UK PlayStation 3 comes in at £425, Sony loses its marbles

[jlmadyson]

UK PlayStation 3 comes in at £425, Sony loses its marbles

Sony has officially announced the U.K. price of the Playstation 3 as £425, representing the fully featured PS3 which comes in at $599 in the U.S. and 599 EUR in Europe. GamesIndustry.biz suggests that Sony won't be selling the cut down model over the pond, although this isn't confirmed. The PS3's price in England is higher than the console's price in the United States and Europe but we're not entirely surprised by this: British consumers are used to paying more for their consoles (although traditionally the U.K. gets identical or lower prices compared to Europe). Here's a breakdown of the U.K. premium over U.S. and EU prices:

£109 more than the U.S. "Premium" PS3: the U.S. price is $599 which converts to £316. Take this away from £425 and you're left with a £109 premium.
£20 more than the EU "Premium" PS3: the EU price is 599 EUR which converts to £405. Take this away from £425 and you're left with a £20 premium
Now check out the price when compared to the Xbox 360:
£146 more than Xbox 360 Premium: the Xbox 360 Premium is £279. Take away this figure from the PS3's £425 price and you're left with a £146 premium.
£206 more than Xbox 360 Core: the Xbox 360 Core is £219. Take away this figure from the PS3's £425 price and you're left with a £206 premium.
If we were in Sony's shoes, we'd feel very uncomfortable right about now: the combination of a chunky U.S./U.K. price divide combined with the absence of a cut-down PS3 bundle doesn't stack up well against the PS3's main competitor: the Xbox 360. But wait! When we stepped into those Sony branded shoes we forgot to take the free prescription of Prozac hidden in the heel! Ahhh, much better. Now we'd say something similar to the Sony marketing rep tasked with announcing the news:

"I don't think it's an expensive machine; I think actually, it's probably a cheap machine ... If you think a Blu-Ray player by itself might be GBP 600-700, and we're coming in at just GBP 425 - it's a bargain."

Sony's "but it plays Blu-Ray" line works if you're addressing early adopters and hardcore users. However, the British public (the majority of which associate "PlayStation" with games console, and not much more) won't take kindly to hearing "bargain" and "cheap" in the same sentence as "four hundred and twenty five pounds".

:shocked:

Little heads up for the UK console gamers. Not sure if this is for the gamer or the Blue Ray enthusiasts, perhaps both but man...

 

[RagingBITCH]

When Sony fails miserably, I'll laugh my ass off.

"But the PS3 is really a media machine, not a gaming console."

Yea OK Sony. :roll:

 

[ryan256]

Awesome! One more nail for the PS3's coffin of failure.

 

[purbeast0]

i think the PS3 will still sell a lot, even to the AV buffs. they praised it over on the AVS forums and aren't bothered at all by the prices.

I mean ... $600 for a bluray machine vs. a $1000+ standalone bluray machine ... pretty easy to see which one will be more likely to be bought.

(although sony must be taking a HUGE hit on each ps3 being sold)

 

[miri]

Prices in the UK are expensive, but they also make more money. The minimum wage in the UK is $9.55 a hour compared to $5.15 a hour here.

 

[jlmadyson]

Originally posted by: purbeast0
i think the PS3 will still sell a lot, even to the AV buffs. they praised it over on the AVS forums and aren't bothered at all by the prices.

I mean ... $600 for a bluray machine vs. a $1000+ standalone bluray machine ... pretty easy to see which one will be more likely to be bought.

(although sony must be taking a HUGE hit on each ps3 being sold)

I think that is correct, but what about average joe, on that side of things, it's a bleak picture imho. When these actually become available post launch sometime, will average joe drop 5 or 6 large here in the US or will they go for a much cheaper Wii or perhaps a 360? Time will tell I suppose.

 

[DaveSimmons]

YASPWT

(Yet Another Sony Pricing Whine Thread)

Sony is being smart, and collecting the gouge money from initial shipments for themselves instead of letting eBayers take it. $100 x 2 million units = an extra 200 million for them not scalpers.

 

[PricklyPete]

Originally posted by: purbeast0
i think the PS3 will still sell a lot, even to the AV buffs. they praised it over on the AVS forums and aren't bothered at all by the prices.

I mean ... $600 for a bluray machine vs. a $1000+ standalone bluray machine ... pretty easy to see which one will be more likely to be bought.

(although sony must be taking a HUGE hit on each ps3 being sold)

I just don't think too many people will be buying the PS3 for a blue ray player. I'm more than happy with DVD's and so are most people I know. On top of that, few have an HDTV. I just don't see many people justifying the purchase for the blueray aspect...hardcore a/v people maybe...but they will probably argue that spending the extra $400 will net you a much higher quality player or something along those lines.

