The PlayStation 3 price cut reactions

The Internet has been all abuzz with the news about Sony’s $100 price cut on the PlayStation 3. I’d like to take a quick look at all the talk that’s been going on and what this might mean for Sony and the rest of us.

First, let’s start with the news from those close to Sony — namely, ThreeSpeech and PlayStation.Blog. ThreeSpeech tries to keep itself apart from Sony, and only has a short blurb and a link to GamesIndustry. PlayStation.Blog, though, has quite a bit more, with a more filled out explanation on what everything is in the package. Of course, there’s not a ton of explanation behind these motives. So, where do we go for that?

Mr. N’Gai Croal, actually. Being all fancy with his Newsweek job and such (I <3 you, N’Gai!), he managed to sit down with Jack Tretton to talk about the price cut and such. Not surprisingly, Tretton continues to tout the “it’s a great bargain” line with the fact that the machine is packing Blu-Ray under it’s hood.

One of your main competitors, Microsoft has a number of the same features, but not all, in the Xbox 360. You don’t think that the messaging that they put out would have primed the hardcore gamer to understand the PS3’s potential value? At this point, I’m not sure what the total is for North America, but I believe that for this year, according to NPD, you guys have sold around 667,000 units, in addition to what was sold last year following the launch. So presumably, you’re still talking to the early adopter and the hardcore gamer, who I think has the ability to understand this stuff. Then you’ve got Microsoft, which was already on the market with a lot of the same messaging. They didn’t have a next-gen DVD drive built in, but they have downloads; the 360 SKUs that are really selling are the ones that have hard drives in them; it does video; it does pictures, etc. So I’m still not sure about how much of the reluctance from consumers stems from complexity of the message versus the price.

A little harsh, I’d say. Let’s continue on and discuss this some.

Tretton, trying to take the question in stride, keeps up the Sony lines, this time with the “it’s good for 10 years” line. Microsoft, meanwhile, is making you cobble together a next gen system with all these attachments and add-ons, that will ultimately look like a Frankenstein monster, and will only last about four years before bursting into flames (and throwing a small girl into a lake).

For the rest of the interview, it was a bit of smoke and mirrors, with Tretton trying to stay vague and give PR talk about the PlayStation 3’s success with this new price cut. Now, the next step is fairly obvious: what did the fans have to say? 

One thing I found particularly interesting was a poll going on in the CheapAssGamer forums. The poll asked if CAGers would be willing to pay for a $500 PS3. The result? About 25% said they’d be willing to do so. I don’t know if this includes those who already own a PS3, but if not, then it shows some positive signs for the system.

If you take a look at the comments on the PlayStation.Blog post, I found it interesting the criticism of overshadowing the price cut with the announcement of the 80GB model. This is something I’ll get into later,

What’s more, Amazon gave us even more uplifting signs for the system. As Jim mentioned, the PS3 sales have gone up 700% since the price cut was announced. Also, as you can see below, the PS3 has jumped quite a bit in the Amazon sales rankings (however much that means to you is debatable):

Finally, there’s the reaction from the competition — namely, Microsoft. As of yet, there’s been no comment from Major Nelson (although pay attention to the podcast, I’m sure he’ll say something there). We’ve heard word of the 360 getting a price drop of it’s own, due to the fact that the 65nm chips will soon be making their way into the consoles.

IGN also had some words from an unnamed Microsoft representative:

“We’re not surprised by Sony’s reaction to the market,” a Microsoft representative told us. “We’ll see if it makes a difference. It’s interesting to note that they’ve significantly dropped their price in the first eight months while Xbox 360 has continued to sell well at our launch price for more than a year and a half. We’re right where we want to be right now — it’s all about choice and bringing the best games and entertainment to homes around the world.”

So, now that we’ve got all this information under our belts (and it really is quite a bit), let me dive into what I think this all means for Sony.

Essentially, this is a gigantic boon for Sony. Already there’s been an increase in sales for the PS3, and this is only going to shoot up if there are strong PS3-exclusive games announced at E3. Here’s my situation, which I think might mirror some other peoples’ positions: right now, I only own a Wii. I’ve been saving up for an Xbox 360 Elite, which would come in at $479. Now, Sony has suddenly lowered the 60GB PS3, which I’ve considered to be plenty, to $499, a mere $20 above the 360. Now, it suddenly becomes a much more attractive offer. I know I want to buy Metal Gear Solid 4 and Final Fantasy XIII for the PS3, and if there’s anything that gets me excited at E3, then I won’t mind putting down the money for this console.

Sony really needs to push this price point, since it’s so close to that of the Elite. If anything, they should let the higher 80GB PS3 sit off to the side as reserved for those who want to go into heavy downloading of movies and digital content, much like MS is doing with the Elite.

Does the announcement of the 80GB PS3 overshadow the price cut? I certainly don’t think so. It’s not like the Xbox 360 Elite is the only version of the console worth buying, and Microsoft realizes this. Sony needs to create more of a gap between the two systems, though. I really don’t think that upgrading the HD by 20GB and including Motorstorm justifies a $100 increase. Microsoft increased the HD by 100GB and gave us HDMI ports for $80. Sony, you need to step up your game on this one. Even just some PSN points thrown in there would make it a little less painful.

I’m going to hold my thoughts on any reactions from Microsoft, because their E3 announcements will certainly shift the landscape some. At this point, though, I don’t think a price cut from them will shift the market drastically. They’ve gotten gamers willing to spend just about $500 for the Elite, and so they’ve just opened the floodgate for Sony.

Sony just needs to take the aggressive and flex its muscles. In the N’Gai Croal interview, Tretton mentions that Sony has a strong first-party studio — and they need to exploit that more. Some great games have come out of SCEA’s development teams (Legend of Dragoon is a personal favorite), and if they unveil some new titles at E3, or give us some strong leads later on in the summer, it’ll turn into more sales of the conosle.

So, is this going to turn things around for Sony?