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.
