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Another PS3 Price Drop Coming for Holidays

5 Sep, 2007 By: John Gaudiosi



Sony has confirmed that it has shipped its total allotment of 60GB PlayStation 3s, which retail for $500. While these models are still on store shelves, they should be depleted in the next few months.

As a result, multiple video game analysts expect Sony to drop the price of the new 80GB PS3, which currently retails for $600, to $500 before the holidays. Sony has not publicly commented on any price reductions, but analysts were first to announce the last PS3 price shake-up prior to the E3 Media Summit in July.

“We note that Sony recently acknowledged that it will no longer produce its 60GB PS3, and we expect the price of the 80GB PS3 to be reduced to $500 before the holidays, maintaining a premium SKU at that price point,” said Michael Pachter, video game analyst with Wedbush Morgan Securities.

Jesse Divnich, an analyst with the simExchange, a video game prediction market, said, “After examining more closely the hardware sales of the PS3 over the last six months, we have come to the conclusion that the PS3 cannot remain competitive in the current North American environment at its current retail offering at $500 and $600. To remain competitive against the other consoles, the Sony PS3 would have to reduce its 80GB SKU by $100, down to $500,”

Divnich added: “Other options, besides a price drop, could be the bundling of more free software titles, which has always been a popular option during the holiday season.”

According to trading on the simExchange, Xbox 360 may outsell the PS3 by a ratio of 2-to-1 this fourth quarter. Although a further price reduction of the more expensive hardware will cost Sony production dollars, Divnich said the alternative could put the game company further behind the competition.

“Sony's third-party software support could be at serious risk if they allow Microsoft to continue to widen the sales gap,” Divnich said. “We are already seeing examples in the market of their deteriorating third-party software support. Titles like EA's SKATE, Medal of Honor and Half-Life 2, and Midway's Stranglehold are just some of the titles being released on the Xbox 360 first with a delayed PS3 release date.”

Divnich said this means that, at any given point through the development process, the PS3 game is always weeks behind the Xbox 360 version, which results in the later release date for the PS3 edition.

After lagging behind both Microsoft and Nintendo in the next-generation console race, Sony actually could be preparing two price cuts.

“Any hardware price reduction could serve as a catalyst for sales growth later in the year,” said Pachter. “We do expect Sony to again be in a position to cut the price of the PS3 in early 2008, when blockbuster games Grand Theft Auto IV and PS3 exclusive Metal Gear Solid 4 will launch.”

Sony isn't expected to comment on any price cuts until they officially announce them, but after sticking to their guns from the launch of PS3, the company has conceded price has been an issue with moving hardware. The other factor has been a lack of compelling, must-have games. Sony's fixed that problem with a much-anticipated line-up of first-party and third-party exclusives for this fall and beyond.

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