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[AranhaHunter]

March 16 (Bloomberg) -- Sony Corp. is under pressure from video-game publishers to cut the price of the PlayStation 3 console or risk seeing more development funds shift to Nintendo Co.’s Wii.

Sony, which has resisted calls for lower prices, is likely to shave $50 to $100 off the PS3 this month or next, said Mike Hickey, an analyst with Janco Partners Inc. in Greenwood Village, Colorado. Starting at $399.99, the PS3 is $200 more than the lowest-priced Xbox 360 from Microsoft Corp. and $150 more than the market-leading Wii.

Three years into the latest generation of game consoles, Sony is stuck in third place, data from the manufacturers show. The Tokyo-based company, once the dominant player, has half the worldwide users of Wii, even though the PS3 has earned praise for its processing power, graphics and Blu-ray movie player. U.S. sales of the PS3 have declined for three straight months.

“If they can’t meaningfully increase their install base, then you will likely see a capital reallocation,” Hickey said.

In 2008, Activision Blizzard Inc., the world’s largest game company, generated 32 percent of its console revenue from Wii titles. That compared with 19 percent for PS3, according to Activision.

Electronic Arts Inc. is releasing some titles solely for Wii as part of a push to stem two years of losses, and showcased games for the Nintendo player at a company event last week.

“You can’t ignore the guy who has half the market,” said Peter Moore, head of sports games at Redwood City, California- based Electronic Arts, maker of the “Madden NFL” series.

‘A Ways to Go’

“Sony obviously still has a ways to go with their pricing,” Moore, a former executive in Microsoft’s Xbox division, said in an interview. Electronic Arts is committed to the PS3 and expects a cut eventually, he said. PS3 games increased to 27 percent of the company’s console sales last quarter, bolstered by a popular soccer title.

Sony has no immediate plan to reduce prices, said Peter Dille, senior vice president of marketing for Sony Computer Entertainment America in Foster City, California.

“Everybody in the development community would love for the PS3 to be free, so they could just sell razor blades,” Dille said in an interview. Sony is concerned with profitability, as well as the installed base, he said.

Sony, the world’s second-largest consumer-electronics maker, is in the middle of a corporate overhaul, cutting 16,000 jobs and closing factories. Chief Executive Officer Howard Stringer took over the main electronics business last month and named Kazuo Hirai, who leads the game unit, to head a new division combining Vaio computers, the Walkman and the PlayStation.

Exclusive Games

Sony is benefiting from exclusive titles for PS3, including the recently released “Killzone 2,” and non-gaming deals like the one announced March 10 to deliver movies and television shows for NBC Universal over the PlayStation 3, Dille said.

Earlier this month, PS3 weekly sales in Japan topped Wii and Xbox ahead of the release of Capcom Co.’s latest “Resident Evil” installment, the Web sites GameSpot and IGN Entertainment reported, citing researcher Media Create.

Not everyone predicts a big shift in spending, because PS3 and Xbox 360 share many titles and costs. Game companies who fail to commit enough money to PS3 risk losing business, said Mark Rein, vice president of Epic Games Inc., the Cary, North Carolina-based maker of “Gears of War.”

“You make very good money on PlayStation 3 if you develop a good game,” Rein said in an interview. “You can very easily take that game to Xbox 360 or PC.”

Seventh Generation

Sony climbed 1.1 percent to close at 1,913 yen on the Tokyo Stock Exchange. It has lost 54 percent in the past year.

The seventh generation of game systems began hitting stores in November 2005 with Microsoft’s Xbox 360. Sony and Kyoto-based Nintendo followed a year later. At the end of December, Sony had sold 21 million PS3s worldwide, compared with Nintendo’s almost 45 million Wii players and Microsoft’s 28 million-plus Xbox 360s, according to the companies.

PS3 sales in the next 12 months are likely to total 14 million, compared with 28 million Wiis and 9.7 million Xbox 360s, according to the Daiwa Institute of Research, a Tokyo-based researcher and consultant.

Price cuts have an immediate impact.

Sony reduced the PS3 price from $499.99 in October 2007 and sales more than doubled in the next month. In September, Redmond, Washington-based Microsoft released its lowest-priced Xbox 360, at $199.99. The company almost doubled Sony’s U.S. shipments from October to January after trailing PS3 in the prior three months, NPD data show.