 

[Queasy]

Originally posted by: DaveSimmons
YASPWT

(Yet Another Sony Pricing Whine Thread)

Sony is being smart, and collecting the gouge money from initial shipments for themselves instead of letting eBayers take it. $100 x 2 million units = an extra 200 million for them not scalpers.

But they are still taking quite a loss on each unit sold. I could understand your logic if they weren't.

 

[RagingBITCH]

Originally posted by: DaveSimmons
YASPWT

(Yet Another Sony Pricing Whine Thread)

Sony is being smart, and collecting the gouge money from initial shipments for themselves instead of letting eBayers take it. $100 x 2 million units = an extra 200 million for them not scalpers.

The average profit on a brand new console around Christmas time is much higher than $100. I sold my 360 Premium for $850

 

[RagingBITCH]

Originally posted by: Queasy

Originally posted by: DaveSimmons
YASPWT

(Yet Another Sony Pricing Whine Thread)

Sony is being smart, and collecting the gouge money from initial shipments for themselves instead of letting eBayers take it. $100 x 2 million units = an extra 200 million for them not scalpers.

But they are still taking quite a loss on each unit sold. I could understand your logic if they weren't.

That's true. The Blu-Ray alone is already at a loss, muchless the actual gaming unit of the machine.

 

[purbeast0]

Originally posted by: jlmadyson

Originally posted by: purbeast0
i think the PS3 will still sell a lot, even to the AV buffs. they praised it over on the AVS forums and aren't bothered at all by the prices.

I mean ... $600 for a bluray machine vs. a $1000+ standalone bluray machine ... pretty easy to see which one will be more likely to be bought.

(although sony must be taking a HUGE hit on each ps3 being sold)

I think that is correct, but what about average joe, on that side of things, it's a bleak picture imho. When these actually become available post launch sometime, will average joe drop 5 or 6 large here in the US or will they go for a much cheaper Wii or perhaps a 360? Time will tell I suppose.

i agree with you. the rush initially is going to be mad for these things, i think worse than with the 360. but after the initial launch, i am expecting to see it slow down.

Originally posted by: DaveSimmons
YASPWT

(Yet Another Sony Pricing Whine Thread)

Sony is being smart, and collecting the gouge money from initial shipments for themselves instead of letting eBayers take it. $100 x 2 million units = an extra 200 million for them not scalpers.

I disagree with that. PS3's wil still sell for more than 2x their retail price on launch day just because there won't be enough supply to meet the demand, especially since sony has already backed away from yet another promise they broke - the 2 million at launch claim.

 

[MmmSkyscraper]

PS2 was £399 at launch IIRC.

 

[otispunkmeyer]

britain gets the shaft as usual

 

[DaveSimmons]

Originally posted by: Queasy

Originally posted by: DaveSimmons
Sony is being smart, and collecting the gouge money from initial shipments for themselves instead of letting eBayers take it. $100 x 2 million units = an extra 200 million for them not scalpers.

But they are still taking quite a loss on each unit sold. I could understand your logic if they weren't.

Then they will take $200 million less of a loss, which makes shareholders happy.

As long as they sell out, their price is too low not too high.

 

[mugs]

Originally posted by: DaveSimmons
YASPWT

(Yet Another Sony Pricing Whine Thread)

Sony is being smart, and collecting the gouge money from initial shipments for themselves instead of letting eBayers take it. $100 x 2 million units = an extra 200 million for them not scalpers.

You know that's a good point, and when the 360 scalping whining threads were around last year that's exactly what I said - I wish the manufacturer or the stores just sold the systems for more. I'd rather see a company that actually assumes risk make the money off it than some guy who will just return it if he can't make a profit.

 

[jlmadyson]

Originally posted by: otispunkmeyer
britain gets the shaft as usual

I'd certainly hate to see those Australian prices.

 

[CPA]

Originally posted by: miri
Prices in the UK are expensive, but they also make more money. The minimum wage in the UK is $9.55 a hour compared to $5.15 a hour here.

Could you provide a link please. Sony's Annual Report does not give a breakdown by country, and the only international breakdown is by Continentent in total, not be segment.

 

[jlmadyson]

Originally posted by: DaveSimmons

Originally posted by: Queasy

Originally posted by: DaveSimmons
Sony is being smart, and collecting the gouge money from initial shipments for themselves instead of letting eBayers take it. $100 x 2 million units = an extra 200 million for them not scalpers.

