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http://games.yahoo.com/blogs/plugge...-cutting-ps3-prices-astounding-165852483.html

Sony’s explanation for not cutting PS3 prices is astounding

Sony, it seems, thinks you're not a big fan of price cuts. Or at the very least, they think you're tired of trying to figure out where the real bargains are.

With this week's unveiling of the Super Slim PlayStation 3, pretty much everyone thought the company would slash prices on the current, uh, "fat" model to help clear space on shelves for the new hardware.

Everyone, that is, except Sony.

The electronics giant says it doesn't plan to make any pricing changes -- even to the now technologically inferior 160 GB model -- since it believes customers are tired of having to choose between differently priced systems.

"There's no price drop formally, but the thing that's been happening in the market over the last year or so is that there's been so many retail price promotions, and so many different gift card offers and all those things, being done by all of us (Microsoft, Nintendo and Sony), that we've heard from our consumer, 'Enough with all these weird price moves. What we really want is content and games and value,'" said John Koller, Sony Computer Entertainment America's VP of marketing, handhelds and home consoles, in an interview with Engadget.

Even in an industry where PR spin can put a nice shine on the lousiest news, a company arguing that customers don't want lower prices is hard to swallow.

It's unlikely that people who already own a PS3 are going to trade it in for a slimmer model with a slightly larger hard drive this late in the cycle. Sony's aiming for late adopters here -- and that's a crowd that makes its decisions purely on price.

Still, there could be a couple of other unspoken factors at work here. It's no secret that Sony is in a financial crisis these days, so there could be orders coming from up high that prevent the PlayStation division from making any formal cuts.

"They want to maintain the brand value and the equity in the Sony name," says P.J. McNealy of DWS Research. "They want to make sure Sony's not associated with a cheap box. So putting in more value also lets them to keep the price up and allows them to charge $60 for AAA titles."

Unfortunately, it also means they've missed out on a great opportunity to severely undercut the newly announced $300 low-end price of the Wii U. Instead, Sony will offer four different PS3 models to consumers: the old 160 GB version for $250, a Super Slim 250 GB model for $270, and, crazy as it sounds, a 320 GB old model and a new 500 GB Super Slim model priced identically at $300. Because you hate price drops.

That might keep the perceived brand value high, but it makes little sense for consumers.

"The reality is Microsoft, Sony and Nintendo have two choices now. They can cut prices on current models or they can extend the life cycles of the current machines by adding more technology and bundling games with them. Sony is clearly in the second camp."

Maybe, but it probably could have found a better way of explaining that.

 

[Loudninja]

We have like 2 topics on the same subject btw.

 

[kuroshiki]

The reason why they need to fire all marketing people. Inject fresh blood with people who know how to market.

 

[Zombie James]

Sony this generation: Damned if they lose money, damned if they try to make any.

 

[chertipros]

John Koller has been on a roll lately

 

[thuway]

We've already had threads on this topic. Sigh...

 

[Hydrogen Bluebird]

This is not good.

 

[inky]

I agree. Consumers hate saving money.

 

[metalslimer]

We all know the likely reason is they are developing the PS4 while Vita is flopping and not brining them in money, but no PR person could say that. This just proves how terrible Sony marketing is though because any sane PR person would have talked about the value the current bundle had instead of saying price drops confuse people. This usually doesn't apply to most companies but Sony marketing is easily one of their weakest links and I would fire all of them because outside of Kevin Butler they've been miss miss miss miss all gen

 

[Tenki]

So consumers don't like price drops? :lol

 

[Shiloa]

I don't see what's wrong with what he said.

While Sony haven't officially cut price, retailers and competition in general can push the prices down for consumers or increase value by creating bundles and stuff.

This ties in with the lack of RRP for the slim in UK.

 

[yon61]

Translation: we've lost so much money on the PS3 that we're desperate to regain some of those losses before we have to lose even more money on PS4.

 

[Synth_floyd]

Business is like politics. You gotta lie for the job.

 

[Draconian]

I don't see what's wrong with what he said.

Yep, you're right. Enough with these weird price moves, Nintendo and Microsoft!

 

[Loudninja]

John Koller has been on a roll lately

Its all the same interview.

 

[kuroshiki]

Business is like politics. You gotta lie for the job.

Yeah, I agree, but it's how you 'spin' it makes you a good politic from bad politic.

Sony doesn't know how to make a good spin.

 

[MikeE21286]

The real answer is they want to see how a new version at similar price point sells compared to the WiiU

 

[Baconsammy]

I'm willing to bet that consumers prefer price drops combined with store-based deals. Nice try, Sony, but no one is buying your stupid excuses.

 

[GeneralManager]

I know its confusing. One day its $300 then later its $250. What does that mean? Stop Sony; I can't handle it anymore.

 

[metalslimer]

The real answer is they want to see how a new version at similar price point sells compared to the WiiU

Or the yen dollar disparity makes dropping the price a no go.

 

[Chris1964]

The real answer is they want to see how a new version at similar price point sells compared to the WiiU

The real answer is they can't afford losing more money

 

[ponpo]

The beginning sounds like people justifying Xbox Live subscription pricing. "Who buys it at the normal price anyway??"

 

[Supermanisdead]

I know its confusing. One day its $300 then later its $250. What does that mean? Stop Sony; I can't handle it anymore.

I was so ready to drop 300 but then when I saw in the store that it was 250 I panicked and shit my pants. *sobs*

 

[Mama Robotnik]

Enough with all these weird price moves.

This is legendary. Customers don't want price drops, says Sony, because price drops are weird.

Amazing. He's just told his customers that they are imbeciles as they cannot understand that prices can go down sometimes. Amazing.

