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When Pachter says "jump": high price of PS3 killing Sony

Posted Jan 24, 2009 at 7:23AM EST by QJ Staff

Listed in: PS3 Tags: Michael Pachter, Sony

high price of PS3 killing Sony - Image 1

Everyone's favorite analyst, Michael Pachter, has joined the bandwagon calling for Sony to lower the price of the PlayStation 3. Echoing the opinions of CNN, Pachter says that the PS3's high price is killing Sony.

Leave it to Pachter to state the obvious:

The most important thing for the company to do is to get the PS3 production cost down, and it appears to be making progress on that front.

Sony has historically priced at its production cost (or above), but it has historically been in first place. This generation, the company is a distant third, and is falling behind at a rapid pace.

Lowering the price will cost Sony a lot, but it should generate sufficient future profits from game and Blu-ray movie sales and royalties to offset those losses.

He figures there's a 40% we'll see a price cut by the holidays, and only a 5% chance of a cut this April. He also says there's a 10% chance we won't see a price cut this year at all. Sony, on the other hand, is busy tending to its financial bleeding. We probably won't hear major news about the console until things settle down from their restructuring.

Via CVG

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I have all 3 systems.60Gb(320GB)PS3,Elite & HBC Wii.If these people were smart they would have bought a launch 60GB system.But instead they choose these watered down consoles. If these late to the PS3 people can't see the value by now they never will. For these people they should offer a non-blu-ray,1 USB,no wifi system for 199.99usd.

# if they offered — Eclipze_ 2009-01-24 09:32

a non-bluray system how would they be able to play ps3 games...

# I forgot to add — Skygunner 2009-01-24 09:33

with a 60GB HDD and sold in very limited quanities for all those cheapskates:)

# What about the other 45% — phiyuku 2009-01-24 09:37

If they don't do one of the those which take up 55%. What is 45% ? Raise the price? Cmon Pachter give us statistics that add up.

# Nvm Read the Full article from their source — phiyuku 2009-01-24 09:39

the other 45% is:

25%: E3

20%: TGS

# What's in the mind doesn't always make it to the pad — Skygunner 2009-01-24 09:39

how about a disabled blu-ray movie player.....kinda like the non PS2 40GB's,some 80GB's + 160GB's.

# fight fire with fire? — masta.g.86 2009-01-24 09:44

This is a good idea. Except for the bit about removing Blue-ray. All of my PS3 games are on BD-ROMs, so if I bought the cheap version for some reason, how would I play them?

Anyway, I'm a computer repairman and I get calls occasionally to go out and fix a computer. While I'm at these homes, I notice that most don't have things like a wireless network setup. Many of these people aren't taking advantage of what they have at all. :|

A stripped-down "basic" PS3 (with accessory addons for future upgrades if desired) for the lamers and a full-fledged "everything included" PS3 model for people who want all of the bells and whistles.

# @Skygunner — masta.g.86 2009-01-24 09:49

Sony owns all rights to Blue-ray, so removing the player wouldn't cut costs at all. They don't license the technology from themselves. They can use it whenever and however they choose for free.

Removing the actual Blue-ray drive from the system would actually cut production costs, but then how the hell would we play games?

# What bothers me is............... — Skygunner 2009-01-24 09:49

that I have bought 2 launch 360 Premiums, 2 Elites and had an Elite replaced from RROD warranty. All 5 of my 360's have passed away from RROD. These figures NEVER account for all the RROD/defective systems replaced.

# ... — blkthunda 2009-01-24 09:57

How can the PS3 be expensive? People spend close to that much on cell phones and people spend like 400 bucks on 10 viagra and people say PS3 is expensive?

# I said the exact same thing — Skygunner 2009-01-24 10:03

to a couple of friends of mine a few days ago. I always buy launch systems beacuse they usually come fully equipped the way the manufacturer meant them to be and are easily exploited homebrew,iso etc.

# $400 is $400 is $400 is $400...etc. — masta.g.86 2009-01-24 11:02

And $400 is not a meager sum of money no matter how you look at it. PS3 has been out for a good while now and it still carries a high price tag.

People who pay $400 for a cell phone are just flat out stupid. A few of these buyers actually use their phone as it is intended, but most forget about the advanced features and just use it to call and text. Still others just got to have the newest phone to be with the "in" crowd.

$400 for Viagra? Well, if it allows me got some, it's worth it!

Point being, $400 is a substantial amount of money no matter how you look at it. Perhaps you'll understand this when you're living on your own and can't beg your parents for their hard-earned cash...

