John Koller, SCEA’s Vice President of Marketing, Handhelds, and Home Consoles, confirmed in an interview with Engadget that there would be no price drop for older PS3 models when the new ultra slim models hit, the first of which arrives to the market this Tuesday.
Specifically, Koller said that the lack of a price drop is a response to recent price instability.
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.”
The new PS3 model will have 250GB of memory and retail for $270. It will be bundled with a copy of Uncharted 3: Drake’s Deception and $30 of in-game credit for the free-to-play MMOFPS Dust 514.
Analysis: The battle for the holidays is incoming. Nintendo’s aiming to take a huge swathe of the holiday money with its brand new Wii U console, and Microsoft is looking exceptionally value-friendly with the XBox 360 selling at only $200. To hold its own, Sony has to make a big move to grab customers away from their competitors at this crucial juncture.
That’s where the new 250GB and 500GB PS3s come in. Sony’s trying to play to the digital download market by selling their consoles with ludicrous amounts of memory right out of the box. Sony’s carving out their niche this holiday as the downloader’s console, and they’re hoping that that niche gives them the edge they need to record healthy sales next quarter.
So it makes sense that Sony’s making this big move for the holidays by offering a console that can hold a treasure trove of PSN content. However, what isn’t as immediately sensible is that the prices for older models aren’t changing at all. Typical console protocol states that, as you release newer models, you drop the price on older models. That won’t be happening this time, so the new PS3 models will directly compete with the older ones still on store shelves at similar prices. That’s very strange, but if you read a bit into Sony’s motives, then it actually does make a bit of sense.
As we all know, Sony has had to restructure itself recently after bleeding money all over itself for months. Financially, the company can’t continue to come in third place, and it’s trying its best now to regain the ground it has lost to Microsoft and Nintendo.
That puts Sony in a bit of a bind. The holidays are coming up, and they need a headline-grabbing move to keep it competitive during this lucrative time of year. However, they don’t actually have the big guns they need to do that yet. They aren’t ready to make the leap to the next generation like Nintendo has, but they also can’t really afford to compete with Microsoft price-wise. In other words, Sony needs to look flashy while still occupying the same market space as before. What’s a company to do?
These new PS3 models are the best they can come up with. Instead of attracting customers by moving down the price of older models to unprofitable levels, Sony’s hoping to attract customers by upgrading their old models with better, more expensive ones. With a new $300 500GB PS3, Sony can still say, “Hey, here’s something cool for the holiday season!” while also staying in a price range that’s comfortable for them.
By doing this, unfortunately, the precedent that you’re supposed to lower the price of older models when releasing newer ones puts Sony back in an awkward position because they definitely don’t want to lower their price. They need to make money, and at approximately $250, they aren’t going to. It’s a lose-lose situation.
At the end of the day, Sony has just resigned itself to the bad press it will get over being miserly with the prices. They’re trying to be competitive while still making money, and sometimes, that means that you’ve got to be a stickler about the price.