By Jared Newman | Monday, March 16, 2009 at 2:26 pm
The story, linked in Harry’s 5Words, is getting old. Sony’s attempts to hush the calls for a Playstation 3 price cut resemble a substitute teacher trying to calm the classroom — a momentary lull that slowly grows into even greater cacophony.
The latest round began earlier this month, when Electronic Arts Redwood Shores manager Glen Schofield said he hoped Sony could figure out how to reconcile the PS3’s high price tag with the current economic climate. Last week, Media Molecule founder Alex Evans — whose company developed LittleBigPlanet — expressed to Gamasutra that the console’s price should go down soon. Analysts have added to the chatter as well, and today, Bloomberg writes that Sony is facing pressure from publishers.
“Sony obviously still has a ways to go with their pricing,” said Peter Moore, the head of EA Sports. Yves Guillemot, CEO of Ubisoft Entertainment SA, said game makers stand to gain any time a console slashes its price.
But Sony is in a bind now, because its console is still too expensive to manufacture. In October, market researcher iSuppli cracked open the Playstation 3 and analyzed its innards. The total cost was down 30 percent from the first-generation, to $448.73, but that still means Sony is losing money on every $399 console it sells. A price drop doesn’t seem wise after the company posted its first annual loss in 14 years.
Appropriately, Sony’s senior marketing VP Peter Dille fired back at critics. “Everybody in the development community would love for the PS3 to be free, so they could just sell razor blades,” he said, adding that the company has to worry about profits as well as the console’s install base.
I’ve read elsewhere that if Sony announces a price cut, it’ll happen at the end of March, after the company closes its financial year. My first thought was “bad call,” as most of this season’s major releases — Street Fighter IV, Resident Evil 5 and the PS3-exclusive Killzone 2 — have come and gone. On the other hand, maybe a price cut is the right prescription as the industry braces for a momentary lull. That way, Sony will be good and ready for the summer and holiday season.