# Sony not sole BD patent-owner; 360 sales inflated — damonous 2009-01-24 11:12

I guess this is both to masta.g.86 and Skygunner: first, Sony (although having a major interest + profit-participation in BD) are NOT the sole proprietors of Blu-ray. Panasonic (Matsu*****a) is also a large patent owner. But, while true that they probably don't have to worry about paying-out royalties, they certainly can't magically make "free" Blu-ray players. The hardware still costs money, even if there are no royalties, and often the parts still come from other manufacturers. (Even Toshiba now is the primary manufacturer of the Cell processor.) The thing is, Sony has already pretty much stripped-out everything possible from the PS3. It wouldn't be wise for them to remove wiFi for 2 reasons: 1) the 20gb never was a star seller, even though it didn't have wiFi. 2) they don't want to limit ANYONE's ability to get onto the PSN and buy online content. You have to figure that PSN (just like Live for 360) is a MAJOR gravy profit-train. No media to manufacture, warehouse, and ship: just direct digital cash. ....They could go down to 1 USB, but when you figure how much 1 USB port probably costs them to manufacture, is it really worth pissing-off their customers by ripping 1 out? They can't take optical or PS-audio out connectors away, either. (Again, unless they want to piss people off.) ...Now, they could MAYBE strip the HDMI connector and ONLY use the PS connector (forcing people to buy a component-out PS cable, for extra profit). But, that would work counter to marketing for the product, and serve (again) only to piss-off their customers who later upgrade to an HDTV with HDMI. ....I think they just have to continue the wait of 'time' and mass-production, as the components will naturally reduce in price. Either that, or really cheap on parts, redesign to a smaller shell, and run the risk of the "Xbox failure ride". ....In the end run, it's really just #$%'s like Pachter that are worried about the price. He probably cuts a check from Microsoft or Nintendo ever now-and-then, and opens his big flap to stir up a media frenzy about 'how bad PS3 is doing'. You know, for a $400 system, it's doing just fine compared to the 360, if you adjust your comparisons to the start launch dates. QJ recently had an article here, I recall, showing that in the same 2yr period since launch, PS3 is actually AHEAD of 360 by a million or two units. And, after Sony corporate took a $2 Billion loss last year, how is increasing their losses on manufacture/sale of PS3 going to HELP Sony? The thing that MIGHT help is if "analysts" like Pachter shart opening their yaps and 'analyzing' exactly what Skygunner last brought-up: if Xbox's have had a 30% failure rate over the last 3yrs, and if you factor-in an estimate of how many of those 30% of customers actually didn't get their system serviced, but instead threw it away or bought YET ANOTHER unit to replace the bad one ......exactly how far ahead is the 360 in sales? --Because recent tallies online seem to be showing a strange phenomenon: for having less consoles sold, PS3 SOFTWARE seems to be selling on an upturn. And, in the end, that is what is going to matter to the Development companies out there; not that Microsoft has managed to re-sell it's defective albatross to a third of its customers in order to 'inflate its fanbase'.

# woo — Navani 2009-01-24 12:13

@blkthunda - You're right, strangely. I mean, it's expensive, but if you look around your room you'd see that you have probably spent well over 400 dollars on other nonneccessities

@skygunner - I agree 100%, just wish I had the money when these consoles were released

@masta.g.86 - Most people in my area take advantage of their expensive phones. The reason it has a higher price tag is because it's expensive to manufacture, yet it is a quality machine that is highly reliable. I don't take Viagra so I have no idea about what it costs lol annddd yes, $400 is expensive, but what he's stating basically is that people can spend that $400 on various other things but are unwilling to spend it on a game console. Think about it. Sure, it could be used to pay rent, but that's not what he's stating. And the little bit at the end of your comment is completely stupid, unless you know him irl.

# Well said "damonous" — Skygunner 2009-01-24 12:35

I knew about the Blu-ray Disc Association (BDA) and the royalties associated with BD-rom. I just didn't want to be technical.Thanks for covering it. I honestly think the only people who would be pissed off with my suggestion would be the people who already own a PS3. Which doesn't make any sense. I'm starting to believe that the last of the cheapskates really need a 199.99 PS3 and wouldn't mind being able to play only PS3/PSone games and losing additional features. If they really wanted/needed all of the features of the Magnificent 60GB PS3 console they would have bought one already.Kazuo Hirai original said during the PS3's development that the PS3 is a "Family Purchase". I would have to agree that the PS3 is doing extremely well for a Family purchase.

# $400 — narutosaiyan 2009-01-24 16:01

I think that everyone is trying to make ps3 look like crap in the eyes of an ignorant buyer (like 85% of the population) I mean here u have this "critic" saying "ps3 costs a lot im filthy rich because microsoft pays me to say that over and over". anyway the other day i got my GI magazine in the mail and it was the february issue... no killzone 2 info anywhere wtf? i guess all i really wanna point out is that the media is pro 360, i mean remember when it was released and it was $400 and it was "the greatest system" everyone had to buy it... i dont remember one damn critic saying 360 was too expensive, and it came without a wireless adapter, controller chargers, or hd player

# Im glad to see... — ptspyder 2009-01-24 16:06

That I am not the only person left that doesn't feel that the PS3 is overpriced. While I find the mud slinging between microsoft and sony laughable, the PS3 is a considerably better value for the price. Not to mention sony customer support treats their customers way better then microsoft.

