsidizes the initial cheap console purchase.

Why buy a console when you can buy a full-fledge PC for the same price and play games on that PC that cost 1/3 less than the console counter-parts?

Sony seems to have truly forgotten what console gaming is all about. Or maybe they haven't, they just made a strategic decision . . . Sony has sacrificed the PS3 on the altar of Blu-Ray. They are trying to boot-strap Blu-Ray using the strong playstation brand.

Maybe it will work out for them . . . the PS3 trojan horse may cause Sony to win the HD format war for discs. And one cannot under-estimate how important that is. HD-DVD & Blu-Ray represent the last physical video format that we may see for 50 years. The change from NTSC to ATSC too around 50 years. So winning the HD format war may be very important. But the wild-card is digital distribution . . . will HD PVRs and HD downloads marginalize the physical HD disc format.

 

[Ceb]

Why buy a console when you can buy a full-fledge PC for the same price and play games on that PC that cost 1/3 less than the console counter-parts?

Good luck getting a good graphics card with that computer. Or the ability to play *gasp* PS3 games.

 

[DenogginizerOS]

That is the killer one.

Not really. You can buy a computer at Best Buy for $500-$600 easily, but you likely won't be running anything worth a damn on it. I think the price difference illustrates to me how much the British pound is worth much more than the US dollar more than anything else. Why people in the UK have to pay so much is a bit of a mystery to me, but as someone has already pointed out, the PS3 is proportionately more expensive than the X360 in the UK as it is in the US. The fact that the UK launch will likely see more games at launch compared to the US leads me to believe that the PS fans will buy it and it will have a a successful launch. The UK is Sonyland, correct?

 

[Gek54]

PS3 comes with a monitor?

 

[GhaleonEB]

Well this is more of an appliance, but still

Zanussi ZCG7551XN cooker

Free Standing 55cm All Gas Cooker c/w 4 Burner Gas Hob *Please Note This Model Now Has Black Control Knobs* in Stainless Steel.

£419


Which leaves you still room for


Boots Omega Oils 3, 6 and 9

£5.99

*wipes off screen*

:lol

 

[LiveFromKyoto]

Good luck getting a good graphics card with that computer. Or the ability to play *gasp* PS3 games.

Good point, you need a 360 for that.

Spoiler

Kidding!

Spoiler

But only sort of.

 

[ChrisD84]

I sure wish the 20GB version was coming out, £425 is too much to stomach on one console

Agreed.

 

[slider]

I sure wish the 20GB version was coming out, £425 is too much to stomach on one console

It probably will. Just not at the launch where the 60gig versions will still shift at that price!

 

[Dazzyman]

PAL = dirty pal dont buy one :lol

Gave up buying domestic stuff here in the UK a long long time ago and have done my importing for 14yrs. I got a JPN PS3 on release weekend with 2 games cheaper than PS3 price here and it had to fly half way around the world for postage (yea ok it was only 20gig but prices are sky high on release). Unfortunetly here in the UK we get ripped off because of VAT (17.5% tax) and then as a single bloke; you get 1/3 wages taken off in tax and national insurance (round about) as well. Average house price is currently £170k upwards (thats conservative) and the cost of mortgages has gone up so bad you can now get a mortage for 5times your annual wage.

Its just too high to pay for a machine for parents for their kids when you can get a Wii/360 for half that. Where still quite far behind regarding HD so stuff like Blueray and HDDVD isnt a mass market to compete (and of course when you have to pay 3-3.5k for a Sony X 46" that doesnt help either).

We have to bend over and take it from the EEC though who wont stand up to the likes of Sony and stop monopolisation, where not legally allowed to import from a vendor for a Sony import machine so hence the stupid price.

It will sell out on launch as it has a Sony badge on it, but I cant see it being the runaway sucess as PS2 and it could take longer than envisioned to compare to 360 sales.

 

[DCharlie]

AS a UKer though - i'm more used to the value of the GBP - and 425 quid really is a lot of friggen money.

Yea...that's what I was getting at.

i'm a notherner too - yes, southerners tend to have a much different take on money, but even then 425 quid on a console is still going to be too much.

You are a UKer living in Japan?

i am

 

[Dr_Cogent]

Holy shit.

 

[Mar]

Well this is more of an appliance, but still

Zanussi ZCG7551XN cooker

Free Standing 55cm All Gas Cooker c/w 4 Burner Gas Hob *Please Note This Model Now Has Black Control Knobs* in Stainless Steel.

£419


Which leaves you still room for


Boots Omega Oils 3, 6 and 9

£5.99

Wins.

 

[tehrik-e-insaaf]

as has already been discussed, this is a pretty GOOD price given the circumstances...