Two Directions

“Anytime a console manufacturer reduces the price, software publishers benefit,” Yves Guillemot, chief executive officer of Ubisoft Entertainment SA, Europe’s largest video-game maker, said in an e-mail.

Game makers now focus development in two directions: one for the top-selling Wii and the other for Xbox 360, PS3 and personal computers.

Titles for Microsoft and Sony are typically more expensive to produce. Sony posts a loss on each console it makes at the current price, according to researcher iSuppli Corp.

“The publishers need the PS3 install base to grow in order for most of these games to be profitable,” said Evan Wilson, an analyst at Pacific Crest Securities in Portland, Oregon. “It’s an easy equation for them, but it’s very different from the one that Sony has to take on.”

http://www.bloomberg.com/apps/news?pid=20601087&sid=aiHCQM2xNCmU&refer=home

Price cut incoming?

 

[Trailblazer]

http://www.bloomberg.com/apps/news?pid=20601087&sid=aiHCQM2xNCmU&refer=home

Price cut incoming?

right after the end of Sony's fiscal year.

 

[Tmac]

After all those months I believe Sony in a unit to unit basis has already break even with ps3. A $100 whould do wonders to the ps3 health.

 

[Gadfly]

PS3 sales in the next 12 months are likely to total 14 million, compared with 28 million Wiis and 9.7 million Xbox 360s, according to the Daiwa Institute of Research, a Tokyo-based researcher and consultant.

2009 = The year of PS3

 

[Diatribe1974]

2009 = The year of PS3

It's been the "Year of the PS3" now since it came out. You sure this time? I ask, because every time one year ends and another is about to begin, you always see is "This year will be Sony's year. It's finally coming!"

Yet it doesn't.

 

[max-pain]

E3

 

[Gadfly]

It's been the "Year of the PS3" now since it came out. You sure this time? I ask, because every time one year ends and another is about to begin, you always see is "This year will be Sony's year. It's finally coming!"

Yet it doesn't.

You don't think selling 50% more than 360 is impressive?

 

[timetokill]

Sony Faces Heat From Investors to Maintain Profitability

 

[____]

I predict Sony will cut the price when they're good and ready to.

 

[Rapping Granny]

It's been the "Year of the PS3" now since it came out. You sure this time? I ask, because every time one year ends and another is about to begin, you always see is "This year will be Sony's year. It's finally coming!"

Yet it doesn't.

 

[Atilac]

You don't think selling 50% more than 360 is impressive?

it would be impressive if it actually happened.

 

[akachan ningen]

It's been the "Year of the PS3" now since it came out. You sure this time? I ask, because every time one year ends and another is about to begin, you always see is "This year will be Sony's year. It's finally coming!"

Yet it doesn't.

When they say that, they usually mean the quality of Sony's games. And they're usually right.

 

[AniHawk]

You don't think selling 50% more than 360 is impressive?

Not when it's selling half as much as the market leader.

 

[Gadfly]

it would be impressive if it actually happened.

Are you suggesting "Daiwa Institute of Research, a Tokyo-based researcher and consultant" is pulling these numbers out of thin air?

Next you're going to tell me Kramer and CNBC misled people by painting a rosy picture of the market.

 

[A Twisty Fluken]

I find that threatening the third place platform holder is generally a good way to ensure profitability moving forward for third party publishers. It sounds like a girlfriend threatening to move out.

 

[viciouskillersquirrel]

right after the end of Sony's fiscal year.

I don't believe. I'm thinking bundles etc. but not a price cut. If a price cut does happen, however, it'd be ~$50 in the US.

 

[°°ToMmY°°]

a 50 euro/dollars price cut is a given now, seeing retailers behaviour.

 

[Gadfly]

Not when it's selling half as much as the market leader.

At least it will secure a strong second place for Sony and a more dominant presence than Microsoft in the living room (which they are very concerned about).

 

[Trailblazer]

After all those months I believe Sony in a unit to unit basis has already break even with ps3. A $100 whould do wonders to the ps3 health.

unfortunately a $100 price cut not coming any time soon. I think a $50 price cut will hit in the next few months. Then maybe another $50 price cut for the holidays.

 

[legend166]

I just can't see how they could afford it. The strong yen has completely evaporated any chance they could do it, I think.

 

[viciouskillersquirrel]

I just can't see how they could afford it. The strong yen has completely evaporated any chance they could do it, I think.