Also, about the whole RROD thing - the most up to date figures I've seen put 360's failure rate at about 15%, but PS3 failure rates at only 3.5%. How well something is constructed should be an important factor in making big purchases....

# you know... — anhero 2009-01-24 18:13

it wouldn't make a difference accounting the people who buy another 360 after theirs get the ROOD becuz its VERY few people who are that stupid/lazy. Out of my like 30 friends who have a 360, like 15 have gotten RROD (I think the failure rate is higher than 30%, Id say around 50%). All of them decided to call Microsoft and get their fixed, and for all of them it was free (except the box and stamp, which may cost like 2 dollars maybe?). Lets just imagine that maybe 5% of the 30% defective 360s get returned (since 15 persons inst enough to make an effective rate), then the differences may be like 50k 360s bought that were due to the guy not gettting it fixed my microsoft. Well if the console charts talk about sells in millions of units thn it doesn't really make a difference.

I think Patcher is right, the bggest reason why the ps3 isnt selling that well is becuz of the price. Lets face it, the 360 is the best GAMING console, and the main reason why most people decide to buy the PS3 is becuz of blu-ray movies. Maybe is Sony was able to sell PS3s at same price as 360s then theyd have and edge, becuz maybe the 360 is just a bit better in games, but completely lacks the ability to play blu-ray movies.

# anhero...I don't think you get it. — Skygunner 2009-01-24 18:43

but that's ok. The 360 is poorly constructed. The RROD is NOT the only thing that goes wrong on the 360. The RROD warranty ONLY addresses the RROD. Not the E79,E76,E74,E73,E72,E71,E69,E68,E67 or E45 error. All of these error's are not coverered by Microsoft 3 year RROD warranty. These errors gives us unfortunate 360 owners no choice but to purchase another console.

# An 86.5% chance he's pulling percentages out of his ass — pissteeth 2009-01-24 21:42

So there's a 40% chance of a price cut by the holidays, but only a 10% chance of no price cut this year. The holidays essentially means the end of the year so wouldn't there then be a 90% chance of a price cut by the holidays?

# Stupid analysts — PimpFriedRice 2009-01-24 22:10

Analysts are proven wrong time and time again. Does anyone remember the criticism the PS3 recieved in the first several month of it's release? I think Sony has done quite well in the last year with the sales and software.

One of the best parts is that the PS3 is almost future-proof. Meaning, most features are available out of the box or can be added via firmware updates without the need to buy proprietary HDDs, headsets, batteries, charge kits, overpriced wi-fi modules, or HD drives that don't even display full HD resolution or HD sound.

# HAHAHAHA — girandhistacos 2009-01-24 23:02

You know, Skygunner, your statement was almost credible... until you mentioned how much money you've WASTED on XBOXs.

It amazes me how the loyalty of some 360 owners just seems to make them completely idiotic.

I have never and will never own a 360 due to the fact that it has such a terrible reputation.

Every friend that I have that has owned a 360 has had it fail, either due to RRoD or because of some stupid error.

It is just foolish to spend money on an XBOX, let alone ANOTHER one.

# @girandhistacos — Skygunner 2009-01-24 23:36

Everything I said was credible.My arguement is that the 360 & PS3 are both great platforms. I think the 360's lead in overall sales is because of the large failure rate.The only reason I did not utilize the RROD warranty more often was because I can't stand refurbs!! When I got my last Elite refurb back from Microsoft I traded it in towards a brand new Elite. That's just the way I roll:)

You know, Skygunner, your statement was almost credible... until you mentioned how much money you've WASTED on XBOXs.

# x — saldude2 2009-01-25 01:02

Why the hell are we discussing about PROD. microsoft is taking care of their consoles.

by giving it 3yrs warranty, they made the console easy to program so that devs dont have to get crazy to make a game (Do you even know how mach time and work it takes to make a game?)

Giving us the exclusive games that were very popular in PS (Giving extra money to devs), Netflix, A cheap price console for hardcore gamers

(do you even know how hard it is for some people to buy 1 game), giving us free will to choose (I dont want wifi so i didnt even have to pay for it and bought an elite)

What did sony do? NOTHING

I never even heard sony caring for ps3 and giving extra money to devs like microsoft

(i hope i typed everything right)

# sthu — saldude2 2009-01-25 01:07

If that were true then microsoft execs would be in jail right now, cuz there are groups who go through the companies records to find out the how many were sold

Recently tata steel industry lied about their sale(telling the world that theywere making profit while they were notnow one of them is in jail jail

# LOL — melty3219 2009-01-25 08:53

*****ING NOOBS CANT TAKE IT THE PS3 IS EXPENSIVE EVEN THOUGH THERE IS NUFFIN GOOD ABOUT IT TO MAKE ME PAY THE EXTRA MONEY THE GUY IS RIGHT IF THEY LOWERED THE PRICE MORE PEOPLE WOULD BUY IT!

