Sony's Game of Chicken

I don't get it. In a year, when PS3 is released, the 360 will just cut it's price below whatever Sony offers the PS3 for. No way Sony releases the PS3 for less than $299, so it won't even be that much of a cut.

The Xbox 360 is not selling for $400, though.

Why is $400 surprising to anyone? Does no one remember how much the playstation was? Here is a list I ganked from IGN:

Atari VCS launched in 1977 for $249.99
Nintendo Entertainment System launched in 1985 for $199.99
SEGA Genesis launched in 1989 for $249.99
NeoGeo launched in 1990 for $699.99
Super Nintendo launched in 1991 for $199.99
Jaguar launched in 1993 for $249.99
3DO Interactive Multiplayer launched in 1993 for $699.95
SEGA Saturn launched in 1995 for $399.99
Nintendo 64 launched in 1996 for $199.99
SEGA Dreamcast launches in 1999 for $199.99
PlayStation launched in 1995 for $299.99
PlayStation 2 launched in 2000 for $299.99
Xbox Launched in 2001 for $299.99
GameCube launched in 2001 for $199.99

They should just drop the $299 ghetto 360 and say look fuckers it comes with a hd, ethernet port, plays dvds, has wireless controllers. The $299 playstation you bought 6 years ago didn't do any of that, suck it up.

Did anyone else notice that Chris Morris has such pretty "glazed-over" eyes? :) Gotta love this CNN reporter who gets paid to have fun ... has a lot in common with some other people I know. CHeck out his "gotta win" face:

http://money.cnn.com/2005/08/24/commentary/game_over/column_gaming/index.htm

hmm seems to me MS would then just be able to lower their price to be competitive, hardly a real strategic move on Sony's part to play those kind of games. More likely they are actually telling the truth, and the PS3 will be expensive.

You know, if MS would have just released the XBox 360 at a low price, even at a slight loss they would be able to take a huge market share NOW, which could simply kill Sony/Nintendo.

I have no idea why they justify:

higher price> more money up front < less market share

and not:

lower price> less money up front > huge market share

The best thing that Sony could do is the day before the Xbox360 comes out is to announce that the PS3 is going to be $299. Have all the game stores put up their "PS3 - $299 reserve now!" signs right next to the register for all the people to see that are being forced to buy the $600 and $700 xbox bundles. That would seriously kick M$ in the nads after all of Sony's talk about how expensive the PS3 is going to be. It won't happen but that would be one hell of a bomb to drop!

I think there's also an issue of percieved value here. Say for instance the PS3 debuts at $299, and the 'real' 360 system has only dropped to $349 by then. There is the fact that Joe Walmart will look at the two and think that more $$ = more power. The gamecube debuted at $199, and everyone thought it was underpowered, when clearly it's not.

After all, the only reason that MS named the Xbox 2 the Xbox 360 is that they didn't want thier Xbox 2 going up against the PS3. Jow Walmart will think "Duh, 3 is more than 2, 3 is betterer."

It's about making sure you get the money from the least hardcore gamer when they walk in to buy something.

So my point here is that I really think the PS3 will debut at $399, even if it only stays at that price point for 6 months. They know they'll sell out if it hits the shelves at $300 or $400, and coming in at $400 is obiously better for their bottom line and makes sure that no one thinks that the PS3 is underpowered.

will either of them play my Vectrex games

Let's face it, consoles are going to become more expensive as time progresses for the fact that game systems are now becoming a full media center as compared to years past.

I can remember my aunts getting sucked in to a game of Missile Command or Asteroids for the Atari 2600 and I thought it was the strangest damn thing in the world to see older people playing kids games.

Don't be surprised to see the PS3 and Revolution sell for just a tad less than the 360. Maybe they'll have most of what you need included, but I'm sure they'll drain you somehow.

I'll stick to what I have until next Holiday or the following Spring. It's not worth the equivalent kick in the junk at this point when games really have a long way to go and hardware bugs and issues need to be ironed out.

