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Why I Think the PS3 Price is a Fake Out

Why I Think the PS3 Price is a Fake Out

Tags: E3 | PS2 | PS3 | Sony

Wednesday - May 10, 2006
Although Sony had a lackluster response to their E3 press conference, the one thing that everybody is talking about is the price. Sony announced the 20 GB hard drive version will debut at $499 and the 60 GB hard drive version at $599. Shocking. As Nintendo VP, George Harrison said, "Now that our competitors have put their cards on the table we think we can wait to set the price of the Wii." Exactly. I think that Sony's absurd announcement is a dupe to make Nintendo set the price of the Wii at the high end of their zone and to make MS feel comfortable with the price point of the Xbox 360, meaning less pressure for an Xbox 360 price cut ahead of the launch of the PS3.

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Over the past few months, Ken Kutaragi, Sony Computer Entertainment president, had been hinting that the price of the PS3 would be high. Again, all part of the dupe.

This consistent message from Sony benefits the launch of the PS3 in three ways. First, an expensive price means that the machine must be chock full of expensive equipment. And, it is. From the Blu-ray drive to the CELL processor to every wireless connectivity standard, the PS3 is packed with the latest and most expensive technology. (UPDATE: The 20 GB PS3 does not have Wi-Fi, does not have Memory Stick, Secure Digital, nor Compact Flash input, nor HDMI output, effectively meaning that it's not HD compatible!) The high price means that Sony hasn't skimped on anything, thus making the case that they have the most advanced console. They want to make sure that consumers know that. The high price tag relays that message in an efficient and easily understandable manner.

Second, the high price sets up the possibility of a "huge announcement" prior to the console's launch. They'll get a lot of traction out of the press coverage of such an event and at the event, they'll reveal that production costs were over-estimated and that the price will actually be $400 and $500 for the two different versions. By doing this, Sony will not only get a bunch of free press, but will look like the "good guy" who is giving back to the gamer.

Finally, as mentioned earlier, the early announcement of the high price, lets Microsoft and Nintendo breath a sigh of relief, albeit a false one. This allows them to relax, thinking that Sony doesn't know what their doing.

Of course, take all of the above with a grain or seven of salt as it is purely speculation and opinion. Whether or not Sony actually intended it, I think that there will have to be a price cut before the launch as it is simply out of the price range for many consumers.

Posted by Jeremy at 11:52 AM |


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