PlayStation 3 Price Cut

I was partially right in my Wii blog post where I thought that Sony’s PlayStation 3 would face a price cut. I saw this at the BBC news. Sony introduced a price cut in US and adds more value for European buyers. In Europe gamers will get a “starter pack” at an unchanged price for the 60GB machine, with two games and two controllers included. Sony has said it would cut the US price of the 60GB PS3 by $100 making it cost $500. Sony also introduces a new 80GB version at the original price of $600. (Interestingly, in Finland PlayStation 3 – without the “starter pack” – costs 650-690 euros, which is $900-950 US dollars, over $400 more expensive than in the US).

In the BBC news article, there was some comments from customers who pondered the following issues (which are worth checking by anyone who wants to learn about price cuts and using different prices for different segments):

  • What if you ordered PlayStation 3 two weeks ago, will you get $100 back?
  • One guy said he won’t be interested in buying PlayStation 3 in the Europe since it costs half in the US
  • Those two games are good addition – but will they be something everybody wants?

I think Sony did a right decision to think about the price cut and “starter pack” – but seems like they might have listened bit more of what some customers are saying. While offering two games and two controllers is a nice addition, the price of the machine might still be too high in the Europe.

Now Sony will have to face with the US people who have already purchased the console – will people who bought PS3 week before the price cut get their money back? The two games (and controllers) are a good idea from Sony, but we’ll see if they are enough to beat Wii or Xbox in the Europe. After all, games are the biggest reason why people by gaming consoles. If the two games aren’t something most players want… then Sony has a problem.

Anyone thinking of reducing the price of his game (or product) has to think about these 2 questions:

  • How will your loyal customers – those who already purchased from you – feel about the price drop? How will you handle with them?
  • Would it be possible to add more value (in Sony’s case they try offering 2 games and 2 controllers with the machine) instead of a price cut?

We’ll see how it goes for Sony – and learn from their business decisions also in the future.

3 thoughts on “PlayStation 3 Price Cut

  1. A lot of people are angry because the price cut is only temporary. The cut is simply to move as many 60GB units out of stores before they introduce the 80GB at the original $600. Currently, at Amazon you can get the 60GB version along with 6 BluRay movies (Memento plus the current 5 movie offer), the $25 Bluetooth remote, free shipping, and no tax for $499.99. That’s a steal, and I took them up on this offer. I could care less about the extra 20 GB or the packed in game they chose for the next version.

  2. Argh I made so many spelling mistakes… of course “THEY are chargeD a big amount” and “they can drop the prices for those WHO knew from the beginning…”

  3. How will your loyal customers – those who already purchased from you – feel about the price drop?

    I think with indie games this is really something to consider. But also, I think for something like a Playstation or a big “AAA” game (like Doom 3) it’s something else, since everybody who doesn’t live under a rock knows that prices will drop someday, often very predictable and soon. So it’s a correct thing for them, because there are many maniacs who sleep in front of the store to get the Playstation as soon as possible, and they charge a big amount. Then, when the first storm has calmed, they can drop the prices for those you knew from the beginning that they will wait until it’s less expensive.

    But yeah, with indie games it’s really different, because they don’t have a “life span” comparable to big commercial products. They can be sold over years for the same price, and so I also would only try to increase value (perhaps also by making some special offers with included bonus packs etc) and not to drop the price.