/.02

Who was the shacker that commented on this a few days ago. About how MS is charging an enormous premium for accessories (like HDD, wireless controller, etc.) when it can all be obtained for cheap.

That's what MS should do. Not make as much of a profit on these things to drive the price down in the event that Sony does pull an "owned".

IMHO:

Isn't a secret Microsoft wasted millions with the Xbox with very few return, and in part was because license fees (to Nvidia and Intel primary), for the 360 the decision was simpler: pay IBM and ATI only for the design, let’s XNA and present technology (dual layer DVD, wi-fi, Xbox live, radio frequencies for the controls, seagate's hard disk etc.) do the rest. In the end you have a good console, a very friendly develop environment, in paper almost no lose for every unit sold, and 1 year of advantage and the option to set prices a little higher, just for star cashing before the release of PS3. MS has paved their way to a "win-win" situation... theorically, because Microsoft still can screw up.

Now Sony, they had the largest part of the market share: +90 millions consoles, they are the king of the hill, the big potato, the chico suave... err you know what I mean. But they like more, so they think "videogames isn’t enough I want to control television, entertainment, internet even computer industry". So they start writing checks for develop the technology that will "rule them all": CELL. That means $400 million dollar for the initial development, one or two BILLION for building the factory (I saw the exact cost in Cnet, but can’t find the link) plus all the cost involved in new technology like blue-ray disc, Bluetooth 2.0, their online service, that thing about media servers, etc. In resume that makes the PlayStation 3 a very powerful and "next next" generation console, but for a cost. Let’s don't forget this, Sony Corp post a lost in Q1, -136 millions to be exact. Normally one would say "hey that’s not much money for Sony, they can recover with the PSP alone" Can they? Sony Corp it’s not only the Playstation, we’re talking about a company that makes televisions, stereos, computers, even movies and music records. Every one of this markets are very tough, Sony lose the portable audio market to the iPod, Samsung and Panasonic are giving them one hell of a ride in TVs, VAIOs are excellent computers but they are not in every home like Dells. What all these means? Answer: they aren’t the super power they used to be. Unlike Microsoft who has the total control of the computer software market and the financial tranquility to plan their next move (result of quarterly revenues of +1-2 billion dollars). Sony is in a very tight spot, in fewer words: they cannot lose money in this thing called PS3, correction, they cannot lose more money at all. More than before cause PSP medium success (remember DS still the number one in sales), and the adjustments of a new administration (with the first CEO non-japanese in company's history, Howard Stinger). So, in this point of view, Sony is in a “make or brake” kind of situation. They have a successful product, they have the market share and the PR machine, some bucks left in the banck, but this is not 2000, and the 360 it’s not the Dreamcast (at least financially). So for me it’s no surprise hearing K. Kutaragi bashing the competence and telling everyone to sell the farm for a taste of mighty Cell, it’s not for fun the company situation oblige him

So, Chris quoted the same quotes Alec did and no one is questioning their veracity or asking for blood. GG folks, you can do better.

X360 is gonna be first and have an established userbase already, and then when the PS3 comes out microsoft is going to drop the price to either match or beat the PS3's offering.

Microsoft is coming to this as the ONLY next gen console on the market. Gouge the consumer during the monopoly phase, and drop the price to compete when Sony releases.

I think Microsoft is in a good position for gaining market share of consoles here.

My lack of an HDTV to enjoy xbox360 on makes me a sad panda...and is the sole reason I won't be getting one right away.

No, because that makes no fucking sense at all. The PS3 will be expensive, period, it's got a lot of expensive stuff in it. If Sony releases at a price <= the 360 price, Sony will be UNDERSELLING THEMSELVES because by then MS will be established with old hardware, while the PS3 will be releasing new, more expensive, and slightly better hardware.

Again, what the Chris twins are proposing makes no sense. Saying the price is high to surprise customers in a year? If anything Sony would say the PS3 will be cheaper than the 360 because they want to avoid potential customers moving to 360 in the space before PS3 release. Scaring customers away with word of a high price is not a smart move in any case.