This is a very good point. Nintendo have used the strong yen / weak pound as an excuse to raise their prices recently.

 

[El-Suave]

Wow, publishers must have an awful lot of third party PS3 exclusives they'd love to unleash on us, if only it sold better.

The logic that PS3 development especially suffers from the Wii's success is flawed. If they said HD console development might suffer, then they might have had a point.

 

[Jostifer]

I ask, because every time one year ends and another is about to begin, you always see is "This year will be Sony's year. It's finally coming!" Yet it doesn't.

As long as they have their larger number of 1st party studios making games it will always be the year of the *current sony console*. They have had since about 2001 or so I would say yearly the most diverse (and high quality) lineup of games from any publisher with their titles consistently breaking new ground.

 

[legend166]

As long as they have their larger number of 1st party studios making games it will always be the year of the *current sony console*. They have had since about 2001 or so I would say yearly the most diverse (and high quality) lineup of games from any publisher with their titles consistently breaking new ground.

lol

 

[Black-Wind]

This is . . . interesting.

From what I know Sony has already bumped up the price of some of their products in the UK because of the Yen . . . wonder if they can actually do a price drop at this time.

 

[OldJadedGamer]

PS3 sales in the next 12 months are likely to total 14 million, compared with 28 million Wiis and 9.7 million Xbox 360s, according to the Daiwa Institute of Research, a Tokyo-based researcher and consultant.

 

[Mohonky]

Are you suggesting "Daiwa Institute of Research, a Tokyo-based researcher and consultant" is pulling these numbers out of thin air?

Next you're going to tell me Kramer and CNBC misled people by painting a rosy picture of the market.

50% more? Eh? In Japan maybe, certainly not worldwide.

 

[smurfx]

i know 2 people that would buy a ps3 if it was 300 bucks.

 

[mujun]

people trying to make it sound like they are third in a 100 person race not a three person one.

 

[Blablurn]

E3 Hopefully!


....

do it, sony. more people should be able to join the party.

 

[Pureauthor]

Meanwhile, Sony faces heat from stockholders to actually turn some profit from the games division...

 

[MrNyarlathotep]

people trying to make it sound like they are third in a 100 person race not a three person one.

Its more like a timed marathon where the guy in second place started 10 minutes before the other two, and is still only about 10 minutes (maybe 11) in front of the guy in last.

The other guy blazed past those two though and is a good half hour ahead of them both.

 

[Suburban Cowboy]

or risk seeing more development funds shift to Nintendo Co.’s Wii.

Ill call this fucking bluff right here, :lol

 

[titiklabingapat]

It's been the "Year of the PS3" now since it came out. You sure this time? I ask, because every time one year ends and another is about to begin, you always see is "This year will be Sony's year. It's finally coming!"

Yet it doesn't.

We're also entering the later half of the generation as well so it seems too late anyway. Even with some sort of a late resurgence but not quite reaching the top.

 

[DMczaf]

It's pretty damn hilarious that we are now almost 3 years removed from the PS3 launch, and the cheapest SKU is $400.

 

[titiklabingapat]

When they say that, they usually mean the quality of Sony's games. And they're usually right.

I don't think so:

You don't think selling 50% more than 360 is impressive?

 

[GDGF]

Sony may just one day wake up and realise that Nintendo had some of it's most profitable days during the N64 period when their third party releases were less than stellar compared to the Playstation's. They made up for it with strong first party releases, licensing fees on what few games third parties did publish, and a strong handheld system.

Sony has all of the above, so I guess what I'm trying to say is Sony may just one day wake up and realise that they don't need third parties.

 

[Burai]

B-b-b-but PS3 ports don't cost anything!

 

[lowrider007]

It's pretty damn hilarious that we are now almost 3 years removed from the PS3 launch, and the cheapest SKU is $400.

TBH I think when you put it like that it just shows how well Sony (PS3) is doing considering the price point and how it compares to it's competitors, and think about this, the 360 was released on November 22, 2005, the PS3 did even hit NA until November 2006, and then it didn't even reach the EU shores until March 2007, that fucking crazy seriously, I honestly think the PS3 is doing pretty dam well all things considered, if anything I would of expected the 360 to be miles ahead in terms of WW install base but they are not.