Pre-tax price (17.5% VAT excluded) = $691

Now consider:

1. distribution costs are exponentially higher in UK than USA (gas prices are double, pension and truck driver costs are nearly triple, ship & air transportation from china/japan to europe is much more expensive than to california)

2. less retail competition overall leading to overall higher price - there are dozens of big box retailers in the USA driving prices lower as margin is less important than marketshare

3. rent, labor cost, marketing costs, etc. are all much more expensive in the UK than in america

4. the parts for PAL/RGB are produced in less scale than the NTSC parts, hence a seperate line on the assembly will drive up prices for items produced in less scale

5. income demographics in the UK are different from the USA - hence the target market that has enough cash to purchase a PS3 + accessories + games has a median income capable of paying the price of the PS3 (relative to similar buyer in the US)

6. The US DOLLAR IS AT AN ALL-TIME LOW and the UK STERLING IS AT AN ALL TIME HIGH - hence the costs are going to be higher when you convert to another currency

7. Sony has to amortize warranty costs across their userbase and hence repairing/returning products will implicitly drive up the price of each unit

8. Sony has to pay regulatory costs to test the system and ensure compliance with various consumer standards which are much hgiher than the USA

Bottom line I guarantee Sony is making less money for a completed good in the UK than the USA - indirect costs drive up the price in retail

Logic for the win!

 

[speculawyer]

as has already been discussed, this is a pretty GOOD price given the circumstances...
Pre-tax price (17.5% VAT excluded) = $691
Now consider:
1. distribution costs are exponentially higher in UK than USA (gas prices are double, pension and truck driver costs are nearly triple, ship & air transportation from china/japan to europe is much more expensive than to california)
2. less retail competition overall leading to overall higher price - there are dozens of big box retailers in the USA driving prices lower as margin is less important than marketshare
3. rent, labor cost, marketing costs, etc. are all much more expensive in the UK than in america
4. the parts for PAL/RGB are produced in less scale than the NTSC parts, hence a seperate line on the assembly will drive up prices for items produced in less scale
5. income demographics in the UK are different from the USA - hence the target market that has enough cash to purchase a PS3 + accessories + games has a median income capable of paying the price of the PS3 (relative to similar buyer in the US)
6. The US DOLLAR IS AT AN ALL-TIME LOW and the UK STERLING IS AT AN ALL TIME HIGH - hence the costs are going to be higher when you convert to another currency
7. Sony has to amortize warranty costs across their userbase and hence repairing/returning products will implicitly drive up the price of each unit
8. Sony has to pay regulatory costs to test the system and ensure compliance with various consumer standards which are much hgiher than the USA
Bottom line I guarantee Sony is making less money for a completed good in the UK than the USA - indirect costs drive up the price in retail
Logic for the win!

Nice list . . . now explain how the xbox 360 & Wii seem to be immune to all those factors.
Logic strikes back!

 

[TheDrowningMan]

£425 PS3 is too expensive, and unless Sony drop the price by, say, £130 very, very quickly it will fail to become a truly mass-market console.

Still, even at this price I think Sony will get the slightly above Saturn level sales that would obviously please them this gen.

 

[tehrik-e-insaaf]

Nice list . . . now explain how the xbox 360 & Wii seem to be immune to all those factors.

Wii = 170 GBP

pre-tax price = $277, which makes it a $27 difference from the US. Nintendo also doesn't use air-shipping and spends relatively meager amounts on marketing. Is Wii Sports a pack-in for the UK?

I also believe Nintendo has more room for margin cuts in the UK because they have cheaper technology overall and are aggressively seeking marketshare. Sony doesn't have the same situation.

Nintendo is also targeting a certain demographic of lapsed gamer/non-gamer, hence capturing their attention with lower pricing is actually very important and they have to put up with the margin cut.

X360 = 279/229 GBP

pre-tax price for the premium = $456, which makes it a $56 difference from the US (probably more since MSFT has been discounting so heavily through various promotions like $100 Wal-Mart gift card promo in the USA). MSFT has room for margin cuts for marketshare since they have achieved process changes in the past year. Demand now is also probably far less than what PS3's initial run is going to be. Moreover, XBox is shipped from Mexico, not China which is more expensive. Xbox is also shipped via ships, not via air which a significant chunk of the PS3 inventory will arrive by.


Ignoring all these issues, I would say if Sony is charging $35 extra dollars versus the relative pricing of the 360, that would be chalked up to demand analysis - based on the stregth of the UK economy and its target demographic, and the supply situations at launch that would guarantee a sell-out

Bottom-line, Sony knows the initial run of units will be sold out based on their demand analysis, and they are recouping additional retail costs by pricing their product in a premium way.

Simple solution, if you don't like it wait for a price drop or go buy the competitor's product. Sony will suffer and they will improve their supply chain and improve the pricing of their product.

 

[tehrik-e-insaaf]

Logic strikes back!

Give me a chance to reply :lol

I am BTW a Nintendo fan who doesn't own a Wii (nor will I buy one until the price comes down and Mario Galaxy is out) that bought a discounted 360 (from Overstock.com), and is likely to skip a PS3 until the end of this generation because of my lack of interest in the games outside 1-2 exclusives like MGS4. I bought a GC last-gen and while I enjoyed the PS2, I thought the hardware was basically trash. So please don't group me with SDF ;-)

 

[speculawyer]

Simple solution, if you don't like it wait for a price drop or go buy the competitor's product. Sony will suffer and they will improve their supply chain and improve the pricing of their product.

I'm in the USA and I already own one. I just want more people to own them so developers will continue to support it.

I agree that there will be buyers at that high price . . . but not very many. And if they have to cut the price relatively quickly, that will alienate the early buyers and give the image of a struggling machine that can't find buyers. I think Sony is making a big mistake by having such a high price . . . and worse, the lack of the 20Gb model.

BTW, all those airfreight costs are Sony's problem. If it is going to add so much to the cost, they should delay by a month and ship by land/sea.