# @saldude2 WOW, you obviously stand behind Microsoft 120% — Skygunner 2009-01-25 09:02

# @saldude2 WOW, you obviously stand behind Microsoft 120% — Skygunner 2009-01-25 09:05

regardless. Did you read our/my post?I clearly pointed out that the 360 has alot more problems than RROD.E79,E76,E74,E73,E72,E71,E69,E68,E67 & E45. You mentioned PROD, what is that? Is that another error to add to the list? You also went on a RAVING SPREE about games and microsoft making it easier.You are so OFF TOPIC!No one here is arguing that the 360 & PS3 have good games.We are just stating that the 360 sales figures are not accounting for all the RROD & E79,E76,E74,E73,E72,E71,E69,E68,E67,E4 5 that were not covered under or utilized by Microsoft's 3 year RROD warranty.

# @melty3219 WoW!! You are such a fanboy!! — Skygunner 2009-01-25 10:49

No discretion what so ever!! Huh? I'm glad I have all 3 consoles so I don't have to look like a COMPLETE idiot like melty3219

# @Skygunner — melty3219 2009-01-25 11:03

OI STFU NOOB STOP MAKING WALLS OF TEXT U STUPID FANBOY!

# THE REAL NUMBERS! — melty3219 2009-01-25 11:12

THERE IS A 40% CHANCE THAT ALL U FANBOYS ARE GAY, 5% CHANCE THAT ALL U FANBOYS ARE LESBIAN AND 10% CHANCE THAT YOU FANBOYS ARE SOMETHING IN BETWEEN!

# the should make it different... — Link75e 2009-01-25 15:00

People keep on complaining about prices i mean if you really want it youll get it if not then your going to wait because your just that not into it. They should do like microsoft and make a arcade version and a elite. For the watered down ps3 they can remove blu ray movie playback just like the first xbox and you was forced to buy the stupid remote to play DVD's. Second remove wifi and have just an ethernet connection. 2 USB;s and no HDMI connection maybe sell an add on that adds it like the old ps2 and the hard drive. Last but not least a cheap USB ps3 remote control this all will cost 200 dollars.

# Hmmm okay??? — BRAV04 2009-01-25 19:19

People are talking!!!! this guy works at CNN (I THINK) ok all these comments that wrote these comments.....Ummmm did sony comment on this....NOpe!guess what Sony is still doing good. lets sell 10 360s thats 200 X 10 = 2000 dollars. wow.. lets sell 10 PS3. 400 X 10 = point Made. sony is just doing this LMFAOOOO HAHAHAHAA

# $400 — Epidemik_Sk8boards 2009-01-25 19:38

i think its a fair price for a PS3 for what you get. It has a lot to offer for what it is. Everyone seems to forget some of the lame features it carries, Linux and Blue Ray, also hook up a printer. It's really handy.

# And — tobyo1 2009-01-25 20:56

There is a 100% chance that you are a complete *****.

# Wow do I hate Fanboys — HDRasta 2009-01-26 05:59

$400 is a fair price and why? Blu-ray; gives the dev's more space (about 50Gigs) for better and longer games. Changeable HD; want more memory just buy a 2.5 sized laptop HD and get as much space as you want unlike the 360 where you have to buy the HD they make and charge a ridiculous price for them. Updates; PSN is always updating the FW for the PS3 so they are always adding new stuff and yes like the 360 I can connect my PS3 to MSN and windows if I wanted to. Media Player; network it with your computer and do anything with the media from your computer. Free Online gaming; this part is big cuz why would someone pay for a console that they will keep paying for? and to those People complaining about wifi (less wires to worry about and if you say it lags then get a better internet service cuz I have wifi and I have no lag what-so-ever! The list goes on and on and they will continue to add more to the PS3 so... good luck M$ fanboys and your RRoD and other errors on your 360.

For $400 it is the BEST QUALITY CONSOLE OUT THERE...PERIOD and I didn't get paid to say that.

# Someone needs... — RexNox 2009-01-26 07:48

to educate Pachter on how to market a product. Price isn't the only factor.

# STFU — saldude2 2009-01-29 20:55

" gives the dev's more space"

WTF are you talking about. Devs have a lot harder time when they make a game for ps3

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When Pachter says "jump": high price of PS3 killing Sony

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