But they are still taking quite a loss on each unit sold. I could understand your logic if they weren't.

Then they will take $200 million less of a loss, which makes shareholders happy.

As long as they sell out, their price is too low not too high.

The prices for shareholders and the industry at large may not be such a good thing:

Analyst: PS3 price bad news for publishers, industry

DFC Intelligence says steep price tag will prevent next-gen platform from rapidly building installed base--which will give developers pause.
By Tor Thorsen, GameSpot

Posted May 17, 2006 2:58 pm PT

It's been over a week since Sony revealed that the PlayStation 3 would launch in November at two price points--$499 for a stripped-down 20GB model and $599 for the tricked-out 60GB model. However, the news is still reverberating through the industry, with more and more analysts weighing in on the matter in the form of notes to investors.

The latest firm to join the fray is DFC intelligence, which predicts the PS3's steep sticker price could cost it--and the game industry--dearly. "The higher priced the hardware, the lower overall industry growth will be," read a report the company issued this week. "The video game business model has been to build an installed base of tens of millions of users in a very short time frame. A key factor in this model is relatively low cost hardware... Unfortunately, there is a sinking feeling that things may have spun out of control for Sony and thus price cuts will be slow in coming."

Indeed, DFC says that the PS3's high price will make--or has already made--many consumers side with a next-gen rival. "With a $200 price difference now announced, consumers that were sitting on the fence can feel free to go buy an Xbox 360," read the report.

Along with the price, DFC reasons that the 360's stout software lineup will be another factor possibly causing consumers to shy away from the PS3. "In terms of game software it currently looks like the Xbox 360 will be able to match the PS3 punch-for-punch in the important genres like shooting, RPGs, racing, sports, Grand Theft Auto IV and others," asserts DFC. "Will Sony's brand name alone explain a $200 price difference to the gaming audience?"

While a shrinking Sony market share will be music to Microsoft and Nintendo's ears, DFC worries it might have have long-term negative impact on third-party publishers and developers. "Hardcore video junkies may go for the PS3's Blu-ray capabilities, as $600 is cheap for a new high-end technology like Blu-ray," said the report. "But if those guys are not buying game software, that does not do game publishers any good."

 

[Queasy]

link

"GBP 425 is definitely not a mass-market price, no," Maguire conceded. "But you think about the price, think about the price of just a Blu-Ray player. It will be cheaper than a Blu-Ray player just by itself. So fundamentally we're going to be great value just from that point of view without even looking at the games side."

It is true...Sony is using gamers to subsidize their venture into Blu-Ray.

 

[randomlinh]

Originally posted by: purbeast0
i think the PS3 will still sell a lot, even to the AV buffs. they praised it over on the AVS forums and aren't bothered at all by the prices.

I mean ... $600 for a bluray machine vs. a $1000+ standalone bluray machine ... pretty easy to see which one will be more likely to be bought.

(although sony must be taking a HUGE hit on each ps3 being sold)

the AVS forums is a very specific group of ppl who are vested and care about things like HD. The general public.. yeah... the price tag matters. I'm not getting HD anytime soon.

 

[DaveSimmons]

What Sony should do is drop the price $100 as soon as supply catches up with demand in early 2007, or bundle in a couple of games and a blu-ray movie coupon to increase the value.

It's 7-8 months too soon to tell whether they need to do something like that though.

 

[Queasy]

Can't wait to see what the game prices for the PS3 will be...

 

[CVSiN]

Originally posted by: RagingBITCH
When Sony fails miserably, I'll laugh my ass off.

"But the PS3 is really a media machine, not a gaming console."

Yea OK Sony. :roll:

heh I actually agree with something you said for once... hell froze over...

 

[purbeast0]

Originally posted by: randomlinh

Originally posted by: purbeast0
i think the PS3 will still sell a lot, even to the AV buffs. they praised it over on the AVS forums and aren't bothered at all by the prices.

I mean ... $600 for a bluray machine vs. a $1000+ standalone bluray machine ... pretty easy to see which one will be more likely to be bought.

(although sony must be taking a HUGE hit on each ps3 being sold)

the AVS forums is a very specific group of ppl who are vested and care about things like HD. The general public.. yeah... the price tag matters. I'm not getting HD anytime soon.

oh i don't disagree with you at all. thats why i think the initial shipment will be a frenzy to purchase because there are (in general) a LOT more Sony fans than MS fans when it comes to the gaming industry, and I expect the PS3 launch to be crazy, because diehard fans will pay $1K+ for the system.

But after that initial launch, when the general public is looking at which system to purchase, the ps3 won't even be in the forecast.