So I keep hearing (seemingly from everywhere) that Sony needs a price cut to increase their attach rate. Somehow this is a key component in gaining the upper hand in their competitions with Microsoft and Nintendo. I can't remember everyone who has made this ridiculous claim, but the two who come to mind are some idiot on a 1UP podcast (I can't remember his name, but they're all about equally clueless, with maybe one or two exceptions) and NihonTiger90 (who isn't an idiot, but I do believe got this wrong).

While it's definitely true that selling more units would help Sony in the Console War(tm) and the increased install base would raise software sales numbers overall, this in NO WAY positively affects attach rate. Which since we're on the topic I should point out isn't even the correct term for what is being discussed.

An attach rate is the percentage of console owners who own any particular title (or accessory; see Wii MotionPlus, PSEye, Live Vision camera, etc). So if Sony has sold 7 million PS3s[1] and 1 million copies of Resistance: Fall of Man[2] then the attach rate for Resistance is (very) roughly 14%. While this number is great for boasting that you have huge blockbuster exclusives it, by itself, is not very meaningful to the success of a console. Especially one that is losing its manufacturer a considerable amount of money per unit.

The term these people are usually looking for is tie ratio, the number of software titles purchased (on average) by each console owner. See this article for a more thorough explanation. If Sony has sold 7 million Playstations and their tie ratio is 5.3[3] then 37.1 million games have been sold for the system.

Whatever you want to call it, how the fuck is increasing the install base going to help Sony sell more software units per console? It isn't! And to see why we have to look at who doesn't already own a PS3 but would if it were at that "magical" $299 price point.

We'll start with probably the most relevant demographic around here, the 360 owner. This person might also own a Wii (as well as "legacy" consoles or "mostly-but-not-yet-quite-legacy" PS2), but they're primarily playing Microsoft's Big Box O' Red Rings(tm). They're heavily invested in that platform with extra controllers, a solid games library, and have all of their friends on Xbox Live. While they very well might transition to PS3 as their console of choice (and I'd call this likely, because PS3 is Blatantly Better[tm] than Xbox) in the short run they're entrenched with Microsoft and at least for the first year or two will be playing PS3 only for the Sony exclusives. Which is what, maybe 4 or 5 titles a year, tops? And how many of them will purchase all of those titles? At best they will maintain the tie ratio status quo, while raising the attach rate for a few titles by some degree.

Next we have the casual player. These might be the PopCap crowd or an iPhone user looking for a beefier home experience. Or it could be the guy who likes to play Madden and the occasional FPS or racing game, but he's not devoting all (or even most) of his leisure time to gaming. Perhaps it's someone looking for a solid Blu-Ray player that's guaranteed to receive updates for future titles and occasionally has an interest in video games. These users at best will buy a handful (maybe only one or two) games a year, which if they buy the lower-priced PS3 in large numbers (and I don't honestly believe many of these people exist, but who knows? I certainly didn't bother to look it up with facts or anything) this would significantly depress the tie ratio for Playstation 3, and possibly make a bullshit party game an attach rate blockbuster.

Then we have the Wii-only household. While I can't imagine there are many people this late in the cycle who only own a Wii but have any interest in owning another console, I'm sure a few exist. Maybe they're huge Nintendo fans who have finally gotten fed up with only having one or two games a year that interest them and the sensibilities of the PS3 line-up appeals a bit more than Xbox. But again, there can't be that many of them and the majority of Wii-only owners would have little or no interest in what the PS3 has to offer. So while the Wii audience is different enough from the wider "casual" audience for me to distinguish between the two, their buying habits, in regards to quantity, upon purchasing a PS3 are likely to be very similar. Again, we'd be seeing a significant decrease in tie ratio if they were to come on board. They could help with that party game bullshit, but then wouldn't they just stick to the Wii?

While I find it very hard to believe they exist in any great number, there is also the possibility of a fourth group. The PS2 hold outs. There certainly are enough great games on that platform with a wide enough range of gameplay to have kept someone busy for the past two-and-a-half years, though I find it unlikely that many have held out this long only to pay $300 for the console. If they're waiting on a price drop because they don't think they can afford the system at $400 then how can they be prepared to drop the cash required to bump up Sony's tie ratio and, while the range of older games now marked down to budget prices has greatly increased, what are the chances that enough of these buyers are going to ALL buy even the 5 games required in their first year to keep the tie ratio in place through 2010? If they're out there and haven't made the jump yet, don't expect them to do so until PS3 is down to at least $199.

Maybe I'm so far off base that I'm not even on the field. I'm sure you'll all let me know in the comments if I am. When you do, remember that these conclusions are all based on my opinions (which are better than facts) and please include directions to these people who are too cash-strapped to drop $400 on a PS3 but as soon as it hits $299 would then have enough money to run out and buy 6 games for the system.

Perhaps they'd have enough to buy two Sony exclusives and boost the attach rate for those titles, but how anyone could think that would make a huge difference in Sony's fortunes is beyond me. At best I can see that turning the Playstation 3 into this generation's GameCube or N64. But comfortably profitable in last place isn't exactly what everyone expects from the successor to Playstation and Playstation 2.

[1] Latest Worldwide Console Sales Revealed

[2] Only one PS3 first-party exclusive has topped 1 million US sales

[3] U.S. Games-Per-Console Ratio Shows Xbox 360 Shooting Ahead