Tuesday, March 31, 2009

What's shiny black and desperately trying to get cheaper?


A price drop for the PS3 is a good thing for everyone, except Sony.

The first reaction I get from that comment is how more PS3s will increase potential game sales. This is true, but also a gamble. If you look at it from Sony's perspective, it is not an easy decision.

The PS3 went on sale with a value bundle version compared with other consoles in order to serve the user a more encompassing solution. There is little doubt this was done very well with blu-ray, built in wireless, included hard drive, battery-less controllers, free online services, etc. With all this great stuff jammed into our shiny little black box, the initial price of production increased.

It took until January of 2009 that the PS3 hardware began to become profitable. This profit is not large by any margin. The PS3 took loses of almost two billion into the fiscal year of 2007. This kind of loss does not make anyone happy, especially the share holders.

So now the question Sony has to ask is, "should we sacrifice the little profitability we have now for the gamble of a larger install base for game software sales to pick up the slack?" I do not gamble, and I'm pretty sure Sony's executives are not going to take this kind of gamble against their jobs in this economy. For a company, and job security, it just makes sense to hold onto the little profitability you have at the moment. With a hot lineup of exclusive games hitting this year as well, Sony has a number of reasons for consoles to sell themselves. It just sucks that you have to pay for them.

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