If there was a Sony Quote Hall of Fame, this would be up there with "get a second job" and Phil Harrison's rant about how the DS is for children and Pokemon only.

 

[pants]

'Enough with all these weird price moves. What we really want is content and games and value'

I dunno guys, I can hardly even stomach the games and content you try and pack in. Give me the base unit cheap and I'll go out and fill your coffers buying shit I actually want.

 

[Jinfash]

"Because Vita."

 

[kadotsu]

Try putting that in a 30 sec ad.

EDIT: Oh, I forgot. Sony don't advertise.

 

[EatinOlives]

I was so ready to drop 300 but then when I saw in the store that it was 250 I panicked and shit my pants. *sobs*

This is why I go out wearing a diaper. So many businesses doing crazy moves like this and bowels empty uncontrollably.

 

[SolarPowered]

Yeah, I agree, but it's how you 'spin' it makes you a good politic from bad politic.

Sony doesn't know how to make a good spin.

It's not just that. Sony can't spin some of the shit they do.

$599 US dollars
Proprietary memory cards in this day and age
Raising the price on a console after six years on the market
Producing a console that lost them hundreds of dollars per SKU for years

How do you spin this? My head would literally fly off into space if I were tasked with justifying some of this stuff.

 

[leatherhat]

Here's the real reason

"The console will sell well enough without one, and we need the money badly."

Its really that simple.

 

[Metalmurphy]

Can't wait for all the "too little too late" threads once they do drop the price.

 

[genjiZERO]

Hopefully, the person on charge of this will be fired before the holidays and there'll be a proper price drop.

 

[Mysterious Stranger]

The Consumer is always right!

:X

 

[HP_Wuvcraft]

Nothing is ever going to top "our fans will just have to get second jobs".

 

[pants]

Hopefully, the person on charge of this will be fired before the holidays and there'll be a proper price drop.

 

[Mama Robotnik]

Nothing is ever going to top "our fans will just have to get second jobs".

There's always Sony gold to find. The gems are collected here. Never forget Ken saying "It’s probably too cheap…" when asked about the five-hundred-and-ninety-nine dollars price point, and of course Kaz Hirai's nonsense about how the PS3 being difficult to program for is a good thing:

"We don't provide the 'easy to program for' console that [developers] want, because 'easy to program for' means that anybody will be able to take advantage of pretty much what the hardware can do, so then the question is what do you do for the rest of the nine-and-a-half years?"

And now this, its like they've learned nothing. They gaffe more than most politicians.

 

[Xav]

Microsoft's explanation for why the Xbox 360 used to ring of death so much (Global warming) is still more astounding.

 

[James Sawyer Ford]

I really dislike John Koller. He's such a transparent bullshit artist.

You can't drop the price because you can't afford to. No use trying to spin this shit

 

[pramath]

Can't wait for all the "too little too late" threads once they do drop the price.

It's certainly a possibility that we could still see a price drop soon and that this could be merely posturing on their end. The statement is funny regardless.

 

[Kazuma Kiryu]

I dunno guys, I can hardly even stomach the games and content you try and pack in. Give me the base unit cheap and I'll go out and fill your coffers buying shit I actually want.

they will, as soon as they get rid of the old slim stock.

 

[hardcastlemccormick]

I want them to drop the price. I've been waiting for the sub-$200 mark for a while. They'll probably let these bundles hit that point on Black Friday and then drop the price mid 2013.

It took Sony a long time to drop the price of the PS2, but hey, when you're dominating, you might as well.

 

[Puppet Shadow]

Here's the real reason

"The console will sell well enough without one, and we need the money badly."

Its really that simple.

Same reason why they aren't lowering the price of the Vita, am I right?

 

[LiveFromKyoto]

"The market doesn't want to be confused by all these price moves, it just wants games. Here, have a completely baffling array of hardware packages."

I love my PS3, but this is a pretty dumb move by Sony. I get that they're haemorrhaging money and don't want to give up the margin or take a loss on hardware, and they probably looked at Wii U coming in without a lot of horsepower as an opportunity to keep prices up and coast on their superior library + blu ray playback.

But get real - the hardware only exists as a way to make people buy your software. Get as much of it out there as possible. The book has been written on this one - get under $200, hit the mass market. Get under $100, hit the impulse purchase & mega mass market.

I'm guessing they figure the losses on hardware wouldn't be offset by the lower tie ratio from late adopters, but I find it hard to believe.

 

[DR2K]

These price drop and gift cards are confusing! Why can't I just spend more money?

 

[Ocaso]

I want them to drop the price. I've been waiting for the sub-$200 mark for a while.

They'll probably let these bundles hit that point on Black Friday and then drop the price mid 2013.

It appears as though they think a price cut right now would do little to stem the tide of enthusiasm for the WiiU, and thus they chose to ride out this holiday season without it. Frankly it is astounding, but provided MS don't drop the price either, it doesn't mean much either way.

That said, topic has been discussed.

 

[jimi_dini]

This is not good.

 

[leatherhat]

Same reason why they aren't lowering the price of the Vita, am I right?

The difference being that ps3 sells well and vita is on life support

 

[pantsmith]

I still stand by my theory that they know the price is going to be dropped by retailers around the holidays, and so they're making whatever they can now by shipping full price before a formal price cut in the spring. Or at least thats what I keep telling myself makes sense.

The super slim probably saves them more money than it does the actual consumer :/

 

[maxxpower]

Maybe they don't want poor people buying their system.

 

[Zephyrus]

SCEA is... wierd.

They must live in Lalaland with unicorns and casinos with hookers and blackjack