 

[mujun]

Its more like a timed marathon where the guy in second place started 10 minutes before the other two, and is still only about 10 minutes (maybe 11) in front of the guy in last.

The other guy blazed past those two though and is a good half hour ahead of them both.

sure, if you are going for accuracy.

isnt the point that sony should if nothing else aim to increase sales (irrespective of what the competition is or isnt doing) and if possible get into either first or second place?

it has great games, its a great system, etc, etc.

it would definitely benefit from a price cut in several ways though.

 

[Puck]

It's pretty damn hilarious that we are now almost 3 years removed from the PS3 launch, and the cheapest SKU is $400.

http://en.wikipedia.org/wiki/Blu-ray_Disc

 

[OldJadedGamer]

It's pretty damn hilarious that we are now almost 3 years removed from the PS3 launch, and the cheapest SKU is $400.

Not only that, after 2 1/2 years it's still $100 more the the PS2 and the PS1 were the day they launched.

 

[Grayman]

Didn't developers threaten this a year or two ago? All the third parties are setup to dev for the PS3 and will continue to until game sales hit near zero.

 

[domokunrox]

TBH I think when you put it like that it just shows how well Sony (PS3) is doing considering the price point and how it compares to it's competitors, and think about this, the 360 was released on November 22, 2005, the PS3 did even hit NA until November 2006, and then it didn't even reach the EU shores until March 2007, that fucking crazy seriously, I honestly think the PS3 is doing pretty dam well all things considered, if anything I would of expected the 360 to be miles ahead in terms of WW install base but they are not.

This.

I fail to understand how anyone can be loud and proud to mock a system that has done incredibly well against their main competitor within the time period.

 

[carnon]

TBH I think when you put it like that it just shows how well Sony (PS3) is doing considering the price point and how it compares to it's competitors, and think about this, the 360 was released on November 22, 2005, the PS3 did even hit NA until November 2006, and then it didn't even reach the EU shores until March 2007, that fucking crazy seriously, I honestly think the PS3 is doing pretty dam well all things considered, if anything I would of expected the 360 to be miles ahead in terms of WW install base but they are not.

Because Sony overdrew their PS brand and credit.

 

[AniHawk]

This.

I fail to understand how anyone can be loud and proud to mock a system that has done incredibly well against their main competitor within the time period.

Because it's the PS3, the successor to the PS2, which was the most successful video game system of all time.

 

[StuBurns]

This.

I fail to understand how anyone can be loud and proud to mock a system that has done incredibly well against their main competitor within the time period.

It's true, month for month since their retrospective launches, the PS3 has sold more worldwide than the 360. At a much higher price point. For some reason people see that as Sony failing and Microsoft doing insanely well.

However, Sony need a price cut to stay competitive, but I don't think publishers are going to drop PS3 support because of it's price. The porting of a 360 game is going to make a profit if it's a decent game. Even if the PS3 version only sells half the 360 version, it still warrants the porting costs with ease. It's Sony decision to set a price on it's console. Publishers shouldn't bully Sony into making a greater loss on consoles.

As for the year of the PS3. I was under the impression it was referring to games not sales?

 

[Kandrick]

TBH I think when you put it like that it just shows how well Sony (PS3) is doing considering the price point and how it compares to it's competitors, and think about this, the 360 was released on November 22, 2005, the PS3 did even hit NA until November 2006, and then it didn't even reach the EU shores until March 2007, that fucking crazy seriously, I honestly think the PS3 is doing pretty dam well all things considered, if anything I would of expected the 360 to be miles ahead in terms of WW install base but they are not.

 

[Suburban Cowboy]

This.

I fail to understand how anyone can be loud and proud to mock a system that has done incredibly well against their main competitor within the time period.

Incredibly well? I think "not terribly" is more apt. Lets save actual praise for when it isn't trailing.

 

[HMC]

Its more like a timed marathon where the guy in second place started 10 minutes before the other two, and is still only about 10 minutes (maybe 11) in front of the guy in last.

The other guy blazed past those two though and is a good half hour ahead of them both.

Unfortunately, that guy in last place is Haile Gebrselassie - a top marathon runner - who was heavily favored, so much so that he decided to sport a three-piece suit made of aluminum foil for the race, and openly mocked the other runners as he warmed up.

"Well, he came in last...but to finish a race in nothing but foil is quite an achievement!" says his loving wife.