I am still just pleased that the US gets a console first (or at least same time as others) compared to Japan always making us wait 6 months. That alone earns some points in my book.

Has any company ever intentionally lied about their price point and then knocked it down upon release like this? It seems like Sony would, you know, actually announce the low price if they were planning on that, since then lots of people who were on the fence about waiting a year for the PS3 or buying a 360 right away would stick it out and buy up the cheaper PS3.

MS could always cut the 360's price, but let's face it, Sony has the majority share of the market when it comes to consoles. They're the leaders, and the PS3 will sell a bunch on name alone. Microsoft is the one who has to try and steal market share from Sony, which they will do a bit with the earlier release, but I think a lot of (more casual) PS2 owners will wait for the PS3 either way.

Even with the high price, PS3 is nice because of the backwards compat, Blu-Ray and HD. Hell, backwards compat alone is a big feature because you can still play all your old PS2 games on your shiny new hardware.

Why doesn't MS include 1 game with their system. Couldn't they develop a game in house, and have it ship with both the core and high end system? That would make a lot of sense to me. Either throw in a free game, or raise the price $50 on each system since nobody can play the systems without buying a game anyway.

To be honest I think this whole upcoming console wars thing has been over-analyzed (or rather, over-speculated) to death. It's just to the point that I don't care anymore. I want them both to be successful because then it's the gamers that win, but no, one just has to be the winner.

Sigh...

So just for an arguments sake he wants us to assume that Sony will do the opposite of what they're saying? I think we need a bit more evidence to make that sort of assumption, seems just like pointless speculation to me and not very insightful. But oh well I suppose that is part of the hype with console launches.

As much crap as i give Ken and Sony, i really hope the PS3 delivers and isnt expensive.

Regardless of what anyone does, next Christmass the common dude is going to:

1) Not think of them as in the same "generation" of consoles, and
2) Assume the PS3 is better because it's a year newer.

I'd wager that most gamers are in a higher financial demographic (simply because it's an expensive hobby) and therefore, will pay what you ask them to.

Sony is not going to play undersell with M$. They have a GIGANTIC marketshare advantage. They have name brand and the slickest marketing crew in gaming.

Sony PS1 and PS2 were not cheap when they launched. The PS3 has a substantial amount more invested than either of those two (probably combined) with the cell processor. Even if they use the cell for other things, their first application will not me mass producing their technology for huge losses. That is bad business.

Where can I find the specs on both of these machines?

Wouldn't it be a sharp marketing move to set consumer expectations for a high price, then surprise them with something drastically lower?

Wouldn't surprise me at all. This is EXACTLY what Sony did with the PSP and look what happened.

look.

Sony needs ppl to keep talking about their console IF the X360 launch is gonna be a success, to prevent the situation M$ was in with the last gen consoles - so everything is welcome to "convince" gamers that the PS3 is worth the wait and the price. At the time the PS3 launches the X360 price will most likely have decreased already, so they need everything to make their console appear cheap, or at least not fundamentally more expensive than the competition's. Especially if the launch titles don't offer the graphic quantum leap the PR department of Sony promised for the PS3 over the competition (namely the X360)...

This makes no sense to me on several levels. Gamers who are undecided will think, "XBOX 360 is $400 dollars, but it comes out a year ahead of the PS3 which will be really expensive".

Then, at the launch of PS3, SUPRISE, it's cheaper than you thought, but now Xbox can go lower to match, or even undercuts them at this point. How would Sony's ploy be in anyway a valid marketing strategy?

If anything, Sony will make Microsoft extra dough by allowing them a year of inflated prices, set to match Sony's rumored price.

Can't MS just drop the price when the PS3 comes out? Doesn't seem like a big deal to me.

I think hardcore gamers are going to see the $399 as a base starting point for a X360, but $299 is what everyone and their mother will buy. This is the real price to compete with IMO.

MSFT doesn't want to, and Sony can't afford, to take huge losses on hardware this generation.

It is a simple as that.

The 2 tier pricing is simply the MBA types not leaving any money on the table by offering one $349 package.

yes becuase we'll see a $300 ps3